SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission file number O-23859
AMERICAN CUSTOM COMPONENTS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
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<S> <C>
Nevada 81-0478643
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) identification No.)
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3310 W. MacArthur Blvd.
Santa Ana, CA 92704
(Address of Principal Executive Offices)
(714) 662-2080
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Y ear,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date: As of September 30, 1998, there were 13,968,578 shares of
common stock outstanding.
AMERICAN CUSTOM COMPONENTS, INC.
INDEX
Page
Part I Financial Information
Item 1. Financial Statements
Balance sheet as of September 30, 1998 (unaudited) . 3
Statements of operations for the three months ended
September 30, 1998 and 1997 (unaudited). . . . . . . . . . .
. . . . . . . 4
Statements of cash flows for the three months ended
September 30, 1998 and 1997 (unaudited). . . . . . . . . . .
. . . . . . . 5
Item 2. Managements Discussion and Analysis or Plan of
Operation . . . 6
Part II Other Information
Item 1. Legal Proceedings. . . . . . . 6
Item 2. Changes in Securities. . . . . 6
Item 3. Defaults Upon Senior Securities. . . . 7
Item 4. Submission of Matters to a Vote of Security Holders. . . . .
. . . . . . . 7
Item 5. Other Information. . . . . . . 7
Item 6. Exhibits and Reports on Form 8-K . . . 7
PART I - FINANCIAL STATEMENTS
Item 1. Financial Statements
AMERICAN CUSTOM COMPONENTS, INC.
BALANCE SHEET
September 30, 1998
ASSETS
Current Assets:
Cash $ 98,000
Accounts receivable, net 378,379
Inventories 161,643
Total current assets 661,505
Property and equipment, net 700,000
Other assets 351,456
Total assets 1,712,961
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable 454,381
Bank overdraft 0
Line of Credit 38,000
Notes payable, current 363,570
Income taxes payable
0
Total current liabilities 855,951
Notes payable, net of current portion
240,864
Total liabilities
1,096,815
Commitments and contingencies
Shareholders' equity (deficit)
Common stock ($0.001 par value; 25,000,000
shares authorized; 13,968,578 shares issued
and outstanding as of September 30, 1998)
13,969
Additional paid-in capital 1,600,885
Accumulated deficit
<998,708>
Total shareholders' equity (deficit) 616,146
Total liabilities and shareholders' equity (deficit)
1,712,961
AMERICAN CUSTOM COMPONENTS, INC.
STATEMENTS OF OPERATIONS
Six months
Six months
ended Sept 30, 1998
ended Sept 30, 1997
Net sales $ 832,011
1,585,108
Cost of sales 421,397
968,560
Gross profit 410,614
616,548
Operating costs and expenses:
Wages and salaries 144,443
161,660
Options compensation expense 0
0
Selling and promotion 27,385
79,510
Insurance 62,771
24,340
Professional fees 101,285
130,680
Depreciation and amortization expense 50,000
47,100
Research and development 0
0
Other operating expenses 7,099
241,020
Total costs and expenses 468,408
684,310
Income (loss) from operations <57,794>
<67,762>
Other expense:
Interest expense 0
29,991
Income (loss) before provision for taxes <57,794>
<97,753>
Provision for income taxes 0
0
Net income (loss) <57,794>
<98,553>
Earnings (loss) per share - basic <.004>
<.01>
Weighted average number of shares
outstanding - basic 11,959,461
7,647,000
AMERICAN CUSTOM COMPONENTS, INC.
STATEMENTS OF CASH FLOWS
Six months
Six Months
ended Sept 30, 1998
ended Sept 30, 1997
Cash flows from operating activities:
Net income (loss) $ < 57,794>
<98,553>
Adjustments to reconcile income (loss)
to net cash provided by operating activities:
Depreciation and amortization 50,000
47,106
Uncollectible accounts receivable 0
0
Compensation expense resulting
from the granting of options 0
0
Decrease (increase) in assets:
Accounts receivable <298,205>
<55,361>
Inventories 65,822 51,455
Other assets <54,538>
<24,627>
Increase in liabilities
Accounts payable <2,596>
243,980
Line of credit <2,179>
0
Income taxes payable <2,400>
25,994
Cash used in operating activities 301,890
189,998
Cash flows used in investing activities:
Acquisition of property and equipment <23,112>
<178,275>
Increase in other assets 0
0
Cash used in investing activities <23,112>
<178,275>
Cash flows provided by (used in) financing activities:
Principal reduction of notes payable <15,616>
<189,238>
Proceeds from notes payable 0
0
Issuance of common stock 307,500
226,645
Cash provided by financing activities 291,884
37,407
Net increase (decrease) in cash <33,118>
49,120
Cash, beginning of period 131,118
<47,735>
Cash, end of period 98,000
1,385
Item 2. Managements Discussion and Analysis or Plan of Operation
Results of Operations
During the first six months of the Company's fiscal year, the
Company focused a significant amount of resources on recovering from
the loss of two major customers who experienced financial
difficulty. The loss of these two customers, as well as expansion
costs, resulted in a shortage of cash flow for the period.
Net Sales decreased from $1,585,108 for the six months ended
September 30, 1997 to $832,011 for the six month ended September 30,
1998, as a result of the loss of the two significant customers.
Selling and promotion expenses decreased from $79,510 to $27,385
during the same periods as the Company re-focused its marketing
efforts into new customers.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is presently, has been, and may from time to time
be involved in various claims, lawsuits, disputes with third
parties, actions involving allegations of discrimination, or breach
of contract actions incidental to the operation of its business.
The Company is not currently involved in any such litigation which
it believes could have a materially adverse effect on its financial
condition or results of operations.
Item 2. Changes in Securities
In July 1998, the Company issued 50,000 shares of restricted
common stock to MRC Legal Services Corporation, an accredited
entity, as consideration for M. Richard Cutler serving on the
Company's Board of Directors. This issuance was exempt under
Section 4(2) of the Securities Act of 1933.
In July 1998, the Company issued 3,000,000 shares of
restricted common stock to Oxford International, Inc. under Rule 506
of Regulation D and Section 4(2) of the Securities Act of 1933 in
anticipation of the sale of those shares at various prices.
In September 1998, the Company sold an aggregate of 14,286
shares of restricted common stock to Greg Harris and Jeng Ching
Hung, sophisticated investors given full access to the books and
records of the Company, as well as existing shareholders of the
Company, for $.70 per share, resulting in net proceeds to the
Company of $10,000. The issuance was exempt under Rule 506 of
Regulation D and Section 4(2) of the Securities Act of 1933.
In September 1998, the Company issued 5,000 shares of
restricted common stock to Christopher S. Bromley as consideration
for certain services rendered. The issuance was exempt under Rule
506 of Regulation D and Section 4(2) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to the security holders for a vote.
Item 5. Other Information
There is no other information deemed material by management
for disclosure herein.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN CUSTOM COMPONENTS, INC.
Dated: March 26, 1999 /s/ John Groom
By: John Groom
Its: President
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<FISCAL-YEAR-END> MAR-31-1998 MAR-31-1997
<PERIOD-END> SEP-30-1998 SEP-30-1997
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0 0
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<SALES> 832011 1585108
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<INTEREST-EXPENSE> 0 29991
<INCOME-PRETAX> (57794) (67762)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
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<EXTRAORDINARY> 0 0
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