U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-69415
BALANCED LIVING, INC.
(Name of Small Business Issuer as specified in its charter)
Colorado 87-0575577
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
6375 South Highland Drive, Suite D, Salt Lake City, Utah 84121
(Address of principal executive offices)
801-424-1624
(Registrants telephone no., including area code)
No Change
(Former name, former address, and former fiscal year, if changed since last
report.)
Securities registered pursuant to Section 12(b) of the Exchange Act:None
Securities registered pursuant to Section 12(g) of the Exchange Act:None
Checkwhether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file suchreports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
Common Stock outstanding at September 30, 1999: 867,849 shares of $.001 par
value
<PAGE>
BALANCED LIVING, INC.
[ A Development Stage Company ]
INDEX
PART I Financial Information
Item I Condensed Balance Sheets - September 30, 1999 and
December 31, 1998 2
Condensed Statements of Operations for the three and six
months ended September 30, 1999 and 1998, and from
inception on January 26, 1998 through September 30, 1999 3
Condensed Statements of Cash Flows for the six months
ended September 30, 1999 and 1998 and from inception on
January 26, 1998 through September 30, 1999 4
Notes to Condensed Financial Statements 5
Item 2 Management's Discussion and Analysis 10
PART II Other Information
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults upon Senior Securities 12
Item 4 Submission of Matters to a vote of Security Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12
Signature page 12
1
<PAGE>
PART 1
FINANCIAL INFORMATION
Item 1
Financial Statements
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
UNAUDITED CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, December 31,
1999 1998
___________ ___________
CURRENT ASSETS:
Cash in bank $ 17,202 $ 56,663
Inventory 11,061 13,227
Prepaid expenses 1,412 35,395
___________ ___________
Total Current Assets 29,675 105,285
EQUIPMENT, net 3,824 3,272
___________ ___________
$ 33,499 $ 108,557
___________ ___________
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 12,601 $ 5,870
Notes payable - related party 40,000 330,000
Accrued liabilities 7,392 5,379
___________ ___________
Total Current Liabilities 59,993 341,249
___________ ___________
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
867,849 and 600,000 shares
issued and outstanding, respectively 868 600
Capital in excess of par value 579,304 44,900
Deficit accumulated during the
development stage (606,666) (278,192)
___________ ___________
Total Stockholders' Deficit (26,494) (232,692)
___________ ___________
$ 33,499 $ 108,557
___________ ___________
Note: The Balance sheet as of December 31, 1998 was taken from the audited
financial statements as of that date.
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three For the Nine From Inception
Months Ended Months Ended on January 26,
September 30, September 30, 1998 Through
_____________________ _____________________ September 30,
1999 1998 1999 1998 1999
__________ __________ __________ __________ ______________
REVENUE $ 8,256 $ 2,416 $ 33,114 $ 6,059 $ 48,028
COST OF SALES 15,218 7,299 43,119 19,511 70,444
__________ __________ __________ __________ ______________
GROSS PROFIT (LOSS) (6,962) (4,883) (10,005) (13,452) (22,416)
__________ __________ __________ __________ ______________
EXPENSES:
General and
administrative 124,866 67,803 245,311 114,326 493,407
__________ __________ __________ __________ ______________
OPERATING LOSS (131,828) (72,686) (255,316) (127,778) (515,823)
OTHER INCOME
(EXPENSE):
Interest expense (2,301) (3,200) (73,158) (5,497) (90,843)
__________ __________ __________ __________ ______________
LOSS BEFORE
INCOME TAXES (134,129) (75,886) (328,474) (133,275) (606,666)
CURRENT TAX
EXPENSE - - - - -
DEFERRED TAX
EXPENSE - - - - -
__________ __________ __________ __________ ______________
NET LOSS $(134,129) $ (75,886) $(328,474) $(133,275) $(606,666)
__________ __________ __________ __________ ______________
LOSS PER COMMON
SHARE:
Basic loss per share $ (.18) $ (.13) $ (.50) $ (.22) $ (.91)
__________ __________ __________ __________ ______________
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine From Inception
Months Ended on January 26,
September 30, 1998 Through
_____________________ September 30,
1999 1998 1999
__________ __________ ______________
Cash Flows Used by Operating Activities:
Net loss $(328,474) $(133,275) $(606,666)
Non-cash operating items
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 534 - 898
Non-cash expense 35,362 - 72,862
Changes in assets and liabilities:
(Increase) decrease in inventory 2,166 (10,730) (11,061)
(Increase) decrease in prepaid assets 33,983 (5,568) (1,412)
Increase (decrease) in accounts payable 6,731 7,554 12,601
Increase (decrease) in accrued
liabilities 2,013 3,200 7,392
__________ __________ ______________
Net Cash Used by Operating Activities (247,685) (138,819) (525,386)
__________ __________ ______________
Cash Flows Used by Investing Activities:
Equipment purchases (1,086) (2,728) (4,722)
__________ __________ ______________
Net Cash Used by Investing Activities (1,086) (2,728) (4,722)
__________ __________ ______________
Cash Flows Provided by Financing
Activities:
Proceeds from options granted - - 5,000
Proceeds from common stock issuance,
net of offering costs 169,310 - 172,310
Proceeds from related party payables 19,584 - 19,584
Payments on notes payable - related
party (79,584) - (79,584)
Proceeds from issuance of warrants
and notes payable 100,000 160,000 430,000
__________ __________ ______________
Net Cash Provided by Financing
Activities 209,310 160,000 547,310
__________ __________ ______________
Net Increase (Decrease) in Cash (39,461) 18,453 17,202
Cash at Beginning of Period 56,663 - -
__________ __________ ______________
Cash at End of Period $ 17,202 $ 18,453 $ 17,202
__________ __________ ______________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 5,658 $ 5,497 $ 17,589
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period ended September 30, 1999:
None
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Balanced Woman, Inc. ("Subsidiary") was organized under the
laws of the State of Colorado on January 26, 1998. During July, 1998 the
Company was reorganized through a stock for stock exchange with Balanced
Living, Inc. ("Parent") [See Note 2]. Balanced Living, Inc. a Colorado
corporation, was organized on July 1, 1998. Balanced Living, Inc. and
Subsidiary (the Company) has not raised significant revenue from planned
principal operations and is considered a development stage company as defined
in the Statement of Financial Accounting Standards (SFAS) No. 7. The Company
is engaged in the business of holding motivational seminars, and selling books
and other motivational products. The Company has, at the present time, not
paid any dividends and any dividends that may be paid in the future will
depend upon the financial requirements of the Company and other relevant
factors. The company adopted December 31st as its fiscal year end.
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
September 30, 1999 and for all the periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1998
audited financial statements. The results of operations for the periods ended
September 30, 1999 are not necessarily indicative of the operating results for
the full year.
Consolidation - The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, The Balanced Woman, Inc. All
significant intercompany transactions have been eliminated in consolidation.
Inventories - Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.
Equipment - Equipment is carried at cost and is depreciated over the
estimated useful lives of the equipment using the straight line method.
Revenue Recognition - The company's revenue comes from holding motivational
seminars and selling motivational products (books, cards, CD's, etc.).
Revenue is recognized when the services are rendered or the product is
delivered.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in accordance
with SFAS 128 "Earnings Per Share". Diluted loss per share is not presented
because its effect is antidilutive.
Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents.
5
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those estimated.
Fair Value of Financial Instruments - Management estimates that the carrying
value of financial instruments on the consolidated financial statements
approximates their fair values.
Restatement - The financial statements have been restated to reflect the
reorganization of the Company pursuant to a stock for stock exchange [See Note
2]. All references to common stock and the numbers of shares issued and
outstanding have been restated to reflect the shares of common stock issued in
the reorganization.
NOTE 2 - BUSINESS REORGANIZATION
On July 14, 1998 the Company entered into an Agreement and Plan of
Reorganization wherein Parent acquired all the issued and outstanding shares
of common stock of Subsidiary in a stock for stock exchange. Parent issued
500,000 shares of common stock in the exchange. Parent and Subsidiary had
similar ownership at the time of reorganization and were considered to be
entities under common control. Accordingly, the reorganization has been
recorded in a manner similar to a pooling of interests.
NOTE 3 - INVENTORIES
Inventories consisted of finished goods in the amount of $13,227 at December
31, 1998 and $11,061 at September 30, 1999.
NOTE 4 - EQUIPMENT
Equipment consists of the following:
Estimated
Useful Lives September 30, December 31,
in Years 1999 1998
____________ ____________ ____________
Office equipment 5 - 7 $ 4,722 $ 3,636
____________ ____________
4,722 3,636
Accumulated depreciation (898) (364)
____________ ____________
$ 3,824 $ 3,272
____________ ____________
Depreciation expense for the nine months ended September 30, 1999 and 1998 was
$534 and $0, respectively.
6
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - NOTES PAYABLE
During 1998, the Company issued subordinated demand notes payable to various
officers, shareholders, and consultants in the amount of $330,000. The notes
bear interest at a rate of 10% per annum with quarterly interest payments. The
notes are due on September 1, 1999. Note-holders can demand payment of the
unpaid principal plus accrued interest in order to purchase other equity
opportunities in the Company of equal value at any time prior to the maturity
date. As of September 30, 1999, interest payments have been made in the
amount of $5,658. The notes are subordinated by 80,000 warrants to purchase
one share of the Company's stock at $1 per share [See Note 6]. During the six
month period ended June 30, 1999 the Company raised an additional $60,000
through issuing additional subordinated demand notes payable, $60,000 of which
came from a private investor. Warrants for 30,000 shares of common stock were
included in the transaction on the same terms as above. The $60,000 was paid
back to the investor during September 1999. During April 1999 the note
holders converted $330,000 into common stock, and all prepaid amounts were
expensed.
Because the Company was proposing a future stock offering at $2.00 per share,
37,500 warrants that were issued during December, 1998 were deemed to have a
value of $1.00 per warrant. Accordingly, $37,500 was recorded as prepaid
interest expense and is being amortized over the life of the notes. Prepaid
interest expenses of $30,000 was also recorded during March, 1999 for the
warrants issued during March, 1999.
NOTE 6 - CAPITAL STOCK
Common Stock - In connection with its acquisition of Subsidiary on July 14,
1998, the Company issued 500,000 shares of its previously authorized, but
unissued common stock [See Note 2]. The Subsidiary had previously been funded
with $2,000.
During January, 1998, the Company issued 100,000 shares of common stock in
connection with the organization of the Company at $.01 per share. Total
proceeds amounted to $1,000.
Stock Warrants - During 1998, Subsidiary issued 165,000 common stock warrants
to various officers, directors and consultants in conjunction with the
issuance of subordinated notes payable [See Note 5]. Due to the
reorganization of the company [See note 2], the warrants of Subsidiary were
cancelled, and re-issued under the same terms by Parent during 1998. Each
warrant grants the holder the right to purchase one share of the Company's
common stock at a price of $1 per share. The warrants may be exercised at any
time prior to March 1, 2003. An additional 30,000 warrants were issued
subsequent to December, 1998. The Company has accrued additional interest
expense for warrants issued after November 1999 as the exercise price of the
warrants were less than the arbitrary value of $2.00 proposed for the
Company's upcoming stock offering. During 1998 $37,500 was capitalized as
prepaid interest expenses and is being amortized over the life of the note.
An additional $30,000 was capitalized in 1999 and will be amortized over the
life of the note. During the six months ended June 30, 1999 prepaid interest
was expensed.
During April 1999, in conjunction with the conversion on Notes Payable [See
Note 5], the Company issued 259,367 A warrants, 259,367 B warrants and 259,367
C warrants.
7
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - CAPITAL STOCK [Continued]
Stock Option Plan - During January, 1998 the Company implemented its 1998
stock option plan. The plan provides for 1,000,000 shares of common stock to
be reserved for issuance to officers, directors, employees and consultants as
employment incentives. As of September 30, 1999, no options have been issued
under the plan. Options granted vest over a five year period and are
exercisable at a price to be determined by the Stock Option Plan Committee at
the time of grant and may not be less than 100% of the full market value.
Public Offering of Common Stock - The Company has filed a registration
statement with the United States Securities and Exchange Commission on Form
SB-2 under the Securities Act of 1933. The Company sold 100,000 "Units" at a
price of $2 per Unit, which price has been arbitrarily determined by the
Company. Each Unit consisted of one share of the Company's $.001 par value
common stock sold at $2 per share, one "Class A Warrant" to purchase one share
of common stock at $3 per share, one "Class B Warrant" to purchase one share
of common stock at $5 per share, and one "Class C Warrant" to purchase one
share of common stock at $10 per share. All warrants issued under the
offering will expire on December 31, 2003. The warrants are callable if,
after one year from the issuance date, public trading develops and trading
occurs for at least 20 consecutive days. The warrants are callable at $.01
per warrant upon 30 days notice by the Company to warrant holders. The Units
were offered and sold by officers of the Company, who received no sales
commissions or other compensation in connection with the offering, except for
reimbursement of expenses actually incurred on behalf of the Company in
connection with the offering. The Company incurred stock offering costs in
the amount of $30,690. These costs were netted against the proceeds of the
proposed public offering.
NOTE 7 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards. At September 30, 1999 the Company has available
unused operating loss carryforwards of approximately $601,000 which may be
applied against future taxable income and which expire in 2018 and 2019.
The amount of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the tax effect of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax assets are approximately $206,000 as of
September 30, 1999 with an offsetting valuation allowance of the same amount
resulting in a change in the valuation allowance of approximately $136,620
during the nine months ended September 30, 1999.
8
<PAGE>
BALANCED LIVING, INC. AND SUBSIDIARY
[A Development Stage Company]
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company paid compensation of $30,000 to an
officer/director of the Company during the period ended September 30, 1999.
The Company has accrued $7,000 in unpaid salaries for another officer/director
of the Company.
Notes Payable - As of September 30, 1999 the Company had outstanding
subordinated demand notes payable to various officers and shareholders
totaling $40,000. The notes bear interest at 10% and are due on demand.
Stock Warrants - During the period ended December 31, 1998, the Company issued
80,000 common stock warrants to various officers, directors and consultants
[See Note 6]. Of the 80,000 warrants, 5,000 were issued to the Company's
President/Secretary-Treasurer, and 25,000 were issued to a majority
shareholder.
Stock Options - During the period ended December 31, 1998, The Company issued
500,000 stock options to various officers, directors and consultants [See Note
6]. Of the 500,000 options, 50,000 were issued to the Company's
President/Secretary-Treasurer, and 50,000 were issued to a majority
shareholder.
NOTE 9 - LOSS PER SHARE
The following data show the amounts used in computing loss per share and the
effect on income and the weighted average number of shares of dilutive
potential common stock for the periods presented:
For the Three For the Nine From Inception
Months Ended Months Ended on January 26,
September 30, September 30, 1998 Through
_____________________ _____________________ September 30,
1999 1998 1999 1998 1999
__________ __________ __________ __________ ______________
REVENUE $ 8,256 $ 2,416 $ 33,114 $ 6,059 $ 48,028
Loss from continuing
operations applicable
to common
shareholders
(Numerator) $(134,129) $ (75,886) $(328,474) $(133,275) $(606,666)
__________ __________ __________ __________ ______________
Weighted average
number of common
shares outstanding
used in loss per
share during the
period (Denominator) 729,341 600,000 662,059 600,000 668,592
__________ __________ __________ __________ ______________
Dilutive earnings (loss) per share was not presented, as its effect is anti-
dilutive.
The Company had at December 31, 1998, options and warrants to purchase 500,000
and 1,323,101 shares of common stock , respectively, at prices of $1.00 per
share, that were not included in the computation of diluted loss per share
because their effect was anti-dilutive.
9
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 2
Management's Discussion and Analysis.
Balanced Living is a new enterprise and a development stage company. It
is still spending more money to develop its business opportunities than it is
receiving from the results of such opportunities. Management hopes to
achieve positive seminar net revenue first, and then positive net income
overall, and regards the current spending on development to be investments in
our future ability to reach these goals.
Some positive new developments indicate that results may be improving as
the Company moves forward. Contracts have recently been signed with internet
businesses, Pixelon and NuSkin/Big Planet that are expected to give us
improved visibility to potential customers, and hence improved revenue. Also,
a new focus of our seminars has occurred through discussions with the
Department of Social Services at the State of Utah. We are excited that our
seminar programs may have a salutary effect on mothers coming off welfare and
seeking tools to give independence and positive self image. Near the date of
this report, although after the end of the third quarter, we provided a
seminar in Salt Lake City with over 50 participants (our largest seminar to
date), with several young welfare mothers in attendance courtesy of the State
of Utah. We anticipate that this assisted rehabilitative use of our
curriculum and presentations will be an increasing contributor to revenue,
along with our original focus on self-rehabilitative efforts.
We are also pushing ahead as much as we can with our business plan, and
have made several milestones and can see the achievement of others in the near
future. These are
--launching of our new Seminar II concept for a 2 1/2 day program, with
attendant higher revenue
--the much anticipated and delayed Balanced Woman book is now in its
second manuscript and may be published before the end of 1999 or in
early 2000, which is later than we thought might be the schedule as we
wrote our June 30, 1999 report on Form 10-Q. Publishers continue to be
enthusiastic about this book
--our Circles of Women program has been launched in Utah and Colorado
--our first seminar in Washington state was presented by the first
person other than Rose Blackham to present a Balanced Woman seminar.
This milestone was a success (based on feedback at the seminar) and
validates our efforts to "train the trainer" and to multiply our
seminar opportunities beyond the capacity of our founder's presentation
availability. Indeed we experienced a decline in seminars during the
third quarter, well below expectations, in large part due to an illness
that incapacitated Ms. Blackham temporarily during this time period.
--We have also concluded that the opportunity discussed in the September
30, 1999 report on Form 10-Q involving the Home Shopping Network is not
in our best interests, and this effort has been abandoned.
Operating Results of First Nine Months of 1999 Compared with Same Period
1998.
Although we earned more sales revenue in the first nine months of 1999
compared with the same period last year, our costs associated with such
seminars were more than double in 1999 what we spent in 1998. This is
explained in part due to the larger number of seminars in the current period,
as well as bulk purchases of seminar supplies in the current period. However
we are also establishing accounting systems that accurately record costs of
seminars as opposed to general costs, and it is possible that the 1998 period
recorded less to costs of sales than should have been done. We also incurred
costs associated with training other presenters in the 1999 period that were
not incurred in 1998.
10
<PAGE>
General expenses also increased in 1999 over 1998 during the first nine
months of the year. This increase is largely explained by cost associated
with our public offering, which closed in the third quarter. While we paid no
broker commissions for our offering, travel, legal and accounting costs were
significant in closing this offering. We expect these expenses to be
nonrecurring. Also we have expanded our staff with an additional employee who
was not on board in the 1998 period.
Interest expense was significantly higher in the 1999 period over the
1998 period due to the growth of loans from founders and related persons we
used in the first half of 1999 to operate our business as our public offering
was wending its way through the Commission. These loans were substantially
all converted to equity late in the second quarter, and the lower interest
costs shown in the third quarter compared with last year's third quarter
evidence the reduction in interest expense on a going forward basis.
The result of these factors is a significantly higher net loss for the
first nine months of 1999 compared with 1998. As noted above, our goal is to
reach gross profitability in the net sales category, and then to generate
enough excess revenue to cover administrative costs. We think we are
operating efficiently and without waste. The costs of starting a new company
are significant and we are experiencing those costs now.
Operating Results of the Three Months ended September 30, 1999 Compared
with the Same Period in 1998.
The explanation for the higher revenues, higher costs and larger losses
in the third quarter of 1999 as compared with the third quarter in 1998 is the
same as outlined above for the comparison of the nine month periods.
Liquidity and Capital Resources.
At September 30, 1999, we had barely enough cash in the bank to pay our
current payables and accruing salary and overhead expenses. While there is
some ability to manage payables, we are living hand to mouth and need seminar
revenue to offset expenses. If we have a net loss in the fourth quarter it
will likely spell the end of available cash and a crisis for paying staff and
overhead. We can and will defer such salaries and expenses as we can to
maintain our operations and existence, but we have found that we need to raise
additional equity capital to enable us to pursue our business plan
aggressively. There is no assurance that we can raise the needed additional
capital, and we have no commitments from anyone for this funding. We are
exploring the possibility that a strategic alliance or merger with one or more
other businesses could aid in obtaining the needed additional capital we need.
No commitment or agreement exists in this area.
The information other than historical information, and specifically the
information set out in this section, is forward looking information presenting
management's beliefs and estimates about the future. These beliefs, plans and
estimates are subject to significant risks, including an inability to recruit,
hire, and retain skilled seminar facilitators, or a copyright infringement of
Balanced Living's unique curriculum materials and products and resulting
litigation, as well as risks from the general economic conditions within which
the Company must operate.. Other risks discussed in the Company's offering
could also negatively effect Balanced Living's ability to meet its projections
for 1999.
To combat intellectual property risks, these potentially harmful
conditions, we have secured the assistance of an intellectual rights attorney
and are taking every measure possible to protect and copyright all of our
materials.
11
<PAGE>
PART II
OTHER INFORMATION
ITEM 1
Legal Proceedings
None
ITEM 2
Changes in Securities
None
ITEM 3
Defaults on Senior Securities
None
ITEM 4
Submission of Matters to a Vote of Security Holders
None
ITEM 5
Other Information
None
ITEM 6
Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
Report dated as of August 15, 1999 reporting on the closing of the
Company's public offering.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALANCED LIVING, INC.
/s/ Jeannene Barhalm November 15, 1999
President Date
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from financial
statements as of September 30, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 17,202
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 11,061
<CURRENT-ASSETS> 29,675
<PP&E> 4,722
<DEPRECIATION> 898
<TOTAL-ASSETS> 33,499
<CURRENT-LIABILITIES> 59,993
<BONDS> 0
0
0
<COMMON> 868
<OTHER-SE> (27,362)
<TOTAL-LIABILITY-AND-EQUITY> 33,499
<SALES> 33,114
<TOTAL-REVENUES> 33,114
<CGS> 43,119
<TOTAL-COSTS> 43,119
<OTHER-EXPENSES> 245,311
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73,158
<INCOME-PRETAX> (328,474)
<INCOME-TAX> 0
<INCOME-CONTINUING> (328,474)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (328,474)
<EPS-BASIC> (.50)
<EPS-DILUTED> (.50)
</TABLE>
