U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB/A-1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended June 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 333-69415
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BALANCED LIVING, INC.
-----------------------------------
(Name of Small Business Issuer in its Charter)
COLORADO 87-0575577
------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5525 South 900 East, Suite 110
Salt Lake City, Utah 84117
-------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
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 Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes____ No ___
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
June 30, 2000
Common - 3,467,849 shares
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company required
to be filed with this 10-QSB Quarterly Report were prepared by management and
reviewed by independent auditors and commence on the following page, together
with related Notes. In the opinion of management, the Consolidated Financial
Statements fairly present the financial condition of the Company.
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
CONTENTS
PAGE
Unaudited Condensed Balance Sheets, June 30,
2000 and December 31, 1999 2
Unaudited Condensed Statements of Operations,
for the three and six months ended
June 30, 2000 and 1999 and from inception on
January 26, 1998 through June 30, 2000 3
Unaudited Condensed Statements
of Cash Flows, for the six months ended
June 30, 2000 and 1999 and from inception on
January 26, 1998 through June 30, 2000 4
Notes to Unaudited Condensed
Financial Statements 5 - 10
<PAGE>
<TABLE>
BALANCED LIVING, INC.
[A Development Stage Company]
<CAPTION>
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
<S> <C> <C>
June 30, December 31,
2000 1999
___________ ___________
CASH HELD IN TRUST $ 25,000 $ -
Total Current Assets 25,000 -
ASSETS OF DISCONTINUED OPERATIONS $ - $ 3,619
___________ ___________
$ 25,000 $ 3,619
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Net current liabilities of discontinued
operations $ - $126,625
___________ ___________
Total Current Liabilities - 126,625
___________ ___________
STOCKHOLDERS' EQUITY (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,
3,467,849 shares issued and outstanding 3,468 868
Additional paid in capital 637,394 609,994
Deficit accumulated during the
development stage (615,862) (733,868)
___________ ___________
Total Stockholders' Equity (Deficit) 25,000 (123,006)
___________ ___________
$ 25,000 $ 3,619
___________ ___________
Note: The balance sheet as of December 31, 1999 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited financial
statements.
</TABLE>
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
[CAPTION]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
For the Three For the Six From Inception
Months Ended Months Ended on January 26,
June 30, June 30, 1998 Through
June 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
REVENUE $ - $ - $ - $ - $ -
EXPENSES:
General and administrative 5,000 48 5,000 48 42,410
OPERATING LOSS (5,000) (48) (5,000) (48) (42,410)
OTHER INCOME (EXPENSE):
Interest expense - - - - -
LOSS BEFORE INCOME TAXES (5,000) (48) (5,000) (48) (42,410)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
LOSS FROM CONTINUING
OPERATIONS BEFORE
DISCONTINUED OPERATIONS (5,000) (48) (5,000) (48) (42,410)
DISCONTINUED OPERATIONS:
Loss from operations of The
Balanced Woman, Inc. (91,241) (100,763)(176,061)(193,723)(872,519)
Gain on disposal of The
Balanced Woman, Inc. 299,067 - 299,067 - 299,067
NET INCOME (LOSS) $ 202,826 $(100,811)$118,006(193,771)$(615,862)
LOSS PER COMMON SHARE:
Loss from continuing operation: (.00) (.00) (.00) (.00) (.04)
Loss from operation of The
Balance Woman, Inc. (.06) (.17) (.15) (.32) (.79)
Gain from disposal of The
Balance Woman, Inc .19 - .25 - .27
Basic loss per share $ .13 $ (.17) $ .10 $ (.32) $ (.56)
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
financial statements.
<PAGE>
<TABLE>
BALANCED LIVING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
<CAPTION>
From Inception
For the Six on January 26,
Months Ended 1998 Through
June 30, June 30,
_____________________ ________________
2000 1999 2000
_____________________ ________________
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net Income (loss) $ 118,006 $ (193,771) $ (615,862)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation 407 404 1,509
Non-cash expense 5,000 35,362 82,862
Gain on disposal of Subsidiary (299,067) - (299,067)
Changes in assets and liabilities:
(Increase) decrease in inventory 463 1,566 (4,152)
(Increase) decrease in prepaids - 34,795 (600)
(increase) in deferred stock
offering costs - (30,690) -
Increase in accounts payables 5,687 24,820 37,521
Increase (decrease) in accrued
expense 13,732 (3,487) 14,511
Net Cash Used by Operating
Activities (155,772) (131,001) (783,278)
Cash Flows From Investing Activities:
Equipment purchases - (1,086) (4,722)
Net Cash Used by Investing Activities - (1,086) (4,722)
Cash Flows From Financing Activities:
Proceeds from options granted - - 5,000
Proceeds from common stock issuance 25,000 - 228,000
Proceed from related-party payable - 19,584 -
Proceeds from issuance of warrants
and notes payable 150,000 60,000 580,000
Net Cash Provided by Financing
Activities 175,000 79,584 813,000
Net Increase in Cash 19,228 (52,503) 25,000
Cash at Beginning of Period 5,772 56,663 -
Cash at End of Period $25,000 $ 4,160 $ 25,000
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ 24,880
Income taxes $ - $ - $ -
Supplemental schedule of Noncash Investing and Financing Activities:
For the six months ended June 30, 2000:
None.
For the six months ended June 30, 1999:
None.
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
financial statements.
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED 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").
Balanced Living, Inc. a Colorado corporation, was organized on
July 1, 1998. The Company has not raised significant revenue from
planned principal operations and is considered a development stage
company as defined in SFAS No. 7. During June 2000, the Company
spun off the Subsidiary, discontinuing the operations of the
subsidiary, for the cancellation of all outstanding options and
warrants of the Parent. 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.
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 June
30, 2000 and 1999 and for the periods then ended 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, 1999 audited financial
statements. The results of operations for the periods ended June
30, 2000 are not necessarily indicative of the operating results
for the full year.
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 No. 128 "Earnings Per Share".
Diluted loss per share is not presented because its effect is
antidilutive.
Statement of Cash Flows - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
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.
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a not
for profit organization or charitable trust that raises or holds
contributions for others", SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities deferral of the effective date
of FASB Statement No. 133 (an amendment of FASB Statement No.
133.),", SFAS No. 138 "Accounting for Certain Derivative Instruments
and Certain Hedging Activities and Amendment of SFAS No. 133",
SFAS No. 139, "Recission of SFAS No. 53 and Amendment to SFAS No 63,
89 and 21", and SFAS No. 140, "Accounting to Transfer and Servicing
of Financial Assets and Extinguishment of Liabilities", were
recently issued SFAS No. 136, 137, 138, 139 and 140 have no current
applicability to the Company or their effect on the financial
statements would not have been significant.
Reclassification - The financial statements for the periods prior to
June 30, 2000 have been reclassified to conform with the June 30,
2000 financial statements.
NOTE 2 DISCONTINUED OPERATIONS
During the second quarter of 2000 the Company adopted a plan to
spin-off and discontinue the operations of The Balanced Woman, Inc.
The Balanced Woman, Inc. is reported as a discontinued operation for
the six months ended June 30, 2000. Net sales related to The
Balanced Woman, Inc. for the six months ended 2000 and 1999 were
$5,663 and $24,858, respectively. These amounts have been
reclassified to loss from operations of The Balanced Woman, Inc. in
the accompanying statement of operations.
The following is a condensed proforma consolidated statement of
operations that reflects what the presentation would have been for
the six months ended June 30, 2000 and 1999 without the
reclassifications required by "discontinued operations" accounting
principles:
2000 1999
___________ ___________
Net Sales $ 5,663 $ 24,858
Cost of goods sold (12,244) (27,901)
Other operating expenses (150,208) (119,871)
Other income (expense) (24,272) (70,857)
___________ ___________
Net loss $ (181,061) $(193,771)
___________ ___________
Loss per share $ (.15) $ (.23)
_______________________
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 DISCONTINUED OPERATIONS [Continued]
Net Assets/(liabilities) of Balance Woman, Inc. consisted of the
following and have been reclassified in the accompanying financial
statements:
June 30, December 31,
2000 1999
___________ ___________
Cash $ - $ 5,772
Inventories - 4,615
Prepaid expenses - 600
Property and equipment - 3,619
Current liabilities - (32,613)
Notes payable related party - (105,000)
Loss on disposal of discontinued segment - -
Loss from operations of discontinued
Operations - -
___________ ___________
Net asset/(liability) of discontinued
operations $ - $(123,007)
___________ ___________
NOTE 3 NOTES PAYABLE
During 1999, the Company's subsidiary issued subordinated demand
notes payable to an officer and shareholder, of the Company in the
amount of $105,000. The notes bear interest at a rate of 10% per
annum with quarterly interest payments, the notes are due on demand.
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.
During the six months ended June 30, 2000 the Company issued an
additional $150,000. Accrued interest as of June 30, 2000 was
$14,511. The note and related accrued interest were included in the
liabilities of the subsidiary that was spun off during June 2000.
NOTE 4 CAPITAL STOCK
Common Stock-During May 2000, The Company issued 2,500,000 shares of
common stock for $25,000 and effectively change control company.
The Company also issued 100,000 share of common stock for services
rendered valued at $5,000. During June 2000,
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. 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.
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 CAPITAL STOCK [Continued]
Stock Warrants-During 1998, Subsidiary issued 100,000 common stock
warrants to various officers, directors and consultants in
conjunction with the issuance of subordinated notes payable. Due to
the reorganization of the company, 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. All amounts were expensed in 1999. An additional $30,000
was expensed in 1999 and will be amortized over the life of the
note. During June 2000, the warrants were cancelled in connection
with the spin off of the subsidiary Balance Woman, Inc.
NOTE 5 - 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 June 30, 2000 the Company has available unused
operating loss carryforwards of approximately $616,000, which are
restricted due to the change in control in the Company, which may be
applied against future taxable income and which expire in 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
$210,000 as of June 30, 2000 with an offsetting valuation allowance
of the same amount resulting in a change in the valuation allowance
of approximately $(38,000) during the six months ended June 30,
2000.
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 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 Six From Inception
Months Ended Months Ended on January 26,
June 30, June 30, 1998 Through
___________________________________ June 30,
2000 1999 2000 1999 2000
__________________________________________________
Loss from continuing
operations applicable
to common shareholders
(Numerator) $(5,000) $ (48) $ (5,000)$ (48)$ (42,410)
________ _________ ________ ______ __________
Loss from discontinued
operations applicable
to common shareholders
(numerator) $(91,241) $ (100,763)$(176,061)$(193,723)$ (872,519)
________ __________ _________ _________ __________
Gain on disposal of
discontinued
operation $299,067 $ - $ 299,067 $ - $ 299,067
________ __________ _________ _________ __________
Weighted average
number of common
outstanding used
in loss per share
during the period
(Denominator) 1,553,563 600,000 1,210,706 600,000 1,096,586
__________ __________ _________ _________ _________
Dilutive earnings (loss) per share was not presented, as its
effect is anti-dilutive.
<PAGE>
BALANCED LIVING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7 GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles
which contemplate continuation of the Company as a going
concern. However, the Company has incurred losses since its
inception and has not yet been successful in establishing
profitable operations. These factors raise substantial doubt
about the ability of the Company to continue as a going
concern. In this regard, management is hopeful that it can
generate adequate capital through improved operations and
reductions in expenditures. If necessary, management will
raise additional funds through loans and/or through
additional sales of its common stock. There is no assurance
that the Company will be successful in raising this
additional capital or achieving profitable operations. The
financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
NOTE 8 SUBSEQUENT EVENTS
The Company has entered into a Letter of Intent with Wizzard
Software Corporation whereby the Company intends to purchase
13,090,000 shares or approximately 96% of Wizzard's outstanding
common stock through the issuance of 13,446,950 shares of the
Company. The transaction will be accounted for as a purchase
whereby Wizzard will become a 96% owned subsidiary of the Company.
In connection with this purchase, and subject to it closing, the
Company will be renamed "Wizzard Software Corporation," and the
Company will effect a 1.65 for 1 forward stock split of its
outstanding securities, with 2,439,394 post-split shares of common
stock being contributed back to the Company and cancelled.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
------------------
During the quarter ended June 30, 2000, the Company's sole director
and executive officer and its principal stockholders who owned in excess of a
majority of its outstanding voting securities determined that it would be in
the best interests of the Company, its stockholders and its wholly-owned
subsidiary, The Balanced Woman, Inc., a Colorado corporation ("Balanced
Woman"), to separate the present or proposed business operations of the
Company and the Balanced Woman. This was accomplished by conveying all of the
outstanding shares of the Balanced Woman that were owned by the Company to the
stockholders and certain warrant and option holders of the Company in exchange
for certain outstanding warrants or options to acquire common stock of the
Company that were owned by these stockholders and these warrant and option
holders.
Further, during this quarter, the Company executed a Letter of
Intent whereby the Company proposed to acquire a 96% interest in Wizzard
Software Corporation, a Delaware corporation ("Wizzard").
For additional information respecting these transactions, reference
is made to the 8-K Current Report of the Company dated May 30, 2000, which has
been previously filed with the Securities and Exchange Commission and is
incorporated herein by reference. See Item 7.
If the Wizzard proposal is not completed, the Board of Directors
will determine which industries or fields of endeavor in which the Company
will focus its efforts in the future and adopt a Business Plan outlining the
steps necessary to engage in these business operations.
Results of Operations.
---------------------
At June 30, 2000, the Company had $25,000 in assets and $0 in
liabilities. The Company had no revenues for the three months ended June
30, 2000 and 1999, with $5,000 and $48 in expenses, for net income and losses
of $202,826 and ($100,811), respectively. The Company had no revenues for the
six months ended June 30, 2000 and 1999, with $5,000 and $48 in expenses, for
net income and losses of $118,006 and ($193,771), respectively.
The Company had a net income of $202,826 primarily from discontinued
operations for the period ended June 30, 2000; and a net loss of ($100,811)
for the period ended June 30, 1999. The Company had a loss from discontinued
operations of ($91,241) in 2000 and ($100,763) in 1999, respectively, with a
gain on discontinued operations in 2000 of 299,067 for a net income of
$118,006 for the six months ended June 30, 2000.
Liquidity.
---------
At June 30, 2000, the Company had $25,000 in current assets, with no
current liabilities of $0. Total stockholder's equity was $25,000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Annual Report for the year ended December 31, 1999.*
(b) Reports on Form 8-K.
8-K Current Report dated May 10, 2000, filed with the
Securities and Exchange Commission on June 21, 2000.
*Incorporated herein by reference.
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.
Date: 11/20/00 By/s/Jeffrey Hardman
-------- ------------------------
Jeffrey Hardman, Director
and President
Date: 11/20/00 By/s/Joel Hardman
-------- ------------------------
Joel Hardman, Director
Secretary
