U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED: MARCH 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _______________.
COMMISSION FILE NUMBER: 0-25609
BABY'S BEST LABORATORIES, INC.
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(Exact name of small business issuer as specified in its charter)
FLORIDA
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(State or other jurisdiction of incorporation or organization)
84-1381946
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(IRS Employer Identification No.)
1600 S. FEDERAL HIGHWAY SUITE 300,
BOCA RATON, FLORIDA 33432
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(Address of principal executive offices)
(561) 361-8020
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(Issuer's Telephone Number)
BABY'S BEST.COM, INC.
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(Former name, former address and former fiscal year,
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 SECURITIES EXCHANGE ACT OF 1934 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 [X] NO [ ].
<PAGE>
BABY'S BEST LABORATORIES, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEET
(UNAUDITED
ASSETS
------
MARCH 31,
2000
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Assets:
Current assets:
Cash $ 69,309
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Property plant & equipment, net 5,259
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Other assets:
Goodwill, net 246,325
Deposits 856
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Total other assets 247,181
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Total assets $ 321,749
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Note payable $ 100,000
Accrued liabilities 7,190
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Total current liabilities 107,190
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Stockholders' equity:
Preferred stock; $0.001 par value; 5,000,000
authorized shares; -0- shares issued and outstanding --
Common stock, $0.001 par value; 100,000,000 authorized
shares; 20,000,000 shares issued and outstanding 20,000
Additional paid-in capital 241,000
Accumulated deficit during development stage (46,441)
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Total stockholders' equity 214,559
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Total liabilities and stockholders' equity $ 321,749
==========
See accompanying notes to condensed financial statements.
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BABY'S BEST LABORATORIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
NOVEMBER 24, 1999
THREE MONTHS (INCEPTION)
ENDED THROUGH
MARCH 31, 2000 MARCH 31, 2000
-------------- --------------
<S> <C> <C>
Revenue $ -- $ --
Selling, general and administrative expenses 45,572 46,441
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Loss from operations (45,572) (46,441)
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Provision (benefit) for income taxes -- --
-------------- --------------
Net loss $ (45,572) $ (46,441)
============== ==============
Net loss per share - basic and diluted $ --
==============
Weighted average number of shares - basic and diluted $ 16,318,681
==============
</TABLE>
See accompanying notes to condensed financial statements.
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BABY'S BEST LABORATORIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
NOVEMBER 24, 1999
THREE MONTHS (INCEPTION)
ENDED THROUGH
MARCH 31, 2000 MARCH 31, 2000
------------ ------------
<S> <C> <C>
Net cash used by operating activities $ (40,382) $ (40,382)
Cash flow from investing activities:
Purchase of property and equipment (2,500) (2,500)
Investment in Mully Corporation (250,000) (250,000)
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Total cash used by investing activities (252,500) (252,500)
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Cash flow from financing activities:
Loans from related parties 112,191 112,191
Issuance of common stock for cash 250,000 250,000
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Total cash provided by financing activities 362,191 362,191
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Net increase in cash 69,309 69,309
Cash at beginning of period -- --
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Cash at end of period $ 69,309 $ 69,309
============ ============
SUPPLEMENTARY INFORMATION:
Non cash transactions affecting investing and
financing activities:
Assets acquired under notes payable $ 3,036 $ 3,036
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
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BABY'S BEST LABORATORIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
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NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of Baby's Best
Laboratories, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the results for the interim periods
presented have been included.
These results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's Annual Financial Statements for the year ended December 31,
1999. Operating results for the three months ended March 31, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000.
It is recommended that the accompanying condensed financial statements be read
in conjunction with the financial statements and notes for the year ended
December 31, 1999 as found in the Company's 8-K/A.
NOTE 2 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK
The Company was incorporated on November 24, 1999 in the state of Florida. The
Company intends to license and market infant formula throughout the United
States and in certain foreign markets. The Company will also develop and market
related products for infants, young adults and senior citizens.
The Company has made no significant product sales to date. Since its inception,
the Company has been dependent upon the receipt of capital investment or other
financing to fund its continuing activities. In addition to the normal risks
associated with a new business venture, there can be no assurance that the
Company's product development will be successfully completed or that it will be
a commercial success. Further, the Company is dependent upon certain related
parties to provide continued funding and capital resources.
The Company merged with Mully Corporation on March 7, 2000 and the new
corporation formed was named Baby's Best.com, Inc. On May 12, 2000,
Baby's Best.com, Inc. changed its name to Baby's Best Laboratories, Inc.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH EQUIVALENTS
The Company considers all highly-liquid debt instruments with original
maturities of three months or less to be cash equivalents. As of March 31, 2000,
the Company has no cash or cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
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BABY'S BEST LABORATORIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
================================================================================
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at March 31, 2000:
Machinery and equipment $ 5,536
Less: accumulated depreciation (277)
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Property and equipment, net $ 5,259
========
Depreciation expense for the period ended March 31, 2000 was $277.
NOTE 5 - ACQUISITION
On March 7, 2000, Mully Corporation ("Mully"), of Nevada, acquired all of the
outstanding common shares (voting and non-voting) of the Company. As
consideration, Mully issued an aggregate of 15,000,000 shares of common stock to
the shareholders of Baby's Best. In addition, Baby's Best paid $250,000 in cash
to the stockholders of Mully. For accounting purposes, the acquisition has been
treated as an acquisition of Mully by the Company and as a recapitalization of
the Company. Goodwill of $250,500 was recorded, and is being amortized over a
period of sixty (60) months. Mully changed its name to "Baby Best.com, Inc." and
reincorporated in Florida. The former principal shareholder of Baby's Best now
has the controlling interest in the surviving company.
NOTE 6 - NOTE PAYABLE
At March 31, 2000, the Company has a note payable to an individual for $100,000.
The note bears interest at 13.5%. Principal and interest are due on or before
September 1, 2000.
NOTE 7 - CAPITAL STOCK
The Company issued 3,000,000 shares of common stock in March 2000. The net
amount obtained from the issuance was $250,000 (see Note 5).
NOTE 8 - SUBSEQUENT EVENTS
In March 2000, the Company commenced a Regulation D 506 common stock offering at
$2.00 per share, and, as a result of the offering, the Company issued 291,250
shares of common stock for $273,500, net of costs during the second quarter of
2000. The Company is continuing the offering.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
Company's unaudited financial statements and notes thereto included herein. In
connection with, and because it desires to take advantage of, the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
cautions readers regarding certain forward looking statements in the following
discussion and elsewhere in this report and in any other statement made by, or
on the behalf of the Company, whether or not in future filings with the
Securities and Exchange Commission. Forward looking statements are statements
not based on historical information and which relate to future operations,
strategies, financial results or other developments. Forward looking statements
are necessarily based upon estimates and assumptions that are inherently subject
to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the Company's control and many of which,
with respect to future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could cause actual
results to differ materially from those expressed in any forward looking
statements made by, or on behalf of, the Company. The Company disclaims any
obligation to update forward looking statements.
OVERVIEW
Baby's Best intends to offer numerous baby products, including Baby's Best
Premium, a unique infant formula, which Baby's Best believes to be a far more
easily digested product and which provides more nourishment per feeding than the
two leading infant formulas, Similac and Enfamil, with better taste. Baby's Best
Premium is expected to be the first infant formula approved for sale in the U.S.
in over 20 years. Baby's Best has completed its comparison tests while working
with the U.S. Food and Drug Administration ("FDA"). Documentation seeking
approval to conduct clinical trials have been submitted to the FDA and are ready
to be approved.
The Company has developed an entire family of products including Baby's Best
Premium, Baby's Best Soyalike, Soy based protein, Baby's Best 11 designed for
export which contains a higher level of protein than is required in the United
States, Personal Choice supplemental food product for teens to the elderly, and
full fat and non fat whey based milk products. These products may be sold under
the Baby's Best brand name but may also be manufactured using store brands or
private labels for certain merchants.
Other products expected to be available in near future, include Bib'ems
disposable bibs, Pad'ems disposable changing pads, and Burp'ems disposable
burping pads.
The Company completed its comparison tests while working with the FDA and the
local Institutional Review Board ("IRB") enabling the Company to submit
protocols and seek approval to conduct clinical trials. Clinical trials are
expected to be completed in late 2000 and regulatory approval received by the
end of 2000.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2000
Baby's Best is in the development stage and did not realize any revenues for the
three months ended March 31, 2000. All of its efforts were focused on completing
development of its core products. General and administrative expenses were
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<PAGE>
$45,572 for the three months ended March 31, 2000. All of such amount was for
salaries and other general expenses.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, Baby's Best had $69,309 of cash and current liabilities of
$107,190, of which $100,000 was a loan from a shareholder. Management estimated
that the Company would require approximately $500,000 to $1,000,000 to complete
product development and clinical trials prior to an anticipated product launch
by the end of 2000. In March 2000, the Company commenced a private placement of
its common stock for $2.00 per share and through June 30, 2000 had raised
approximately $522,000 in cash from the private placement.
The Company was also seeking additional sources of funds, including strategic
partners. If regulatory approval is received in 2000, the Company may be
required to seek funding to manufacture initial product inventory.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS None
ITEM 2. CHANGES IN SECURITIES None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
March 21, 2000 reporting reverse merger with Mully Corp.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BABY'S BEST LABORATORIES, INC.
Dated: September 12, 2000
By: /s/ PATRICIA BISHOP
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Patricia Bishop, President
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