SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1999
Commission File Number 000-26973
WHOLE LIVING, INC.
--------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 87-0621709
------ ----------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
1185 South Mike Jense Circle, Provo, Utah 84601
------------------------------------------------
(Address of principal executive offices) (Zip Code)
(801) 342-3300
--------------
(Issuer's telephone number including area code)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) Yes X No , and (2) has been
subject to such filing requirements for the past 90 days. Yes No X
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of June 30, 1999, the Issuer had issued and outstanding an aggregate
of 10,299,000 common voting shares, par value $0.001
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
The unaudited financial statements of Whole Living, Inc. (the "Company")
for the quarter ended June 30, 1999 as follows:
Whole Living, Inc.
Financial Statements
June 30, 1999 (unaudited)
and
December 31, 1998
<PAGE>
C O N T E N T S
Accountants' Report ..................................... 3
Balance Sheets ...........................................4
Statements of Operations .................................6
Statements of Stockholders' Equity....................... 7
Statements of Cash Flows .................................8
Notes to the Financial Statements ....................... 9
<PAGE>
<Letterhead of
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1120
Salt Lake City, Utah 84101
office (801) 363-1175
Fax: (801) 363-0615>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Whole Living, Inc.
We have audited the accompanying balance sheet of Whole Living, Inc. as of
December 31, 1998 and the related statements of operations, stockholders'
equity and cash flows from inception on November 25, 1998 through December 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Whole Living, Inc. as of
December 31, 1998 and the results of its operations and cash flows from
inception on November 25, 1998 through December 31, 1998 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5, the
Company's short operating history and operating losses raise substantial doubt
about its ability to continue as a going concern. Management's plans in those
matters are also described in Note 5. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
February 23, 1999
-3-
<PAGE>
Whole Living, Inc.
Balance Sheet
ASSETS
-------
June 30 December 31
1999 1998
-------------- ---------------
CURRENT ASSETS (unaudited)
Cash (Note 1) $ 44,905 $ 68,205
Accounts receivable 56,038 1,044
Inventory (Note 1) 209,337 93,995
Prepaid expenses 85,954 -
-------------- ---------------
Total Current Assets 396,234 163,244
-------------- ---------------
PROPERTY & EQUIPMENT (Note 2) 260,423 167,322
-------------- ---------------
OTHER ASSETS
Goodwill (Note 1) 60,062 43,295
-------------- ---------------
TOTAL ASSETS $ 716,719 $ 373,861
============== ===============
The accompanying notes are an integral part of these financial statements.
<PAGE> -4-
Whole Living, Inc.
Balance Sheet continued
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
June 30 December 31
1999 1998
-------------- ---------------
CURRENT LIABILITIES (unaudited)
Accounts payable $ 89,956 $ 36,790
Accrued expenses 153,140 55,954
Current portion of long-term
liabilities (Note 3) 448,304 127,657
-------------- ---------------
Total Current Liabilities 691,400 220,401
-------------- ---------------
LONG TERM LIABILITIES (Note 3)
Notes payable-related party 390,000 50,000
Notes payable 47,051 70,872
Capital lease obligations 11,253 14,502
Less current portion (448,304) (127,657)
-------------- ---------------
Total long term Liabilities - 7,717
-------------- ---------------
TOTAL LIABILITIES 691,400 228,118
-------------- ---------------
STOCKHOLDERS' EQUITY
Common stock, authorized 50,000,000
shares $.001 par value, issued and
outstanding 10,299,000 and 11,100
shares, respectively 10,299 11
Additional paid in capital 990,700 200,989
Retained earnings (975,680) (55,257)
-------------- ---------------
Total Stockholders' Equity 25,319 145,743
-------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 716,719 $ 373,861
============== ===============
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
Whole Living, Inc.
Statement of Operations
From inception
on November
For the Six 25, 1998
Months Ended through
June 30 December 31,
1999 1998
-------------- ---------------
(unaudited)
REVENUES $ 1,033,498 $ 163,074
COST OF SALES 288,321 65,407
-------------- ---------------
GROSS PROFIT 745,177 97,667
-------------- ---------------
SELLING EXPENSES 675,477 54,755
RESEARCH & DEVELOPMENT 1,047 10,040
GENERAL & ADMINISTRATIVE EXPENSES 982,777 87,902
-------------- ---------------
TOTAL OPERATING EXPENSES 1,659,301 152,697
-------------- ---------------
OPERATING LOSS (914,124) (55,030)
-------------- ---------------
OTHER INCOME AND (EXPENSES)
Interest expense (1,109) (227)
Interest income 900 -
Loss on sale of asset (6,090) -
-------------- ---------------
Total Other Income and (Expenses) (6,299) (227)
-------------- ---------------
LOSS BEFORE INCOME TAXES (920,423) (55,257)
PROVISION FOR INCOME TAXES (Note 1) - -
-------------- ---------------
NET LOSS $ (920,423) $ (55,257)
============== ===============
NET LOSS PER SHARE $ (0.27) $ (4.98)
============== ===============
WEIGHTED AVERAGE OUTSTANDING SHARES 3,440,733 11,100
============== ===============
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
Whole Living, Inc.
Statement of Stockholders' Equity
From Inception on November 25, 1998 through December 31, 1998,
and June 30,1999 (unaudited)
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid in Earnings
Shares Amount Capital (Deficit)
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Beginning Balance November 25, 1998 - $ - $ - $ -
November 1998-Shares issued to
organizers for services 9,400 9 991 -
December 1998-Shares issued for cash 1,700 2 199,998 -
Net (Loss) from inception on
November 25, 1998 through
December 31, 1998 - - - (55,257)
------------- ------------ ------------ -------------
Balance on December 31, 1998 11,100 11 200,989 (55,257)
Reorganization adjustment 10,287,900 10,288 789,711 -
Net (Loss) for the three months
ended June 30,1999 - - - (920,423)
------------- ------------ ------------ -------------
Balance on June 30, 1999 10,299,000 $ 10,299 $ 990,700 $ (975,680)
============= ============ ============ =============
The accompanying notes are an integral part of these financial statements.
-7-
</TABLE>
<PAGE>
Whole Living, Inc.
Statement of Cash Flows
From inception
For the Six on November
Months 25, 1998
Ended through
June 30 December 31
1999 1998
-------------- ----------------
Cash Flows From Operating Activities (unaudited)
Net income (loss) $ (920,423) $ (55,257)
Non-cash items:
Depreciation & amortization 24,325 2,581
Stock issued for services - 1,000
(Increase)/decrease in current assets:
Accounts receivable (54,994) (1,044)
Inventory (115,342) (93,995)
Prepaid expenses (85,954) -
Increase/(decrease) in current liabilities:
Accounts payable 53,166 36,790
Accrued expenses 97,186 55,954
-------------- ----------------
Net Cash Provided (Used) by
Operating Activities (1,002,036) (53,971)
-------------- ----------------
Cash Flows from Investing Activities
Cash paid for Property and Equipment (117,427) (71,510)
Cash paid for Goodwill (16,767) (43,295)
-------------- ----------------
Net Cash Provided (Used) by
Investing Activities (134,194) (114,805)
-------------- ----------------
Cash Flows from Financing Activities
Cash received from stock issuance 800,000 200,000
Cash received from debt financing 340,000 50,000
Principal payments on long-term debt (27,070) (13,019)
-------------- ----------------
Net Cash Provided (Used) by
Financing Activities 1,112,930 236,981
-------------- ----------------
Increase/(decrease) in Cash (23,300) 68,205
Cash and Cash Equivalents at
Beginning of Period 68,205 -
-------------- ----------------
Cash and Cash Equivalents at
End of Period $ 44,905 $ 68,205
============== ================
Supplemental Cash Flow Information:
Cash paid for interest $ - $ -
Cash paid for income taxes $ - $ -
Non-cash financing transaction:
Purchase of equipment with lease
obligations and notes $ - $ 101,393
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
Whole Living Inc.
Note to the Financial Statements
December 31, 1998
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
Whole Living, Inc. (the Company) was incorporated on November 25,
1998 in the state of Utah. On November 30, 1998, the Company acquired the
assets, leases, product line and name of Brain Garden, L.L.C., a Utah limited
liability company engaged in the marketing and distribution of various natural
food products, oils and bath salts. The Company does business under the name
of Brain Garden, and maintains its headquarters in Provo, Utah.
b. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on
the weighted average number of shares outstanding at the date of the financial
statements.
d. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
loss carryforwards totaling approximately $55,000 that will be offset against
future taxable income. Since the Company has yet to prove they can generate
taxable income, a valuation account has been created to eliminate the deferred
tax asset.
Deferred tax assets and the valuation account is as follows at
December 31, 1998:
December 31,
1998
-----------
Deferred tax asset:
NOL carryforward $ 18,700
Valuation allowance (18,700)
------------
Total $ -
------------
e. Cash and Cash Equivalents
The company considers all highly liquid investments with maturities
of three months or less to be cash equivalents.
-9-
<PAGE>
Whole Living Inc.
Note to the Financial Statements
December 31, 1998
NOTE 1 - Summary of Significant Accounting Policies (Continued)
f. Property and Equipment
Expenditures for property and equipment and for renewals and
betterments, which extend the originally estimated economic life of assets or
convert the assets to a new use, are capitalized at cost. Expenditures for
maintenance, repairs and other renewals of items are charged to expense. When
items are disposed of, the cost and accumulated depreciation are eliminated
from the accounts, and any gain or loss is included in the results of
operations.
The provision for depreciation is calculated using the straight-line
method over the estimated useful lives of the assets. Depreciation expense
for the period ended December 31,1998 is $2,581.
g. Inventory
Inventory is recorded at the lower of cost or market and consists
primarily of consumable food products and ingredients.
h. Fair Value of Financial Instruments
Unless other indicated, the fair values of all reported assets and
liabilities which represent financial instruments (none of which are held for
trading purposes) approximate the carrying values of such amounts.
i. Goodwill
The Company recorded goodwill in the acquisition of the assets of
Brain Garden, LLC, due to the excess cost paid over the estimated value of
assets acquired. Goodwill is being amortized over 5 years on a straight-line
method, to begin in 1999.
j. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make assumptions that
affect the amounts reported in the financial statements and accompanying
notes. In these financial statements, assets, liabilities and earnings
involve extensive reliance on managements estimates. Actual results could
differ from those estimates.
-10-
<PAGE>
Whole Living Inc.
Note to the Financial Statements
December 31, 1998
NOTE 2 - Property & Equipment
Property and equipment consists of the following at December 31, 1998:
December 31,
1998
--------------
Office equipment & furnishings $ 33,682
Office furniture & fixtures 34,829
Software 86,379
Leased equipment 15,014
--------------
169,904
Less:
Accumulated depreciation (2,332)
Accumulated depreciation - leased equipment (250)
---------------
Total Property & Equipment $ 167,322
===============
NOTE 3 - Long-Term Liabilities
Long Term Liabilities are detailed in the following schedules as of
December 31, 1998:
Notes payable related party is detailed as follows: December 31
1998
-------------
Note payable to a shareholder of the Company,
non-interest bearing, due upon demand and
unsecured $ 50,000
-------------
Total notes payable - related party 50,000
-------------
Notes Payable are detailed as follows:
Note payable to a corporation, non-interest
bearing, due within 60 days of delivery of
software, unsecured $ 70,872
-------------
-11-
<PAGE>
Whole Living Inc.
Note to the Financial Statements
December 31, 1998
NOTE 3 - Long-Term Liabilities (continued)
Capital lease obligations are detailed in the following schedule as of
December 31, 1998:
December 31,
1998
--------------
Capital lease obligation to a corporation
for computer equipment, lease payments due
monthly of $435 through February 2000,
bears interest at 18%, secured by computer
equipment. $ 5,401
Capital lease obligation to a corporation
for computer equipment, lease payments
due monthly of $304 through April 2002,
bears interest at 18%, secured by equipment. 9,101
-------------
Total Lease Obligations 14,502
-------------
Total long term liabilities 135,374
Less current portion of:
Notes payable - related party 50,000
Notes payable 70,872
Capital lease obligations 6,785
-------------
Total current portion 127,657
-------------
Net Long Term Liabilities $ 7,717
=============
Future minimum principal payments on notes payable and notes
payable-related party are as follows:
1999 $ 120,872
-------------
Total notes payable and notes payable-related party $ 120,872
-------------
Future minimum lease payments are as follows at December 31, 1998:
1999 8,871
2000 4,471
2001 3,651
2002 1,217
-------------
18,210
Less portion representing interest (3,708)
-------------
Total $ 14,502
-------------
-12-
<PAGE>
Whole Living Inc.
Note to the Financial Statements
December 31, 1998
NOTE 4 - Commitments and Contingencies
The Company is committed for their office facilities. Monthly
lease payments are due of $4,886 on a month to month basis. Subsequent to the
audit, the Company moved their facilities to Provo, Utah.
The Company sales and distributes its products through independent
distributors. The Company is committed to a guaranteed monthly distributors
bonus of $5,000 to one of its distributors. The agreement has no termination
date.
NOTE 5 - Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has a short
operating history and net operating losses since inception and is dependent
upon financing to continue operations. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty. It is management's plan to raise additional funds through a
merger with a public company and market it's products aggressively.
NOTE 6 - Related Party Transactions
Mark Comer, a shareholder of the Company, advanced $50,000 to the
Company for operating capital. The entire amount is payable at December 31,
1998 and is due upon demand.
NOTE 7 - Subsequent Events
Subsequent to the audit date, the Company received $650,000 in
advances from Whole Living, Inc., a Nevada public corporation in anticipation
of a merger to be completed by June 30, 1999.
NOTE 8 - Unaudited Information
Whole Living, Inc. (the Company) has elected to omit substantially
all footnotes to the financial statements for the six months ended June 30,
1999. The information furnished herein was taken from the books and records
of the Company without audit. However, such information reflects all
adjustments which are, in the opinion of management, necessary to properly
reflect the results of the six months ended June 30, 1999. The information
presented is not necessarily indicative of the results from operations
expected for the full fiscal year.
-13-
<PAGE>
Whole Living Inc.
Note to the Financial Statements
December 31, 1998
NOTE 9 - Principles of Consolidation
The June 30, 1999 unaudited financial statements include the books
of Whole Living, Inc. (Nevada) and its wholly owned subsidiary Whole Living,
Inc. (Utah). All intercompany transactions and balances have been eliminated
in the consolidation.
NOTE 10 - Reverse Acquisition
Effective March 24, 1999 the Company entered into an agreement
to merge with Whole Living, Inc. a Nevada Corporation (WLN). Pursuant to the
merger, WLN issued 6,000,000 shares of common stock to the shareholders of the
Company for all outstanding stock of the Company. The merger was recorded as
a reverse merger, with Whole Living, Inc. (Utah) being the accounting
survivor. A reverse merger adjustment was made to the books of the Company to
reflect the change in capital to that of WLN.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
The following Management's Discussion and Analysis contains forward-
looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward- looking
statements as a result of a number of factors discussed below.
Overview. We are a network marketing company involved in the distribution
and sale of proprietary whole food, personal care and educational products.
Our revenue is primarily dependent upon the efforts of a network of
independent distributors who purchase products and sales materials from us for
personal use or for resale to customers or sponsored distributors. We realize
revenue when products are shipped and title passes to our customers or our
independent distributors. Revenue is net of returns, which have historically
been less than 1% of gross sales. Distributor commissions are paid to several
levels of distributors on each product sale. The amount and recipient of the
commission varies depending on the purchaser's position within the Unigen
Plan. (See "Business - Distribution Network," above.) These incentives are
classified as operating expenses.
Costs of sales primarily consist of the cost of the products purchased
from third-party vendors and distributor commissions. Distributor commissions
are paid to distributors on a monthly basis based upon their personal and
group sales volume. The overall payout average has been approximately 35% of
product sales. Also, distributor commissions include the cost of computing
and paying commissions as well as the cost of various incentive programs for
distributors which may include the cost of trips to our conventions and other
incentives paid to distributors for achieving certain sales goals.
Reverse Merger Treatment
In May of 1999 we merged with a Utah corporation, Whole Living, Inc.,
doing business as Brain Garden (the "Brain Garden"). Whole Living, the Nevada
corporation, was the surviving entity in that transaction. At the time of the
merger, Brain Garden owned a significant portion of the products we currently
sell. Accordingly, in conformance with generally accepted accounting
principles, the merger has been accounted for as a "reverse merger" and the
accounting survivor is Brain Garden. We will use Brain Garden's fiscal year
of December 31 rather than March 31. The following discussions will be based
upon the audited financials for Whole Living for the fiscal years ended March
31, 1999 and 1998. The discussions regarding the six month interim period
ended June 30, 1999 will be based upon the unaudited financials which reflect
the operations of the merged corporations.
Liquidity and Capital Resources
We have funded our cash requirements primarily through sales of our
common stock and debt. As of the fiscal year ended March 31, 1999 we had
$150,000 in cash and total assets of $800,000 with no liabilities. During the
interim period ended June 30, 1999, we posted cash amounts of $44,905 and
total current assets of $396,234, with current liabilities of $691,400,
resulting in a negative net worth of $295,166. Our operating loss for that
period was $914,124 and was funded primarily by an advance of $650,000 to
Brain Garden by Whole Living and a loan of $340,000. (See, "Certain
Relationships and Related Transactions.") We currently do not have any
material capital commitments.
Results of Operations. The following table summarizes the results of
operations for the years ended December 31, 1997 and 1998 and for the interim
period ended June 30, 1999 and 1998.
<TABLE>
Interim Interim
Year ended Year ended Period Ended Period Ended
December 31, December 31, June 30, June 30,
1997 1998 1998 1999
------------ ------------ ------------ ------------
<C> <S> <S> <S> <S>
Revenues 0 163,074 163,074 1,033,498
General &
Administrative 0 87,902 87,902 982,777
Total
Operating
Expense 0 152,697 152,697 1,659,301
Operating
Income (Loss) 0 (55,030) (55,030) (914,124)
Other Income
Net Profit (loss) 0 (227) (227) (6,299)
</TABLE>
We believe we have sufficient resources to continue our operations,
product development, and sales and marketing development for the next twelve
months. We expect to fund growth from internal cash flows if growth remains
relatively moderate (20% to 50% per month). However, if we experience growth
rates in excess of 50% per month, we will need to seek additional external
financing. We might also require external financing to fund the development
of Whole Learning programs if market research shows strong demand for the
proposed products.
Internal cash flows will be dependent on a number of factors: 1) our
ability to develop successful new product lines; 2) our ability to encourage
our distributors to sponsor new distributors and increase their own personal
sales; 3) regulatory changes; and 4) our ability to remain competitive in our
markets. Actual costs and revenues could vary from the amounts we expect or
budget, possibly materially, and those variations are likely to affect how
much additional financing we will need for our operations.
If additional funds are needed, we can not assure that funds will be
available from any source, or, if available, that we will be able to obtain
the funds on terms agreeable to us. We have not investigated the
availability, source or terms for additional financing. If we raise funds
through the sale of our common stock, our then current shareholders may
experience dilution in the value per share of their common stock. Also, the
acquisition of funding through the issuance of debt could result in a
substantial portion of our cash flows from operations being dedicated to the
payment of principal and interest on the indebtedness, and could render us
more vulnerable to competitive and economic downturns.
Results of Operations
Prior to our merger with Brain Garden, we did not generate any revenues
during the fiscal years 1998 and 1999. Brain Garden was incorporated in
November of 1998 and thus has a short history of operations prior to the
merger. Accordingly, we are unable to present a meaningful comparative
analysis of our operations from year to year or quarter to quarter. Since
Brain Garden is the accounting survivor, we will present a comparison of the
operations of Brain Garden for the fiscal year ended December 31, 1998 and our
interim six month period ended June 30, 1999.
We posted a net loss of $920,423 for the interim period, compared to a
net loss of $55,257 at the end of the fiscal year. Our revenues during the
interim period were $1,033,498 compared to $163,074 at year's end. Our gross
profit for the interim period was $745,177, compared to the year end amount of
$97,667. Our operating expenses totaled $1,659,301 for the interim period as
compared to $152,697 at year's end. The increase is operating expenses is a
result of general administrative costs which jumped from $87,902 to $982,777,
and selling expenses which increased from $54,755 to $675,477. The increase
in operating expenses is due primarily to: 1) expenditures to create and
support the infrastructure and systems to support expected revenue levels; 2)
costs to develop the distributor network, and 3) product and sales and
marketing program development.
We anticipate our operating losses to continue until we develop a larger
distributor network, produce new marketing and sales materials and develop new
product lines. However, we also expect our revenues to increase as a result
of our efforts to build a larger distributor network and expand our product
lines. This rise in revenues will likely be offset by increased operating
expenses due to additional burdens on our managerial, accounting, and support
personnel. Also, by becoming a fully reporting company we will add additional
expenses to our operations, including the expense of filing this registration
statement, preparing annual reports and preparation and filing of Form 10K's
and 10Q's.
Seasonal Aspects
In the direct selling industry, the summer months of June, July and
August, and the holiday months of November and December are relatively soft.
However, in the past we have not experienced a decrease in sales during these
time periods and are unsure how the industry-wide fluctuations will affect our
business in the future.
Year 2000 Compliance. The Company has completed a review of its computer
systems and operations to determine the extent to which its business will be
vulnerable to potential errors and failures as a result of the "year 2000"
problem. The Company has concluded, based on the review of its operations and
computer systems, that its significant computer programs and operations will
not be materially affected by the Year 2000 problem, and that it can modify or
replace the programs that will be affected by the end of 1999 at a cost which
will not be significant. Under a reasonably likely worst case scenario,
however, the Company's computer systems and/or operations could be materially
affected by the Year 2000 problem.
PART II. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
On July 26, 1999, Sharon Baez, an individual, filed a complaint in the
Fourth District Court, Provo Department, State of Utah, naming Don V. Tolman,
individually and as agent for The Brain Garden, LLC, and Whole Living, Inc.
dba Brain Garden, a Nevada Corporation, as defendants. Ms. Baez alleges
breach of contract and unjust enrichment by the defendants. The complaint
claims that Mr. Tolman, as CEO and President of Brain Garden, LLC. entered
into an agreement with Ms. Baez on September 22, 1998. Per the agreement, Ms.
Baez loaned $121,264.34 to Mr. Tolman and he agreed to repay the principal
amount, with 10% interest, with monthly payments. Ms. Baez claims Mr. Tolman
failed to complete the repayment schedule. In addition, the complaint alleges
that Whole Living, Inc. contacted persons who had loaned money to Mr. Tolman
and had offered to refund their money. Ms. Baez claims she did not receive
such an offer. Ms. Baez seeks $113,966.81, pre-judgment interest of 10% per
annum and post-judgment interest at the maximum legal rate until all amounts
due and owing are paid in full. We disclaim any liability and have referred
this matter to our legal counsel.
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
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are attached hereto and incorporated herewith.
Exhibit # Description
- --------- -----------
27 Financial Data Schedule
No Reports on 8-K were filed during the quarter ended June 30, 1999.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report be signed on its behalf by the undersigned, thereunto duly
authorized.
DATED this 16th day of August 1999.
WHOLE LIVING, INC.
/s/ Ron Williams
By:_________________
Ron Williams, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 44,905
<SECURITIES> 0
<RECEIVABLES> 56,038
<ALLOWANCES> 0
<INVENTORY> 209,337
<CURRENT-ASSETS> 396,234
<PP&E> 284,022
<DEPRECIATION> (23,599)
<TOTAL-ASSETS> 716,719
<CURRENT-LIABILITIES> 691,400
<BONDS> 0
0
0
<COMMON> 1,000,999
<OTHER-SE> (975,680)
<TOTAL-LIABILITY-AND-EQUITY> 716,719
<SALES> 1,033,498
<TOTAL-REVENUES> 1,033,498
<CGS> 288,321
<TOTAL-COSTS> 1,659,301
<OTHER-EXPENSES> 5,190
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,109
<INCOME-PRETAX> (920,423)
<INCOME-TAX> 0
<INCOME-CONTINUING> (920,423)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (920,423)
<EPS-BASIC> (.27)
<EPS-DILUTED> (.27)
</TABLE>
