UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1998
OR
[ ] 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 0-11718
Stevia Company, Inc.
- ----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-2967419
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1940 East Devon Avenue, Elk Grove Village, Illinois 60007
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 593-0226
Indicate by check mark whether the registrant (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), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
Number of shares outstanding of common stock as of the close of the period
covered by this report: 32,195,300
Page 1 of 20 pages contained in the sequential numbering system.
<PAGE>
STEVIA COMPANY, INC.
PART 1 - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Board of Directors and Shareholders
Stevia Company, Inc.
Elk Grove Village, Illinois
The accompanying balance sheet of STEVIA COMPANY, INC. at October 31,
1998 and the related statements of operations, shareholders' equity and cash
flow for the three and six month periods ended October 31, 1998 and 1997 were
not audited; however, the financial statements for the three and six month
periods ending October 31, 1998 and 1997 reflect all adjustments (consisting
only of normal reoccurring adjustments) which are, in the opinion of
management, necessary to provide a fair statement of the results of operations
for the interim period presented.
The financial statements for the year ended April 30, 1998 were not
audited pursuant to Rule 210.3-11 promulgated under Securities and Exchange
Act of 1934; however, the financial statements for the fiscal year ending
April 30, 1998 reflect all adjustments (consisting only of normal reoccurring
adjustments) which are, in the opinion of management, necessary to provide a
fair statement of the results of operations for the fiscal year presented.
STEVIA COMPANY, INC.
December 10, 1998
<PAGE>
<TABLE>
STEVIA COMPANY, INC.
BALANCE SHEET
ASSETS
<CAPTION>
October 31, 1998 April 30, 1998
Unaudited Unaudited
<S> <C> <C>
CURRENT ASSETS
Cash 3,906 1,873
Accounts Receivables-other 2,315 184
Inventories 6,962 6,962
Prepaid Expenses 2,028 5
Total Current Assets 15,211 9,024
PROPERTY AND EQUIPMENT (Notes 1 and 3)
Land 1,127 1,127
Furniture and Equipment 44,750 44,750
Building 483,200 483,200
Idle Equipment 121,728 121,728
650,805 650,805
Less: Accumulated Depreciation (121,912) (114,242)
528,893 536,563
OTHER ASSETS
Patents, Net of Amortization 10,774 11,554
Investment in Affiliated Company
(Note 4) - -
554,878 557,141
--------------- ----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<C> <S> <S>
CURRENT LIABILITIES
Accounts Payable 36,385 34,292
Short Term Note Payable to
Affiliates (Note 4) 2,200 -
Due to Affiliates (Note 4) 372,215 368,747
Accrued Executive Compensation 124,524 124,524
Deferred Rent 317 315
Accrued Expenses 9,178 3,983
Total Current Liabilities 545,599 531,861
---------------- ----------------
NON-CURRENT LIABILITIES
Tenant Security Deposit 3,245 3,245
COMMITMENTS AND CONTINGENCIES
(Notes 5 and 8) - -
SHAREHOLDERS' EQUITY (Notes
4 and 6)
Common Stock, No Par Value,
100,000,000 Shares
Authorized as of
April 30, 1998 and
October 31, 1998;
Issued 32,195,300
Shares at April 30, 1998
and October 31, 1998 2,088,001 2,088,001
Additional Paid in Capital 100 100
Accumulated Deficit (2,082,067) (2,066,066)
6,034 22,035
554,878 557,141
----------------- ---------------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
STEVIA COMPANY, INC.
STATEMENT OF OPERATIONS
Unaudited
<CAPTION>
Three Months Ended Six Months Ended
October 31, October 31,
1998 1997 1998 1997
<C> <S> <S> <S> <S>
REVENUES
Sales - - - -
COST OF SALES - - - -
Gross Profit (Loss) - - - -
OPERATING EXPENSES
Research and Development 390 390 780 780
General and Administrative 13,760 15,388 29,110 28,567
14,150 15,778 29,890 29,347
Loss From Operations (14,150) (15,778) (29,890) (29,347)
OTHER INCOME AND (EXPENSE)
Rental Income 6,944 6,713 13,889 13,163
Interest Income - 332 - 332
6,944 6,045 13,889 13,495
NET LOSS
(7,206) (8,733) (16,001) ( 15,852)
--------------- ------ --------- ----------
NET LOSS PER COMMON SHARE
(Note 7) (.001) (.001) (.001) (.001)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 32,195,300 32,195,300 32,195,300 32,195,300
--------------- ---------- ---------- ----------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
STEVIA COMPANY, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED OCTOBER 31, 1998
Unaudited
<CAPTION>
Additional
Share- Common Stock Paid-in Total
holders' Shares Amount Capital (Deficit)
Equity
<C> <S> <S> <S> <S> <S>
BALANCE
May 1, 1998 32,195,300 2,088,001 100 (2,066,066) 22,035
NET INCOME
(LOSS) - - - ( 16,001) (16,001)
BALANCE,
October 31,
1998 32,195,300 2,088,001 100 (2,082,067) 6,034
------------ ----------- -------- ---------- -----------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
STEVIA COMPANY, INC.
STATEMENT OF CASH FLOW
Unaudited
<CAPTION>
Six Months Ended October 31,
1998 1997
<C> <S> <S>
OPERATING ACTIVITIES:
Net Loss (16,001) (15,852)
Adjustments to Reconcile Net (Loss)
to Net Cash Used by Operating
Activities:
Depreciation and Amortization 8,450 8,451
Changes in Operating Assets and
Liabilities:
(Increase) Decrease in Accounts
Receivable (2,131) 9,668
(Increase) Decrease in Inventories
and Prepaid Expenses (2,023) ( 487)
Increase (Decrease) in Accounts Payable and
Accrued Expenses 8,070 ( 9,520)
Increase (Decrease) in Due to Affiliates
(Note 4) 3,468 9,618
Net Cash Provided (Used) by Operating
Activities (167) 1,878
INVESTING ACTIVITIES:
Net Cash Provided (Used) by
Investing
Activities - -
FINANCING ACTIVITIES:
Proceeds From (Repayments of)
Short Term Notes (Note 4) 2,200 (7,588)
Net Cash Provided (Used) by Financing
Activities 2,200 (7,588)
Increase (Decrease) in Cash and
Cash
Equivalents 2,033 (5,710)
Cash and Cash Equivalents at
Beginning of Period 1,873 6,574
Cash and Cash Equivalents at End of Period 3,906 864
------------- ---------------
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
STEVIA COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Inventories - Harvested crop inventories are stated at the lower of cost
(determined by actual specific lot production cost) or market. Seed inventory
is valued based upon the year of original harvest and their expected yield of
seedlings capability. The Company wrote-down and disposed of its seed
inventory at April 30, 1998, since it was substantially non-viable.
Components of inventories are as follows:
October 31, 1998 April 30, 1998
Leaves $ 6,962 $ 6,962
$ 6,962 $ 6,962
-------------- ---------------
Research and Development, and Patents - Research and development expenditures,
including depreciation of laboratory equipment, are charged to operations as
capitalized and amortized over seventeen years or life of the patent on the
straight-line method.
Buildings, Property and Equipment - Buildings, property and equipment are
stated at cost. Depreciation and amortization are computed, primarily on the
straight-line and accelerated methods, over the estimated useful lives of the
respective assets. Repairs and maintenance are charged to expenses as
incurred; renewals and betterments which significantly extend the useful
lives of existing property and equipment are capitalized.
Deferred Computer Software Charges - Charges for externally purchased computer
software are shown as deferred charges and are amortized over a 60 month
period from the date put into use.
Statements of Cash Flow - In accordance with Statement of Financial Accounting
Standards No. 95, issued in November, 1987, Statements of Cash Flows are
presented in place of Statement of Changes in Financial Position.
2. Company Organization and Description:
Stevia Company, Inc. was incorporated under the laws of the State of Illinois
on November 22, 1976.
The Company was organized for the primary purpose of developing and
manufacturing natural products, including sweeteners, derived from the Stevia
rebaudina plant. However, the Company has been dormant for several years.
On November 17, 1998, the Company filed a complaint for judicial dissolution
with the State of Illinois Circuit Court for the County of Cook, County
Department, Chancery Division. On December 7, 1998, the court approved the
Motion of the Company to appoint Lauane C. Addis,
<PAGE>
STEVIA COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
Secretary and General Counsel, as a Receiver Pendant Lite. The Court also
approved the sale of the Company's Pueblo, Colorado facility pursuant to the
terms of a contract dated June 1, 1998 between the Company and the current
lessee of the facility. See Footnote 3.
3. Property and Equipment:
In 1986, the Company completed construction of a building for a sweetener
production facility in Pueblo, Colorado on a parcel of land (25 acres)
acquired by the Company. The net price for construction of the building was
$483,200. The Company also purchased certain equipment for its processing
facility. Completion of the processing facility was terminated in 1987 due to
lack of funds. See Footnote 10.
On September 1, 1993, the Company entered into a three-year lease for its
Pueblo, Colorado facility with an unaffiliated third party. The tenant was
granted two one-year options and a first right of refusal to purchase the
Pueblo, Colorado facility in the event the Company sells or otherwise disposes
of the facility. The lease provides for base rent of $19,473 for the first
two years, $20,466 for the third year, $22,394 for the first option year and
$23,264 for the second option year. The lease has been extended pending sale
of the Pueblo, Colorado facility.
The Company has entered into a contract dated June 1, 1998, for the sale of
the Pueblo, Colorado facility to the current lessee for a sales price of
$475,000. All contingencies under the contract have been satisfied. It is
anticipated that this transaction will close, if at all, before January 31,
1999.
4. Related Party Transactions:
The Company was indebted to affiliated companies as follows:
October 31, April 30,
1998 1998
F.K. Suzuki International, Inc. $ 64,045 $70,412
Biosynergy, Inc. $ 308,170 $298,335
Totals $ 372,215 $368,747
------------- ------------
As of October 31, 1998 and April 30, 1998, the Company was indebted to F.K.
Suzuki International, Inc. for the net amounts due as a result of an
irrevocable exclusive license agreement with F.K. International, Inc.
described in Note 8.
The Company shares common offices with Biosynergy, Inc. Each company has
incurred certain shared office expenses which have been allocated to the other
company. The Company has not been able to reimburse Biosynergy, Inc. on a
regular basis which has resulted in a net payables at October 31, 1998 and
April 30, 1998.
<PAGE>
STEVIA COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
August 31, 1998, Biosynergy, Inc. extended a line of credit of $20,000 to the
Company evidenced by a Note payable or before December 31, 1998 with 10%
interest on the unpaid principal balance. Proceeds of this line of credit are
intended to be used by the Company for expenses related to its liquidation and
dissolution. See Footnote 2. The Note is secured by a first mortgage on the
Company's Pueblo, Colorado facility. See Footnote 3. The balance due under
the Note at October 31, 1998 was $2,200.
The Company and its affiliates are related through Common Stock ownership as
follows on October 31, 1998.
S T O C K O F A F F I L I A T E S
F.K. Suzuki
Stevia Biosynergy International Medlab
Stock Owner Company Inc. Inc. Inc.
- ----------------- ---------- ---------- --------------- ---------
Stevia Company, Inc. - 13.8% - -
Biosynergy, Inc. .4% - - -
F.K. Suzuki
International, Inc. 55.8% 18.8% - 100.0%
Medlab, Inc. - - - -
Fred K. Suzuki,
Officer/ - - 35.6% -
Director
Lauane C. Addis, Officer/ .1% .1% 32.7% -
Director
James F. Schembri, .2% 12.9% - -
Director
On July 7, 1983, the Company exchanged 1,058,181 shares of its Common Stock
for 2,000,000 shares of Biosynergy, Inc's (an affiliate) Common Stock. The
Common Stock of the Company had no book value at the time of the exchange;
thus, no dollar value was assigned to the transaction. The Company currently
owns 1,900,000 shares of Biosynergy, Inc. Common Stock. Although Biosynergy,
Inc.'s Common Stock can be traded in the over-the-counter market, there is no
established public trading market for the shares due in limited and sporadic
trades.
5.Lease Commitments:
The Company shares offices in Elk Grove Village, Illinois with Biosynergy,
Inc. The master lease for these offices expires January 31, 2001, and is in
the name of Biosynergy, Inc. The total annual base rent for these premises is
$60,500.00 for year 1, $68,199.96 for years 2 and 3, and $69,300.00 for years
4 and 5. The Company's portion is $9,075.00 for year 1, $10,230.00 for years
2 and 3, and $10,395.00 for years 4 and 5.
<PAGE>
STEVIA COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
6. Common Stock:
Common Stock has been issued as compensation for services rendered by certain
individuals. These transactions were recorded at prices estimated to
approximate the fair value of the stock taking into account restrictions which
attached to certain shares at the time of issuance.
The authorized capital stock of the Company is one hundred million
(100,000,000) shares of no par value Common Stock and one hundred thousand
(100,000) shares of $100 par value Preferred Stock. The preferences,
qualifications, limitations, restrictions and special or relative rights in
respect to the Preferred Stock are to be determined by the Board of Directors
at the time of their issuance, subject to limitations set forth in the
Company's Articles of Incorporation, as amended. As of October 31, 1998, no
shares of Preferred Stock were outstanding.
On November 1, 1989, the Company's Secretary, Lauane C. Addis, and President,
Fred K. Suzuki, agreed to forego their salaries in exchange for an option to
purchase 83,333 shares of the Company's no par value common stock for each
month they forfeited their salary at an option price of $.025 per share.
Accrual of these options was terminated effective April 30, 1991. These
options may be exercised until one year after the respective optionee receives
all deferred compensation due at October 31, 1989, the optionee's salary is
reinstated, or the optionee is no longer employed by the Company, whichever is
later. A total of 2,999,988 shares are subject to the options. These options
provide for adjustments to prevent dilution in the event of capital
reorganizations.
Mr. Suzuki was granted an option to convert all or a portion of his deferred
compensation into shares of the Company's no par value common stock at a
conversion rate of $.025 of deferred compensation per share. Conversion can
only occur in the event the Company has sufficient liquid assets to pay all
employee taxes due upon issuance of the shares. A total of 1,448,917 shares
have been reserved for Mr. Suzuki's option. The option provides for
adjustments to prevent dilution in the event of capital reorganizations.
7. Loss per share:
Net loss per common shares is computed based on the weighted average number
of shares outstanding during the period.
8. Agreements, Licenses and Options:
The Company entered into an irrevocable exclusive license agreement with F.K.
Suzuki International, Inc., parent of the Company, in 1983. For an annual fee
of $75,000, payment of which began in January of 1987, the Company received
certain patent and other rights owned by F.K. Suzuki International, Inc.
Effective May 1, 1988, the license agreement was amended to provide for a
royalty payment of 3% of revenues derived from the licensed technology in lieu
of a set fee. No fees were accrued for the quarter ended October 31, 1998.
<PAGE>
STEVIA COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
9. Income Taxes:
There is no provision for income taxes in the accompanying financial
statements due to the Company's net operating loss position. At April 30,
1998, net operating loss carry forwards are available and expire, if not used,
as follows:
1997 292,440
1998 224,075
1999 167,356
2000 302,320
2001 423,843
2002 389,355
2003 328,016
2004 189,389
2005 133,704
2006 74,264
2007 73,470
2008 49,568
2009 119,410
2010 55,831
2011 33,519
2012 37,407
2013 49,155
$3,062,360
---------------
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes". Due to the historical and continued net
operating losses of the Company, Statement 109 has no material effect, if any,
on the Company's Financial Statements. The Company has elected not to
retroactively adopt the provisions allowed in SFAS NO.109; however, all
provisions of the document have been applied since the beginning of fiscal
year 1994.
10. Management's Plans:
In view of the fact that the Company has incurred losses of $49,155, $37,407,
and $33,519 for the years ended April 30, 1998, 1997, and 1996, respectively,
and the Company has been unable to obtain financing to commence its proposed
operations, management of the Company believes it is in the best interest of
the Company, its creditors and shareholders to liquidate its assets, pay off
its liabilities and dissolve the Company. In this regard, the Company has
entered into an agreement to sell its Pueblo, Colorado facility for $475,000
to the current lessee of the facility. See footnote 3. Furthermore, the
Company has filed a complaint for judicial dissolution. See footnote 2.
11. Unaudited Financial Statements:
The Company's Financial Statements for the fiscal year ending April 30, 1998,
1997 and 1996 have not been audited pursuant to Rule 210.3-11 of Regulation SX
promulgated under the Securities Exchange Act of 1934, which provides that an
inactive entity need not submit audited financial statements with reports
filed pursuant to the Securities Exchange Act of 1934. An inactive entity
<PAGE>
STEVIA COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
is defined as an entity not having gross receipts from all sources and
expenditures for all purposes in excess of $100,000 each, which has not
purchased or sold any of its own stock, granted options therefore, or levied
any assessments against outstanding stock during the applicable fiscal year,
which has had no material change in business, including any material
acquisitions or dispositions of assets, and which is not required to publish
audited financial statements by any exchange or governmental authority having
jurisdiction. In the opinion of management, the Company met the criteria of
an inactive entity for the fiscal year ending April 30, 1998.
12. Forward-Looking Statements.
This report may contain statements which, to the extent they are not
recitations of historical fact, constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve risks and
uncertainties. Actual results may differ materially from such forward-looking
statements for reasons including, but not limited to, changes to and
developments in the legislative and regulatory environments effecting the
Company, the impact of competitive products and services, changes in the real
estate market, changes in the food additive industry caused by various
factors, as well as other factors as set forth in this report. Thus, such
forward-looking statements should not be relied upon to indicate the actual
results which might be obtained by the Company. No representation or warranty
of any kind is given with respect to the accuracy of such forward-looking
information. The forward-looking information has been prepared by the
management of the Company and has not been reviewed or compiled by independent
public accountants.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SALES/REVENUES
The Company had no sales during the quarter ("2nd Quarter") or six month
period ending October 31, 1998. The Company did not produce rebaudioside A or
other products on a commercial basis during the 2nd Quarter, and was not
expected to have sales.
The Company realized rental income of $6,944 during the 2nd Quarter and
$13,859 during the six-month period ending October 31, 1998 from leasing its
Pueblo, Colorado facility to an unrelated third party. On September 1, 1993,
the Company entered into a three-year lease for its Pueblo facility with an
unaffiliated party. The lease provides for two one-year options. The second
of such options was exercised by the tenant. The lease provides for rent of
$23,264 for the second option year. The Company has entered into an agreement
to sell the Pueblo, Colorado facility to the current lessee, and therefore
does not expect any rental revenues after the closing of such transaction. It
is anticipated such transaction will close no later than January 31, 1999.
See "Liquidity and Capital Resources".
COSTS AND EXPENSES
The overall operating expenses of the Company decreased by $1,628 during the
2nd Quarter as compared to the same quarter ending in 1997 and increased by
$543 during the six month period ending October 31, 1998 as compared to the
same period ending in 1997. Most of the current expenses are overhead and
general and administration items required to maintain the Company. It is not
anticipated that the expenses of the Company will materially change until the
Company dissolves or commences operations.
NET LOSS
The Company realized a net loss of $7,206 in the 2nd Quarter as compared to a
net loss of $8,732 in the comparative quarter in 1997. The Company's net loss
of $16,001 during the six month period ending October 31, 1998 was $149 more
than the net loss during the comparative period in 1997. The Company's
continuing losses are due to the lack of operating revenues, which will
continue until such time as the Company dissolves or commences operations.
See "LIQUIDITY AND CAPITAL RESOURCES" below.
As of April 30, 1998, the Company has incurred net operating losses
aggregating $3,062,360. There is no provision for income taxes in the
Financial Statements due to the Company's net operating loss position.
Furthermore, the Tax Reform Act of 1986 will not materially alter the
Company's net operating loss carryforward position, and the net operating loss
carry forwards will be available and expire, if not used, as set forth in
Footnote 9 to the Financial Statements. See "FINANCIAL STATEMENTS."
ASSETS
The assets of the Company have not materially changed. Management of the
Company intends to sell the Pueblo, Colorado facility to satisfy the
liabilities of the Company. See also "LIQUIDITY AND CAPITAL RESOURCES" below.
LIABILITIES
With the exception of an increase in the amount due to affiliated companies
and short term notes due to an affiliate, there has been substantially no
material change in the liabilities of the Company during the 2nd Quarter.
The amounts due to affiliates at October 31, 1998 include $64,045 payable to
F.K. Suzuki International, Inc. ("FKSI") and $308,170 payable to Biosynergy,
Inc. ("Biosynergy"). The amount due to FKSI represents amounts payable under
an irrevocable exclusive licensing agreement with FKSI for the license of
certain technology, including the rebaudioside A patent and Stevia leaf
technology. The Company was originally obligated to pay $75,000 per year to
FKSI in exchange for his license. Effective May 1, 1998, this agreement was
amended to provide that the Company
will pay royalties in the amount of 3% of revenues derived from the licensed
technology in lieu of the fee of $75,000 per calendar year. See "Footnote 8
to the Financial Statements."
The Company and Biosynergy share office space, and as a result, share certain
expenses. Both companies account to each other on an on-going, basis for
these shared expenses. The resulting payable as of October 31, 1998 was
$308,170, as compared to a payable of $298,335 at April 30, 1998. The amounts
due to Biosynergy reflect on-going transactions in the ordinary course of
business and do not represent any extraordinary transactions. Management of
the Company believes it has been more economical to share these expenses with
Biosynergy.
On August 31, 1998, Biosynergy extended a $20,000 line of credit to the Company
to fund the expenses of dissolving the Company. The line of credit is
evidenced by a Note bearing interest at 10% on the unpaid balance. The Note
is secured by a first mortgage or the Company's Pueblo, Colorado facility.
The balance of the Note at October 31, 1998 was $2,200.
ASSETS/LIABILITY RATIO
The ratio of current assets to current liabilities (.03 to 1) is not
acceptable taking into consideration the Company's cash flow position. The
Company is not engaged in commercial operations and therefore has no operating
revenue. The Company intends to liquidate its assets to pay creditors. See
"LIQUIDITY AND CAPITAL RESOURCES" below.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net working capital decreased by $7,551 during the six month
period ending October 31, 1998. The Company's negative net working capital is
due to the continuing losses of the Company. The Company had $3,906 in cash
at October 31, 1998. Management of the Company believes this amount is
insufficient to provide working capital for the ensuing quarter. The Company
does not have, nor does it anticipate obtaining in the near future, a working
line of credit. The Company has a line of credit extended by Biosynergy for
the purposes of funding the Company's dissolution expenses. See "LIABILITIES"
above.
The Company has been leasing its Pueblo, Colorado facility to an unaffiliated
third party for over five years. The lease provided for base rent of $19,473
for the first two years, $20,466 for the third year, $22,394 for the first
option year and $23,264 for the second option year. The lease has been
extended pending the sale of the Pueblo, Colorado facility. The proceeds from
leasing such facility have been used primarily to offset expenses of the
Company. However, the cash flow from leasing the facility in Pueblo does not
cover all of the expenses of the Company, and furthermore, there is no assurance
the Company will be able to continue leasing its facility or lease the
facility at a profit.
The Company owns 1,900,000 shares of Biosynergy common stock. Such common
stock can be traded in the over-the-counter market and stock prices are
recorded on "pink sheets." The bid price at October 31, 1998 was estimated to
be $.01 per share. Although the Company is free to currently sell these
shares of Biosynergy common stock, it does not have plans to do so in the near
future. See Footnote 4 of the "FINANCIAL STATEMENTS."
The Company's continuing inability to obtain financing or alternative
operations has made it practically impossible to continue with the Company's
proposed business plan for the benefit of its shareholders. The Company
therefore intends to liquidate its assets, satisfy its creditors, if possible,
and dissolve the Company. The Company has filed a Complaint for Judicial
Dissolution to accomplish this goal. See Footnote 2 of the "FINANCIAL
STATEMENTS." The Court has appointed Lauane C. Addis, Secretary and General
Counsel of the Company, as a Receiver Pendant Lite and approved the Company's
Motion to sell the Company's processing facility pursuant to the June 1, 1998
contract with the current lessee of the facility. It is anticipated the
closing of the transaction will occur before January 31, 1998. See Footnote 3
of the "FINANCIAL STATEMENTS."
<PAGE>
STEVIA COMPANY, INC.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
A. The following Exhibits are included herein pursuant to Section 601:
(3) (a) Articles of Incorporation (i)
(b) By-Laws (ii)
(10) Material Contracts.
(a) Lease Agreement, dated September 1, 1993, between the Company
and Pacific Aero Manufacturing, Inc. (iii)
(b) Commercial Contract to Buy and Sell Real Estate dated June 1,
1998, between the Company and Pacific Aero Manufacturing, Inc. (iv)
(c) Letter dated August 17, 1998, amending the Commercial Contract
to Buy and Sell Real Estate dated June 1, 1998. (v)
(d) Court Order approving Lauane C. Addis as Receiver Pendant Lite
and authorizing sale of the Company's Pueblo, Colorado facility. (vi)
(11) Statement regarding computation of per share earnings -none.
(15) Letter dated December 10, 1998, regarding interim financial
information. (vii)
(18) Letter regarding change in accounting principals - none.
(19) Reports furnished to security holders - none.
(22) Published report regarding matters submitted to vote of security
holders - none.
(23) Consents of experts and counsel - none.
(24) Power of Attorney - none.
(27) Financial Data Schedule. P. E-1
B. No Current Reports on Form 8K were filed during the period covered by
this Report.
- -----------------------
[FN]
(i)Incorporated by reference to a Registration Statement filed on Form S-18
with the Securities and Exchange Commission, 1933 Act, Registration Number
2-87364C, under the Securities Act of 1933, as amended, and incorporated by
reference, to the extent of Articles of Amendment, to Form 10K for Fiscal Year
Ending April 30, 1986 filed with the Securities and Exchange Commission.
(ii) Incorporated by reference to Form 10K for Fiscal Year Ending April 30,
1987 filed with the Securities and Exchange Commission.
(iii)Incorporated by reference to Form 10K for Fiscal Year ending April 30,
1994 filed with the Securities and Exchange Commission.
(iv) Incorporated by reference to Form 10K for Fiscal Year ending April 30,
1991 filed with the Securities and Exchange Commission.
(v)Incorporated by reference to Form 10Q for the quarter ending July 31, 1998
filed with the Securities and Exchange Commission.
(vi)Incorporated by reference to Form 8K for the period ending December 8, 1998
filed with Securities and Exchange Commission.
(vii)This Exhibit is included in this report as a part of the Financial
Statements, and is incorporated by reference herein
<PAGE>
STEVIA COMPANY, INC.
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.
STEVIA COMPANY, INC.
Date December 10, 1998 /s/ FRED K. SUZUKI/s/
---------------------------------
Fred K. Suzuki
President, Chairman of the Board,
Chief Accounting Officer and
Treasurer
Date December 10, 1998 /s/ LAUANE C. ADDIS /s/
--------------------------------
Lauane C. Addis
Secretary, Corporate Counsel and
Director
<PAGE>
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.
STEVIA COMPANY, INC.
Date December 10, 1998
Fred K. Suzuki
---------------------------------------
President, Chairman of the Board,
Chief Accounting Officer and Treasurer
Date December 10, 1998
Lauane C. Addis
--------------------------------------
Secretary, Corporate Counsel and
Director
<PAGE>
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of
THE SECURITIES AND EXCHANGE ACT OF 1934
For the period ending October 31, 1998
Commission File Number: 0-11718
STEVIA COMPANY, INC.
_________________________________________________________________
(Exact name of registrant as specified in charter)
1940 East Devon Avenue
Elk Grove Village, IL 60007
(847) 593-0226
(Address and telephone number of registrant's principal executive office on a
principal place of business)
__________________________________
EXHIBITS
_________________________________________________________________
_________________________________________________________________
__________________________________________________________________
__________________________________________________________________
EXHIBIT INDEX
_______________
Page Number
Pursuant to
Sequential
Exhibit Numbering
Number System
Exhibit _______ _______
_________
10(e) Note, dated August 31, 1998, E-1
executed by the Company
10(f) Mortgage, dated August 31, 1998,
executed by the Company E-5
27 Financial Data Schedule E-8
<PAGE>
N O T E
FOR VALUE RECEIVED, the undersigned, Stevia Company, Inc., an Illinois
corporation ("Borrower") herein), hereby promises to pay to the order of
Biosynergy, Inc., an Illinois corporation, its successors and assigns
("Lender" herein), at 1940 E. Devon, Elk Grove Village, Illinois, 60007, or
such other place as may be designated by the holder of this Note, the
principal sum of Twenty-Thousand Dollars (U.S. $20,000) (the "Maximum
Principal Amount") or such other lesser amount as may be advanced by Lender to
Borrower from time to time, together with interest on the principal balance
remaining unpaid from time to time at the rate of ten percent (10%) per annum
from the hereof until maturity, interest payable in monthly installments
commencing September 1, 1998 and on the first day of each subsequent month,
and the final payment of unpaid principal and accrued interest, if not sooner
paid, shall be due December 31, 1998. Interest on the principal balance of
the Note outstanding from time to time shall be computed on the basis of a
year consisting of 360 days and paid for the actual days elapsed.
This Note may be prepaid in full or in part. Any prepayment of principal
must include accrued interest, if any, and any other sums then due Lender
hereunder.
At the request of Borrower, Lender may, provided Borrower is not in
default hereunder, from time to time, advance funds to Borrower to be used by
Borrower for payment of expenses incurred by Borrower in the sale of 33850
United Avenue, Pueblo, Colorado (the "Premises"), such advance of funds to
become principal under this Note; provided, however, the principal of this
Note shall not at any time exceed the Maximum Principal Amount. Borrower
further agrees to pay to Lender the expenses of Lender incurred with respect
to the advancement of the funds by Lender to Borrower under this Note, the
enforcement of this Note and the enforcement of the Mortgage (hereafter
defined) including, but not limited to, filing charges, recording fees,
appraisal fees, real estate tax service fees, court costs, and all other fees
incurred by Lender from time to time related to this Note, including the fees
of Lender's counsel.
All payments on account of indebtedness evidenced by this Note are to be
applied first to any costs, fees or expenses incurred by Lender pursuant to
the provisions of this Note or the Mortgage (hereafter defined), then to
Penalty Interest (hereafter defined) and late charges, then to interest on the
unpaid principal balance and the remainder to principal, provided that if any
installment due hereunder or the final payment of the principal balance of the
Note and accrued interest thereon is not paid within fifteen (15) days of the
due date then such installment payment or final payment will be subject to a
late charge in the amount of ten (10%) percent of the installment or final
payment then due. Upon maturity of the principal balance of this Note whether
by acceleration or otherwise according to the terms of this Note, the
remaining unpaid principal balance of this Note shall accrue interest at the
per annum rate equal to the unmatured Note rate plus three (3%) percent
("Penalty Rate") until paid. All of said principal, interest, fees, costs and
expenses are payable at such place as the holders of this Note may, from time
to time in writing appoint, and in the absence of such appointment, then at
the address of Lender set forth above.
The payment of this Note is secured by a Mortgage ("the "Mortgage")
bearing same date herewith delivered by Borrower to Lender encumbering real
estate at 33850 United Avenue, in the County of Pueblo, State of Colorado, as
legally described therein. It is agreed that at the election of the holder or
holders hereof and without notice, the principal balance of this Note
remaining unpaid, together with accrued interest thereon, shall become at once
due and payable at the place of payment aforesaid in case of default in the
payment of principal or interest when due in accordance with the terms hereof
or in case at any time hereafter the right to foreclose the said Mortgage
shall accrue to the legal holders hereto under any of the provisions contained
in the said Mortgage, time being the essence of this Note. The terms and
provisions of said Mortgage are incorporated herein by reference as if fully
restated.
Waiver by Lender of any default hereunder or under the Mortgage shall
not, at any other time, be taken to be a waiver of the terms of this Note or
the Mortgage, and the acceptance of payments after default shall not
constitute a waiver of the option of the holder of this Note to accelerate
repayments of the entire unpaid balance of this Note or prejudice Lender if
acceleration has occurred or this Note has matured. If suit is brought for
collection of this Note, the Note holder shall be entitled to collect all
reasonable costs and expenses of suit, including, but not limited to
reasonable attorneys' fees, appraisal fees, title charges, recording charges,
court costs, and costs incurred to preserve, protect or liquidate the real
estate encumbered by the Mortgage which secures this Note.
The Borrower and any endorser or guarantor hereof hereby waive demand,
presentment for payment, notice of non-payment and protest, all notices of
whatever kind or nature, including prompt payment demands and further waive
exhaustion of legal remedies, valuation, exemption, marshaling and homestead
rights as may be applicable.
This Note shall be interpreted under the laws of the State of Illinois.
In the event that any provision of this Note is ruled invalid or unenforceable
under the laws of the State of Illinois or any other applicable law, including
any provision of applicable usury laws, such invalid or unenforceable provision
shall be deleted herefrom or shall be modified to the extent necessary to make
such invalid or enforceable provision valid and enforceable. This Note shall
remain fully effective according to its terms after such deletions or
modifications.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Note to be signed by its
President, and its corporate seal to be hereunder affixed and attested by its
secretary this 31st day of August, 1998.
/s/ FRED K. SUZUKI, PRESIDENT/s/
____________________________________
ATTEST: Fred K. Suzuki, President
/s/ LAUANE C. ADDIS /s/
_____________________________
Secretary
MORTGAGE
This Mortgage (the "Mortgage"), dated as of August 31, 1998, is made
between Stevia Company, Inc., an Illinois corporation with offices at 1940
East Devon, Elk Grove Village, Illinois, 60007, (the "Mortgagor"), and
Biosynergy, Inc., an Illinois corporation, with offices at 1940 E. Devon, Elk
Grove Village, Illinois, 60007 (the "Mortgage").
In order to secure the payment of that certain promissory note (the
"Note") executed by the Mortgagor and payable to the order of Mortgagee on or
before December 31, 1998 in the principal sum of Twenty Thousand Dollars
($20,000), with interest thereon at the rate of ten percent (10%) per annum,
and to secure the terms, covenants, promises, agreements and conditions as
more fully described in the Note between the Mortgagor and the Mortgagee,
bearing the same date as this Mortgage, the Mortgagor hereby mortgages and
warrants to the Mortgagee, its successors and assigns the following described
real estate:
Lot 55 of the Pueblo Memorial Airport Industrial Park Subdivision, a
Subdivision of a portion of Sections 29 and 30, Township 20 South, Range 63
West and Sections 25 and 26, Township 20 South, Range 64 West of the Sixth
Principal Meridian, Pueblo County, Colorado
Tax Parcel Number: 03-00-01-001
Address of real estate: 33850 United Avenue, Pueblo, Colorado, 81001
In the event of a default in payment of the Note, or any part thereof, or
the interest thereon, or any part thereof, or the interest thereon, or any
part thereof, or in the event of a default under this Mortgage, or in case of
waste or non-payment of taxes or assessments on said premises, or of a breach
of any of the covenants or agreements herein contained, then and in such case
the whole of said principal sum and interest payable under the Note shall
thereupon, at the option of the said Mortgagee, its assigns or successors,
become immediately due and payable; and this Mortgage may be immediately
foreclosed to pay the same by said Mortgagee, its assigns or successors, to
enter into and upon the premises hereby granted, or any part thereof, and to
receive and collect all rents, issues and profits thereof.
If any provisions of this Mortgage shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating or affecting the
remainder of such provision or the remaining provisions of this Mortgage.
Dated this 31st day of August, 1998.
ATTEST: STEVIA COMPANY, INC.
/s/ LAUANE C. ADDIS /s/ /s/ FRED K. SUZUKI /s/
__________________________ ______________________________
Fred K. Suzuki, President
This instrument was prepared by: KATZ, KARACIC, HELMIN & ADDIS, P.C.
180 North LaSalle, Suite 3001
Chicago, Illinois 60601
<PAGE>
STATE OF ILLINOIS )
) SS
COUNTY OF C O O K )
/s/MARCIA J. NAWROCKI/s/
I, ___________________________, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that Fred K. Suzuki and Lauane C.
Addis, personally known to me to be the same persons whose names are
subscribed to the foregoing instrument and the president and secretary,
respectively of Stevia Company, Inc., appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument
as their free and voluntary act, for the uses and purposes therein set forth,
including the release and waiver of the right of homestead.
Given under my hand and official seal this 31st day of August, 1998.
/s/ MARCIA J. NAWROCKI/s/
______________________________
Notary Public
Commission Expires: 9-28-99
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF THE REGISTRANT FOR THE SIX MONTH PERIOD ENDING OCTOBER 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> APR-30-1998 APR-30-1998
<PERIOD-END> OCT-31-1998 OCT-31-1998
<CASH> 3,906 3,906
<SECURITIES> 0 0
<RECEIVABLES> 2,315 2,315
<ALLOWANCES> 0 0
<INVENTORY> 6,962 6,962
<CURRENT-ASSETS> 15,211 15,211
<PP&E> 650,805 650,805
<DEPRECIATION> (121,912) (121,912)
<TOTAL-ASSETS> 554,878 554,878
<CURRENT-LIABILITIES> 545,599 545,599
<BONDS> 0 0
2,088,001 2,088,001
0 0
<COMMON> 0 0
<OTHER-SE> (2,082,067) (2,082,067)
<TOTAL-LIABILITY-AND-EQUITY> 554,878 554,878
<SALES> 0 0
<TOTAL-REVENUES> 6,944 13,889
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 390 390
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (7,206) (16,001)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (7,206) (16,001)
<EPS-PRIMARY> (0.001) (0.001)
<EPS-DILUTED> (0.001) (0.001)
</TABLE>
