BAP ACQUISITION CORP.
1051 FIFTH AVENUE NORTH,
NAPLES, FL 34102-5818
TEL: (941) 261-3396
FAX: (941) 261-5031
May 13, 1998
Ms. Barbara Jacobs-Deputy Director
Mr, Ed. Loftus-Chief Accountant
U.S.Securities & Exchange Commission,
Corporate & Finance Small Business Section,
Washington, DC
I am hereby transmitting form 10Q-SB for the period ended March 31, 1998.
The financial statements included herein reflect no changes from the
preceding periods in accounting principles or practices or in the method
of applying them.
Yours Truly,
Bap Acquisition Corp.
/s/ Garfield Ricketts
- ----------------------
Garfield Ricketts-President.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-QSB
QUARTERLY REPORT PUSRUANT TO SECTION 13 OR 15 (d) THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ending March 31,1998 Commission File Number 21-16563-B
BAP ACQUISITION CORP.
-----------------------------------------------------
( Exact Name of Registrant as Specified in its Charter)
DELAWARE 51-0373876
----------------------------- ---------------------
(State or other Jurisdiction of (IRS Employee Number)
(Incorporation Or Organization)
1051 FIFTH AVENUE NORTH, NAPLES, FLORIDA 34102
------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
(941) 261-3396
------------------------------
(Regiatrant's Telephone Number
Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceeding 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_____
As of March 31, 1998 4,655,310 shares of common stock, $.001 par were
outstanding.
Mr Garfield Ricketts-President
BAP Acquisition Corp.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Recapitalization
Effective November 21, 1995, pursuant to the terms and
conditions of an Agreement and Plan of Reorganization by and between BAP
Acquisition Corp. (the Company) and Ricketts Enterprises International,
Inc. (REI), REI became a wholly owned subsidiary of the Company. The
transaction was accounted for as a recapitalization, resulting in the
historical operations of REI being treated as the historical operations
of the Company. Prior to the recapitalization, the Company had not
engaged in any form of business activity and as a result, had no
operating history. Subsequent to the recapitalization, the principal
business activities of the Company were carried out through its
wholly-owned subsidiary, REI. All discussions below concerning the
Company prior to the recapitalization relate to and reflect the
operations of REI only.
Revenue Sources
The company generates revenue primarily from the rental of
residential property, representing approximately 70% of total revenues
and real estate management services, representing approximately 30% of
total revenues. The Company plans to increase revenues by acquiring
existing and/or developing new residential properties and commercial
real estate.
Financial Condition and Liquidity
The Company's long-term debt to capital (long-term debt and
stockholders' equity) ratio at March 31, 1998 and 1997 was 52.8% and
51.9%, respectively.
The Company's source of working capital is from rental operating
activities and capital contributions from stockholders. The Company has
not borrowed any moneys from financial institutions for working capital
needs. All debt of the Company is from first mortgages on the income
producing properties acquired as a result of the recapitalization of
REI.
Net cash provided by operating activities for the three month periods
ended March 31, 1998 and 1997 was negative $15,628 and negative $4,847,
respectively. The negative cash flows were primarily due to payment of
current liabilities in 1998 and an increase in prepaid expenses in 1997.
Management of the Company believes that there are no commitments,
uncertainties, or contingent liabilities that will have a materially
adverse effect on the consolidated financial position or results of
operations of the Company.
Capital Expenditures and Financing Requirements
Capital expenditures during the three month periods ended March
31, 1998 and 1997 totaled $1,271 and $1,782, respectively, which were
for purchases of office equipment and furniture. There were no real
property acquisitions or investments thereof.
The Company currently has an agreement represented by a Letter
of Intent dated January 15, 1996 to purchase 26 residential rental
properties and one commercial office property from Garfield Ricketts, a
majority stockholder. Total purchase price of the 27 properties per the
agreement is $2,482,800, based on the lower of cost or market value of
the properties. Market value was determined based on Multiple Listing
Service's market analysis, which tracks sales prices of comparable
properties within the area. Terms of the agreement require the Company
to assume, refinance, or pay off the balance due on the first mortgages
on the properties in the amount of $1,322,102 as of December 31, 1997,
less any debt reduction since that date, and pay the balance of the
purchase price as of January 15, 1996 to Garfield Ricketts in cash or
other form of payment acceptable to him. All properties to be acquired
will be subject to a current appraisal; purchase price will be amended
accordingly for any material changes in value of the properties before
proceeding with the terms of the agreement.
The Company will require funds to acquire additional income producing
properties and/or real estate related entities and also to cover the
legal and accounting costs of meeting its reporting obligations under
the Securities Exchange Act. The Company will seek to borrow funds from
financial institutions or raise money through the offering of its common
stock in order to acquire the 27 properties represented by the agreement
and Letter of Intent described above. Management believes that the
Company can continue to operate and meet its obligations via working
capital from operating and financing activities. Management is of the
opinion that inflation has not and will not have a material effect on
the operations of the Company.
Results of Operations
The following table sets forth for the periods indicated, the
percentages which selected items in the Company's Statements of
Operations bear to total revenues:
<TABLE>
Three Month Period
Ended March 31
1998 1997
____________ ____________
Revenues: <C> <C>
Rental Income 70.3% 74.5%
Management Services 29.7% 25.0%
Interest and Other --- .5%
_____________ _____________
Total Revenues 100.0% 100.0%
Expenses:
Direct Expenses:
Depreciation and Amortization 22.8% 24.4%
Interest 18.7% 20.5%
Real Estate Taxes 12.0% 12.6%
Repairs & Maintenance 25.8% 7.6%
Utilities 3.2% 7.2%
Insurance 8.0% 8.1%
Other Direct Expenses 1.3% 1.7%
___________ __________
Total Direct Expenses 91.8% 82.1%
General and Administrative Expenses:
Office Occupancy Expense 11.8% 9.5%
Office Supplies & Expense 2.9% 4.5%
Professional Fees 4.2% 1.4%
Telephone 4.9% 5.1%
Dues & Subscriptions 5.7% 5.2%
License, Dues, and Fees 5.3% 2.9%
Travel & Entertainment .5% .6%
Other Administrative Expenses 2.3% 1.6%
__________ ___________
Total General & Administrative Expenses 37.6% 30.8%
Total Expenses 129.4% 112.9%
Income (Loss) Before Taxes (29.4)% (12.9)%
Provision for Income Taxes --- ---
Net Income (Loss) (29.4)% (12.9)%
Three Months Ended March 31, 1998 Compared With Three Months Ended March
31, 1997
Net Income (Loss)
The Company reported a net loss of $5,689 for the three months
ended March 31, 1998, compared to a net loss of $2,345 for the three
months ended March 31, 1997. The losses are primarily due to the fact
that revenues from the income producing properties were not sufficient
to cover both the direct expenses of those properties and the general
and administrative expenses of the Company.
Revenues
Total revenues for the three months ended March 31, 1998 increased by
$1,182 (6.5%) to $19,307 from $18,125 for the three months ended March
31, 1997. The increase is due primarily to an increase in management
services revenue received in 1998.
Direct Expenses
Direct expenses for the three months ended March 31, 1998 increased by
$2,844 (19.1%) to $17,732 (91.8% of total revenues) from $14,888 (82.1%
of total revenues) for the three months ended March 31, 1997. The
increase is due primarily to interior maintenance of the rental
properties performed in 1998.
General and Administrative Expenses
General and administrative expenses for the three months ended March 31,
1998 increased by $1,682 (30.1%) to $7,264 (37.6% of total revenues)
from $5,582 (30.8% of total revenues) for the three months ended March
31, 1997. The increase is due primarily to fees that the Company
incurred to meet its reporting obligations under the Securities Exchange
Act.
Income Taxes
There were no provisions for Federal Income Tax for the three month
periods ended March 31, 1998 and 1997 because the Company was operating
at a loss.
</TABLE>
PART 11
ITEM 1
Legal Proceedings
The Company is not presently a party to any litigation of any kind or
nature whatsoever, nor to the company's best knowledge and belief is any
litigation threatened or contemplated.
ITEM 2
Change in Securities.
There has not been any material changes of the rights of holders of
registered securities, and working capital restrictions and other
limitations on the payment of dividends.
ITEM 3
Defaults Upon Senior Securities.
There has not been any defaults on any senior Securities.
ITEM 4
Submission of Matters to a vote of Security Holders.
On December 30th, 1997 the annual meeting of the Company was held at the
Company's principal office, at 1051-5th Avenue North in Naples Florida.
Of the 4,655,310 shares outstanding, 3,631,802 were represented in person
and by proxy. The sole purpose of the meeting was to re-elect the Officers
and Directors.
The following officers and Directors were unanimously elected.
Garfield Ricketts Director/ Chairman/CEO
Una M. Ricketts Director/Secretary/Treasurer
Karen Ricketts Director
There were no setlements or matters or solicitations under Rule 14a-11
ITEM 5
Other Matters
None
ITEM 6
Exhibits and reports on Form 8-K
NONE
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunder duly authorized
Dated May 13th, 1998
BAP ACQUISITION CORP
by /s/ Garfield Ricketts by /s/ Una M. Ricketts
- ------------------------- ------------------------
Garfield Ricketts-President Una M. Ricketts-Secretary/Treasurer
