<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
March 31, 1995 33-10236
BAYWOOD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 77-0125664
(state of other jurisdiction of (I.R.S. Employer's
incorporation or organization) Identification Number)
14950 North 83rd Place, Suite 1
Scottsdale, Arizona 85260
(Address principal office) (Zip Code)
Registrant's telephone number, including area code: (602)951-3956
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
$.001 par value common stock
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 and Exchange Act of 1934
during the preceding 12 months (or for such shorter periods 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 1995, there were 12,815,357 shares of Baywood International,
Inc. common stock, $.001 par value outstanding.
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BAYWOOD INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY OF CHANGES FILED WITH FORM 10-Q/A 3
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheets as of March 31, 1995 and December 31, 1994 4
Statements of Operations for the three months ended March 31, 1995
and 1994 5
Statements of Cash Flows for the three months ended March 31, 1995
and 1994 6
Statement of Information Furnished 7
Item 2 - Management's Discussion and Analysis or Plan of Operation 8
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 9
Item 2 - Changes in Securities 9
Item 3 - Defaults Upon Senior Securities 9
Item 4 - Submission of Matters to a Vote of Security Holders 9
Item 5 - Other Information 9
Item 6 - Exhibits and Reports on Form 8-K 9
SIGNATURES 10
</TABLE>
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<PAGE> 3
BAYWOOD INTERNATIONAL, INC.
SUMMARY OF CHANGES FILED WITH FORM 10-Q/A
FOR THE QUARTER ENDED MARCH 31, 1995
The Company is amending Form 10-Q for the quarter ended March 31, 1995
as previously filed due to adjustments on income statement accounts and prior
period adjustments that affected the opening balances of intangibles assets,
accumulated amortization, retained earnings, accounts receivable and inventory.
These adjustments resulted from the audit of the annual financial statements for
the year ended December 31, 1995 by the Company's independent accountants. As
previously reported, net income was $83,572. The effect of these adjustments
resulted in a net loss of $592,056 for the quarter ended March 31, 1995.
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BAYWOOD INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
BALANCE SHEET
UNAUDITED
<TABLE>
<CAPTION>
ASSETS
March 31, 1995 December 31, 1994
-------------- -----------------
(as restated) (as restated)
<S> <C> <C>
CURRENT ASSETS
Cash $ 13,818 $ 254,867
Accounts receivable (net of allowance) 35,334 8,936
Inventories (net of reserve) 321,226 227,887
Current portion of related party receivable 16,896 16,896
Interest receivable 13,654 9,102
Prepaid expenses and other current assets 3,822 2,000
---------- -----------
TOTAL CURRENT ASSETS 404,750 519,688
---------- -----------
PROPERTY & EQUIPMENT
Furniture, fixtures, computers and equipment
(net of accumulated depreciation) 77,830 83,715
---------- -----------
OTHER ASSETS
Long-term related party receivable 165,151 165,151
Contracts & marketing rights
(net of accumulated amortization) 346,806 350,296
Formulas & product lines
(net of accumulated amortization) 346,806 350,295
---------- -----------
TOTAL OTHER ASSETS 858,763 865,742
---------- -----------
TOTAL ASSETS $ 1,341,343 $ 1,469,145
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 144,989 $ 186,407
Notes payable 975,000 1,000,000
Accrued interest 40,800 44,991
---------- ----------
TOTAL CURRENT LIABILITIES 1,160,789 1,231,398
---------- ----------
STOCKHOLDERS' EQUITY
Preferred Stock, $1 par value,
10,000,000 shares authorized, 1,210,500
shares issued and outstanding 1,210,500 1,210,500
Common stock, $.001 par value, 50,000,000
shares authorized, 12,815,357 shares
issued and outstanding at March 31, 1995 12,815 12,539
Additional paid-in capital 3,418,660 2,821,573
Treasury stock at cost (62,500) -
Accumulated deficit (4,398,921) (3,806,865)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY 180,554 237,747
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,341,343 $1,469,145
========== ==========
</TABLE>
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<PAGE> 5
BAYWOOD INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
3 months ended March 31,
1995 1994
------------- ------------
(as restated)
<S> <C> <C>
NET SALES $ 162,922 $ 1,314,828
COST OF SALES 112,529 691,494
----------- -----------
Gross profit 50,393 623,334
----------- -----------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Marketing expenses 158,582 264,443
General and administrative expenses 384,129 123,603
Depreciation and amortization 13,631 58,955
----------- -----------
Total selling, general and administrative expenses 556,342 447,001
----------- -----------
Operating profit (loss) (505,949) 176,333
----------- -----------
OTHER INCOME (EXPENSE)
Interest income 4,340 731
Interest expense (105,563) (12,500)
----------- -----------
Total other (expense) (101,223) (11,769)
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM (607,172) 164,564
PROVISION FOR INCOME TAXES - -
----------- -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (607,172) 164,564
EXTRAORDINARY GAIN: EXTINGUISHMENT OF DEBT 15,116 -
----------- -----------
NET INCOME (LOSS) $ (592,056) $ 164,564
=========== ===========
INCOME (LOSS) PER COMMON SHARE:
Before extraordinary item $ (0.046) $ 0.014
Extraordinary item 0.001 -
----------- -----------
NET INCOME (LOSS) PER COMMON SHARE $ (0.045) $ 0.014
=========== ===========
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 13,088,163 12,038,024
=========== ===========
</TABLE>
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<PAGE> 6
BAYWOOD INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
3 months ended March 31,
1995 1994
------------- ---------
(as restated)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $(592,056) $ 164,564
Adjustments to reconcile net income (loss) to cash used in
operating activities:
Depreciation and amortization 13,631 58,955
Issuance of common stock as payment for services performed 597,362 46,354
Extraordinary gain on extinguishment of debt (15,116) -
Common stock issued as payment for interest on notes payable 14,351 -
Changes in assets and liabilities:
(Increase) in accounts receivable (17,299) (108,667)
(Increase) in interest receivable (13,653) (731)
(Increase) in inventory (93,339) (24,528)
(Increase) in prepaid expenses (1,822) (16,667)
(Decrease) in interest payable (4,191) -
Increase (decrease) in accounts payable and accrued liabilities (41,418) 274,360
--------- ---------
Net cash used in operating activities (153,550) 393,640
--------- ---------
INVESTING ACTIVITIES:
Purchase of furniture, computers and equipment - (5,233)
--------- ---------
Net cash used by investing activities - (5,233)
--------- ---------
FINANCING ACTIVITIES:
Purchase of treasury stock (62,500) -
Principal payments on notes payable (25,000) -
---------- ---------
Net cash provided (used) by financing activities (87,500) -
--------- ---------
CASH (USED) PROVIDED DURING PERIOD (241,050) 388,407
CASH, BEGINNING OF PERIOD 254,868 215,800
========= =========
CASH, END OF PERIOD $ 13,818 $ 604,207
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 15,000 $ -
NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of notes payable with common stock $ 100,000 $ -
</TABLE>
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<PAGE> 7
BAYWOOD INTERNATIONAL, INC.
STATEMENT OF INFORMATION FURNISHED
The accompanying financial statements have been prepared in accordance
with Form 10-Q instructions and in the opinion of management contain all
adjustments (consisting of only normal and recurring accruals) necessary to
present fairly the financial position as of March 31, 1995 and the results of
operations for the three months ended March 31, 1995 and 1994 and the cash flows
for the three months ended March 31, 1995 and 1994. 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 1994 Annual Report on Form 10-K.
Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that the accompanying
financial statements be read in conjunction with the financial statements and
notes thereto incorporated by reference in the Company's 1994 Annual Report on
Form 10-K.
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<PAGE> 8
BAYWOOD INTERNATIONAL, INC.
Item 2 - Management's Discussion and Analysis or Plan of Operation
RESULTS OF OPERATIONS
Revenues for the first quarter of 1995 decreased to $162,922 from
$1,314,828, a decrease of $1,151,906 or 87.6% from the same period last year.
The decrease in net sales is mainly attributable to the loss of one major
customer in Europe who discontinued the purchase of the Company's product and
began manufacturing the product overseas in the beginning of 1995. The Company
is currently involved in a claim against this customer for breach of contract
regarding the manufacture and use of the Company's proprietary formula. The
Company believes the decrease in sales is not indicative of future performance
or customer retention.
Gross margins decreased 16.5% during the first quarter in 1995 due to
lower margins on the aloe vera based product shipped to the Far East of 41% and
the private labeled sports nutrition shipped domestically of 25%.
Marketing expenses decreased by $105,861 or 40% for the first quarter
of 1995 compared to the same period in 1994 due mainly to lower sales
commissions on sales volume. Marketing was higher in the first quarter of 1994
as compared to the following quarters in 1994 and the first quarter of 1995.
General and administrative expenses increased $260,526 or 210.8% for
the first quarter of 1995 compared to the same period in 1994. Depreciation and
amortization expense was $13,631 for the first three months of 1995, a decrease
of $45,324 from the same period last year. Due to write downs of the Company's
intangible assets, amortization expense substantially decreased.
The net effect of expenses on other income and expenses increased
760.1% from $(11,769) to $(101,223) for the three months ended March 31, 1995
and 1994, respectively. This change is attributed to the cash and stock portion
of interest on notes payable which increased in the last six months of 1994 from
new financing of short-term notes with lenders at interest between 10% and 12%.
Net loss for the three month period ended March 31, 1995 was $(592,056) or
$(.045) per common share compared to $164,564 or $.014 for the same period last
year.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1995, the Company still was seeking a capital injection
in excess of $2,000,000 to fund marketing and inventory of new products in the
cholesterol reduction and skin care product lines as well as the repayment of
short-term notes due within one year. With the onset of increasing demand of new
private labeled products, this amount of capital is essential to continue to
supply the market.
OTHER INFORMATION
The majority of the Company's interest revenue was generated by the
interest due from contracts with the sale of the right to distribute the
products in the Aurore-B Line to Royal Products, Inc.
Due to losses incurred and loss carryforwards, no provision for income
taxes is necessary.
The Company recognizes that its business in natural products in the
private label industry may be at risk because Baywood International, Inc. is a
small company that competes against better known companies with large
advertising and marketing budgets and having substantially greater sales volume
and financial resources.
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<PAGE> 9
BAYWOOD INTERNATIONAL, INC.
CAPITAL EXPENDITURES
During the three months ended March 31, 1995, the Company had not
incurred any expenditures for property and equipment.
The Company neither anticipates any significant capital expenditures
nor are material capital expenditures required to meet expected growth.
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
None
Item 6 - Exhibits and Reports on Form 8-K
None
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<PAGE> 10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BAYWOOD INTERNATIONAL, INC.
(Registrant)
May 10, 1996
/s/ Georgia Aadland
- - -------------------------------
Georgia Aadland
Vice President of Operations,
Treasurer and Secretary
Principal Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806175
<NAME> BAYWOOD INTERNATIONAL, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 13,818
<SECURITIES> 0
<RECEIVABLES> 182,047
<ALLOWANCES> 0
<INVENTORY> 321,226
<CURRENT-ASSETS> 404,750
<PP&E> 77,830
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,341,343
<CURRENT-LIABILITIES> 1,160,789
<BONDS> 0
0
1,210,500
<COMMON> 12,815
<OTHER-SE> (62,500)
<TOTAL-LIABILITY-AND-EQUITY> 1,341,343
<SALES> 162,922
<TOTAL-REVENUES> 162,922
<CGS> 112,529
<TOTAL-COSTS> 542,711
<OTHER-EXPENSES> 13,631
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 105,563
<INCOME-PRETAX> (607,172)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 15,116
<CHANGES> 0
<NET-INCOME> (592,056)
<EPS-PRIMARY> (.045)
<EPS-DILUTED> 0
</TABLE>
