<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
SEPTEMBER 30, 1997 33-26109
AMAZON NATURAL TREASURES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
(I.R.S. EMPLOYER IDENTIFICATION NO.)
87-0460880
4011 W. OQUENDO AVENUE, SUITE C
LAS VEGAS, NEVADA 89118
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
4386 SOUTH EASTERN AVENUE
LAS VEGAS, NEVADA 89119
(FORMER ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(702) 795-4333
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:
NONE
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.
X Yes No
State the number of shares outstanding of each of the registrants classes of
common stock, as of the latest practicable date.
<PAGE> 2
September 30, 1997
Common Voting Stock 48,009,589
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited financial statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence of the
following page, together with Related Notes. In the opinion on management, the
Financial Statements fairly present the financial condition of the Registrant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS
LIQUIDITY AND CAPITAL RESOURCES
Since the reverse acquisition of Amazon Natural Treasures, Inc., (NV) the
Company has had limited operations and has made preparation to launch more
extensive operations in the near future. Currently, the Company's capital
resources are adequate for this purpose. To finance these activities the Company
is engaged in the private placement of securities. The company has sufficient
capitol for the start of their Direct Marketing Program, which will begin in the
first quarter of 1998.
RESULTS OF OPERATIONS
The Company does have limited operations and costs attributed to development of
future operations. In the year-to-date ended September 30, 1996, the Company
lost $56,001. In the year-to-date ended September 30, 1997, the Company lost
$906,042.00, which is offset by assets in the amount of $1,217,069.00.
PLAN OF OPERATION
In March 1996, the Board of Directors approved an exchange of common shares with
Amazon Natural Treasures, Inc., a privately held Nevada Company. Amazon Natural
Treasures, Inc., is a multi-faceted company which is a Phytogenics(R) Health
Maintenance Company along with bringing the treasures of the Brazilian Amazon
Rain Forest to the rest of the world. They produce and distribute health
supplements derived from plants and related species for the cure and treatment
of human illnesses and disease. The Board of Directors feel this will offer
shareholders a viable business opportunity now and for the future.
Amazon Natural Treasures, Inc. or A.N.T., as it is also known, was incorporated
in Nevada, during 1995. It is a company with a unique mission. To bring the
Amazon's naturally produced treasures, in their purest form, to the people of
the world. To this end, A.N.T. has obtained the rights to export products from
the Amazon area to the United States, Canada and the rest of the world. These
products include: herbs, roots, plants and teas. Along with these products come
their associated benefits. A.N.T. also produces and exports a bevy of additional
product lines.
For many years people have looked for alternative treatments for their diseases
and maladies. People all over the world have had unpleasant experiences with
modern (allopathic) medical treatments, that in many cases are made up of
man-made chemicals that produce unwanted, if not dangerous side effects. Health
food stores have made billions of dollars catering to this ever-increasing
segment of the population. Many of their products are beneficial, but far too
many of them contain a small percentage (usually under 10%) of their advertised
ingredient(s). Ninety percent is filler. All of Amazon Natural Treasures, Inc.
Phytogenics(R) products are 100% pure and natural without any fillers. Our
customers get the full potency of the product they purchase and at competitive
prices. Key personnel have been actively working in the research and development
phase of our Phytogenics(R) products since 1972. In 1995 a decision was made to
enter A.N.T. products into the world market.
<PAGE> 3
Amazon Natural Treasures' business plan for the next twelve-(12) months
contemplates the utilization of an aggressive multi-dimensional marketing
campaign. The company will use direct mail to qualified leads. Also planned is
the placement of advertising in established and widely circulated
health-related, as well as general interest publications. An "infomercial" is
planned to further disseminate information into the marketplace. It is
anticipated this will result in strong revenue in the first quarter of 1998 and
increasing sales thereafter. This assertive plan will be implemented at the
conclusion of the private placement offering.
The company contemplates entering into advertising contracts with magazines,
including but not limited to the following:
<TABLE>
<CAPTION>
MAGAZINE CIRCULATION
-------- -----------
<S> <C>
PREVENTION 3,000,000
Rx REMEDY 1,500,000
VITALITY 1,250,000
HEALTH JOURNAL 1,200,000
AMERICAN HEALTH 1,000,689
</TABLE>
The plan is to place full-page ads, in those magazines eventually selected, at a
monthly cost of approximately Fifteen Thousand ($15,000.00) Dollars each. We
expect each magazine will run an article detailing the company and its unique
products. Most important, we expect the publications will provide a list of
their subscribers for follow-up direct mailing.
The acquisition of a total lead base of approximately seven million (7,000,000)
leads is envisioned through marketing with publications. An additional one
million (1,000,000) leads will be purchased from lead based companies.
Amazon Natural Treasures, Inc. will purchase leads of individuals who have
regularly purchased, at a minimum, two hundred fifty ($250) dollars worth of
health supplements per month for the last twelve (12) months. Amazon Natural
Treasures, Inc. has been informed that there are five million (5,000,000) leads
available. Utilizing magazines, "infomercials, " direct mail, and lead based
companies, Amazon Natural Treasures, Inc. will continue to build their lead base
so that potential customers will number in the millions.
The company eventually plans to publish its own catalog/magazine. The cover will
feature a full color photograph of the Amazon Rain Forest with the company's
logo prominently displayed. Inside, there will be messages from the principals
of the company, a history of the rain forest, and a history of the company. An
explanation of the company's purpose and adoption of "phytogenics(R)" or the
treatment of ailments through plants and other naturally occurring products,
will also be included.
The magazine will contain a chart consisting of possible symptoms/ailments
people may be suffering from and corresponding product(s) customers can purchase
for their treatment. Each product will be individually presented and explained
on its own page. The benefits of each product, how it works, and how it should
be used will be illustrated.
It is anticipated articles by respected researchers and medical professionals
will be included. These articles will correspond to the natural theme of the
company. There will be other attractions in the magazine for the consumer, such
as monthly pullout calendars and full-color pictures of the rain forest will be
featured. These photographs will be unique and collectable. To this end all the
photographs will be numbered and in a limited quantity.
Customer testimonials, with photographs, will be included each month. There will
be a "Letter to the Editor" selection each month with answers to customer's
questions. The company also plans to provide "on-line" support, which will allow
the company to be interactive with its customer base. Thus, a "web-site" and
individual Internet address has been established. This website address is
www.amazon-treasures.com.
It is predicted customers will have on-line forum discussions and this will lead
to additional marketing opportunities. Videos and cd-roms will be available.
These videos and cd-roms will be designed to show how to use our more unique
product, particularly the teas.
The benefit and effectiveness of our products have been demonstrated, throughout
the ages, by people who continue to use them. The inhabitants of the Amazon, as
well as many others have taken the products for their ailments and achieved
astonishing results.
Amazon Natural Treasures, Inc. can be characterized as a leader in bringing to
the world Phytogenics(R) products. The company believes in complete control from
the harvesting of the products through sale to the end user. Only through this
business principle (vertical integration) can high quality standards be
controlled and enforced.
<PAGE> 4
Sales will be obtained through the introduction of other Amazon products from
the Brazilian Amazon rain forest such as sports drinks, soft drinks, a 100%
natural sweetener, teeth whitening chewing gum, aids preventive cream as well as
rare earth elements. Those additional products will include hand-carved items
made from gems, found in the Amazon, for which the company has obtained
exportation rights. Typically, these products will involve carvings of birds
found in the Amazon and can consist of: tanzanite, peridot, lolite, garnet,
citrine, aquamarine or amethyst. The birds will be accompanied with certified
appraisals of their value. It is anticipated these birds also can be sold in the
catalog.
The company is presently operating at 4011 West Oquendo Road, Suite C, Las
Vegas, Nevada 89118 (Corporate Offices); 3977 West Oquendo Road, Suite C, Las
Vegas, Nevada 89118 (Investor Relations); 6435 South Valley View Boulevard,
Suite G, Las Vegas, Nevada 89118 (Distribution Center); Rua Dona Cesaria
Fagundes, 209 Vila Mariana Sao Paulo/ SP-Brasil CEP 04054-030; Rua Belem, 1036
Facing Rue Recife, Andrianopolis, Manaus Brazil; 470 North Rivermeade Drive,
Unit #7, Concord, Ontario, Canada L4K3R8.
The anticipated demand, in the North American market, is expected to be
particularly strong. Evidenced by the fact that even though A.N.T. has recently
commenced importing these products, and has yet to commence an official
marketing campaign, "word-of-mouth" has already created a positive reaction,
which has required the ordering of additional products.
Once it is felt the North American market is being fully maximized, the company
will look to international markets for expansion. The company has established
important relationships with officials of the Government of Brazil. These
officials have expressed an interest in establishing a museum, dedicated to the
Amazon area, in Las Vegas, Nevada. They feel Las Vegas is an ideal location to
promote the Amazon and its many assets due to the high number of visitors from
throughout the world. This would be a joint venture between Amazon Natural
Treasures, the Brazilian government, State of Nevada, and local authorities.
Amazon Natural Treasures would be responsible for the day to day management.
This project should give our company world-wide exposure and, it is hoped,
provide the momentum for a weekly spin-off of a television series dedicated to
the 2,700,000 square miles of the Brazilian rain forest.
The company has negotiated a favorable price schedule for the harvesting of
their products; this should allow for a strong profit margin on sales. In turn,
it should result in a healthy bottom line for the company.
The company will offer monthly specials so customers can take advantage of by
sending in coupons throughout the catalog/magazine. Order forms will be included
throughout the catalog/magazine. Customers will be able to place their orders by
e-mail, U.S. mail or telephone. Amazon Natural Treasures will accepts checks,
money orders, ATM or Debit cards, and all major credit cards. There will be a
shipping and handling charge added to all orders.
It is anticipated, at some point, circulation of Amazon Natural Treasures'
catalog/magazine will reach significant numbers of people. At that time,
advertising space will be sold to health-related, but noncompeting, companies
for their products. The revenue generated will offset the costs associated with
the catalog/magazine.
Amazon Natural Treasures is poised to enter and capture a segment of the
multi-billion dollar market in health supplements and create a new market niche
for the rest of their unique product lines.
<PAGE> 5
AMAZON NATURAL TREASURES, INC.
BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS
Cash in bank $ 161,688
Petty cash 2,000
Employee advances 2,475
Inventory-bottles/bagged 216,535
Inventory-raw material 21,146
Inventory-birds 33,323
Prepaid insurance 5,838
443,005
PROPERTY AND EQUIPMENT-AT COST
Office furniture and equipment 87,415
Clean room & equipment 187,493
Laboratory equipment 36,262
Warehouse equipment 115,562
Computer equipment 24,586
Automobiles 7,590
458,908
Less: accumulated depreciation (70,333)
388,575
OTHER ASSETS
Construction in process 151,741
Refundable deposits 57,885
Organization costs-net 45,863
Prepaid logos, trademarks, etc. 125,000
Licenses 5,000
385,489
TOTAL ASSETS $1,217,069
</TABLE>
<PAGE> 6
AMAZON NATURAL TREASURES, INC.
BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
<S> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $ 4,464
Less: current unamortized discount (2,437)
2,027
Accounts payable 145,805
Payroll taxes payable 4,668
Sales/use tax payable 10,000
Accounts payable-related parties 116,358
Notes payable-related parties 22,090
300,948
LONG-TERM DEBT
Notes payable 22,319
Less: current maturities (4,464)
Less: unamortized discount (4,882)
12,973
313,921
STOCKHOLDERS' EQUITY
COMMON STOCK
500,000,000 common shares authorized
at $0.001 par value 48,009,589 shares
issued and outstanding 48,010
ADDITIONAL PAID IN CAPITAL 1,761,180
RETAINED EARNINGS (DEFICIT) (906,042)
903,148
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $1,217,069
</TABLE>
<PAGE> 7
AMAZON NATURAL TREASURES, INC.
STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS (DEFICIT)
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
CURRENT TO-DATE
BALANCE BALANCE
<S> <C> <C>
INCOME
Sales-non-taxable $ 8,779 $ 30,770
Interest income 942 1,716
9,721 32,486
COST OF SALES
Purchases 2,595 8,508
Processing costs 155 1,311
Freight-in 720 720
Shipping expense 3,408 10,795
Commissions 175
6,878 21,509
GROSS PROFIT 2,843 10,977
OPERATING EXPENSES 326,782 678,333
OPERATING LOSS (323,939) (667,356)
NET LOSS $ (323,939) $ (667,356)
BEGINNING RETAINED EARNINGS (DEFICIT) (238,686)
ENDING RETAINED EARNINGS (DEFICIT) $ (906,042)
</TABLE>
<PAGE> 8
AMAZON NATURAL TREASURES, INC.
STATEMENT OF CASH FLOWS
JULY 1, 1997 TO SEPTEMBER 30, 1997
AND JANUARY 1, 1997 TO SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
7/1/97 TO 1/1/97 TO
9/30/97 9/30/97
<S> <C> <C>
Cash flows from operating activities
Net loss $ (323,939) $ (667,356)
Adjustments to reconcile net loss
to net cash
Amortization 17,943 18,829
Depreciation 36,443 47,858
Changes in operating assets & liabilities
Increase in accounts receivable (2,475) (2,475)
Increase in inventory (159,356) (232,854)
Decrease(Increase) in prepaid expenses 1,928 (5,838)
Increase in deposits (15,000) (52,215)
Increase in accounts payable 176,428 209,646
Net cash used by operating
activities (268,028) (684,405)
Cash flows from investing activities
Equipment purchases (320,970) (389,473)
Investment in amortizable assets (150,000) (182,668)
Investment in building construction (78,269) (151,741)
Net cash used by investing
activities (549,239) (723,882)
Cash flows from financing activities
Increase(Decrease) in notes payable 10,300 (4,853)
Sale of common shares 858,333 1,575,438
Net cash provided by financing
activities 868,633 1,570,585
Increase in cash 51,366 162,298
Cash at beginning of period 112,322 1,390
Cash at end of period $ 163,688 $ 163,688
Disclosures from operating activities
Interest paid from 7/1/97 to 9/30/97: $5,980
Interest paid from 1/1/97 to 9/30/97: $7,254
</TABLE>
<PAGE> 9
SUPPLEMENTARY INFORMATION
AMAZON NATURAL TREASURES, INC.
BALANCE SHEET SCHEDULES
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
SCHEDULE OF ACCUMULATED DEPRECIATION
<S> <C>
Furniture and fixtures $ (6,722)
Laboratory equipment (13,636)
Clean room equipment (34,104)
Warehouse equipment (12,373)
Computer equipment (2,486)
Automobiles (1,012)
$ (70,333)
SCHEDULE OF NOTES PAYABLE
Note payable-American Express Capital Finance $ 15,000
</TABLE>
<PAGE> 10
AMAZON NATURAL TREASURES, INC.
SCHEDULE OF OPERATING EXPENSES
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
CURRENT TO-DATE
BALANCE BALANCE
<S> <C> <C>
Accounting-outside $ 3,510 $ 30,275
Advertising 8,593 8,955
Amortization 17,943 18,828
Apartment leases 13,742 13,742
Auto & truck 2,238 6,234
Auto lease 7,377 19,227
Bank charges 173 813
Bank charges-credit cards 463 1,008
Casual labor 2,432 15,493
Clean room supplies 813 3,774
Consulting fees 87 85,004
Depreciation 36,443 47,858
Donations 500 500
Dues & subscriptions 2,940 4,223
Entertainment 3,718 6,168
Equipment rental 1,289 3,623
Furniture lease 990 1,118
Insurance-group 3,838 4,229
Insurance-general 9,961 11,864
Interest 5,980 7,254
Janitorial 298 737
Laboratory supplies 2,261 2,311
Legal 27,260 40,399
Licenses & taxes 982 3,014
Miscellaneous 146 146
Moving expense 240
Nevada business tax 1,257
Office expenses 7,828 20,367
Penalties 21
Printing 459 609
Postage 2,535 4,646
Professional services 6,589 11,639
Promotional 6,904 39,535
Rent 14,085 43,346
Repairs & maintenance 1,844 3,701
Research & development 2,294 5,704
Salaries & wages 55,958 83,257
Taxes-payroll 8,323 11,827
Taxes-corporate 162 162
Telephone 21,421 34,868
Travel 38,190 72,889
Utilities 2,064 3,319
Warehouse supplies 4,149 4,149
$ 326,782 $ 678,333
</TABLE>
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None; not applicable.
ITEM 2. CHANGES IN SECURITIES
None; not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None; not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None; not applicable.
ITEM 5. OTHER INFORMATION
None; not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
None.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the undersigned
thereunto duly authorized.
AMAZON NATURAL TREASURES, INC.
Date: By:
-------------------------- -----------------------------------
Michael Sylver President & Chief Financial Officer
Date: By:
-------------------------- -----------------------------------
Robert Qualey Secretary/Treasurer
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
(AUDITED) AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE 9 MONTHS ENDING
SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 163,688
<SECURITIES> 0
<RECEIVABLES> 2,475
<ALLOWANCES> 0
<INVENTORY> 271,004
<CURRENT-ASSETS> 443,005
<PP&E> 458,908
<DEPRECIATION> (70,333)
<TOTAL-ASSETS> 1,217,069
<CURRENT-LIABILITIES> 300,948
<BONDS> 12,973
0
0
<COMMON> 48,010
<OTHER-SE> 855,138
<TOTAL-LIABILITY-AND-EQUITY> 1,217,069
<SALES> 30,770
<TOTAL-REVENUES> 32,486
<CGS> 21,509
<TOTAL-COSTS> 21,509
<OTHER-EXPENSES> 678,333
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,254
<INCOME-PRETAX> (667,356)
<INCOME-TAX> 0
<INCOME-CONTINUING> (667,356)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (667,356)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
