U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from: to:
Commission file number: 33-26899-D
BEST OF AMERICA CORPORATION
(Exact Name of Registrant as specified in its charter)
COLORADO 84-1082394
(State or other jurisdiction (IRS Employer Identi-
of incorporation or organization fication Number)
27690 Main Street
Lacombe, Louisiana 70445
(Address code of principal executive offices)
(504) 646-0261
(Issuer=s telephone number)
Check mark whether the Issuer (1) has filed all reports required by Section
13 or 15(d) of the Exchange Act 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 the filing requirements for at least the past 90
days. YES: X NO:
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PREVIOUS FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by the court. YES: NO:
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer=s classes of
common stock, as of the last practicable date: 9,729,000
Transitional Small Business Disclosure Format. YES: NO: X
<PAGE>2
BEST OF AMERICA CORPORATION
Index
PART I FINANCIAL INFORMATION
Balance Sheet
June 30, 1998 3
Statements of Operations
Three Months
Ended June 30, 1998 and 1997 4
Statements of Cash Flows
Three Months Ended
June 30, 1998 and 1997 5
Notes to Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
PART II
Other Information 9
Signatures 10
<PAGE>3
Best of America Corporation
Balance Sheet
June 30, 1998
(Unaudited)
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash $ 1,206
Accounts receivable, net of allowance for
doubtful accounts of $ 0 4,888
Inventory 13,220
Note receivable - trade 27,743
Contract receivable 48,925
Prepaid expenses 26,686
Due from related parties 28,087
-------------
Total current assets 150,755
Property and equipment, at cost, net of
accumulated depreciation of $32,316 5,073
Land 469,151
Patents and formulas, at cost, net of
accumulated amortization of $6,539 3,548
Deposits 25,215
-------------
$ 653,742
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 332,687
Due to related parties 160,316
Note payable-current portion 12,321
Customer deposits 10,000
-------------
Total current liabilities 515,324
Note payable-net of current portion 30,183
Commitments and contingencies
Stockholders' equity:
Preferred stock, $10 par value, non-voting,
non-cumulative, non participating,
convertible, 50,000,000 shares authorized
216,200 shares issued and outstanding 2,162,000
Discount below par on preferred stock (1,732,532)
Common stock, no par value,
1,000,000,000 shares authorized,
9,729,000 shares issued and outstanding 1,444,930
Less: stock subscription receivable (998,000)
Paid in capital 26,647
Accumulated deficit (794,810)
------------
108,235
$ 653,742
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>4
Best of America Corporation
Statements of Operations
For the Three and Six Months Months Ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
Six Months Three Months
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Sales $ 38,309 $ 56,393 $ 19,870 $ 35,497
Cost of sales 17,707 31,284 10,167 20,700
---------- --------- ---------- ---------
Gross margin 20,602 25,109 9,703 14,797
General and administrative expenses 158,142 82,793 89,382
49,415
---------- --------- ---------- ---------
Income (loss) from operations (137,540) (57,684) (79,679)
(34,518)
Other income and (expense):
Miscellaneous income 1,052 8 552 (7)
Interest expense (27,270) (15,424) (13,152) (8,234)
(26,218) (15,416) (12,600) (8,241)
---------- --------- ---------- ---------
Net income (loss) $ (163,758 $ (73,100) $ (92,279) $ (42,759)
Basic (loss) per share ($0.02) ($0.01) ($0.01) ($0.01)
Weighted average shares outstanding 9,629,000 8,129,000 9,729,000
8,129,000
=========== ========== ==========
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>5
Best of America Corporation
Statement of Cash Flows
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net cash provided by (used in) operating activities $ (168,887) $ (122,519) $
(54,000) $ (24,183)
Cash flows from investing activities:
Note receivable - trade issued (500)
Acquisition of office equipment 5,000 (1,293) 5,731
Acquisition of option on real estate (3,000)
(3,000)
Net cash (used in) investing activities 4,500 (4,293) 5,731
(3,000)
Cash flows from financing activities:
Proceeds from related parties 65,138 76,073 48,481
27,183
Proceeds from note payable 1,986 994
Common stock issued for cash 96,000
Net cash provided by financing activities 163,124 76,073 49,475
27,183
Increase (decrease) in cash (1,263) (50,739) 1,206
Cash and cash equivalents,
beginning of period 2,469 51,437
698
Cash and cash equivalents,
end of period $ 1,206 $ 698 $ 1,206 $
698
</TABLE>
See accompanying notes to financial statements.
<PAGE>6
Best of America Corporation
Notes to Financial Statements
The accompanying condensed unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's form
10-KSB filed for the year ended December 31, 1997.
Basic (loss) per share was computed using the weighted average number of
common shares outstanding.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on a "going concern"
basis which contemplates the realization of assets and the liquidation of
liabilities in the ordinary course of business.
The Company has incurred operating losses during the periods ended June 30,
1998, and 1997, aggregating $71,479 and $30,251, and has negative working
capital of $280,388 at June 30, 1998.
During the periods presented the Company has not generated positive cash flow
from operations and there can be no assurance that the trend will not
continue. Profitable operations are dependent upon, among other factors, the
Company's ability to obtain equity or debt financing and the Company's
ability to finance, manage, and construct car wash operations.
The Company is unable to project a level of revenue which would allow a
reversal of its history of operating losses in the near future. In this
regard the Company has undertaken the raising of additional equity
capital and debt financing. The Company's continued operations are dependent
upon obtaining financing.
<PAGE>7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Trends and Uncertainties: The Company is structured so that it can adjust to
the trends and uncertainties in the automobile service industry. The Company
has tied to eliminate the major variables of interest rates and operating
expenses. However, as the Company has little or no control over the demand
for its products and/or services, inflation and changing prices could have a
material effect on the future profitability of the Company.
Capital and Sources of Liquidity: During the three months ended June 30, 1998
the Company's principal source of funding was derived from operations, loans
from shareholders and proceeds from the sale of common stock.
The Company's sources of liquidity for the remainder of 1998 are expected to
be generated from efforts to raise additional capital and advances from
affiliates. This capital is essential to the continued operation of the
Company. See the discussion of Capital Resources included in the Company's
Report on Form 10-KSB for the year ended December 31, 1997 for additional
information.
The Company currently has no material commitments for capital expenditures.
The Company recently moved its offices and increased its lease obligation
from a base rental of $644.50 per month to $1,200 per month under the terms
of an operating lease that expires on February 1, 2000. The monthly lease
payments will increase to $1,400 and $1,600 during the second and third year
of the lease. In addition, 800 square feet of storage space for its parts and
chemicals is leased on a month-to-month basis for a monthly rent of $220. The
increased lease payments have a negative effect on the cash flow of the
Company. The Company believes that its existing facilities are adequate to
meet its needs for the foreseeable future.
The Company purchased office equipment of $731 and paid $500 for a trade note
receivable during the three months ended June 30, 1998, resulting in net cash
used in investing activities of $1,231.
The Company purchased office equipment of $1,293 during the three months
ended June 30, 1997, resulting in net cash used in investing activities of
$1,293.
The Company received advances from shareholders of $16,657, proceeds from the
sale of common stock of $96,000, and proceeds from a note payable of $992
during the three months ended June 30, 1998, resulting in net cash provided
by financing activities of $113,649.
The Company received advances from shareholders of $48,890 during the three
months ended June 30, 1997, resulting in net cash provided by financing
activities of $48,890.
Results of Operations:
The Company has not generated positive cash flow from operations and there
can be no assurance that the trend will not continue. Profitable operations
are dependent upon, among other factors, the Company's ability to obtain
equity or debt financing and the Company's ability to finance, manage, and
construct car wash operations, and acquire manufacturing equipment.
The Company is unable to project a level of revenue which would allow a
reversal of its history of operating losses in the near future. In this
regard the Company has undertaken the raising of additional equity
capital and debt financing. The Company's continued operations are dependent
upon obtaining financing.
1998 Compared to 1997: For the three months ended June 30, 1998, the Company
experienced a net loss of $71,479 compared to a net loss of $30,251 for the
three months ended June 30, 1997. The Company experienced negative cash flow
from operating activities of $115,254 for the three months ended June 30,
1998 compared to negative cash flow from operations of $98,336 for the three
months ended June 30, 1997.
The Company received revenue of $18,439 for the three months ended June 30,
1998, compared to $20,986 for the three months ended June 30, 1997.
Cost of sales decreased from $10,584 during the three months ended June 30,
1997, to $7,540 during the three months ended June 30, 1998, due to decreased
merchandise sales.
General and administrative expenses increased from $33,478 during the nine
months ended June 30, 1997, to $68,760 during the three months ended June 30,
1998, due to more money spent to acquire financing.
The Company's interest expense increased from $7,190 during the three months
ended June 30, 1997, to $14,118 during the three months ended June 30, 1998.
<PAGE>8
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Not applicable.
(b) Not applicable.
<PAGE>9
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.
Best of America Corporation
(Registrant)
Dated: August 18, 1998
By:_ By: /s/ Michael Yates
- ----------------------------
Acting President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,206
<SECURITIES> 0
<RECEIVABLES> 4,888
<ALLOWANCES> 81,556
<INVENTORY> 13,220
<CURRENT-ASSETS> 150,755
<PP&E> 5,073
<DEPRECIATION> 32,316
<TOTAL-ASSETS> 653,742
<CURRENT-LIABILITIES> 515,324
<BONDS> 0
<COMMON> 1,444,930
0
2,162,000
<OTHER-SE> (3,498,695)
<TOTAL-LIABILITY-AND-EQUITY> 653,742
<SALES> 38,309
<TOTAL-REVENUES> 38,309
<CGS> 17,707
<TOTAL-COSTS> 17,707
<OTHER-EXPENSES> 158,142
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,270
<INCOME-PRETAX> (163,758)
<INCOME-TAX> 0
<INCOME-CONTINUING> (163,758)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (163,758)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
