SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999
[ ] 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 0-22934
Ovvio Better Life, Inc.
(Exact Name of Small Business Issuer as specified in its
Charter)
Washington 91-1268870
(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification
Number)
83-888 Ave. 51, Coachella, CA 92236
(Address of principal executive offices) (Zip Code)
(760) 398-9700
(Issuer's telephone number)
Check whether the Issuer (1) 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
Indicate the number of shares outstanding of each of the
issuer's classes of Common Equity, as of the latest practicable date.
Common Stock, no par value 1,458,187
Title of Class Number of Shares
outstanding
at June 30, 1999
No exhibits included.
General
The condensed consolidated financial statements of Ovvio Better Life, Inc.
included herein, have been prepared without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. Although certain
information normally included in financial statements prepared in accordance
with generally accepted accounting principles has been condensed or omitted,
Ovvio Better Life's management believes that the disclosures are adequate to
make the information presented not misleading. The condensed financial
statements for the three months and the six months ended June 30, 1999
should be read in conjunction with the financial statements and notes thereto
included in this report and Ovvio Better Life's annual report on Form 10-KSB for
the fiscal year ended December 31, 1998, and Form 10-QSB for the period ending
March 31, 1999.
The condensed financial statements included herein reflect all normal
recurring adjustments that, in the opinion of management, are necessary for a
fair presentation. The result of the interim period are not necessarily
indicative of trends or of results to be expected for a full year.
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.
Ovvio Better Life, Inc. has finalized a license agreement with Ovvio Holding
B.V., a Dutch company which allows Ovvio Better Life the exclusive right to
market Ovvio products on the Internet. The same agreement grants Ovvio
Better Life the right to use the Ovvio name and the right to market Ovvio
products in its new store to be located in Stezzano Italy. The license is for
the period up to Dec 31, 2005 and Ovvio has options to extend the term for up
to 12 years. Ovvio will pay an annual fee of $ 10,000 Eur for the license
plus a royalty of 2.5% on Ovvio sales in the Stezzano store.
Ovvio's concept, which is carried out in all its stores, is that the company
carries a full line of high quality Italian designed home accessories,
furniture, appliances, and decorator items.
The main activity of the US office will be to market Ovvio products
throughout the world over the Internet. The Internet logistics of inventory,
shipping, and customer service will managed by Lorenza Semeraro, who is a
Ovvio Better Life director working in Erbusco, Italy. Ovvio Better Life is
budgeting $1.5 million over the next 18 months to establish itself as an
Internet company.
In anticipation of signing a lease agreement on a new store and operating a
retail store, Ovvio incorporated an Italian subsidiary named Ovvio Vivere
Meglio S.p.A for this purpose. The store lease was executed on July 21,
1999. The lease covers a 120,000 square foot retail store in a new shopping
mall located in Stezzano Italy. Along with the store, Ovvio's Italian
subsidiary received one of the few licenses allowing the retail store to
remain open on Sundays. The leasehold improvements, inventory selection,
employee staffing and oversight of the retail store will managed by Giavanni
Semeraro, who is an Ovvio Better life director located in Erbusco, Italy.
Ovvio Better Life is budgeting $6 million to establish the retail store.
Ovvio Better life has received a subscription from Semeraro Group, to
purchase 840,000 shares of Ovvio Better Life common stock at $3.00 per
share, accompanied by a bank guarantee.. These shares will be purchased over
a period of 8 months, which coincides with Ovvio Better Life's capital needs
for opening the Stezzano store together with the already raised $600,000 plus.
After reserving $1.5 million for establishing the company as an Internet
company and developing its E-commerce, it is anticipated Ovvio Better Life
will need to borrow about $2 million for its retail store.
Ovvio Better Life expects to generate immediate positive cash flow and
profits for its retail store. It is expected that these profits will exceed
the early expected operating losses incurred by the companies Internet
marketing efforts. By combining the establishment of a physical retail store
concurrently with selling and shipping Italian designed furniture to
customers throughout the world over the Internet, the company expects to
avoid the huge early losses sustained by most Internet companies.
Luigi Zavaglio resigned as a Ovvio Better Life director prior to the company
executing the license agreement with Ovvio Holding B.V., a Dutch company and
Ovvio Vivere Meglio S.p.A. executing the real estate lease, to avoid a
conflict of interest. Luigi Zavaglio was not involved in any of the
negotiations leading up to these agreements. Luigi Zavaglio was appointed Chief
Financial Officer of Ovvio Vivere Meglio S.p.A. Randall A. Baker, who has
served as the company's corporate secretary for the past two years, was
appointed to the board of directors. Mr. Baker participated in the contract
negotiations and supported the transaction, along with all of the other
directors.
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.
Date: September 8, 1999 By: /s/Dempsey K. Mork
Dempsey K. Mork
(Chief accounting and financial officer
and duly authorized officer)
Unaudited
Ovvio Better Life, Inc.
CONSOLIDATED BALANCE SHEET
Assets
June 30, December 31,
1999 1998
Current assets:
Cash 5,084 $ 8,337
Loan Receivable Related
Party (Note 6) -0- 281,800
Interest Receivable 12,331 -0-
Total current assets 17,415 290,137
INVESTMENTS, Net 4,133,960 4,133,960
PROPERTY & EQUIPMENT, less Accum.
Deprec. $8,555 & $7,355 6,342 7 ,542
Construction in Progress
(Note 7) 232,224 -0-
OTHER ASSETS - -
---------- -----------
TOTAL ASSETS $4,389,941 $4,431,639
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Investment Margin
Account (Note8) $ 335,732 $ 750,553
Accounts payable 7,097 18,944
Other accrued liabilities 480,004 436,000
Deferred Income Credits 55,578 -0-
----------- -----------
TOTAL LIABILITIES $ 878,411 $ 1,205,497
___________ __________
MINORITY INTEREST 2,000 2,000
Preferred Stock -0- 1,500
Shareholders' equity:
Common Stock, no par value;
50,000,000 shares authorized;
1,458,187 & 842,542 shares
issued and outstanding
respectively 12,586,451 12,252,597
Foreign currency
translation ( 108,378) ( 163,360)
Retained (deficit) (8,968,543) (8,866,595)
------------- ------------
Total shareholders'
equity 3,509,530 3,222,642
------------- -----------
Total Liabilities
and Equity $4,389,941 $ 4,431,639
======== =======
The accompanying notes are an integral part of these financial statements
Unaudited
Ovvio Better Life, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three & Six Months Ended March 31, 1999 and 1998
Three Months Ended six Months Ended
March 31, June 30,
1999 1998 1999 1998
Revenues:
Commissions and consulting
fees $ -0- $ -0- -0- $ -0-
Income (Note 1) 46,598 34,194 83,366 56,427
General & Administrative
Expenses (Note 2) 98,122 173,743 178,541 298,561
---------- ------- -------- ---------
Income (Loss) from Operations (51,524) (139,549) (96,175) (242,134)
---------- --------- -------- ---------
Other Income (expense)
Interest & Income on
Marketable Securities -0- (1,067) -0- 9,961
Interest (Expense)
Bank Chg (Note 3) (8,405) -0- (19,439) -0-
Writedown Investments Note 4 -0(1,139,603) -0-(1,139,603)
Settlement Income- IMA 16,666 -0- 16,666 -0-
Purchase Technology
Foreign Currency Transaction
(Loss) (3,000) -0- (3,000) -0-
--------- -------- -------- ---------
Total Other Income (Expense) 5, 261(1,140,670) (5,773)(1,129,642)
---------- --------- -------- ---------
Gain (Loss) from Continuing
Operations (46,263)(1,280,219)(101,948)(1,371,776)
Gain (Loss) from
Discontinued Operations -0- (281,800) -0- (281,800)
--------- -------- -------- ---------
Net Income (Loss) (46,263)(1,562,019)(101,948)(1,653,576)
======= ======== ======= ========
Per Share Information (Note 5)
Basic (Loss) Per Common Share
Continuing Operation $ (0.03) (1.52) $(0.09) (1.62)
---------- ---------- -------- ---------
Discontinued Operation $ (0.00) (0.33) $(0.00) (0.33)
--------- ---------- --------- ---------
Basic Weighted Avg Number
of common stk shs outstanding
1,340,927 842,542 1,176,840 844,584
======= ======== ======== ========
Diluted (Loss) Per common sh
Continuing Operation $ (0.04) (1.42) $ (0.08) (1.52)
Discontinued Operations $ (0.00) (0.31) $ (0.00) (0.31)
Diluted Weighted Average
Number of common stock
Shares Outstanding 1,176,840 900,876 1,340,927 900,377
======= ======= ======= ======
The accompanying notes are an integral part of these financial statements
Unaudited
Ovvio Better Life, Inc.
Consolidated Statement of Cash Flows
For the Three & Six Months Ended June 30, 1999 & 1998
Three months ended Six months ended
June 30 June 30
1999 1998 1999 1998
Operating Activities:
Net income (loss) $ (46,263) (1,562,019) $(101,948) (1,653,576)
Transactions not
requiring cash:
Depreciation and
amortization 600 9,250 1,200 12,550
Foreign Currency Transaction
(Gain) Loss -0- -0- -0- -0-
Writedown Pemp Investment -0- 1,139,603 -0- 1,139,603
Changes in Current
Assets and Liabilities:
Receivables/Marketable
Securities/other assets
(Increase)/Decrease 269,469 316,390 269,469 609,110
Investment Margin Account,
Accounts Payable, Other
Accrued Liabilities & Deferred
Income Credits (Decreases)
Increases (346,184) 100,154 (327,086) (512,190)
----------- --------- ---------- -----------
Net Cash (Used) Provided
by Operating Activities (122,378) 3,378 (158,365) (404,503)
Investing Activities:
Sale (Purchase)
Property & Equipt -0- (2,992) -0- 2,087
Leasehold Improvments (232,224) -0- (232,224) -0-
Financing Activities:
Proceeds From Issuance Common
Stock 332,354 -0- 333,854 -0-
Liquidation of Preferred Stock -0- -0- (1,500) -0-
Translation (Increase) Adj.
Changes to Cash 19,350 (2,807) 54,982 79,855
--------- --------- --------- ----------
Net Increase (Decrease)
In Cash (2,898) (2,421) (3,253) (322,561)
Cash in Beginning of Period 7,982 3,059 8,337 323,199
Cash at End of Period 5,084 638 5,084 638
The accompanying notes are an integral part of these financial statements
Unaudited
Ovvio Better Life, Inc.
CONSOLIDATED FINANCIAL NOTES
For the Three and Six Month Period Ending June 30, 1999
Note 1 - Revenue Income - Current year 1999, secoond quarter and six months
YTD represents the receipt/accruals of six (6) monthly payments of interest from
Guychar, Inc. The first and second quarters of 1998 was attributable to the
accruals/payments on Marketable Securities and Investments.
Note 2 - General and Administrative Expenses - Second quarter and 6 months
YTD 1999 expenses are lower than prior year's similar periods due to reduced
expenses at the Thermal Corporate Offices.
Note 3 - Other Income/ Expense - Interest expense for 1999 is attributable to
bank service charges (interest and fees) on the investment margin accounts in
Geneva. (See Note 8 on the Investment Margin Liability Account - SFP Bank
stock Purchases).
Note 4 - Writedown of Pemp Investment - Prior year, 1998 second quarter and
YTD had a writedown of $1,139.603.
Note 5 - Per share information - The common stock number of shares outstanding
for all periods reflect the one for four share reverse split effective April,
1999. Prior periods have been recalculated to make per share data comparable
to the June 30, 1999 data.
Note 6 - The related party note receivable (Sangate) was paid off in full
during the second quarter of 1999 by the SFP Bank (Geneva) in conjunction
with their purchase of 178,500 shares of Ovvio Better Life, Inc. on 4/29/1999.
Note 7 - Construction in Progress - The $232,224 charges in the second quarter
of 1999 represents payments made for leasehold improvements on the new Ovvio
Better Life, Inc. store in Italy.
Note 8 - Investment Margin Liability Account - This account represent the stock
margin accounts on the SFP Bank Stock Purchases in Geneva. During the second
quarter of 1999, there was a decrease of $405,919 due primarily to the cash
received on sale of Ovvio common stock for $332,354.
The accompanying selected information is an integral part of
the financial statements.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 5,084
<SECURITIES> 4,133,960
<RECEIVABLES> 12,331
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,151,375
<PP&E> 247,121
<DEPRECIATION> 8,555
<TOTAL-ASSETS> 4,389,941
<CURRENT-LIABILITIES> 878,411
<BONDS> 0
0
0
<COMMON> 12,586,451
<OTHER-SE> 9,074,921
<TOTAL-LIABILITY-AND-EQUITY> 4,389,941
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 37,858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,405
<INCOME-PRETAX> (46,263)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,263)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,263)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.04)
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