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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15 (d) of the Security
- --- Exchange Act of 1934 For the Quarterly period ended September 30, 1998.
- --- 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: 0-25334
INTERNATIONAL DIVERSIFIED INDUSTRIES, INC.
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(Exact name of Small Business Issuer as specified in the charter)
New York 13-3729043
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(State of Incorporation) (I.R.S. Employer Identification No.)
4500 140th Avenue No., Suite 221, Clearwater, Florida 33762
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(Address of principal executive offices)
(727) 532-4818
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(Issuer's telephone number)
THE GREAT AMERICAN BACKRUB STORE, INC.
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(Former name)
Check whether the issuer: (1) filed all reports required by Section 13 or 15 (d)
of the Securities Exchange Act during the past 12 months (or for such 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
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State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at November 12, 1998
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Common Stock, $.001 par value 3,788,588
Transitional Small Business Disclosure Format (check one):
Yes No X
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INTERNATIONAL DIVERSIFIED INDUSTRIES, INC.
(formerly known as) THE GREAT AMERICAN BACKRUB STORE, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEET
AS OF September 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Part 1: Financial Information
Item 1: Financial Statements
ASSETS
<S> <C>
Current assets
Cash $ 32,589
Other receivables, net 3,290
Prepaid expenses 25,148
Inventory 84,499
Capitalized loan costs, net of $123,367 accumulated amortization 213,325
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Total current assets 358,851
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Property and equipment, net
Real property 5,305,129
Furniture and fixtures 426,887
Leasehold improvements 849,649
Computer equipment 44,983
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6,626,648
Less accumulated depreciation (410,214)
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6,216,434
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Other assets
Notes receivable, net 100,000
Accrued interest receivable 21,750
Lease and equipment deposits 211,443
Other assets 206,167
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Total other assets 539,360
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Goodwill, net of $266,424 accumulated amortization 1,123,624
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Total assets $ 8,238,269
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,656,508
Accrued expenses 1,006,857
Accrued payroll and related expenses 95,785
Bridge notes 262,667
Note payable - related party, net 732,645
Deferred revenue 138,519
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Total current liabilities 3,892,981
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Deferred rent 215,007
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Commitments and contingencies --
Stockholders' equity
Series A convertible preferred stock, $0.001 par
value 15,000,000 shares authorized, none issued --
Common stock, par value $0.001, 25,000,000
shares authorized, 3,788,588 shares issued and
outstanding 3,788
Common stock to be issued, 1,764,979 shares, par
value $0.001 1,765
Additional paid-in capital 7,067,018
Additional paid-in on common stock to be issued 736,074
Accumulated deficit (3,595,114)
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4,213,531
Less subscriptions receivable (83,250)
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4,130,281
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Total liabilities and stockholders' equity $ 8,238,269
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</TABLE>
See accompanying notes to financial statements.
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INTERNATIONAL DIVERSIFIED INDUSTRIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 2 - Reverse Acquisition, continued:
On October 16, 1997 the acquisition was consummated and the Company
initially issued 11,000,000 shares of its common stock to Ascot in exchange for
100% of the issued and outstanding common stock of CARIBSUN. Due to a deficiency
on the Company's authorized shares of common stock on October 16, 1997,
6,097,416 shares of common stock of the Company remain to be issued to Ascot.
Upon shareholder approval and completion of an amendment to the Company's
certificate of incorporation increasing the authorized shares, the remaining
6,097,416 common shares will be issued. These unissued shares are presented in
the balance sheet as Common Stock to be issued and Additional paid-in capital on
common stock to be issued. See note 7 Common Stock, for information
concerning the adjustment of the number of shares issuable to Ascot as a result
of the change of domicile merger which took place on August 3, 1998.
The CARIBSUN acquisition and issuance of the Company's Common Stock to
Ascot resulted in Ascot obtaining approximately an 80% voting interest in the
Company. Generally Accepted Accounting Principles require that the company whose
shareholders retain the majority interest in the voting stock of the combined
business be treated as the acquirer for accounting purposes. As a result, the
acquisition is accounted for as a reverse acquisition for financial reporting
purposes and CARIBSUN is deemed to have acquired the Company. Accordingly, the
Company's financial statements at the acquisition date and at September 30, 1998
are presented as follows: (1) the balance sheet consists of CARIBSUN's net
assets as historical cost, and the Company's net assets at fair market value in
the date of acquisition (acquired cost); and (2) the statement of operations
includes CARIBSUN's operations for the period presented and Company's operations
from the date of acquisition, October 16, 1997.
The purchase price consists of the 17,097,416 common shares issued to
Ascot multiplied by the average fair market value of the Company's common stock
as measured just before and after the agreement and announcement of the
acquisition, as adjusted for management's estimate of the fair market value
dilution effect of issuing those shares, plus acquisition costs. The entire
difference between the purchase prices and net assets of the Company acquired
was allocated to goodwill.
The following unaudited pro-forma information presents a summary of
consolidated results of operations of the Company as if the reverse acquisition
had occurred on January 1, 1996. These pro-forma results have been prepared for
comparative purposes only and do not purport to be indicative of the results of
operations which actually would have resulted had the acquisition occurred on
the date indicated, or which may result in the future. The pro-forma results
follow:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
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<S> <C> <C>
Revenues $ 1,245,225 $ 2,845,956
Operating expenses 3,352,644 4,496,921
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Net loss from operations (2,107,419) (1,650,965)
Other income (expense) (193,584) (219,177)
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Net Loss $(2,301,003) $(1,870,142)
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Weighted average number of shares outstanding during the period 5,271,277 5,233,586
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Net loss per common share $ (0.44) $ (0.36)
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</TABLE>
Note 3 - Options, Stock Plans and Management Compensation
At the Company's 1994 annual meeting of shareholders held on July 18,
1994, the Company's shareholders approved the Employee Plan. The purpose of the
Employee Plan is to promote the success of the Company by providing a method
whereby eligible employees of the Company and its subsidiaries, as defined
therein, may be awarded additional remuneration for services rendered, thereby
increasing aid in attracting persons of suitable ability to become employees of
the Company and its subsidiaries. The plan covers an aggregate of 75,000 shares
of the Company's Common Stock. As of September 30, 1997, options to purchase
8,500 shares of Common Stock were outstanding under the plan.
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Signature
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.
INTERNATIONAL DIVERSIFIED INDUSTRIES, INC.
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Registrant
Date: November 23, 1998 David L. West
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David L. West, Chief Financial Officer (duly
authorized officer and principal financial
officer and principal accounting officer)
Treasurer and Secretary
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