UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For the Quarter Ended: Commission File Number
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July 31, 2001 0-30653
BOOK CORPORATION OF AMERICA
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(Name of small business issuer in its chapter)
Utah 87-0375228
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(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4894 Mt. Elbrus Drive, San Diego, California 92117
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (858) 565-1073
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Securities registered pursuant to section 12(b) of the Exchange Act: None
Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
report(s), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [ ] No [X]
State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date:
As of July 31, 2001, issuer had 2,349,540 shares of its $.005 par value
common stock outstanding.
This Form 10-QSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which
act contains a safe harbor for forward looking statements. The Company
believes that investors would be benefitted by the cautionary language
included in this paragraph. For this purpose any statements contained in
this Form 10-QSB that are not statements of historical fact may be deemed
to be forward-looking statements. Without limiting the foregoing, words
such as "may," "will," "expect," "believe," "anticipate," "estimate," or
"continue" or comparable terminology are intended to identify forward-
looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending
on a variety of factors, many of which are not within the Company's
control. These factors include but are not limited to economic conditions
generally and in the industries in which the Company may participate;
competition within the Company's chosen industry, including competition
from much larger competitors; technological advances and failure by the
Company to successfully develop business relationships.
[Left blank intentionally]
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Book Corporation of America
(A Development Stage Company)
Balance Sheet
July October
31, 2001 31, 2000
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(Unaudited)
Assets
Current Assets $ - $ -
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Liabilities & Stockholders' Equity
Current Liabilities
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Accounts Payable $ 20,066 $ 16,107
Taxes Payable 200 200
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Total Current Liabilities 20,266 16,307
Stockholders' Equity
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Common Shares 100,000,000 Authorized;
$0.005 Par Value 2,349,540 Shares
Issued & Outstanding 11,748 11,748
Paid In Capital 3,041,711 3,041,711
Accumulated Deficit (3,073,725) (3,069,766)
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Total Stockholders' Equity (20,266) (16,307)
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Total Liabilities & Stockholders' Equity $ - $ -
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See Accompanying Notes
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Book Corporation of America
(A Development Stage Company)
Statements of Operations (Unaudited)
For the Three Months Ended July 31, 2001 and 2000
and the Nine Months Ended July 31, 2001 and 2000
For the Three For the Nine
Months Ended Months Ended
July July July July
31, 2001 31, 2000 31, 2001 31, 2000
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Revenues $ - $ - $ - $ -
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Expenses
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Administrative Expenses 721 1,814 3,959 16,207
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Total Expenses 721 1,814 3,959 16,207
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Net Loss $ (721) $ (1,814) $ (3,959) $ (16,207)
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Net Loss Per Share of
Common Stock $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted Average Number
Of Shares Outstanding
During Period 2,349,540 2,349,540 2,349,540 2,349,540
See Accompanying Notes
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Book Corporation of America
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
For the Nine Months Period Ended July 31
2001 2000
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Cash Flows from Operating Expenses
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Net (Loss) $ (721) $ (1,814)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Changes in Operating Assets & Liabilities
Increase in Accounts Payable 721 1,814
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Net Cash (Used) by Operating Expenses - -
Cash Flows from Investing Activities
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Net Cash Provided by Investing Activities - -
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Cash Flows from Financing Activities
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Net Cash Provided by Financing Activities - -
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Increase (Decrease) in Cash - -
Cash at Beginning of Period - -
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Cash at End of Period $ - $ -
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Disclosures for Operating Activities
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Interest $ - $ -
Taxes - -
See Accompanying Notes
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Book Corporation of America
(A Development Stage Company)
Notes to Financial Statements
July 31, 2001
NOTE #1 - Organization
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The Company was incorporated under the laws of the state of Utah on
November 22, 1978. The Company amended its Articles of Incorporation,
authorizing 100,000,000 shares of common stock having a par value of $0.005
per share.
The Articles of Incorporation grants the Company unlimited power to engage
in and to do any lawful act concerning any and all lawful businesses for
which corporations may be organized. The Company currently seeks to
license films to television and to engage in market-by-market exploitation
of the films it holds in its film inventory.
In accordance with FASB 7 the Company is considered to be a development
stage company.
NOTE #2 - Significant Accounting Policies
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A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period in
which the sales are finalized with customers.
C. The Company considers all short term, highly liquid investments, that
are readily convertible to known amounts within ninety days as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares would have an antidilutive effect upon
earnings per share no diluted earnings per share shall be presented.
E. As a licensor of films to television or other markets the Company
shall recognize revenues on the dates of the exhibition for both
percentage and flat fee engagements. Revenues from license agreements
that meet the requirements of FASB 53 shall be recognized when the
license period begins.
F. Costs to produce a film shall be capitalized as film costs inventory
and shall be amortized using the individual film forecast computation
method.
G. Operating expenses and all type of income are recognized in the period
in which the activities occur.
H. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of
leasehold improvements is amortized over the lesser of the length of
the lease of the related assets for the estimated lives of the assets.
Depreciation and amortization is computed on the straight line method.
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Book Corporation of America
(A Development Stage Company)
Notes to Financial Statements
July 31, 2001
NOTE #3 - Non Cash Investing and Non Cash Financing Activities
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In 1988, the Company issued 200,000 shares of its common stock to a
related entity for assets valued at historical cost of $200,000.
The Company currently holds in its film inventory, films contributed to the
Company by principal stockholders. In the year ended October 31, 1999, the
Company wrote off 100% of the cost of these films, because it has not and
has no plans to aggressively market the films.
NOTE #4 - Public Stock Offering
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In 1979, the Company conducted an intrastate public offering of its common
stock shares and issued 15,000,000 pre split, 300,000 post split shares for
net proceeds of $127,500.
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Item 2 Plan of Operation
For a complete understanding, this Plan of Operations should be read
in conjunction with Part I- Item 1. Financial Statements to this Form 10-
QSB.
Book Corporation of America (the "Company"), was incorporated under
the laws of the State of Utah on November 22, 1978 for the purpose of (1)
engaging primarily in the specific business of acquiring, developing,
owning, selling, leasing, licensing, exploiting, and otherwise dealing with
literary properties and materials, copyrights, licenses, and other tangible
and intangible properties in connection with artistic ideas and endeavors,
and to carry on a negotiation for, production of, purchase of, sale,
licensing, distribution, advertising, and promotion of all rights,
privileges, and properties in the entertainment industry, including, but
not limited to, all types of theatrical motion pictures, theatrical stage
plays, television films, programs and commercials, radio recordings, books,
and music publications and music recordings and (2) acting as principal,
agent, joint venturer, partner, or in any other capacity which may be
authorized or approved by the Board of Directors of the Company. The
Company has no "parents" or "predecessors," as those terms are defined
under the federal securities laws.
In 1979 the Company conducted an intrastate public offering of its
common stock. On October 10, 1988, the common stock of the Company was
reverse split 50 to 1, and the par value was changed from $0.01 to $.005
per share. Also in October 1988, the Company acquired Sun Television
Entertainment, Inc., bringing assets of 36 motion picture screenplays
(subsequently valued at $-0-) and motion picture production equipment was
transferred to the Company by Visto International, Inc.
Since its inception the Company has sustained continued losses and
currently has liabilities in excess of current assets. In addition, the
Company has no revenue producing activities and is dependent upon its
officers to provide for its cash requirements. These factors indicate
considerable doubt as to the Company's ability to continue as a going
concern. To date the Company has been unsuccessful in its efforts to
develop its entertainment business.
Therefore, the Company intends to seek, investigate, and if warranted,
acquire an interest in a business opportunity. The Company proposes to
seek a business opportunity within the entertainment industry. The Company
has unrestricted discretion in seeking and participating in a business
opportunity, subject to the availability of such opportunities, economic
conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its business judgment. There is no assurance that the Company will be
able to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.
The risks inherent in seeking a business interest are further
complicated as a result of the fact that the Company is a dormant company,
has limited resources and is unable to provide a prospective business
opportunity with capital.
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The Company's limited resources include property and equipment that
have been completely depreciated. In addition, the Company has been unable
to market its films which are now more than twenty-five years old. The
Company does not anticipate any future market developing for the films, and
subsequently, in October 1999 the value of the films was written down to $-
0-. Because the Company's resources are limited to depreciated and
unmarketable property, the Company's ability to acquire a business
opportunity within the entertainment industry may be affected.
Sources of Opportunities
It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other
businesses and professional people. Although the Company does not
anticipate engaging professional firms specializing in business
acquisitions or reorganizations, if management deems it in the best
interest of the Company, such firms may be retained. In some instances,
the Company may publish notices or advertisements seeking a potential
business opportunity in financial or trade publications.
Criteria
The Company intends to focus its search for prospective business
opportunities to the area of entertainment. However, should other
opportunities become available, the Company may also consider
opportunities outside the entertainment industry based on criteria outlined
below.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations; prospects for the future; the nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of the management; the potential for success of the
opportunity; the potential for growth and expansion; the potential for
profit; and other relevant factors.
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the
other firm's management and personnel, the ability to market products, and
numerous other factors which are difficult if not impossible to analyze
through the application of any objective criteria. In many instances, it
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future.
Generally, the Company will analyze all factors and circumstances and
make a determination based upon a composite of available facts, without
reliance upon any single fact as controlling.
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Methods of Participation of Acquisition
Specific business opportunities will be reviewed and on the basis of
that review the legal structure or method of participation deemed by
management to be suitable will be selected. The Company may consider
structures and methods such as leases, purchase and sale agreements,
licenses, joint ventures, or other contractual arrangements and may involve
a reorganization, merger or consolidation transaction. The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.
Procedures
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as: a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon
which they are based; and explanation of proprietary products and services;
present and proposed forms of compensation to management; a description of
transactions between the prospective entity and its affiliates; relevant
analysis of risks and competitive conditions; a financial plan of operation
and estimated capital requirements; and other information deemed relevant.
Competition
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is from
other companies, organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals who are interested in a business opportunity. Many
of these companies and groups have substantial financial and personal
resources which give such companies considerable advantage over the
Company.
Employees
The Company does not currently have any employees but relies upon the
efforts of its officers and directors to conduct the business of the
Company.
Should a business opportunity become available to the Company, the
Company's management may seek to raise additional capital by investment
from outsiders in the Company's common stock.
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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
(a) Reports on Form 8-k - No reports on Form 8-k were filed during the
quarter.
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SIGNATURES
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In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Book Corporation of America
Date: September 10, 2001 By: /s/ William Messerli
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President
Date: September 10, 2001 By: /s/ Philip Yordan
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Treasurer
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SIGNATURES
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In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Book Corporation of America
Date: September 10, 2001 By:
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President
Date: September 10, 2001 By:
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Treasurer
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