-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/DvG7cwkPmKyvuaPxBv5mz7XBD5y4dqaGbOlFGjXjbKiVZM/tflWKqhDW22I93A K46rwbIYO4x8nltWiTJorQ== 0001074140-99-000012.txt : 19990302 0001074140-99-000012.hdr.sgml : 19990302 ACCESSION NUMBER: 0001074140-99-000012 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CUSTOM COMPONENTS INC CENTRAL INDEX KEY: 0001053322 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 810478643 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23859 FILM NUMBER: 99552832 BUSINESS ADDRESS: STREET 1: 3310 WEST MCARTHUR BLVD CITY: SANTA ANA STATE: CA ZIP: 92704 BUSINESS PHONE: 7146622080 MAIL ADDRESS: STREET 1: 3310 W MACARTHUR BLVD CITY: SANTA ANA STATE: CA ZIP: 92704 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB (Mark One) [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 1999 [ ] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from __________ to __________ Commission file number O-23859 AMERICAN CUSTOM COMPONENTS, INC. (Exact Name of Small Business Issuer as Specified in Its Charter) Nevada 81-0478643 (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) identification No.) 3310 W. MacArthur Blvd. Santa Ana, CA 92704 (Address of Principal Executive Offices) (714) 662-2080 (Issuer's Telephone Number, Including Area Code) (Former Name, Former Address and Former Fiscal Y ear, if Changed Since Last Report) 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of February 26, 1999, there were 13,778,341 shares of common stock outstanding. AMERICAN CUSTOM COMPONENTS, INC. INDEX Page Part I Financial Information Item 1. Financial Statements Balance sheet as of December 31, 1998 (unaudited). . 3 Statements of operations for the nine months ended December 31, 1998 and 1997 (unaudited) . . . . . . . . . 4 Statements of cash flows for the nine months ended December 31, 1998 and 1997 (unaudited) . . . . . . . . . .5 Item 2. Managements Discussion and Analysis or Plan of Operation . . . . . . . . . . . . . . . . . . . . . 6 Part II Other Information Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . 6 Item 2. Changes in Securities. . . . . . . . . . . . . . . . . 6 Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . 7 Item 4. Submission of Matters to a Vote of Security Holders. . 7 Item 5. Other Information. . . . . . . . . . . . . . . . . . . 7 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 7 PART I - FINANCIAL STATEMENTS Item 1. Financial Statements AMERICAN CUSTOM COMPONENTS, INC. BALANCE SHEET December 31, 1998 ASSETS Current Assets: Cash $ 3,817 Accounts receivable, net 60,562 Inventories 140,944 Total current assets 205,323 Property and equipment, net 962,250 Other assets 310,375 Total assets 1,477,948 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable 753,978 Bank overdraft 0 Line of Credit 40,179 Notes payable, current 346,575 Income taxes payable 6,137 Total current liabilities 1,210,363 Notes payable, net of current portion 413,998 Total liabilities 1,560,860 Commitments and contingencies Shareholders' equity (deficit) Common stock ($0.001 par value; 25,000,000 shares authorized; 13,873,341 shares issued and outstanding as of December 31, 1998) 13,873 Additional paid-in capital 1,801,927 Accumulated deficit <1,898,712> Total shareholders' equity (deficit) <82,912> Total liabilities and shareholders' equity (deficit) 1,477,948
AMERICAN CUSTOM COMPONENTS, INC. STATEMENTS OF OPERATIONS Nine months ended Nine months ended December 31, 1998 December 31, 1997 Net sales $ 1,004,309 2,153,090 Cost of sales 644,721 1,099,236 Gross profit 359,588 1,053,854 Operating costs and expenses: Wages and salaries 339,355 389,892 Options compensation expense 0 0 Selling and promotion 46,025 51,796 Insurance 47,803 51,505 Professional fees 164,277 83,653 Depreciation and amortization expense 72,000 55,448 Research and development 0 0 Other operating expenses 266,028 269,905 Total costs and expenses 935,488 902,199 Income (loss) from operations <575,900> 151,655 Other expense: Interest expense 44,980 44,525 Income (loss) before provision for taxes <620,880> 107,130 Provision for income taxes 800 800 Net income (loss) <621,680> 106,330 Earnings (loss) per share - basic <.05> .01 Weighted average number of shares outstanding - basic 12,987,996 8,319,369
AMERICAN CUSTOM COMPONENTS, INC. STATEMENTS OF CASH FLOWS Nine months ended Nine months ended December 31, 1998 December 31, 1997 Cash flows from operating activities: Net income (loss) $ <621,680> 106,330 Adjustments to reconcile income (loss) to net cash provided by operating activities: Depreciation and amortization 72,000 55,448 Uncollectible accounts receivable 0 0 Compensation expense resulting from the granting of options 0 0 Decrease (increase) in assets: Accounts receivable 419,325 <47,300> Inventories 40,002 <105,536> Other assets <111,518> <1,600> Increase in liabilities Accounts payable 499,820 15,450 Line of credit 0 0 Income taxes payable 6,137 0 Cash used in operating activities 526,942 22,792 Cash flows used in investing activities: Acquisition of property and equipment <294,823> <276,556> Increase in other assets 0 <191,655> Cash used in investing activities <294,823> <468,211> Cash flows provided by (used in) financing activities: Principal reduction of notes payable <380,159> <270,535> Proceeds from notes payable 14,899 146,125 Issuance of common stock 5,840 740,985 Cash provided by financing activities <359,420> 616,575 Net increase (decrease) in cash <127,301> 171,156 Cash, beginning of period 131,118 <47,735> Cash, end of period 3,817 123,421
Item 2. Managements Discussion and Analysis or Plan of Operation Results of Operations During the first nine months of the Company's fiscal year, the Company focused a significant amount of resources on recovering from the loss of two major customers who experienced financial difficulty. The loss of these two customers, as well as expansion costs, resulted in a shortage of cash flow for the period. During the nine months ended December 31, 1998, net sales decreased to $1,004,309 from $2,153,090 for the nine months ended December 31, 1997. This decrease of 53% was attributed to the Company's lack of financial resources to obtain materials to fulfill its purchase orders. In addition, the Company did not have the financial resources to expand its existing customer base. Gross profit was $359,588 for the nine months ended December 31, 1998, or 36% of net sales. For the nine months ended December 31, 1997, gross profit was $1,053,854, or 49% of net sales. This decrease of 13% was attributed to the front-end expenses related to several new customers. During the nine months ended December 31, 1998, accounts payable increased 3135% to $499,820 as compared to $15,450 for the nine months ended December 31, 1997. This increase is related to the Company's purchase of materials used for programs which became obsolete when the two major customers experienced financial difficulties and ended their relationship with the Company, and increased legal and accounting expenses. PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company is presently, has been, and may from time to time be involved in various claims, lawsuits, disputes with third parties, actions involving allegations of discrimination, or breach of contract actions incidental to the operation of its business. The Company is not currently involved in any such litigation which it believes could have a materially adverse effect on its financial condition or results of operations. Item 2. Changes in Securities In October 1998, the Company sold an aggregate of 7,143 restricted shares of common stock under Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933 to George Brook, a sophisticated investor given full access to the Company's books and records, for $0.70 per share, resulting in net proceeds to the Company of $5,000. In October 1998, the Company issued 200,000 shares of restricted common stock to The Michelson Group, Inc., an accredited investors, in consideration for the cancellation of outstanding open account indebtedness. The issuance was exempt under Section 4(2) of the Securities Act of 1933. In November 1998, the Company sold an aggregate of 26,667 shares of common stock under Section 4(2) of the Securities Act of 1933 to Jeffrey Willmann, a sophisticated individual given full access to the Company's books and records, at a price of $0.375 per share, resulting in net proceeds to the Company of $10,000. In November 1998, the Company issued 40,000 shares of common stock to MRC Legal Services Corporation, an accredited entity, in consideration for the cancellation of outstanding open account indebtedness. This issuance was exempt under Section 4(2) of the Securities Act of 1933. In November 1998, the Company sold an aggregate of 13,334 shares of common stock under Section 4(2) of the Securities Act of 1933 to Robert Karinchak, a sophisticated individual given full access to the Company's books and records, at a price of $0.375 per share, resulting in net proceeds to the Company of $5,000. In November 1998, the Company issued 100,000 shares of common stock to National Capital Merchant Group, Ltd., an accredited entity, in accordance with the terms of an agreement. The issuance was exempt under Section 4(2) of the Securities Act of 1933. In November 1998, the Company issued 20,000 shares of common stock to Prototype and Short Run Services, Inc., an accredited entity, in consideration for the cancellation of outstanding open account indebtedness. This issuance was exempt under Section 4(2) of the Securities Act of 1933. Item 3. Defaults Upon Senior Securities As of December 31, 1998, the Company was in default under two promissory notes to private individuals. In the aggregate, these two notes represent an outstanding principal balance of $373,475, plus unpaid interest and arreages of $34,278.50. Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted to the security holders for a vote. Item 5. Other Information There is no other information deemed material by management for disclosure herein. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K None. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN CUSTOM COMPONENTS, INC. Dated: February 26, 1999 /s/ John Groom By: John Groom Its: President -----END PRIVACY-ENHANCED MESSAGE-----