U.S. 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 March 31, 1996
-------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _________________
Commission File Number: 1-14078
-------
BLUE FISH CLOTHING, INC.
------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Pennsylvania 22-2781253
------------ ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
No. 3 Sixth Street, Frenchtown, New Jersey 08825
------------------------------------------------
(Address of Principal Executive Offices)
(908) 996-3844
--------------
(Issuer's Telephone Number, Including Area Code)
N/A
-------------------------------------------------------------------
(Former Name,Former Address and Former Fiscal Year,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 X NO
----- -----
State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest practicable date: As of May 17, 1996,
---------------------
6,635,305 shares of Common Stock, $.001 par value per share, were issued and
- --------------------------------------------------------------------------------
4,586,609 shares of Common Stock were outstanding.
- --------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (check one): YES NO X
---- ----
BLUE FISH CLOTHING, INC.
INDEX
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets - December 31, 1995 and March 31, 1996 3
Statements of Operations - For the Three Months Ended 4
March 31, 1995 and March 31, 1996
Statements of Cash Flows - For the Three Months Ended
March 31, 1995 and March 31, 1996 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 13
ITEM 2. CHANGES IN SECURITIES 13
ITEM 3. DEFAULTS ON SENIOR SECURITIES 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY 13
HOLDERS
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
INDEX TO EXHIBITS AND EXHIBITS 15
BLUE FISH CLOTHING, INC.
BALANCE SHEETS (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------
DECEMBER 31,
1995 ACTUAL PRO FORMA
---------------- ------ ---------
(Note 4)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 124,862 $ 24,764 $ 24,764
Restricted cash 81,016 102,863 102,863
Receivables, net of allowance of 818,066 1,220,276 1,220,276
$33,000 and $33,000
Inventories 2,026,988 2,100,491 2,100,491
Other current assets 20,684 - -
Deferred income taxes - - 107,688
------------- ------------ ------------
Total current assets 3,071,616 3,448,394 3,556,082
PROPERTY AND EQUIPMENT
Property and equipment, net of accumulated 743,242 751,347 751,347
depreciation of $291,567 and $332,935
OTHER ASSETS
Noncompete and consulting agreement, net 90,667 82,167 82,167
Security deposits 20,201 20,201 20,201
Deferred offering costs 512,770 600,398 600,398
Deferred income taxes - - 65,878
------------ ----------- ------------
$ 4,438,496 $ 4,902,507 $5,076,073
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITES
Line of credit $ 500,000 $ 750,000 $ 750,000
Demand note payable - 100,000 100,000
Current portion of long-term debt 189,419 158,247 158,247
Receivable purchase line of credit 810,163 1,028,625 1,028,625
Accounts payable 897,732 1,175,258 1,175,258
Accrued expenses 435,287 379,295 379,295
Shareholder distributions payable 102,157 52,719 52,719
Accrued bonus - stock grant 216,144 216,144 216,144
------------- ------------ -----------
Total current liabilities 3,150,902 3,860,288 3,860,288
LONG-TERM DEBT 109,610 425,916 425,916
DEFERRED COMPENSATION 186,845 186,845 186,845
------------- ------------ -----------
COMMITMENTS AND CONTINGENCIES
(Note 8)
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 11,000,000
shares authorized, 5,848,696 shares issued
and 3,800,000 shares outstanding 5,849 5,849 5,849
Additional paid-in capital 503,471 503,471 827,175
Retained earnings 711,819 150,138 -
Less- Treasury stock, 2,048,696 common
shares, at cost (230,000) (230,000) (230,000)
------------ ----------- ------------
Total stockholders' equity 991,139 429,458 603,024
------------ ----------- ------------
$ 4,438,496 $ 4,902,507 $5,076,073
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
3
BLUE FISH CLOTHING, INC.
STATEMENTS OF OPERATIONS (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996
---- ----
<S> <C> <C>
SALES $1,809,923 $2,752,179
COST OF GOODS SOLD 788,278 1,355,301
---------- ----------
Gross margin 1,021,645 1,396,878
OPERATING EXPENSES 882,623 1,470,718
---------- ----------
Income (loss) from operations 139,022 (73,840)
INTEREST EXPENSE 34,229 62,980
---------- ----------
INCOME (LOSS) BEFORE STATE INCOME
TAXES 104,793 (136,820)
STATE INCOME TAXES 13,322 900
---------- -----------
NET INCOME (LOSS) $ 91,471 $ (137,720)
=========== ===========
PRO FORMA DATA (Note 3)
Historical income (loss) before
income taxes $ 104,793 $ (136,820)
Pro forma income taxes (benefit) 43,699 (42,277)
----------- ------------
PRO FORMA NET INCOME (LOSS) $ 61,094 $ (94,543)
============ ============
PRO FORMA NET INCOME (LOSS)
PER SHARE $ 0.02 $ (0.02)
PRO FORMA WEIGHTED AVERAGE
SHARES OUTSTANDING 3,834,800 3,800,000
</TABLE>
The accompanying notes are an integral part of these statements.
4
BLUE FISH CLOTHING, INC.
STATEMENTS OF CASH FLOW (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------
1995 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) $ 91,471 $ (137,720)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities -
Depreciation and amortization 49,689 49,868
Net recovery on accounts receivable - (57,834)
(Increase) decrease in assets -
Accounts receivable (26,792) (344,376)
Inventory (22,171) (73,503)
Other current assets (59) 20,684
Other assets (1,100) -
Increase (decrease) in liabilities -
Accounts payable 59,441 277,526
Accrued expenses (387,887) (55,992)
--------- ----------
Net cash used in
operating activities (237,408) (321,347)
--------- ----------
INVESTING ACTIVITIES
Payments for purchases of property and equipment (98,390) (49,473)
--------- ----------
Net cash used in investing activities (98,390) (49,473)
--------- ----------
FINANCING ACTIVITIES
Net borrowings on line of credit 300,000 250,000
Receivable purchase line of credit, net 28,704 218,462
Borrowing on long-term debt - 450,000
Repayments on long-term debt (56,227) (64,866)
Deferred offering expenses paid - (87,628)
Stockholder cash distributions (73,564) (473,399)
--------- ----------
Net cash provided by financing activities 198,913 292,569
--------- ----------
NET DECREASE IN CASH AND (136,885) (78,251)
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 405,564 205,878
--------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 268,679 $ 127,627
========= ==========
CASH PAID DURING THE PERIOD FOR
Interest $ 34,229 $ 60,580
========= ==========
State income taxes $ 13,322 $ 900
========= ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
BLUE FISH CLOTHING, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDING MARCH 31, 1996
------------------------------------
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION:
- ---------------------------------------------------
The accompanying unaudited financial statements are presented in accordance with
the requirements for Form 10-QSB and do not include all the disclosures required
by generally accepted accounting principles for complete financial statements.
Reference should be made to Registration Statement on Form SB-2 (Registration
No. 33-97418-NY) for Blue Fish Clothing, Inc. (the Company) and the Company's
Annual Report on Form 10-KSB for additional disclosures including a summary of
the Company's accounting policies.
In the opinion of management of the Company, the financial statements include
all adjustments, consisting of only normal recurring accruals, necessary for a
fair presentation of the financial position of Blue Fish Clothing, Inc. The
results of operations for the quarter ended March 31, 1996 or any other interim
period, are not necessarily indicative of the results to be expected for the
full year.
NOTE 2 - INITIAL PUBLIC OFFERING:
- ---------------------------------
On November 13, 1995, the Company commenced the sale of 800,000 shares of common
stock in a public offering at a price of $5.00 per share. The offering was made
directly by the Company on a "Minimum/Maximum" basis subject to subscription and
payment for not less than 500,000 shares (the Minimum) and not more than 800,000
shares (the Maximum). As of May 13, 1996 the Company sold 786,609 shares in the
offering and the offering has been closed yielding net proceeds of approximately
$3,400,000. Costs incurred in relation to this offering have been separately
identified in Other Assets, and will be reclassified to additional paid in
capital in the second quarter.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES AND DISCLOSURES:
- ---------------------------------------------------------
Inventories
- -----------
The components of inventory as presented are as follows:
December 31, 1995 March 31, 1996
----------------- --------------
Raw materials $200,297 $177,472
Work-in-process 689,337 533,079
Finished goods 1,137,354 1,389,940
---------- ----------
$ 2,026,988 $2,100,491
=========== ==========
6
Major Customers and Concentration of Credit Risk
- ------------------------------------------------
The Company has one significant customer that accounted for 18.9% and 12.6% of
total sales through December 31, 1995 and March 31, 1996, respectively. This
same customer accounted for 16.5% and 10.1% of net accounts receivable at
December 31, 1995 and March 31, 1996, respectively.
NOTE 4 - PRO FORMA INFORMATION:
- -------------------------------
Balance Sheet Effect
- --------------------
The pro forma balance sheet of the Company as of March 31, 1996 reflects (1) the
net deferred income tax asset which will be recorded by the Company as a result
of the termination of its S Corporation status upon the closing of the Company's
initial public offering (estimated at $173,566 at March 31, 1996), and (2) the
reclassification of all S Corporation earnings to additional paid-in capital.
Pro Forma Statement of Operations Data
- --------------------------------------
For informational purposes, the accompanying statements of operations for the
quarter ended March 31, 1995 and 1996 include an unaudited pro forma adjustment
for the income taxes which would have been recorded if the Company had not been
an S Corporation, based on the tax laws in effect during the respective period.
The differences between the federal statutory income tax (benefit) rate and the
pro forma income tax (benefit) rate for all periods presented are as follows:
1995 1996
---- ----
Federal statutory tax rate 34.0% (34.0)%
State income taxes, net of federal benefit 6.8 (5.0)
Other 0.9 8.1
---- ----
41.7% (30.9)%
==== ====
Pro Forma Net Income (Loss) Per Share
- -------------------------------------
Pro forma net income (loss) per share was calculated by dividing pro forma net
income (loss) by the weighted average number of shares of common stock
outstanding for the respective periods, adjusted for the dilutive effect of
common stock equivalents which consist of stock options. Pursuant to the
requirements of the Securities and Exchange Commission, common stock issued by
the Company during the twelve months immediately preceding the initial public
offering, plus the number of common equivalent shares which were authorized and
will become issuable during the same period pursuant to the grant of common
stock options, have been included in the calculation of the shares used in
computing pro forma net income (loss) per share as if they were outstanding for
all periods presented using the treasury stock method and the offering price of
$5.00 per share.
7
NOTE 5 - FACTORING AND FINANCING AGREEMENTS:
- --------------------------------------------
During 1995, the Company had a receivable purchases line of credit agreement
with a bank which provided for the assignment and processing of Company
receivables with recourse to a maximum outstanding assigned amount of
$1,000,000. The Company assigned 100% of its wholesale credit receivables under
this agreement, providing immediate cash availability of up to 88.25% of these
receivables. In February, 1996, the Company refinanced this purchase line of
credit with another bank subject to identical conditions of the original
agreement.
NOTE 6 - LINE OF CREDIT:
- ------------------------
The Company fully utilized its $500,000 line of credit at March 31, 1995, which
bore interest at prime plus .75%. In February, 1996, the Company refinanced this
line of credit with another bank, and increased the available line of credit to
$1,000,000. This line of credit is subject to a maximum outstanding amount not
to exceed 50% of finished goods inventory plus 25% of work in process. At March
31, 1996, $750,000 of this line of credit was advanced and outstanding.
NOTE 7 - LONG-TERM DEBT:
- ------------------------
On January 2, 1996, the Company borrowed $450,000 from a majority shareholder
subject to certain repayment conditions (see Note 10).
NOTE 8 - COMMITMENTS AND CONTINGENCIES:
- ---------------------------------------
Operating Leases
- ----------------
Effective January 1, 1996, the Company entered into a five-year lease to secure
a wholesale showroom space in New York City, New York at an annual rental of
$59,520.
On January 5, 1996, the Company entered a five-year lease to operate a retail
store in Austin, Texas. This lease, which is expected to commence in the Fall,
1996, has escalating monthly rents of $4,356 to $4,982.
NOTE 9 - STOCKHOLDERS' EQUITY AND CHANGE OF OWNERSHIP:
- ------------------------------------------------------
The Company experienced no change of ownership during the first quarter of 1996.
Subject to a request made of and approved by the Board of Directors in
September, 1995, on January 2, 1996, a majority shareholder withdrew $450,000 of
equity as a shareholder distribution (see Note 10).
8
NOTE 10 - RELATED PARTY TRANSACTIONS:
- -------------------------------------
The Company leases one of its facilities from the father of the Company
president and majority stockholder under a ten-year operating lease for
approximately $35,000 per year. The Company also leases additional office space
from this same individual on a month-to-month lease for approximately $11,000
per year.
On January 2, 1996, the Company's majority shareholder withdrew $450,000 of the
taxed but undistributed S corporation earnings. The shareholder loaned these
funds back to the Company on an unsecured basis and has waived the right to
receive any further distributions of S corporation earnings other than to pay
taxes on S corporation earnings. The Company borrowed these funds from the
shareholder and issued a promissory note in the amount of $450,000 and bearing
interest at 7%. Interest is payable monthly, and the principal is due on demand
subject to certain limitations, as defined, including limiting payment to
$100,000 in any 12 month period.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS:
- --------------
THREE MONTHS ENDED MARCH 31, 1996 ("1996 QUARTER") COMPARED TO THREE MONTHS
ENDED MARCH 31, 1995 ("1995 QUARTER")
SALES. The Company's sales increased by $942,256 or 52.1% from
$1,809,923 in the 1995 quarter to $2,752,179 in the 1996 quarter. The Company's
wholesale sales increased by 59.5% from $1,379,783 in the 1995 quarter to
$2,200,686 in the 1996 quarter, its retail sales increased by 27.4% from
$426,667 in the 1995 quarter to $543,512 in the 1996 quarter and craft fair
sales increased by 129.8% from $3,473 in the 1995 quarter to $7,981 in the 1996
quarter. The Company attributes the wholesale sales increase during the 1996
quarter primarily to an increase in the number of wholesale accounts, improved
relations with wholesale accounts through the Company's direct sales Messenger
Program, and the February, 1996 opening of its New York City showroom. The
retail sales increase was primarily due to a 30.6% increase in same store sales
at the Company's Frenchtown retail location, from $244,966 in the 1995 quarter
to $319,863 in the 1996 quarter, which the Company attributes to increased
marketing efforts, personal shopping through its phone sales, and repeat
customer purchases. The Company opened the Santa Fe store in December 1994,
which achieved $144,976 in the 1996 quarter, up 67.3% from its $86,634 sales in
the 1995 quarter. This growth was offset in part by a 17.2% decrease in same
store sales at the Company's Taos retail location, from $95,067 in the 1995
quarter to $78,673 in the 1996 quarter, which the Company attributes primarily
to migration of business to its new Santa Fe, New Mexico retail location.
GROSS MARGIN. The major components impacting gross margin are raw
material and production costs, wholesale and retail maintained margins and sales
mix. The Company's gross margin decreased, as a percentage of sales, by 5.6
percentage points from 56.4% in the 1995
9
quarter to 50.8% in the 1996 quarter. The Company attributes this decrease to
the discounted sale of outside vendor inventory in its retail stores in order to
increase the merchandising mix of Company product. Also, excess merchandise from
prior seasons was sold to wholesale customers, at reduced margins. The increased
wholesale sales as a percentage of total sales for the quarter also reduced
gross margin percentages.
OPERATING EXPENSES. The Company's operating expenses increased by 66.6%
from $882,623 to $1,470,718 in the 1996 quarter and increased as a percentage of
sales by 4.6 percentage points from 48.8% in the 1995 quarter to 53.4% in the
1996 quarter. The increase in operating expenses in the 1996 quarter was
primarily due to the addition of management team members and staff support,
insurance, and accounting expenses. Operating expenses related to general and
administrative functions have increased throughout 1995 and 1996, providing
capacity for future sales growth. Management expects that operating expenses as
a percentage of sales will decline throughout 1996 due to sales seasonality and
planned growth.
INTEREST EXPENSE. The Company's interest expense increased by $28,751
or 84% from $34,229 in the 1995 quarter to $62,980 in the 1996 quarter due to
increased borrowings for the Company's working capital needs including increased
usage of its inventory line of credit (up $250,000 from the 1995 period).
NET INCOME (LOSS). As a result of the foregoing, income (loss) before
pro forma income tax provision (benefit) decreased $241,613 or 231% from income
of $104,793 in the 1995 quarter to a loss of $136,820 in the 1996 quarter. Pro
forma net income (loss) after taxes decreased by $155,637 or 255% from income of
$61,094 in the 1995 quarter to a loss of $94,543 in the 1996 quarter. Although
the addition of senior managers, support staff and a new retail store have and
may continue to temporarily reduce net income, the Company believes these
expenditures are imperative for the Company's anticipated future growth. Higher
levels of fixed costs will be diluted by anticipated future sales expansion. The
Company expects to recognize reduced earnings throughout the first half of 1996
due to continued infrastructure improvements.
LIQUIDITY AND CAPITAL RESOURCES:
- --------------------------------
On November 13, 1995, the Company commenced the sale of 800,000 shares
of common stock in a public offering at a price of $5.00 per share. The offering
was made directly by the Company on a "Minimum/Maximum" basis subject to
subscription and payment for not less than 500,000 shares (the Minimum) and not
more than 800,000 shares (the Maximum). As of May 13, 1996 the Company sold
786,609 shares in the offering and the offering has been closed. The public
offering generated approximately $3,400,000, net of transaction costs, of
additional liquidity to the Company.
10
Since its inception, the Company has financed its operations through
bank lines of credit, factoring agreements, bank notes and capital lease
financing, which has subjected the Company to significant financial constraints.
At March 31, 1996 the Company had $127,628 in cash and cash equivalents (of
which $102,863 was restricted), a receivable purchase line of credit for up to
$1,000,000 (with $1,028,625 outstanding and in transit) and a demand bank line
of credit for up to $1,000,000 (with a $750,000 outstanding balance). At March
31, 1996, the Company had negative working capital of $411,894, reflecting a
decrease in working capital of $332,608 from a working capital deficit of
$79,286 on December 31, 1995. Working capital is defined as current assets less
current liabilities. As a result of the Company's direct public offering, the
Company has working capital of approximately $3,400,000, as of May 13, 1996.
At March 31, 1996, the Company's current liabilities included a
stockholder distribution payable of $52,719 for the payment of income taxes by
the two stockholders. This amount was recorded in 1995 as an equity distribution
and corresponding accrued liability.
Net cash used in operations was $321,347 during the three months ended
March 31, 1996, consisting primarily of increases in accounts receivable of
$344,376 and operating losses of $137,720, which were partially offset by period
payables increases of $277,526. Net cash used in operating activities during the
same period for 1995 was $237,408 and consisted primarily of the Company's net
income of $91,471, which was more than offset by decreased accrued expenses
($387,887) due to tax payments made in 1995.
Net cash used in investing activities during the three month periods
ended March 31, 1996 and 1995 was $49,473 and $98,390, respectively, consisting
of capital expenditures to purchase property and equipment, including the
opening of the Company's Santa Fe retail store, the renovation of its Taos
retail store and the implementation of the Company's management information
system foundation in 1995. The majority of the 1996 expenditures consisted of
the buildout of the wholesale showroom. The Company anticipates that future
investing activities will be funded substantially by the proceeds of its
Offering, as described by "Use of Proceeds" under Form SB-2, Registration Number
33-97418-NY.
Net cash provided by financing activities in the 1996 period was
$292,569, consisting primarily of borrowings of $250,000 on the Company's line
of credit, receivables advances of $218,462, and $450,000 in borrowings from a
majority shareholder. This funding was offset in part by $473,399 shareholder
distributions as a withdrawal of accumulated S corporation earnings ($450,000)
and the payment of shareholder taxes. Net cash provided by financing activities
in the same period for 1995 was $198,913, consisting primarily of borrowings on
the Company's line of credit.
During 1995, the Company had a receivable purchases line of credit
agreement with a bank which provided for the assignment and processing of
Company receivables with recourse to a maximum outstanding assigned amount of
$1,000,000. The Company assigned 100% of its wholesale credit receivables under
this agreement, providing immediate cash availability of up to 88.25% of these
receivables. In February, 1996, the Company refinanced this purchase line of
credit with another bank subject to identical conditions of the original
agreement. This type of
11
agreement has provided a beneficial source of liquidity to the Company since its
implementation in December 1994.
The Company fully utilized its $500,000 line of credit at March 31,
1995, which bore interest at prime plus .75%. In February, 1996, the Company
refinanced this line of credit with another bank, and increased the available
line of credit to $1,000,000. This line of credit is subject to a maximum
outstanding amount not to exceed 50% of finished goods inventory plus 25% of
work in process. At March 31, 1996, $750,000 of this line of credit was advanced
and outstanding.
12
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
-----------------
Effective May 20, 1996 the Company has appointed Richard Swarttz as the
Company's Chief Financial Officer and Treasurer to replace Marc Wallach who was
serving as acting Chief Financial Officer and acting Treasurer. Mr. Swarttz wil
be paid a base salary of $76,000 per year and granted options to purchase 10,000
shares of the Company's Common Stock exercisable in increments of 20% over 5
years at an exercise price of $4.00 per share. Mr. Wallach will continue to
serve as the Company's Chief Executive Officer.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) EXHIBITS
10.23 Employment Agreement by and between Blue Fish Clothing, Inc.
and Richard Swarttz dated April 29, 1996 and effective
May 20, 1996.
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K.
Not applicable
13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
certifies that it has caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Frenchtown in the State
of New Jersey on May 20, 1996.
BLUE FISH CLOTHING, INC.
(Registrant)
DATE: May 20, 1996 /s/Marc Wallach
______________________________
Marc Wallach
Chief Executive Officer,
Acting Chief Financial Officer and
Acting Treasurer
14
BLUE FISH CLOTHING, INC.
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
10.23 Employment Agreement by and between Blue Fish Clothing, Inc.
and Richard Swarttz dated April 29, 1995 and effective
May 20, 1996.
27 Financial Data Schedule
15
EXHIBIT 10.23
FORM OF EMPLOYMENT AGREEMENT
April 29, 1996
Richard Swarttz
1425 Forestdale Circle
Jamison, Pa 16829
Dear Richard:
I'm sending this letter along to confirm our offer of employment at Blue Fish
Clothing on April 23th, 1996 and your acceptance on April 26, 1996.
On April 23th, Blue Fish offered you the position of Chief Financial Officer
with a starting salary of $76,000 a year. The offer will also include any stock
options presented previously to the CFO if Blue Fish is to successfully go
public on May 13th.
On April 26th, 1995 I received a phone call from you confirming this offer as
our new CFO. On April 29th, we finalized together a start date of May 20th,
1996. If you should have any questions or concerns between now and May 20th,
please contact me at 908-996-3844 Ext. 268.
Marc and I both have signed this confirmation letter. Please sign it as well to
confirm that you received it and agree to the above and fax that back to us at
908-996-7151. Once this is all done we plan to announce your appointment to
everyone at Blue Fish. We look forward to letting them know you have come
aboard.
We look forward to seeing you on May 20th.
Thank you.
Sincerely yours,
Karen Otto
Director of People Resources
Marc Wallach
Chief Executive Officer
------------------------------
Richard Swarttz
Dated:______________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS DATED MARCH 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 127,627
<SECURITIES> 0
<RECEIVABLES> 1,253,726
<ALLOWANCES> 33,000
<INVENTORY> 2,100,491
<CURRENT-ASSETS> 3,448,394
<PP&E> 751,347
<DEPRECIATION> 332,935
<TOTAL-ASSETS> 4,902,507
<CURRENT-LIABILITIES> 3,860,288
<BONDS> 425,916
0
0
<COMMON> 5,849
<OTHER-SE> 423,609
<TOTAL-LIABILITY-AND-EQUITY> 4,902,507
<SALES> 2,752,179
<TOTAL-REVENUES> 2,752,179
<CGS> 1,355,301
<TOTAL-COSTS> 2,826,019
<OTHER-EXPENSES> 473,399
<LOSS-PROVISION> 33,000
<INTEREST-EXPENSE> 62,980
<INCOME-PRETAX> (136,820)
<INCOME-TAX> 900
<INCOME-CONTINUING> (137,720)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (137,720)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> 0
</TABLE>
