<PAGE>
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
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission file number 0-28760
PACIFIC COAST APPAREL COMPANY, INC.
-----------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4536683
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(State or other Jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1620 SO. LOS ANGELES ST.
LOS ANGELES, CA 90015
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(Address of principal office) (Zip Code)
Registrant's telephone number, including area code: (213) 748-9724
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INAPPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has 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 / /
Number of shares of common stock outstanding as of March 31, 1998: 2,958,000
Transactional Small Business Disclosure Format Yes /X/ No / /
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1
PACIFIC COAST APPAREL CO., INC.
BALANCE SHEET
<TABLE>
<CAPTION>
March 31, 1998 September 30, 1997
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $38,851 $406,608
Due from factors $329,862 $173,577
Accounts receivable $59,052 $52,665
Inventories $793,780 $865,326
Prepaid expenses and other current assets $55,146 $17,637
Note receivable, stockholder $10,000 $10,000
Total current assets $1,286,691 $1,525,813
PROPERTY AND EQUIPMENT - at cost, net of $124,218 $138,011
accumulated depreciation
OTHER ASSETS $26,542 $19,739
$1,437,451 $1,683,563
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $272,658 $241,303
Accrued expenses $219,571 $180,992
Current maturities of long-term debt $108,000 $98,000
Total current liabilities $600,229 $520,295
LONG TERM DEBT, LESS CURRENT $165,462 $230,355
MATURITY
NEGATIVE GOODWILL $166,798 $172,566
STOCKHOLDERS' EQUITY
Preferred stock
Authorized, 600,000 shares
No shares outstanding
Common stock - no par value $5,452,718 $5,452,718
Authorized, 1,000,000 shares
Issued and outstanding 2,958,000 shares
Additional paid-in capital $479,860 $479,860
Deficit ($5,427,616) ($5,172,231)
Total stockholders' equity $504,962 $760,347
$1,437,451 $1,683,563
</TABLE>
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2
PACIFIC COAST APPAREL CO., INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended March 31
-------------------------
1998 1997
---- ----
<S> <C> <C>
NET SALES $2,483,669 $407,606
COST OF GOOD SOLD 1,222,718 284,404
GROSS (LOSS) PROFIT 1,260,951 123,202
OPERATING EXPENSES
Design and production 316,710 87,799
Selling 428,069 263,239
Shipping 110,423 8,509
General and administrative 707,544 710,033
Interest (income) expense 33,875 (25,354)
Total Operating Expenses 1,596,621 1,044,226
LOSS BEFORE INCOME TAXES (335,670) (921,024)
PROVISION FOR INCOME TAXES (800) (800)
NET LOSS ($336,470) ($921,824)
NET LOSS PER SHARE (0.11) (0.31)
WEIGHTED AVERAGE NUMBER OF 2,958,000 3,012,000
COMMON SHARES OUTSTANDING
</TABLE>
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3
PACIFIC COAST APPAREL CO., INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1998 1997
---- ----
<S> <C> <C>
NET SALES $1,349,148 $351,971
COST OF GOOD SOLD 668,925 263,656
GROSS (LOSS) PROFIT 680,223 88,315
OPERATING EXPENSES
Design and production 189,335 67,295
Selling 232,451 224,299
Shipping 54,497 6,318
General and administrative 314,892 374,330
Interest (income) expense 14,138 (14,967)
Total Operating Expenses 805,313 657,275
LOSS BEFORE INCOME TAXES (125,090) (568,960)
PROVISION FOR INCOME TAXES 0 (800)
NET LOSS ($125,090) ($569,760)
NET LOSS PER SHARE (0.04) (0.19)
WEIGHTED AVERAGE NUMBER OF 2,958,000 2,954,000
COMMON SHARES OUTSTANDING
</TABLE>
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4
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PACIFIC COAST APPAREL CO., INC.
CONDENSED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
Six Months Ended March 31
-------------------------
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITES
Net loss ($336,470) ($921,824)
Adjustments to reconcile net loss to
cash used by operating activities:
Depreciation $18,494 $13,038
Amortization of negative goodwill ($5,768)
Changes in assets and liabilities, net
of effect of assets and liabilities
acquired:
Increase in due from factors ($156,285) ($129,547)
Decrease in accounts receivable ($6,387)
Increase in inventories $71,546 ($589,510)
Increase in prepaid expenses and ($37,509) ($141,975)
other current assets
Increase in other assets ($6,803)
Increase in accounts payable $31,357 $227,048
Increase (decrease) in accrued expenses $38,917 $62,817
Total Adjustments ($52,438) ($558,129)
Net Cash Used By Operating Activities ($388,908) ($1,479,953)
</TABLE>
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5
Page 2 0f 2
PACIFIC COAST APPAREL CO., INC.
CONDENSED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
Six Months Ended March 31
-------------------------
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment ($5,039) ($170,685)
Decrease in short term investments $1,737,654
Net Cash (used) Provided by ($5,039) $1,566,969
Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long term debt ($54,893)
Reacquistion of common stock ($144,966)
Net Cash Used by
Financing Activities ($54,893) ($144,966)
NET DECREASE IN CASH AND
CASH EQUIVALENTS ($448,840) ($57,950)
CASH AND CASH EQUIVALENTS, beginning
as previously stated $406,606 $109,977
PRIOR PERIOD ADJUSTMENT $81,085
CASH AND CASH EQUIVALENTS,
beginning, as restated $487,691 $109,977
CASH AND CASH EQUIVALENTS, ending $38,851 $52,027
</TABLE>
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6
PACIFIC COAST APPAREL CO., INC.
CONDENSED STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
<TABLE>
<CAPTION>
Three Months Ended March 31
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1998 1997
---- ----
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid during period for:
Interest $14,138 $10,921
Income Taxes $800
</TABLE>
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7
PACIFIC COAST APPAREL CO., INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
1 - ACCOUNTING POLICIES
Although the interim condensed financial statements of the Company are
unaudited, it is the opinion of the Company's management that all normal
recurring adjustments necessary for a fair statement of the results have
been reflected therein. Operating revenues and net earnings for any interim
period are not necessarily indicative of results that may be expected for
the entire year.
These statements should be read in conjunction wth the financial statements
and reflected notes which are incorporated by reference in the Company's
Annual Report on Form 10-KSB for the year ended September 30, 1997
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8
PACIFIC COAST APPAREL CO., INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED SEPTEMBER 30, 1997
AND THE SIX MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
Common stock Additional Total
------------------------- Paid-in Stockholders'
Shares Amount Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1996 3,070,000 $5,920,118 $162,500 ($2,136,808) $3,945,810
Issuance of stock for services 9,000 $4,500 $4,500
Reacquistion of stock during the
year ended September 30, 1997 (121,000) ($471,900) $317,360 ($154,540)
Net loss for the year ended
. September 30, 1997 ($3,035,423) ($3,035,423)
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Balance, September 30, 1997, 2,958,000 $5,452,718 $479,860 ($5,172,231) $760,347
as previously reported
Prior period adjustment, (Note 2) $81,085 $81,085
---------- ---------- ------------- ---------- --------
Balance, September 30, 1997, 2,958,000 $5,452,718 $479,860 ($5,091,146) $841,432
as restated
Net loss for the six months ended
. March 31, 1997 ($336,470) ($336,470)
---------- ---------- -------- ---------- --------
Balance, March 31, 1998 2,958,000 $5,452,718 $479,860 ($5,427,616) $504,962
</TABLE>
See notes to condensed financial statements
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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.
Pacific Coast Apparel Company, Inc.
By /s/ Terrence L. McGovern
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Terrence L. McGovern
Chief Executive Officer and
Chief Financial Officer
June 16, 1998