U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB/A
Amendment Number 3
[X] Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act
of 1934 For The Quarterly Period Ended March 31, 1998.
[_] Transition Report Under Section 13 or 15(d) of The Securities Exchange Act
of 1934
For the Transition Period from ________ to ________
Commission File Number 1-14478
ROOM PLUS, INC.
(Exact name of small business issuer as specified in its charter)
New York 11-2622051
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
91 Michigan Avenue
Paterson, NJ 07503
------------------
(Address of principal executive offices)
(973) 523-4600
--------------
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 ___
The number of shares outstanding of the Issuer's Common Stock $.00133 par value,
as of May 11, 1998 was 4,385,000.
The number of the Issuer's Common Stock Purchase Warrants outstanding as of
May 11, 1998 was 2,530,000.
Transitional small business disclosure format:
Yes ___ No _X_
<PAGE>
ROOM PLUS, INC.
Form 10-QSB/A
This Form 10-QSB/A amends the following items of the Company's Quarterly Report
on Form 10-QSB/A previously filed with the Securities and Exchange Commission on
February 19, 1999.
INDEX
Part I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Balance Sheets as of March 31, 1998 and December 31, 1997 3
Statements of Operations for the three months ended
March 31, 1998 and 1997 4
Statements of Cash Flows for the three months ended
March 31, 1998 5
Notes to Financial Statements 6
Signatures 11
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<PAGE>
ROOM PLUS, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31 December 31
1998 1997
----------- -----------
ASSETS (Restated)
<S> <C> <C>
Current Assets
Cash and cash equivalents ..................... $ 72,640 $ 185,843
Accounts receivable ........................... 106,250 67,685
Inventories ................................... 2,061,739 1,904,326
Notes receivable, officers .................... 12,000 12,400
Prepaid expenses .............................. 369,158 492,555
Deferred income taxes ......................... 133,500 134,500
----------- -----------
Total Current Assets ....................... 2,755,287 2,797,309
----------- -----------
Property and Equipment, net ...................... 1,758,165 1,804,303
----------- -----------
Other Assets
Security deposits and deferred charges ........ 225,759 249,474
Deferred income taxes ......................... 1,084,500 1,038,500
Notes receivable, officers .................... 175,445 177,965
----------- -----------
1,485,704 1,465,939
----------- -----------
$ 5,999,156 $ 6,067,551
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt ............. $ 195,192 $ 212,791
Notes payable ................................. 499,123 400,070
Due to related companies ...................... 297,872 258,770
Accounts payable and accrued expenses ......... 1,678,887 1,604,047
Sales taxes payable ........................... 110,361 108,475
Customer deposits and other advances .......... 533,865 528,517
----------- -----------
Total Current Liabilities ................. 3,315,300 3,112,670
----------- -----------
Long-Term Debt, less current portion ............. 405,538 447,857
----------- -----------
Stockholders' Equity
Common stock; authorized, 10,000,000 shares;
$.00133 par value; 4,385,000 shares
issued and outstanding ...................... 5,832 5,832
Additional paid-in capital .................... 6,512,645 6,512,645
Deficit ....................................... (4,240,159) (4,011,453)
----------- -----------
2,278,318 2,507,024
----------- -----------
$ 5,999,156 $ 6,067,551
=========== ===========
</TABLE>
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<PAGE>
ROOM PLUS, INC.
STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------
1998 1997
----------- -----------
(Restated)
<S> <C> <C>
Revenues ....................................... $ 4,559,934 $ 3,426,026
Cost of goods sold ............................. 2,007,331 1,455,207
----------- -----------
Gross profit ................................... 2,552,603 1,970,819
----------- -----------
Expenses
Selling .................................... 2,290,545 2,259,096
General and administrative ................. 508,075 635,637
----------- -----------
2,798,620 2,894,733
Loss from operations ........................... (246,017) (923,914)
----------- -----------
Other income (expenses)
Interest income ................................ -- 28,579
Interest expense ............................... (29,546) (22,615)
Miscellaneous income ........................... 1,857 1,200
----------- -----------
(27,689) 7,164
----------- -----------
Loss before income tax benefits ................ (273,706) (916,750)
Income tax benefits ............................ (45,000) (434,241)
----------- -----------
Net loss ....................................... (228,706) (482,509)
Deficit, beginning of period ................... (4,011,453) (2,111,402)
----------- -----------
Deficit, end of period ......................... $(4,240,159) $(2,593,911)
=========== ===========
Weighted average common shares outstanding ..... 4,385,000 4,385,000
=========== -----------
Basic and diluted loss per share ............... $ (.05) $ (.11)
=========== ===========
</TABLE>
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<PAGE>
ROOM PLUS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-------------------------
1998 1997
--------- -----------
(Restated)
<S> <C> <C>
Cash Flows from Operating Activities
Net loss ......................................... $(228,706) $ (482,509)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation ..................................... 66,524 51,561
Deferred income taxes ............................ (45,000) (435,623)
(Increase) decrease in operating assets
Accounts receivable .......................... (38,565) (32,259)
Inventories .................................. (157,413) (323,022)
Prepaid expenses ............................. 123,397 (36,994)
Deferred charges ............................. 25,215 33,108
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses ........ 119,290 205,133
Sales taxes payable .......................... 1,886 4,537
--------- -----------
Net cash used in operating activities ........ (133,372) (1,016,068)
--------- -----------
Cash Flows from Investing Activities
Purchases of property and equipment ............. (20,386) (488,325)
Net loans from certain shareholders ............. 2,920 36,878
Increase in security deposits ................... (1,500) (5,883)
--------- -----------
Net cash used in investing activities ........ (18,966) (457,330)
--------- -----------
Cash Flows from Financing Activities
Net proceeds (repayment) of short-term debt ...... 99,053 (75,000)
Net repayment of long-term debt .................. (59,918) (66,339)
--------- -----------
Net cash provided by (used in)
financing activities ....................... 39,135 (141,339)
--------- -----------
Net Decrease in Cash ......................... (113,203) (1,614,737)
Cash, beginning of period ........................ 185,843 3,178,088
--------- -----------
Cash, end of period .............................. $ 72,640 $ 1,563,351
========= ===========
</TABLE>
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<PAGE>
ROOM PLUS, INC.
Notes to Financial Statements
Note 1: BASIS OF PRESENTATION
The accompanying unaudited financial statements, which are for
interim periods, do not include all disclosures provided in the
annual financial statements. These unaudited financial statements
should be read in conjunction with the financial statements and
footnotes thereto contained in the Annual Report on Form 10-KSB for
the year ended December 31, 1997 of Room Plus, Inc. (the
"Company"), as filed with the Securities and Exchange Commission.
In the opinion of management of the Company, the accompanying
unaudited financial statements contain all adjustments (which
include only normal recurring adjustments) necessary in order to
make the balance sheets, statements of operations and deficit and
statements of cash flow not misleading.
The results of operations for the three-month period ended March
31, 1998, are not necessarily indicative of the operating results
to be expected for the full year.
Note 2: INVENTORIES
Inventories are stated at the lower of cost determined by the
first-in, first-out method or market and consist of the following:
<TABLE>
<CAPTION>
March 31 December 31
------------------------- -------------
1998 1997 1997
---------- ---------- -------------
<S> <C> <C> <C>
Finished goods $1,551,559 $1,362,025 $1,451,814
Work in process 38,802 95,041 25,258
Raw materials 471,378 316,362 427,254
---------- ---------- ----------
$2,061,739 $1,773,428 $1,904,326
========== ========== ==========
</TABLE>
Note 3: SUBSEQUENT EVENT
In April 1998, the Company obtained bridge loans totaling $200,000
from certain unaffiliated individuals. The loans are due in June
1998. In consideration for these loans, the Company issued the
lenders options to acquire an aggregate 500,000 shares of the
Company's common stock at $2.125 per share.
Note 4: RESTATEMENT
During the course of the preparation of the interim financial
statements for the quarter ended September 30, 1998, the Company
determined that the method used to value its inventories at interim
dates was in error. The effect of the correction of this error on
the previously issued financial statements was to reduce the net
income by $260,857, or $.06 per share, from $32,151 to a loss of
$(228,706). This error was discovered by the Company's taking
certain physical inventory counts as of September 30, 1998 and
comparing the valuation of those inventories with the values
computed using the methodology employed as of March 31, 1998 (and
as of June 30, 1998). Management did not previously detect these
errors since the results of operations, based on such methodology,
were consistent with projected results.
Management has since implemented a new data processing system that
will more accurately account for inventory quantities and costs.
The Company will employ cycle counts of its finished goods
inventories and is conducting monthly physical counts of its raw
material inventories to ensure a proper accounting. This new system
will also provide the Company with more reliable data as to the
sales product mix, which has a significant impact on gross profits.
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<PAGE>
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: February 24, 1999 ROOM PLUS, INC.
By: /s/ Jay H. Goldberg
--------------------------------
Name: Jay H. Goldberg
Title: Chief Financial Officer
(Principal Accounting and
Financial Officer)
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