<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-QSB
QUARTERLY REPORT ISSUED UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the three month period ending March 31, 2000
LITEGLOW INDUSTRIES, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Utah 65-05164035 0-27087
--------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer Commission File
of Incorporation) Identification Number) Number
2301 N.W. 33rd Court, Unit 112, Pompano Beach, Florida 33069
--------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (954) 971-4569
--------------
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15 (d) of the Securities and
Exchange Act of 1934 during the preceding 12 months (or 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[ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE TO CORPORATE ISSUERS
On March 31, 2000, the Registrant had outstanding 4,273,287 shares of common
stock.
<PAGE> 2
LITEGLOW INDUSTRIES, INC.
INDEX
PART I.FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II.OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holdings
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LITEGLOW INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Current assets
Cash 6,808 53,991
Accounts receivable, net 467,902 364,851
Inventory 743,816 570,895
Prepaid expenses 129,268 163,375
---------- ----------
Total current assets 1,347,794 1,153,112
---------- ----------
Property and equipment
Property and equipment, at cost 310,454 328,155
Less accumulated depreciation (95,623) (61,452)
---------- ----------
Property and equipment, net 214,831 266,703
---------- ----------
Other Assets:
Goodwill, net 197,944 206,397
Deposits 58,570 15,237
---------- ----------
Total other assets 256,514 221,634
---------- ----------
Total assets 1,819,139 1,641,449
========== ==========
Current Liabilites
Line-of-Credit 416,603 380,000
Accounts payable 338,239 163,155
Accrued liabilities 31,321 75,140
Accrued loss on disposal of subsidiary 17,606 43,740
Due to stockholder 36,366 0
Current maturities of note payable 130,000 99,215
Current maturities of capital leases 13,994 12,974
---------- ----------
Total current liabilities 984,129 774,224
---------- ----------
Long-term liabilities (exclusive of current maturities):
Note payable 88,175 75,899
Capital leases payable 20,931 33,438
---------- ----------
Total long-term liabilities 109,106 109,337
---------- ----------
Total liabilites 1,093,235 883,561
---------- ----------
Stockholders' equity:
Preferred stock, $.001 par value, authorized
1,000,000 shares;
issued and outstanding - 1,000,000 1,000 1,000
Common stock, $.001 par value, authorized,
10,000,000 shares: issued and outstanding-
March 31, 2000, - 4,273,287 and
March 31, 1999, - 2,377,087 shares 4,273 2,377
Additional paid-in captial 3,413,871 3,371,767
Accumulated deficit (2,693,240) (2,617,256)
---------- ----------
Total stockholders' equity 725,904 757,888
---------- ----------
Total liabilities and stockholders' equity 1,819,139 1,641,449
========== ==========
</TABLE>
See notes to Consolidated Financial Statements
1
<PAGE> 4
LITEGLOW INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
March 31, March 31,
2000 1999
----------- -----------
Revenues 922,195 1,054,362
Cost of sales 454,183 490,444
------- ---------
Gross profit 468,012 563,918
Selling, general and administrative
expense 593,906 408,928
------- ---------
Income (loss) from operations (125,894) 154,990
Other income (expenses):
Interest expense (17,213) (7,651)
Sale of truck 14,349 0
------- ---------
Total other (expense) (2,864) (7,651)
------- ---------
Income (loss) from operations
before income taxes (128,758) 147,339
------- ---------
Provision for income taxes 0 0
------- ---------
Net income (loss) (128,758) 147,339
------- ---------
Net income per share-basic (0.02) 0.05
------- ---------
See notes to Consolidated Financial Statements
2
<PAGE> 5
LITEGLOW INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
<TABLE>
<CAPTION>
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) (128,758) 147,338
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
Depreciation and amortization 8,867 15,000
Changes in operating assets and liabilities
(increase) decrease in:
Accounts receivable 103,372 (118,887)
Inventory (83,788) (263,552)
Prepaid expenses 44,548 51,527
Deposits (20,065) (333)
(Decrease) increase in:
Accounts payable (93,707) 28,492
Accrued liabilities 17,810 (67,544)
-------- -------
Net cash used by operating activities: (151,721) (207,959)
Cash flows from investing activities:
Purchases of property and equipment (10,813) (50,758)
Proceeds from sale of equipment 12,000 0
-------- -------
Net cash provided by (used in) investing activities 1,187 (50,758)
Cash flows from financing activities:
Sale of stock 0 225,000
Loans from shareholders - net 28,183 58,355
Accrued loss on disposal of subsidiary 0 (61,348)
Borrowings on line-of-credit 16,603 0
Net increase in notes payable 3,067 15,183
Net increase (repayment) of capital leases (1,516) 7,222
-------- -------
Net cash from financing activities 46,337 244,412
-------- -------
Net decrease in cash (104,197) (14,305)
Cash balance at beginning of period 112,005 68,296
-------- -------
Cash balance at end of period 7,808 53,991
======== =======
Supplementary Disclosure of Cash Flow Information:
Interest paid 17,213 7,651
======== =======
Income taxes paid 0 0
======== =======
</TABLE>
See notes to Consolidated Financial Statements
3
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
The following discussion and analysis should be read in conjunction with the
Financial Statements appearing elsewhere in this Report on Form 10-QSB.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000, COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 1999
Net sales for the quarter ended March 31, 2000, were $922,195 compared
to net sales of $1,054,362 for the comparable 1999 period. For these same
periods costs of sales decreased from $490,444 to $454,183. Gross profit
decreased from $563,918 for the three months ended March 31, 1999, to $468,012
for the three months ended March 31, 2000. The Company's selling, general and
administrative expenses increased from $408,928 for the three months ended March
31, 1999, to $593,906 for the three months ended March 31, 2000. The Company had
net income of $154,990 during the first quarter of 1999 compared to a loss of
operations of $125,894 during the first quarter of 2000.
The Company substantially increased its inventory during the first
quarter of 2000 compared to the first quarter of 1999 in anticipation of new
customers and new business from those customers and its existing customers.
However, the Company believes that its sales were adversely affected by the
general softness in the United States retai lmarket and by unfavorable weather
in major markets. As a consequence of these matters, while the Company
substantially increased its inventory during the first quarter of 2000 it was
unable to sell a substantial portion of its additional inventory because of lack
of demand from its retail accounts. Also during the first quarter of 2000, the
Company experienced increases in accounts receivable as companies paid more
slowly than in the quarter ended March 31, 1999. During the quarter ended March
31, 2000, the Company experienced substantial increases in selling, general and
administrative expenses related to its having become a reporting company in
September 1999, and, also, as a consequence of staffing increases in
anticipation of an increase in sales.
LIQUIDITY AND CAPITAL RESOURCES
Total current assets increased from $1,150,112 for the three months
ended March 31, 1999, to $1,347,794, for the three months ended March 31, 2000,
primarily as a result of substantial increases in accounts receivable and
inventory. The Company's total assets
<PAGE> 7
increased from $1,641,449 at March 31, 1999, to $1,819,139 at March 31, 2000,
primarily as a result of increased current assets.
The Company's accounts payable increased substantially from $163,155 at
March 31, 1999, to $338,239 at March 31, 2000, as the Company had difficulty
paying its accounts on a current basis. The Company's total current liabilities
increased from $774,224 at March 31, 1999, to $984,129 at March 31, 2000,
primarily as a result of the increase of its short-term borrowings and increased
accounts payable. The Company had net cash used by operating activities of
$207,959 for the three months ended March 31, 1999, compared to $151,721 for the
three months ended March 31, 2000. The Company's cash balance decreased from
$53,991 at March 31, 1999, to $7,808 at March 31, 2000. The Company's net cash
used by operating activities decreased from $207,959 for the quarter ended March
31, 1999, to $151,721 for the quarter ended March 31, 2000. While the Company
decreased its negative cash flow from operations in the first quarter of 2000
compared to the first quarter of 1999, the Company's substantial increase in
inventory and accounts receivable in the first quarter of 2000 compared to the
first quarter of 1999 created a need for additional financing. The Company has
borrowed the maximum amount permitted by its line of credit arrangement and has
had to turn to a principal shareholder for a loan to meet its continuing
obligations. To meet some of its cash obligations, the Company increased
borrowings under its line of credit from $380,000 at March 31, 1999, to $416,603
at March 31, 2000, and, also, borrowed $28,183 from a principal shareholder
during the first quarter of 2000. The Company is exploring additional and
increased line of credit arrangements and other financing operations to meet its
ongoing cash requirements.
<PAGE> 8
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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. Exhibits.
None.
B. REPORTS ON FORM 8-K
None.
<PAGE> 9
SIGNATURES
In accordance with 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, duly authorized.
LITEGLOW INDUSTRIES, INC.
(Registrant)
Dated: June 19, 2000 By: /s/ Spencer Krumholz
----------------------------------
Spencer Krumholz, President
