SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to __________________________
Commission file number 000-24941
Next Generation Technology Holdings, Inc.
--------------------------------------------------------------------------------
(Exact name of the registrant as specified in its charter)
Delaware 06-1255882
--------------------------------------------------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
590 Madison Avenue, 21st Floor
PMB 2137 New York, NY 10022
--------------------------------------------------------------------------------
(Address of Principal executive offices) (Zip code)
Registrant's telephone number including area code: (212) 521-4180
Delicious Brands, Inc., 2070 Maple Street, Des Plaines, Illinois 60018
--------------------------------------------------------------------------------
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 / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
5,702,865 shares of Common Stock were outstanding on August, 2000.
<PAGE>
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2000
I N D E X
Part I: Financial Information Page
Item 1. Financial Statements:
Balance Sheets as of June 30, 2000 and December 31, 1999 2
Statements of Operations, Three and Six Months Ended 3
June 30, 2000 and 1999
Statements of Cash Flows, Six Months Ended June 30, 2000 4
and 1999
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
Part II: Other Information
Item 1. Legal Proceedings 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
1
<PAGE>
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31
2000 1999
---- ----
ASSETS (unaudited)
Current Assets:
<S> <C> <C>
Cash ...................................................................................... $ 8,908,336 $ 600,762
Accounts receivable including $39,284 and $213,040,
respectively, due from related parties, net of allowances of
$1,816,043 and $2,857,970, respectively ............................................. 0 1,797,900
Inventory ................................................................................. 0 1,043,400
Prepaid expenses and other current assets ................................................. 4,283,702 247,761
------------ ------------
13,192,038 3,689,823
------------ ------------
Property and Equipment, Net of Accumulated Depreciation ......................................... 0 269,833
Other Assets:
Goodwill .................................................................................. 0 9,460,852
Other ..................................................................................... 1,499,550 813,919
------------ ------------
1,499,550 10,274,771
------------ ------------
$ 14,691,588 $ 14,234,427
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank loan payable ......................................................................... $ 0 $ 1,326,033
Current portion of subordinated debt....................................................... 5,300,000 5,643,332
Accounts payable including $64,404 and $60,460, respectively,
due to related parties .............................................................. 299,177 3,839,756
Income Taxes Payable ............................................................................ 300,000 0
Due to distributors ............................................................................. 257,420 308,559
Accrued expenses .......................................................................... 2,416,553 1,796,091
Current portion of long-term liabilities .................................................. 519,678 791,354
------------ ------------
9,092,827 13,705,125
------------ ------------
Long-term Liabilities:
Restructuring liability 210,871 335,454
------------ ------------
Stockholders' Equity:
Preferred stock, $.01 par value 1,000,000 shares authorized:
Series A, 183,334 shares issued and outstanding ..................................... 1,466,668 1,466,668
Series B, 35,000 shares issued and outstanding. Liquidation
value equals stated value ..................................................... 1,750,000 1,750,000
Series C, 170,038 shares issued and outstanding in 1999
Liquidation value of $5,101,140 ............................................... 0 3,400,760
Series D, 100,000 shares issued and outstanding in 2000
Liquidation value of 3,000,000 ................................................ 2,000,000 0
Common Stock, $.01 par value, 25,000,000 shares authorized,
5,751,790 shares issued ............................................................. 57,518 47,460
Additional paid-in capital ................................................................ 15,373,652 18,335,918
Accumulated deficit ....................................................................... (15,098,899) (24,645,909)
------------ ------------
5,548,939 354,897
Less, common stock in treasury at cost.................................................... (161,049) (161,049)
------------ ------------
Total stockholders' equity $ 5,387,890 193,848
------------ ------------
$ 14,691,588 $ 14,234,427
============ ============
</TABLE>
The accompanying notes are an integral part of this statement
2
<PAGE>
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales (including approximately
$33,989, $1,277,000, $94,846 and
$2,390,000 respectively, to related
parties)................................. $ 4,143,434 $ 11,389,402 $ 10,508,289 $ 23,731,219
Cost of Sales (including approximately
$0, $7,000, $1,008 and $17,000
respectively, from related parties)...... 3,037,507 8,821,129 7,701,178 18,317,268
----------- ------------ ------------ ------------
Gross Profit................................... 1,105,927 2,568,273 2,807,111 5,413,951
----------- ------------ ------------ ------------
Selling, general and administrative 3,759,956 3,760,040 6,830,793 7,671,800
----------- ------------ ------------ ------------
Loss from Operations........................... (2,654,029) (1,191,767) (4,023,682) (2,257,849)
----------- ------------ ------------ ------------
Other Income (Expense):
Gain on the Sale of Business 14,439,149 0 14,439,149 0
Interest expense......................... (147,320) (175,601) (341,197) (342,076)
Other, net............................... 175,964 116,372 175,568 121,197
----------- ------------ ------------ ------------
14,467,793 (59,229) 14,273,520 (220,879)
----------- ------------ ------------ ------------
Income (Loss) before Provision for Income
Taxes.................................... 11,813,764 (1,250,996) 10,249,838 (2,478,728)
Provision for Income Taxes..................... 300,000 0 300,000 0
----------- ------------ ------------ ------------
Net Income (Loss).............................. $11,513,764 $ (1,250,996) $ 9,949,838 $ (2,478,728)
=========== ============ ============ ============
Earnings per Share:
Basic:
Net Income (Loss) per common
share........................ $ 2.02 $ (.28) $ 1.92 $ (.56)
=========== ============ ============ ============
Weighted average number of
common shares outstanding.... 5,702,865 4,441,085 5,173,898 4,438,586
Diluted:
Net Income (Loss) per common
share $ 1.66 $ (.28) $ 1.51 $ (.56)
=========== ============ ============ ============
Weighted average number of
common shares outstanding.... 6,917,070 4,441,085 6,583,234 4,438,586
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------------------
2000 1999
---- ----
Cash Flows from Operating Activities:
<S> <C> <C>
Net loss ............................................................ $ 9,949,838 $ (2,478,728)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization..................................... 717,080 394,184
Provision for bad debts........................................... 290,234 37,333
Gain on Sale of Business.......................................... (14,439,149) 0
Increase (Decrease) in cash from changes in:
Accounts receivable......................................... (729,921) (262,421)
Inventory................................................... (21,854) 170,630
Prepaid expenses and other current assets................... (4,298,438) (301,013)
Other assets................................................ (1,361,189) 49,103
Accounts payable and accrued expenses....................... 211,899 649,095
Income taxes payable........................................ 300,000 0
Due to distributors......................................... (15,166) (20,471)
Accrued restructuring liabilities........................... (124,583) (128,406)
Other liabilities........................................... (271,676) (109,740)
----------------- ---------------
Net cash provided (used) in operating activities........................ (9,792,925) (2,000,434)
----------------- ---------------
Cash Flows from Investing Activities:
Purchase of property and equipment...................................... (1,925) (50,859)
Proceeds from Sale of Business (net of $849,400
of sales commissions and accrued estimate
working capital adjustment due purchaser of
$462,013)......................................................... 24,527,587 0
----------------- ---------------
Net cash used in investing activities................................... 24,525,662 (50,859)
----------------- ---------------
Cash Flows from Financing Activities:
Proceeds from (Payments) of bank loan payable, net...................... (1,326,032) (308,646)
Proceeds (Payments) of current portion of
subordinated debt................................................. (343,332)
Proceeds from issuance of preferred stock B............................. 0 1,750,000
Proceeds from issuance of preferred stock C............................. 1,672,500 0
Proceeds from issuance of common stock.................................. 10,058 3,191
Proceeds from issuance of preferred stock D............................. 2,000,000 0
Redemption of preferred stock C......................................... (7,609,890) 0
Payment of preferred stock dividend..................................... (402,831) (78,334)
Payments of stock issuance costs........................................ (425,636) (296,564)
----------------- ---------------
Net cash provided by (used in) financing activities..................... (6,425,163) 1,069,647
----------------- ---------------
Increase (decrease) in Cash................................................... 8,307,574 (981,646)
Cash, Beginning of Period..................................................... 600,762 981,646
----------------- ---------------
Cash, End of Period........................................................... $ 8,908,336 $ 0
================= ===============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Income taxes...................................................... $ 0 $ 0
================= ===============
Interest.......................................................... $ 144,517 $ 348,720
================= ===============
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
STATEMENT OF CASH FLOWS, CONT.
Supplemental Disclosure of Non-Cash
Investing and Financing Activities:
On June 1, 2000 the Company sold substantially all of its assets to BF
USB, Inc. for cash and the assumption of certain liabilities, as
follows:
Gross Purchase Price $ 26,680,000
Working Capital Adjustment (1,700,000)
Estimated Closing Working Capital Balance 859,000
Closing Working Capital Balance Adjustment (462,013)
--------------
Net Proceeds Purchase Price 25,376,987
Liabilities Assumed 3,167,628
Assets Sold (13,256,066)
Sales Commission Paid (849,400)
---------------
Gain on the Sale $ 14,439,149
===============
5
<PAGE>
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Interim Financial Statements
The unaudited interim financial statements included herein were prepared
pursuant to the rules and regulations for interim reporting under the Securities
Exchange Act of 1934, as amended. Accordingly, certain information and footnote
disclosures normally accompanying the annual financial statements were omitted.
The interim financial statements and notes should be read in conjunction with
the annual audited financial statements and notes thereto contained in the Form
10-K of Delicious Brands, Inc. (the "Company") dated April 14, 2000. The
accompanying unaudited interim financial statements contain all adjustments,
consisting only of normal adjustments, which in the opinion of management were
necessary for a fair statement of the results for the interim periods. Results
for the interim periods are not necessarily indicative of results for the full
year.
2. Net Income (Loss) Per Share
For the three and six months ended June 30, 1999, basic net income (loss) per
share and diluted net income (loss) per share have been calculated using the
weighted average number of Common shares outstanding during each period. All
options and warrants were omitted from the computation of diluted net income
(loss) per share because the options and warrants are antidilutive when net
losses are reported.
3. Inventory
Inventory is stated at the lower of cost or market with cost determined by the
first-in, first-out (FIFO) method.
4. Recent Account Pronouncements
Effective January 1, 1999, the Company adopted FAS No. 133, "Accounting for
Derivatives Instruments and Hedging Activities," which required the recording of
all derivatives on the balance sheet at fair value, and Statement of Position
98-5 (SOP 98-5), "Reporting on the Cost of Start-up Activities," which requires
costs of start-up activities and organization costs to be expensed as incurred.
The adoption of FAS No. 133 and SOP 98-5 had no impact on the Company's results
of operations, financial position or cash flows.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2.
General
On April 5, 2000, Next Generation Technology Holdings, Inc. (f/k/a
Delicious Brands, Inc.) (the "Company") entered into an Asset Purchase Agreement
(the "APA") with BF USB, Inc. ("BF USB"), a Delaware corporation and indirect
subsidiary of Parmalat Canada Ltd., who was affiliated with certain of the
Company's suppliers and customers and who has acquired businesses from and
entered into a consulting agreement with the Company's Chairman of the Board of
Directors. On June 1, 2000, the Company consummated the sale of substantially
all of its assets and business to BF USB for cash. The $26,680,000 purchase
price reduced by a net working capital adjustment of $841,000, which adjustment
will be revised based on the actual net working capital reflected in the balance
sheet as of May 31, 2000. The net proceeds of $25,839,000 were paid as follows:
o Deposited into an escrow account $ 5,336,000
o Non-assumed bank debt, other debt 11,524,000
and liabilities of the Company paid directly
by BF USB
o Wire transfer to the Company's bank account 8,979,000
------------
$ 25,839,000
============
The escrow account deposit of $5,336,000 will be held to cover any
indemnification claims that arise within eighteen months of the closing of the
sales transaction. One half of such escrow amount, $2,668,000, will be released
December 1, 2000, $1,334,000 will be released June 1, 2001, and $1,334,000 will
be released December 1, 2001. Each deposit release will be reduced by the amount
of indemnification claims, if any, paid or filed by BF USB. Remaining proceeds
and escrow deposit refunds will be used to liquidate certain classes of
preferred stock, repay debt and other liabilities not assumed and pay ongoing
operating expenses. Assuming that the Company receives a full reimbursement of
the $5,336,000 escrow account deposit and combines these funds with existing
cash balances to pay all existing debt and redeems all currently outstanding
Series B and Series D Preferred Stock, the Company anticipates there could be up
to $400,000 available to pay ongoing operating expenses and make a liquidating
distribution, if liquidation were to be pursued, to the remaining Series A
Preferred and common stockholders; however, the assumptions and approximations
may be inaccurate, and therefore, no assurance can be given that such full
reimbursement and or approximation will be reliable.
The Company has agreed not to compete in the snack food industry
without the consent of BF USB, and does not plan to operate in the snack food
industry. The Board of Directors of the Company is exploring various
opportunities to enter a new line of business. The Board of Directors has not
identified any new line of business at the present and there can be no assurance
that any new line of business will ever be identified. If the Board does not
successfully identify or otherwise develop a new line of business, it may seek
to liquidate the Company and pay out any net cash to the stockholders.
In conjunction with the sales transaction, the Company sold the
right to its brand names. Accordingly, it changed its name to Next Generation
Technology Holdings, Inc.
The Company was incorporated under the laws of the State of Delaware
in 1989. Its principal executive offices are located at 590 Madison Avenue, 21st
Floor, PMB 2137 New York, NY 10022, and its telephone number is (212) 521-4108.
The Company's failure to satisfy the Nasdaq SmallCap Market
maintenance requirements resulted in the Common Stock being delisted from the
Nasdaq SmallCap Market as of February 1, 2000. Trading of the Company's Common
Stock, if any, is now conducted in the Over-the-Counter Bulletin Board.
7
<PAGE>
As a result of the delisting of the Common Stock from the Nasdaq
SmallCap Market, an investor may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of the Common Stock.
Furthermore, the regulations of the Securities and Exchange Commission ("SEC")
promulgated under the Securities Exchange Act of 1934, as amended, require
additional disclosure relating to the market for penny stocks. SEC regulations
generally define a penny stock to be an equity security that has a market price
of less than $5.00 per share, subject to certain exceptions. A disclosure
schedule explaining the penny stock market and the risks associated therewith is
required to be delivered to a purchaser and various sales practice requirements
are imposed on broker-dealers who sell penny stocks to persons other than
established customers and accredited investors (generally institutions). In
addition, the broker-dealer must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. If the Company's
securities become subject to the regulations applicable to penny stocks, the
market liquidity for the Company's securities could be severely affected. In
such an event, the regulations on penny stock could limit the ability of
broker-dealers to sell the Company's securities and thus the ability of
purchaser of the Company's securities to sell their securities in the secondary
market.
Results of Operations
The Company's auditors have questioned the ability of the Company to
continue as a going concern due to recurring losses from operations and a
significant net working capital deficit. Upon the consummation of the sale of
assets the Company has been exploring new business opportunities but has not
identified any new business at present. The Company's financial statements have
been presented on the basis that it is a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result in the event
the Company's plans are not successful. Further, the results of operations for
the quarter ending June 30, 2000 may not be indicative of the results for the
full year or necessarily comparable to prior quarters as a result of the sale of
substantially all the assets of the Company during the quarter.
Net Sales. Net sales decreased 64% to $4.1 million for the three months ended
June 30, 2000 as compared to approximately $11.3 million for the same period in
1999. The decrease is primarily a result of the sale of the business effective
June 1, 2000 as well as product shortages resulting from credit restrictions
instituted by certain of the Company's vendors.
Gross Profit. Gross profit decreased 57% to $1.1 million for the three months
ended June 30, 2000 as compared to approximately $2.6 million for the same
period in 1999. The decrease is primarily as a result of the decreased sales
noted above.
Selling, General and Administrative Expenses. The selling, general and
administrative expenses was unchanged for the three months ended June 30, 2000
as compared to the same period in 1999.
Other Income (Expense) Other income increased to $15.0 million for the three
months ended June 30, 2000, primarily as a result of the gain on the sales
transaction as compared to the same period in 1999.
Provision for Income Tax. The provision for income tax for the three months
ended June 30, 2000 was $300,000 as compared to $0 for the same period in 1999.
Net Income. Net income was $11.5 million for the three months ended June 30,
2000 as compared to the net loss of $1.25 million for the same period in 1999.
Liquidity and Capital Resources
In recent periods, the Company has utilized its working capital,
proceeds from both private placements and the Company's initial public offering
(the "Initial Public Offering") of common stock, $.01 par value per share
("Common Stock") and proceeds from the sale of its assets to BF USB to cover
operating deficits. Because of the Company's sale of assets and related
non-compete requirements, it does not intend to invest in plant or equipment
8
<PAGE>
relating to the manufacture or distribution of products for sale. Consequently,
additions to property and equipment are not expected to be material in future
periods.
On August 18, 1999, the Company issued promissory notes in the
aggregate principal amount of $360,000 (the "Notes"). Interest on the Notes
accrues at a rate of 10% per annum. A Note in the principal amount of $250,000
was converted at the holder's request to an 8% Note (as defined below) on August
30, 1999. The remaining Note in the principal amount of $110,000, along with all
accrued interest on the Note, was paid on September 3, 1999.
On August 30, 1999, the Company issued an 8% non-negotiable
unsecured convertible promissory note in the principal amount of $5,250,000 (the
"8% Notes"). The 8% Notes and accrued interest thereon are due and payable one
year from issuance of the 8% Notes. The 8% Notes are convertible, at the option
of the 8% Note holder, into shares of the Company's Common Stock at the rate of
one share for each $5.00 of outstanding principal amount.
On December 23, 1999, the Company consummated an initial closing of
a private placement to which it issued an aggregate of 170,038 share of 12%
Cumulative Series C Preferred Stock for an aggregate price of $3,401,000. The
net proceeds of $2,993,000 were applied by the Company to increase cash balances
and reduce outstanding trade payable balances.
On January 7, 2000, the Company consummated a second closing of a
private placement to which it issued an aggregate of 83,625 shares of 12%
Cumulative Series C Preferred Stock for an aggregate price of $1,673,000. The
net proceeds of $1,467,000 were applied by the Company to increase cash balances
and reduce outstanding trade payable balances.
On April 6, 2000, the Company consummated the closing of a private
placement to which it issued an aggregate 100,000 shares of 12% Cumulative
Series D Preferred Stock for an aggregate price of $2,000,000. The net proceeds
of $1,725,000 were used as follows: (1) $500,000 was deposited into a special
escrow reserve account related to the pending asset sale of the Company (see
"Recent History" for previous discussion), and (2) $1,225,000 to increase cash
balances, paydown the bank loan and reduce outstanding trade payable balances.
Proceeds from the sales transaction and escrow deposit refunds (when received)
have been and will be used to liquidate certain classes of preferred stock,
repay debt and other liabilities not assumed and pay ongoing operating expenses.
Assuming that the Company receives a full reimbursement of the $5,336,000 escrow
account deposit and combines these funds with existing cash balances to pay all
existing debt and redeems all currently outstanding Series B and Series D
Preferred Stock, the Company anticipates there could be up to $400,000 available
to pay ongoing operating expenses and make a liquidating distribution to the
remaining Series A Preferred and common stockholders; however, such assumptions
and approximations may be inaccurate due to unknown indemnification claims which
may arise and the possible new business opportunities that the Company may
enter.
Forward-Looking Statements
This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Although the Company believes that
the assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this report will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
9
<PAGE>
Item 3: Quantitative and Qualitative Disclosures About Market Risk
At June 30, 2000, the Company had no outstanding derivative financial
instruments. All of the Company's transactions occur in U.S. dollars. Therefore,
the Company is not subject to significant foreign currency exchange risk.
10
<PAGE>
Part II: Other Information
Item 1: Legal Proceedings
On October 9, 1999 one of the Company's suppliers filed suit against
the Company in the Circuit Court of Cook County, Illinois claiming breach of
contract and bad faith dealing. The Company answered the complaint and filed a
counterclaim for breach of contract due to poor quality of products. The Company
continued to do business with this supplier up to the date of sale, June 1,
2000, of substantially all of its assets to BF USB; however, the Company has
terminated its contract with this supplier. In the opinion of management, this
suit is without merit but unfavorable disposition could have a material effect
on the Company's financial position, results of operations or liquidity. In
addition, from time to time the Company may be subject to claims and lawsuits
arising in the normal course of business.
Item 5: Other Information
On June 1, 2000, the Company consummated the sale of substantially
all of its assets and business to BF USB for cash. The $26,680,000 purchase
price reduced by a net working capital adjustment of $841,000, which adjustment
will be revised based on the actual net working capital reflected in the balance
sheet as of May 31, 2000. The net proceeds of $25,839,000 were paid as follows:
o Deposited into an escrow account $ 5,336,000
o Non-assumed bank debt, other debt 11,524,000
and liabilities of the Company paid directly
by BF USB
o Wire transfer to the Company's bank account 8,979,000
-------------
$ 25,839,000
=============
The escrow account deposit of $5,336,000 will be held to cover any
indemnification claims that arise within eighteen months of the closing of the
sales transaction. One half of such escrow amount, $2,668,000, will be released
December 1, 2000, $1,334,000 will be released June 1, 2001, and $1,334,000 will
be released December 1, 2001. Each deposit release will be reduced by the amount
of indemnification claims, if any, paid or filed by BF USB. Remaining proceeds
and escrow deposit refunds will be used to liquidate certain classes of
preferred stock, repay debt and other liabilities not assumed and pay ongoing
operating expenses.
Item 6: Exhibits and reports on Form 8-K:
a) Exhibits:
3.1 Certificate of Amendment to the Certificate of Incorporation
of Delicious Brands, Inc. dated June 1, 2000.
*3.2 Certificate of Designation, Preferences and Other Rights and
Qualifications of Series D Preferred Stock.
*10.1 Asset Purchase Agreement dated April 5, 2000.
27 Financial Data Schedule
b) Form 8-K: On June 7, 2000, the Company filed a Form 8-K.
----------
* Incorporated by reference to the Company's Annual Report on Form 10-K dated
April 14, 2000.
11
<PAGE>
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.
NEXT GENERATION TECHNOLOGY HOLDINGS, INC.
(Registrant)
August 11, 2000 /s/ Donald C. Schmitt
------------------------------- -----------------------------------------
Date Donald C. Schmitt
President, Director and
Chief Executive Officer
12
