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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 12/31/99
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to _____________.
Commission file number:
POP N GO, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 95-4603172
- -------- --------------
(State or other jurisdiction (IRS Employer identification No.)
of incorporation or organization)
12429 EAST PUTNAM STREET
WHITTIER, CALIFORNIA 90602
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(Address of principal executive offices)
(562) 945-9351
--------------
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
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 the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date: 6,526,200.
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
POP N' GO, INC. AND SUBSIDIARY
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31 SEPTEMBER 30
1999 1999
(UNAUDITED) (AUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 91,908 $ 140,264
Trade accounts receivable, less allowance
for sales returns and doubtful accounts of
$7,000 ($7,000 at Sept 30, 1999) 85,406 59,055
Debt issuance costs 61,650 -
Inventories 226,788 311,477
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Total current assets 465,752 510,796
Long-Term Receivable 67,708 47,500
Property and equipment, net 49,174 54,017
Proprietary software, net 95,280 123,890
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Total assets $ 677,914 $ 736,203
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts Payable $ 154,465 $ 194,775
Accrued liabilities 33,192 30,911
Accrued consulting fees 155,400 77,700
Customer deposits 19,767 19,767
Convertible debentures 420,000 -
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Total current liabilities 782,824 323,153
Put option 315,000 315,000
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Total liabilities 1,097,824 638,153
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Stockholders' equity:
Common stock, par value $.001 per share,
authorized 20,000,000 shares, issued
and outstanding 6,551,200 shares at
December 31, 1999 and 6,514,771 shares at
September 30, 1999 6,552 6,515
Additional paid in capital 4,585,457 4,568,243
Retained deficit (5,011,919) (4,476,708)
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Total stockholders' equity (419,910) 98,050
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Total liabilities and stockholders'
equity $ 677,914 $ 736,203
=========== ===========
</TABLE>
See accompanying notes to financial statements.
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POP N' GO, INC. AND SUBSIDIARY
STATEMENTS OF OPERATIONS AND RETAINED DEFICIT
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
DECEMBER 31,
1999 1998
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<S> <C> <C>
Net sales $ 182,005 $ 139,096
Costs of goods sold 129,224 121,013
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Gross profit 52,781 18,083
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Operating expenses:
Administrative and general 534,190 300,743
Development costs 44,218 56,662
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Total operating expenses 578,400 357,405
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Operating loss (525,627) (339,322)
Interest expense (9,584) (12,375)
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Income (loss) before income taxes (535,211) (351,697)
Provision for income taxes - -
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Net profit (loss) $ (535,211) $ (351,697)
Retained deficit, beginning
of period (4,476,708) (1,725,395)
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Retained deficit, end
of period $(5,011,919) $(2,077,092)
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Per common share information:
Net earnings (loss) $ (535,211) $ (351,697)
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Earnings (loss) per share:
Basic and diluted $ (0.08) $ (0.08)
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Weighted average shares outstanding
used in the per share calculation:
Basic and diluted 6,532,986 3,797,629
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</TABLE>
See accompanying notes to financial statements.
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POP N' GO, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED DECEMBER 31,
1999 1998
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<S> <C> <C>
Cash flows from operating activities
Net income (loss) $(535,211) $(351,697)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 31,153 39,359
Provision for losses and sales returns -
Changes in assets and liabilities:
Accounts receivable (46,559) (13,488)
Inventories 84,689 82,351
Other accounts payable and
accrued expenses 39,671 (90,049)
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Net cash provided by operating activities (426,257) (333,524)
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Cash flows from investing activities:
Capital expenditures 2,300 (9,766)
---------
Net cash (used in) investing activities 2,300 (9,766)
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Cash flows from financing activities:
Debt issuance costs (61,650) -
Convertible debentures 420,000 -
Common stock 37 924
Additional paid in capital 17,214 483,215
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Net cash (used in) financing activities 375,601 484,139
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Net decrease in cash and cash equivalents (48,356) 140,849
Cash and cash equivalents, beginning of period 140,264 17,238
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Cash and cash equivalents, end of period $ 91,908 $ 158,087
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 9,584 $ 12,375
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Income taxes $ - $ -
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</TABLE>
See accompanying notes to financial statements.
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POP N GO, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (UNAUDITED)
1. Summary of significant accounting policies:
Basis of quarterly presentation: The accompanying quarterly financial
statements of Pop N Go, Inc. and subsidiary (the "Company") have been
prepared in conformity with generally accepted accounting principles and
pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC") and, in the opinion of management, reflect all
adjustments, which are necessary to present fairly the results of
operations for the periods ended December 31, 1999 and 1998.
Certain information and footnote disclosures normally included in
financial principles have been condensed or omitted pursuant to such rules
and regulations; however, management believes that the disclosures are
adequate to make the information presented not misleading. This report
should be read in conjunction with financial statements and footnotes
therein included in the audited financial statements as of September 30,
1999.
Principles of consolidation: The Company's consolidated financial
statements include the accounts of the Pop N Go, Inc. and its wholly-owned
subsidiary, Nuts To Go, Inc. All intercompany balances and transactions
have been eliminated.
2. Debt financing:
In the quarter ending December 31, 1999, the Company received proceeds of
$420,000 from the issuance of convertible notes. The notes bear interest
at 15% per annum and mature on October 1, 2000.
3. Income or Loss per share:
Income or Loss per share amounts for the 1999 and 1998 periods were
computed by dividing net income/(loss) by the weighted average number of
shares outstanding.
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Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1999 VERSUS THREE MONTHS ENDED DECEMBER 31, 1998
RESULTS OF OPERATIONS
The Company incurred a net loss of $535,211 for the period ended December 31,
1999 as compared to a net loss of $351,697 for the period ended December 31,
1998. This loss represents a loss from operations of $525,627 and $339,322 for
the period ended December 31, 1999 and 1998, respectively. The net loss also
includes interest expense and other finance charges totaling $9,584 and $12,375
for the period ended December 31, 1999 and 1998, respectively.
Total revenues for the period ended December 31, 1999 were $182,005 as compared
to $139,096 for the period ended December 31, 1998. This represents an increase
in revenues of 31% over the same period in the prior year. This increase was
primarily due to additional popcorn machine sales during 1999.
Total cost of goods sold for the period ended December 31, 1999 was $129,244 as
compared to $121,013 for the period ended December 31, 1998. The gross profit
percent on the equipment sales was 29% for the three months ended December 31,
1999 as compared to 13.0% for the same period in the prior year. The gross
profit percent increase during the current period was due to the Company
becoming more efficient in manufacturing and assembling the units.
Total operating expenses consist primarily of development expenses and general
and administrative expenses. For the period ended December 31, 1999, total
operating expenses were $549,288. For the period ended December 31, 1998, total
operating expenses were $357,405. This represents a 54% increase over the same
period in the prior year.
General and administrative expenses for the period ended December 31, 1999 was
$505,070 as compared to $300,743 for the period ended December 31, 1998. This
represents an increase of 68% over the same period in the prior year. This
increase was caused by higher professional fees due to the various filings and
money-raising activities done by the Company, increases in salaries and wages
due to hiring of additional employees, increases in travel and trade show
expenses, and the amortization of costs relating to acquiring proprietary
software.
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Interest expense and other finance charges went from $12,375 for the period
ended December 31, 1998 to $9,584 for the period ended December 31, 1999. This
represents a decrease in interest expense of 23% from the prior year. This
decrease was due primarily to the issuance of common stock in exchange for
convertible debentures at a value below the market price of the common stock at
that time of the issuance.
Liquidity and Capital Resources
As of December 31, 1999, the Company had cash and cash equivalents of $91,908 as
compared to cash and cash equivalents of $140,264 as of September 30, 1999. At
December 31, 1999, the Company had a working capital deficiency (total current
liabilities in excess of total current assets) of ($317,072) as compared to a
working capital (total current liabilities in excess of current assets) of
$187,643 as of September 30, 1999.
Net cash used in operating activities was $426,257 for the period ended
December 31, 1999 and $333,524 for the period ended December 31, 1998. The
principal use of cash for the period ended December 31, 1999 was to fund the net
loss from operations for the period.
Net cash from investing activities was $2,300, compared with net cash used in
investing activities was $9,766 for the year ended December 31, 1999 and 1998,
respectively. This increase in net cash was a result of the disposition of demo
units during the period ended December 31, 1999 for which the research and
development was completed during the prior period.
Net cash from financing activities was $375,601 for the period ended December
31, 1999 as compared to $484,139 for the period ended December 31, 1998. The
Company raised a total of $375,601 from the issuance of convertible debentures,
net of debt issuance costs during the three months ended December 31, 1999, and
this was used to fund the net loss from operations. The Company raised a total
of $484,139 from the sale of its common stock during the three months ended
December 31, 1998, which was used to finance the net loss from operations for
the period and future periods.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities
None.
Item 3. Defaults in Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 10-QSB
(a) The following is a complete list of Exhibits filed as part of
this Registration Statement, which are incorporated herein:
<TABLE>
<CAPTION>
Exhibit No. Reference
<S> <C>
3.(i)* Certificate of Incorporation of Pop N Go, Inc.
3.(ii)* Bylaws
</TABLE>
*Incorporated by reference to Registrant's Form SB-2 Registration Statement
filed on February 11, 2000.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Los Angeles, State of California, on the 16th day of
February, 2000.
POP N GO, INC.
By /s/ Melvin Wyman
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Melvin Wyman,
Chief Financial Officer
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