<PAGE> 1
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 3/31/00.
[ ] 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 of (IRS Employer identification No.)
incorporation or organization)
12429 EAST PUTNAM STREET
WHITTIER, CALIFORNIA 90602
(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: 6,975,792.
Transitional Small Business Disclosure Format (Check One):
Yes [ ] No [X]
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE> 3
POP 'N GO, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
2000 1999
----------- ------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 62,791 $ 140,264
Trade accounts receivable,
less allowance for sales
returns and doubtful accounts of
$7,000 ($7,000 at Sept 30, 1999) 156,502 59,055
Inventories 263,829 311,477
----------- -----------
Total current assets 483,122 510,796
Long-Term Receivable -- 47,500
Furniture and equipment, net 56,911 54,017
Proprietary software, net 38,147 123,890
----------- -----------
Total assets $ 578,180 $ 736,203
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts Payable $ 323,169 $ 194,775
Accrued liabilities 33,736 30,911
Accrued consulting fees 233,100 77,700
Customer deposits 19,767 19,767
Convertible debentures 649,800 --
----------- -----------
Total current liabilities 1,259,572 323,153
Put option 315,000 315,000
----------- -----------
Total liabilities 1,574,572 638,153
----------- -----------
Stockholders' equity:
Common stock, par value $.001 per share,
authorized 20,000,000 shares, issued
and outstanding 6,654,986 shares at
March 31, 2000 and 6,514,771 shares at
September 30, 1999 6,655 6,515
Additional paid in capital 4,521,178 4,568,243
Retained deficit (5,524,225) (4,476,708)
----------- -----------
Total stockholders' equity (996,392) 98,050
----------- -----------
Total liabilities and stockholders'
equity $ 578,180 $ 736,203
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 4
POP 'N GO, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MARCH 31,
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $(1,047,517) $ (969,511)
Adjustments to reconcile net income
(loss to net cash provided by
operating activities:
Depreciation and amortization 81,549 103,076
Provision for losses and sales returns -- --
Changes in assets and liabilities:
Accounts receivable (49,948) (25,349)
Inventories 47,648 (30,143)
Proprietary Software -- (37,706)
Other accounts payable and
accrued expenses 286,620 (37,693)
----------- -----------
Net cash provided by operating activities (681,648) (997,326)
----------- -----------
Cash flows from investing activities:
Capital expenditures 1,300 (10,809)
----------- -----------
Net cash (used in) investing activities 1,300 (10,809)
----------- -----------
Cash flows from financing activities:
Convertible debentures 649,800 --
Common stock 140 750
Additional paid in capital (47,065) 1,039,055
----------- -----------
Net cash (used in) financing activities 602,875 1,039,805
----------- -----------
Net decrease in cash and cash equivalents (77,473) 31,670
Cash and cash equivalents,
beginning of period 140,264 17,238
----------- -----------
Cash and cash equivalents,
end of period $ 62,791 $ 48,908
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 9,584 $ 1,250
=========== ===========
Income taxes $ 800 $ 800
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 5
POP 'N GO, INC.
STATEMENTS OF OPERATIONS AND RETAINED DEFICIT
FOR THE THREE MONTH AND SIX MONTH PERIODS
ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH MARCH
THREE MONTHS SIX MONTHS
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 213,501 $ 181,958 $ 395,506 $ 321,054
Costs of goods sold 185,747 237,708 344,091 358,721
Gross profit 27,754 $ (55,750) 51,417 (37,667)
----------- ----------- ----------- -----------
Operating expenses:
Administrative and general 517,846 498,738 1,022,916 799,481
Development costs 21,416 51,901 65,634 108,563
----------- ----------- ----------- -----------
Total operating expenses 539,262 550,639 1,088,550 908,044
----------- ----------- ----------- -----------
Operating loss (511,506) (606,389) (1,037,133) (945,711)
Interest expense (9,584) (10,625) (9,584) (23,000)
----------- ----------- ----------- -----------
Income (loss) before
income taxes (521,090) (617,014) (1,046,717) (968,711)
Provision for income taxes -- -- (800) (800)
----------- ----------- ----------- -----------
Net profit (loss) $ (521,090) $ (617,014) $(1,047,517) $ (969,511)
Per common share information:
Net earnings (loss) $ (521,090) $ (617,014) $(1,047,517) $ (969,511)
=========== =========== =========== ===========
Earnings (loss) per share:
Basic and diluted $ (0.08) $ (0.17) $ (0.16) $ (0.26)
=========== =========== =========== ===========
Weighted average shares
outstanding used in the
per share calculation:
Basic and diluted 6,636,772 3,710,111 6,584,879 3,710,111
=========== =========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 6
POP 'N GO, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 AND 1999
(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 March 31, 2000 and 1999.
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 March 31, 2000, the Company received proceeds of
$229,800 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 2000 and 1999 periods were
computed by dividing net income/(loss) by the weighted average number of
shares outstanding.
<PAGE> 7
Item 2. Management's Discussion and Analysis or Plan of Operations
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis should be read in conjunction with the
Company's financial statements and the notes thereto.
The following table sets forth, for the periods indicated, certain statements of
operations and retained deficit data for the Company expressed as a percentage
of net sales:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2000 1999 2000 1999
------ ------ -------- ------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 87.0 130.6 87.0 111.7
------ ------ -------- ------
Gross profit 13.0 (30.6) 13.0 (11.7)
Administrative and general expenses (242.6) (274.1) (258.6) (249.0)
Development costs (10.0) (28.5) (16.6) (38.8)
Loss from operations (239.6) (333.2) (262.2) (294.5)
Interest expense (4.5) (5.8) (2.4) (7.2)
------ ------ -------- ------
Income (loss) before income taxes (244.1) (339.0) (264.6) (301.7)
Provision for income taxes -- -- (0.2) (0.3)
------ ------ -------- ------
Net income (loss) (244.1)% (339.0)% (264.8)% (302.0)%
====== ====== ======== ======
</TABLE>
THREE MONTHS ENDED MARCH 31, 2000 VERSUS THREE MONTHS ENDED MARCH 31, 1999
RESULTS OF OPERATIONS
The Company incurred a net loss of $521,090 for the period ended March 31, 2000
as compared to a net loss of $617,014 for the period ended March 31, 1999. This
loss represents a loss from operations of $511,506 and $606,389 for the period
ended March 31, 2000 and 1999, respectively. The net loss also includes interest
expense and other finance charges totaling $9,584 and $10,625 for the period
ended March 31, 2000 and 1999, respectively.
Total revenues for the period ended March 31, 2000 were $213,501 as compared to
$181,958 for the period ended March 31, 1999. This represents an increase in
revenues of 17.3% over the same period in the prior year. This increase was
primarily due to additional
<PAGE> 9
popcorn machine sales during 2000.
Total cost of goods sold for the period ended March 31, 2000 was $185,747 as
compared to $181,958 for the period ended March 31, 1999. The gross profit
percent on the equipment sales was 13.0% for the period ended March 31, 1999
and for the period ended March 31, 2000.
Total operating expenses consist primarily of development expenses and general
and administrative expenses. For the period ended March 31, 2000, total
operating expenses were $539,262. For the period ended March 31, 1999, total
operating expenses were $550,639. This represents a 2% decrease over the same
period in the prior year.
General and administrative expenses for the period ended March 31, 2000 was
$517,846 as compared to $498,738 for the period ended March 31, 1999. This
represents an increase of 4% 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.
Interest expense and other finance charges went from $10,625 for the period
ended March 31, 1999 to $9,584 for the period ended March 31, 2000. This
represents a decrease in interest expense of 10% 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.
SIX MONTHS ENDED MARCH 31, 2000 VERSUS SIX MONTHS ENDED MARCH 31, 1999
RESULTS OF OPERATIONS
The Company incurred a net loss of $1,047,517 for the period ended March 31,
2000 as compared to a net loss of $969,511 for the period ended March 31, 1999.
This loss represents a loss from operations of $1,037,133 and $945,711 for the
period ended March 31, 2000 and 1999, respectively. The net loss also includes
interest expense and other finance charges totaling $9,584 and $23,000 for the
period ended March 31, 2000 and 1999, respectively.
Total revenues for the period ended March 31, 2000 were $395,506 as compared to
$321,054 for the period ended March 31, 1999. This represents an increase in
revenues of 23% over the same period in the prior year. This increase was
primarily due to additional popcorn machine sales during 1999 and 2000.
Total cost of goods sold for the period ended March 31, 2000 was $344,091 as
compared to $358,721 for the period ended March 31, 1999. The gross profit
percent on the equipment sales was 13.0% for the period ended March 31, 2000 and
(12%) for the period ended March 31, 1999.
Total operating expenses consist primarily of development expenses and general
and administrative expenses. For the period ended March 31, 2000, total
operating expenses
<PAGE> 10
were $1,088,550. For the period ended March 31, 1999, total operating expenses
were $908,044. This represents a 20% increase over the same period in the prior
year.
General and administrative expenses for the period ended March 31, 2000 was
$1,022,916 as compared to $799,481 for the period ended March 31, 1999. This
represents an increase of 28% 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.
Interest expense and other finance charges went from $23,000 for the period
ended March 31, 1999 to $9,584 for the period ended March 31, 2000. This
represents a decrease in interest expense of 58% 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 March 31, 2000, the Company had cash and cash equivalents of $62,791 as
compared to cash and cash equivalents of $140,264 as of September 30, 1999. At
September 30, 1999, the Company had a working capital (total current assets in
excess of total current liabilities) of $187,643 as compared to a working
capital deficiency (total current liabilities in excess of current assets) of
$687,800 as of March 31, 2000. Net cash used in operating activities was
$776,450 for the period ended March 31, 2000 and $997,326 for the period ended
March 31, 1999. The principal use of cash for the period ended March 31, 2000
was to fund the net loss from operations for the period. The Company raised a
total of $602,875 from the issuance of common stock, net of stock issuance costs
and the issuance of convertible debentures during the period ended March 31,
2000, and this was used to fund the net loss from operations, as well as to
purchase furniture and equipment and pay off a loan from a shareholder.
Net cash from investing activities was $1,300, compared with net cash used in
investing activities was $10,809 for the year ended March 31, 2000 and 1999,
respectively. This increase in net cash was a result of the disposition of demo
units during the period ended March 31, 2000 for which the research and
development was completed during the prior period.
Net cash from financing activities was $602,875 for the period ended March 31,
2000 as compared to $1,039,805 for the period ended March 31, 1999.
<PAGE> 11
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.
<PAGE> 12
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 12th day of
May, 2000.
POP 'N GO, INC.
By /s/ Melvin Wyman
--------------------------------------
Melvin Wyman,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 62,791
<SECURITIES> 0
<RECEIVABLES> 163,502
<ALLOWANCES> 7,000
<INVENTORY> 263,829
<CURRENT-ASSETS> 571,772
<PP&E> 54,084
<DEPRECIATION> 15,187
<TOTAL-ASSETS> 666,830
<CURRENT-LIABILITIES> 1,254,572
<BONDS> 649,800
0
0
<COMMON> 6,655
<OTHER-SE> 4,609,828
<TOTAL-LIABILITY-AND-EQUITY> 666,830
<SALES> 395,506
<TOTAL-REVENUES> 395,506
<CGS> 344,091
<TOTAL-COSTS> 344,091
<OTHER-EXPENSES> 1,088,550
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,584
<INCOME-PRETAX> (1,046,717)
<INCOME-TAX> 800
<INCOME-CONTINUING> (1,047,517)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,047,517)
<EPS-BASIC> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
