<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 6/30/00.
[ ] 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)
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Delaware 95-4603172
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(State or other jurisdiction (IRS Employer
of incorporation or organization) identification No.)
12429 EAST PUTNAM STREET
WHITTIER, CALIFORNIA 90602
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(Address of principal executive offices)
(562) 945-9351
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(Issuer's telephone number)
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(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]
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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POP N' GO, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
2000 1999
(UNAUDITED) (AUDITED)
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 116,048 $ 140,264
Trade accounts receivable,
less allowance for sales
returns and doubtful accounts of
$7,000 ($7,000 at Sept 30, 1999) 180,998 59,055
Inventories 347,857 311,477
Prepaid expenses 145,000 --
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Total current assets 789,903 510,796
Long-Term Receivable 47,500
Property and equipment, net 46,365 54,017
Proprietary software, net 9,450 123,890
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Total assets $ 845,718 $ 736,203
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Convertible debentures $ 789,234 $ --
Loan Payable 250,000
Accounts Payable 228,978 194,775
Accrued liabilities 38,322 30,911
Accrued consulting fees 310,800 77,700
Customer deposits 19,767 19,767
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Total current liabilities 1,637,101 323,153
Put option -- 315,000
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Total liabilities 1,637,101 638,153
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Stockholders' equity:
Committed stock, 110,000 shares 168,000
Common stock, par value $.001 per share,
authorized 20,000,000 shares, issued
and outstanding 6,949,270 shares at
June 30, 2000 and 6,514,771 shares at
September 30, 1999 6,949 6,515
Additional paid in capital 5,229,957 4,568,243
Retained deficit (6,196,289) (4,476,708)
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Total stockholders' equity (791,383) 98,050
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Total liabilities and stockholders'
equity $ 845,718 $ 736,203
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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POP N' GO, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTH AND NINE MONTH PERIODS
ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
----------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 56,956 $ 178,190 $ 452,463 $ 499,244
Costs of goods sold 49,551 46,000 393,642 404,721
----------- ----------- ----------- -----------
Gross profit 7,405 132,190 58,821 94,523
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Operating expenses:
Administrative and general 638,772 589,285 1,661,688 1,388,766
Development costs 10,300 41,497 75,934 150,060
----------- ----------- ----------- -----------
Total operating expenses 649,072 630,782 1,737,622 1,538,826
----------- ----------- ----------- -----------
Operating loss (641,667) (498,592) (1,678,801) (1,444,303)
Interest expense (30,183) (9,375) (39,767) (32,375)
----------- ----------- ----------- -----------
Income (loss) before
income taxes (671,850) (507,967) (1,718,568) (1,476,678)
Provision for income taxes (213) (915) (1,013) (1,715)
----------- ----------- ----------- -----------
Net profit (loss) $ (672,063) $ (508,882) $(1,719,581) $(1,478,393)
Per common share information:
Net earnings (loss) $ (672,063) $ (508,882) $(1,719,581) $(1,478,393)
=========== =========== =========== ===========
Earnings (loss) per share:
Basic and diluted $ (0.10) $ (0.11) $ (0.26) $ (0.34)
=========== =========== =========== ===========
Weighted average shares
outstanding used in the
per share calculation:
Basic and diluted 6,802,128 4,749,089 6,603,093 4,374,530
=========== =========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 5
POP N' GO, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED JUNE 30,
-----------------------------
2000 1999
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<S> <C> <C>
Cash flows from operating activities
Net income (loss) $(1,719,581) $(1,478,393)
Adjustments to reconcile net income
(loss to net cash provided by
operating activities:
Depreciation and amortization 122,972 118,975
Provision for losses and sales returns -- --
Issued for services 168,000 --
Changes in assets and liabilities:
Accounts receivable (74,443) (108,809)
Inventories (36,380) (70,436)
Prepaid expenses (145,000) --
Proprietary Software -- (13,026)
Other accounts payable and
accrued expenses 274,714 (72,023)
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Net cash provided by operating activities (1,409,718) (1,623,712)
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Cash flows from investing activities:
Capital expenditures (880) (18,498)
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Net cash (used in) investing activities (880) (18,498)
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Cash flows from financing activities:
Convertible debentures 789,234 (250,000)
Common stock 434 2,078
Loan Payable 250,000 --
Additional paid in capital 346,714 1,963,882
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Net cash (used in) financing activities 1,386,382 1,715,960
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Net decrease in cash and cash equivalents (24,216) 73,750
Cash and cash equivalents,
beginning of period 140,264 17,238
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Cash and cash equivalents,
end of period $ 116,048 $ 90,988
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 39,767 $ 32,375
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Income taxes $ 1,013 $ 1,715
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE> 6
POP N' GO, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 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 June 30, 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. Going concern issues
The Company has received a report from its independent auditors that
includes an explanatory paragraph describing the Company's uncertainty to
continue as a going concern. These consolidated financial statements
contemplate the ability to continue as such and do not include any
adjustments that might result from this uncertainty.
3. Debt financing:
In the quarter ending June 30, 2000, the Company received proceeds of
$134,434 from the issuance of convertible notes and $250,000 loan from a
private lender. The loan is payable on January 1, 2000 and bears interest
at a rate of 12%. In addition, the loan required the issuance of 25,000
shares of stock. Accordingly, the Company has recorded the fair market
value of the shares as interest over the term of the loan.
During the three months ending June 30, 2000, the Company received
proceeds of $139,434 from the issuance of convertible debentures. The
debentures are convertible immediately and are due September 30, 2000. As
these debentures were issued
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at a conversion rate equal to the fair market value of the Company's
stock, no additional charge has been recorded.
4. Put Option:
During the quarter ended June 30, 2000, the put option expired and the
carrying amount of the contingent liability of $315,000 has been
reclassified to additional paid in capital.
5. Consulting Agreement:
The Company entered into an agreement with an investor relations firm for
certain consulting services. The agreement called for the issuance of
200,000 shares of common stock over the 7 month term of the agreement
period. As of the June 30, the company had issued 105,000 shares of stock.
Related to the agreement, the company has recorded the transaction at the
fair market value of the stock, and maintains $120,000 capitalized as
prepaid consulting fees, which is being amortized over its remaining term
of the agreement, and has recorded $133,000 as committed common stock for
those shares remaining un-issued at June 30, 2000.
6. Income or Loss per share:
Income or Loss per share for the 2000 and 1999 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 or Plan of Operations
<PAGE> 9
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 NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------- ----------------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 87.0 25.8 87.0 81.1
------- ------- ------- -------
Gross profit 13.0 74.2 13.0 18.9
Administrative and general expenses (1,121.5) (330.7) (367.3) (278.2)
Development costs (18.1) (23.3) (16.8) (30.1)
------- ------- ------- -------
Loss from operations (1,126.6) (279.8) (371.1) (289.4)
Interest expense (53.0) (5.3) (8.8) (6.5)
------- ------- ------- -------
Income (loss) before income taxes (1,179.6) (285.1) (379.9) (295.9)
Provision for income taxes (0.4) (0.5) (0.2) (0.3)
------- ------- ------- -------
Net income (loss) (1,180.0)% (285.6)% (380.1)% (296.2)%
======= ======= ======= =======
</TABLE>
THREE MONTHS ENDED JUNE 30, 2000 VERSUS THREE MONTHS ENDED JUNE 30, 1999
RESULTS OF OPERATIONS
The Company incurred a net loss of $672,063 for the three months ended June 30,
2000 as compared to a net loss of $508,882 for the three months ended June 30,
1999. This loss represents a loss from operations of $641,667 and $498,592 for
the three months ended June 30, 2000 and 1999, respectively. The net loss also
includes interest expense and other finance charges totaling $30,183 and $9,375
for the three months ended June 30, 2000 and 1999, respectively.
Total revenues for the three months ended June 30, 2000 were $ 56,956 as
compared to $178,190 for the three months ended June 30, 1999. This represents a
decrease in revenues of 68% over the same period in the prior year. This
decrease was primarily due to a reduction in popcorn machine sales during 2000.
<PAGE> 10
Total cost of goods sold for the three months ended June 30, 2000 was $49,551 as
compared to $46,000 for the three months ended June 30, 1999. The gross profit
percent on the equipment sales was 74.0% for the three months ended June 30,
1999 and 13.0% for the three months ended June 30, 2000.
Total operating expenses consist primarily of development expenses and general
and administrative expenses. For the three months ended June 30, 2000, total
operating expenses were $649,072. For the three months ended June 30, 1999,
total operating expenses were $630,782. This represents a 2.9% increase over the
same period in the prior year.
General and administrative expenses for the three months ended June 30, 2000
were $638,772 as compared to $589,285 for the three months ended June 30, 1999.
This represents an increase of 8.4% 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 $9,375 for the three months
ended June 30, 1999 to $30,183 for the three months ended June 30, 2000. This
represents an increase in interest expense of 222% from the prior year. This
increase was due primarily to the interest on convertible debentures.
NINE MONTHS ENDED JUNE 30, 2000 VERSUS NINE MONTHS ENDED JUNE 30, 1999
RESULTS OF OPERATIONS
The Company incurred a net loss of $1,719,581 for the nine months ended June 30,
2000 as compared to a net loss of $1,478,393 for the nine months ended June 30,
1999. This loss represents a loss from operations of $1,678,801 and $1,444,303
for the nine months ended June 30, 2000 and 1999, respectively. The net loss
also includes interest expense and other finance charges totaling $39,767 and
$32,375 for the nine months ended June 30, 2000 and 1999, respectively.
Total revenues for the nine months ended June 30, 2000 were $452,463 as compared
to $499,244 for the nine months ended June 30, 1999. This represents a decrease
in revenues of 9% over the same period in the prior year. This decrease was
primarily due to a reduction in popcorn machine sales during 1999 and 2000.
Total cost of goods sold for the nine months ended June 30, 2000 was $393,642 as
compared to $404,721 for the nine months ended June 30, 1999. The gross profit
percent on the equipment sales was 13.0% for the nine months ended June 30, 2000
and 18.9% for the nine months ended June 30, 1999.
Total operating expenses consist primarily of development expenses and general
and administrative expenses. For the nine months ended June 30, 2000, total
operating expenses were $1,737,622. For the nine months ended June 30, 1999,
total operating expenses were $1,538,826. This represents a 13% increase over
the same period in the prior year.
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General and administrative expenses for the nine months ended June 30, 2000 were
$1,661,688 as compared to $1,388,766 for the nine months ended June 30, 1999.
This represents an increase of 20% 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 $32,375 for the nine months
ended June 30, 1999 to $39,767 for the nine months ended June 30, 2000. This
represents an increase in interest expense of 23% from the prior year. This
increase was due primarily to the interest on convertible debentures.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2000, the Company had cash and cash equivalents of $116,048 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
$847,198 as of June 30, 2000. Net cash used in operating activities was
$1,409,718 for the nine months ended June 30, 2000 and $1,717,123 for the nine
months ended June 30, 1999. The principal use of cash for the nine months ended
June 30, 2000 was to fund the net loss from operations for the period. The
Company raised a total of $1,386,382 from the issuance of common stock, net of
stock issuance costs, loan from a private lender and the issuance of convertible
debentures during the nine months ended June 30, 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 used in investing activities was $880, compared with net cash used in
investing activities of $18,498 for the nine months ended June 30, 2000 and
1999, respectively. This decrease in net cash used was primarily attributable to
a reduction in capital expenditures incurred during the nine month period ended
June 30, 2000.
Net cash from financing activities was $1,386,382 for the nine months ended June
30, 2000 as compared to $1,715,960 for the nine months ended June 30, 1999.
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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 10Q-SB
(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
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<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 11th day of
August, 2000.
POP N GO, INC.
By /s/ MELVIN WYMAN
---------------------------------
Melvin Wyman,
Chief Financial Officer
