UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: March 31, 2000 Commission File Number 0-28447
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VILLA PASTA, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 84-1313551
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
581 County Line Road, Suite B, Palmer Lake, Colorado 80133
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(Address of principal executive offices) (Zip code)
(719) 481-6815
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check 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.
Common stock, no par value 1,155,000
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Class Number of shares outstanding at May 10, 2000
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This document is comprised of 11 pages.
<PAGE>
FORM 10-QSB
1ST QUARTER
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements *
Condensed balance sheet, March 31, 2000 (Unaudited).................... 3
Condensed statements of operations, three months ended
March 31, 2000 (Unaudited) and 1999 (Unaudited)..................... 4
Condensed statements of cash flows, three months ended
March 31, 2000 (Unaudited) and 1999 (Unaudited)..................... 5
Notes to condensed financial statements (Unaudited).................... 6
Item 2. Management's Discussion and Analysis.......................... 7
PART II - OTHER INFORMATION................................................. 7
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 Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures............................................................. 8
* The accompanying financial statements are not covered by an Independent
Certified Public Accountant's report.
2
<PAGE>
Part I. Item 1. Financial information
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VILLA PASTA, INC.
Condensed Balance Sheet
(Unaudited)
March 31, 2000
ASSETS
Current assets:
Cash.......................................................$ 37,167
Accounts receivable........................................ 4,152
Inventories, at lower of cost or market.................... 12,424
----------------
Total current assets 53,743
Property and equipment, less accumulated depreciation
of $16,794................................................. 4,567
Other assets.................................................... 1,195
----------------
$ 59,505
================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable...........................................$ 519
Due to officer (Note B).................................... 982
Accrued expenses........................................... 4,333
----------------
Total current liabilities 5,834
----------------
Shareholders' equity:
Preferred stock, no par value; 5,000,000 shares authorized;
-0- shares issued and outstanding....................... -
Common stock, no par value; 50,000,000 shares authorized;
1,155,000 shares issued and outstanding................. 84,775
Retained deficit........................................... (31,104)
----------------
Total shareholders' equity 53,671
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$ 59,505
================
See accompanying notes to condensed financial statements
3
<PAGE>
VILLA PASTA, INC.
Condensed Statements of Operations
(Unaudited)
Three Months Ended
March 31,
---------------------------
2000 1999
------------ ------------
Net Sales $ 15,640 $ 18,089
Cost of sales.................................... 7,084 7,990
------------ ------------
Gross profit 8,556 10,099
Selling, general and administrative expenses..... 11,108 10,063
------------ ------------
Operating (loss) income (2,552) 36
Income taxes (Note C)............................ - -
------------ ------------
Net (loss) income $ (2,552) $ 36
============ ============
Pro forma information (Note A):
Historical (loss) income before income taxes.$ (2,552) $ 36
Pro forma provision for income taxes:
Current................................... - 5
Deferred.................................. - (5)
------------ ------------
Pro forma net (loss) income $ (2,552) $ 36
============ ============
Basic loss per common share......................$ * $ *
============ ============
Weighted average common shares outstanding....... 1,155,000 900,000
============ ============
Basic pro forma loss per common share............$ * $ *
============ ============
Pro forma weighted average common
shares outstanding........................... 1,155,000 900,000
============ ============
* Less than $.01 per common share
See accompanying notes to condensed financial statements
4
<PAGE>
VILLA PASTA, INC.
Condensed Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
---------------------------
2000 1999
NET CASH PROVIDED BY ------------ ------------
OPERATING ACTIVITIES $ 1,923 $ 11,670
------------ ------------
FINANCING ACTIVITIES
Repayments to members/officers (Note B)..... (840) (10,209)
NET CASH (USED IN) ------------ ------------
FINANCING ACTIVITIES (840) (10,209)
------------ ------------
NET CHANGE IN CASH............................... 1,083 1,461
Cash, beginning of period........................ 36,084 4,010
------------ ------------
CASH, END OF PERIOD..............................$ 37,167 $ 5,471
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest......................$ - $ -
============ ============
Cash paid for income taxes..................$ - $ -
============ ============
See accompanying notes to condensed financial statements
5
<PAGE>
VILLA PASTA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2000
Note A: Presentation and reorganization
-------------------------------
Basis of presentation
- ---------------------
The financial statements presented herein have been prepared by Villa Pasta,
Inc. (the "Company") in accordance with the accounting policies in its Form
10-KSB dated December 31, 1999 and should be read in conjunction with the notes
thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
Description of operations and recent reorganization
- ---------------------------------------------------
Villa Pasta, Inc. (the "Company") was incorporated in Colorado on April 6, 1999
to act as the successor to Villa Pasta, LLC (the "LLC"). Effective April 1,
1999, the LLC reorganized (the "Reorganization") and the existing members
exchanged 100 percent of their membership interests for 900,000 common shares of
the Company. This transaction was a reorganization of entities under common
control, and accordingly, it was accounted for at historical cost.
Pro forma financial information
- -------------------------------
Pro forma provision for income taxes and pro forma net income:
Prior to the reorganization, Villa Pasta was organized as a limited liability
company and consequently, was not subject to income tax. A pro forma provision
for income taxes for the quarter ended March 31, 1999 has been presented for
purposes of comparability as if the Company had been a taxable entity for all
periods presented.
Pro forma weighted average shares outstanding:
Pro forma weighted average common shares outstanding for March 31, 1999
represents the weighted average number of common shares issued in the
Reorganization.
Note B: Related party transactions
--------------------------
At December 31, 1999, $1,822 was owed to an officer of the Company. During the
three months ended March 31, 2000, the Company repaid the officer $840, which
reduced the obligation to $982 at March 31, 2000.
6
<PAGE>
VILLA PASTA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2000
Note C: Income taxes
------------
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred
net operating losses during the three months ended March 31, 2000 resulting in a
deferred tax asset, which was fully allowed for; therefore, the net benefit and
expense resulted in $-0- income taxes.
7
<PAGE>
Part I. Item 2. Management's Discussion and Analysis
- ------- ------------------------------------
VILLA PASTA
March 31, 2000
RESULTS OF OPERATIONS
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The Company operates in the specialty food industry as a maker of fine pasta and
related products, which are sold in supermarkets and specialty stores in
Colorado and other locations in the United States.
During the three months ended March 31, 2000, the Company realized a net loss of
$2,552 on revenues of $15,640. That represents an increase in the net loss from
the three months ended March 31, 1999, when the Company recognized net income of
$36. Sales decreased from the first quarter of 1999 to the first quarter of
2000, down approximately 13.5 percent. Management believes substantial
additional marketing is necessary to raise sales significantly. However, the
Company currently has little capital available for that purpose. It is
anticipated that sales will remain at a constant level for the foreseeable
future.
The Company's gross margin remained constant at approximately 55 percent for the
first quarter of 1999 and the first quarter of 2000. The main factors
contributing to the net loss for the three months ended March 31, 2000 were the
increased manufacturing wages and wages paid to officers during the quarter. The
slight increase in selling, general and administrative expenses was principally
due to the increase in officer salaries.
FINANCIAL CONDITION
- -------------------
At March 31, 2000, management believed the Company had sufficient liquidity and
capital to meet its needs for the next twelve months. This assumes limited funds
are spent on marketing and promotion. In order for the Company to become
profitable, management believes marketing must be increased. At March 31, 2000,
the Company had working capital of $47,909, consisting of current assets of
$53,743 and current liabilities of $5,834. Working capital at March 31, 2000
represented a decrease of $1,347 from December 31, 1999 and an increase of
$33,905 from March 31, 1999. The increase resulted from a private placement
conducted by the Company during the second quarter of 1999.
Capital requirements for the next twelve months include cash to pay vendors,
employees and other general and administrative expenses pending the collection
of accounts receivable. Most of the Company's customers are large supermarket
chains or established specialty food stores, so collection of accounts
receivable has not been an issue for the Company to date.
8
<PAGE>
Management's Discussion and Analysis, Continued
- -----------------------------------------------
VILLA PASTA
March 31, 2000
Liabilities of the Company at March 31, 2000 consisted of trade accounts
payable, indebtedness to an officer and other accrued expenses in the ordinary
course of business. The Company has no long-term debt, and it is not expected
that borrowing will be necessary in the foreseeable future. Historically, the
Company has relied on periodic advancements from a shareholder (former member)
to finance short-term capital requirements. However, due to the proceeds of the
private placement, such borrowing should not be necessary for the foreseeable
future.
At March 31, 1999, the Company had working capital of $14,004, which consisted
of current assets of $25,487 and current liabilities of $11,483. The Company
also had additional liabilities of $1,243, representing indebtedness to a
related party. In the opinion of management, the Company's financial condition
at March 31, 1999 warranted additional efforts to increase liquidity and
available capital. As a result, the private placement was conducted.
PART II - OTHER INFORMATION
- ----------------------------
Items 1 through 5 - No response required.
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits 27 - Financial Data Schedule.
There were no reports on Form 8-K.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VILLA PASTA, INC.
(Registrant)
DATE: May 11, 2000 BY: /s/ Craig Van Scoten
------------ ---------------------
Craig Van Scoten
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 37,167
<SECURITIES> 0
<RECEIVABLES> 4,152
<ALLOWANCES> 0
<INVENTORY> 12,424
<CURRENT-ASSETS> 53,743
<PP&E> 21,361
<DEPRECIATION> (16,794)
<TOTAL-ASSETS> 59,505
<CURRENT-LIABILITIES> 5,834
<BONDS> 0
0
0
<COMMON> 84,775
<OTHER-SE> (31,104)
<TOTAL-LIABILITY-AND-EQUITY> 59,505
<SALES> 15,640
<TOTAL-REVENUES> 15,640
<CGS> 7,084
<TOTAL-COSTS> 7,084
<OTHER-EXPENSES> 11,108
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,552)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,552)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,552)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
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