UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For Quarter Ended September 30, 2000
-------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______________ to _______________
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.)
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.
Common stock, no par value 1,155,000
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Class Number of shares outstanding at November 6,2000
Traditional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
This document is comprised of 10 pages.
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FORM 10-QSB
3RD QUARTER
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements *
Condensed balance sheet, September 30, 2000 (Unaudited).................. 3
Condensed statements of operations, three and nine months
ended September 30, 2000 and 1999 (Unaudited)......................... 4
Condensed statements of cash flows, nine months ended
September 30, 2000 and 1999 (Unaudited)............................... 5
Notes to condensed financial statements (Unaudited)...................... 6
Item 2. Management's Discussion and Analysis............................ 7
PART II - OTHER INFORMATION.............................................. 8
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............................................................... 9
* The accompanying financial statements are not covered by an Independent
Certified Public Accountant's report.
See accompanying notes to condensed financial statements
2
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Part I. Item 1. Financial Information
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VILLA PASTA, INC.
CONDENSED BALANCE SHEET
(Unaudited)
September 30, 2000
Assets
Current assets:
Cash................................................. $ 12,868
Accounts receivable.................................. 6,076
Inventories, at lower of cost or market.............. 11,117
-----------
Total current assets 30,061
Property and equipment, less accumlated depreciation
of $18,629........................................... 2,732
Other assets........................................... 1,195
-----------
$ 33,988
===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable..................................... $ 1,363
Due to officer (Note B).............................. 2,263
Accrued Expenses..................................... 3,704
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Total current liabilities 7,330
-----------
Shareholders' equity:
Preferred stock...................................... -
Common stock......................................... 84,775
Retained deficit..................................... (58,117)
-----------
Total shareholders' equity 26,658
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$ 33,988
===========
See accompanying notes to condensed financial statements
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<TABLE>
VILLA PASTA, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales.............................................. $ 17,137 $ 38,434 $ 49,137 $ 63,685
Cost of sales.......................................... 16,613 24,638 25,770 32,277
----------- ----------- ----------- ------------
Gross profit 524 13,796 23,367 31,408
Selling, general and
administrative expenses.............................. 17,527 13,374 53,713 30,421
Stock-based compensation............................... - - - 25,000
----------- ----------- ----------- ------------
Operating (loss) income (17,003) 422 (30,346) (24,013)
Interest income........................................ 182 - 781 -
----------- ----------- ----------- ------------
(Loss) income before income taxes (16,821) 422 (29,565) (24,013)
Income taxes (Note C).................................. - - - -
----------- ----------- ----------- ------------
Net (loss) income $ (16,821) $ 422 $ (29,565) $ (24,013)
=========== =========== =========== ============
Pro forma information (Note A):
Historical (loss) income before
income taxes...................................... $ (16,821) $ 422 $ (29,565) $ (24,013)
Pro forma provision for income taxes................. - - - -
----------- ----------- ----------- ------------
Pro forma net (loss) income $ (16,821) $ 422 $ (29,565) $ (24,013)
=========== =========== =========== ============
Basic and diluted loss per common share................ $ (0.01) $ * $ (0.03) $ (0.02)
=========== =========== =========== ============
Basic and diluted weighted average
common shares outstanding............................ 1,155,000 1,155,000 1,155,000 1,070,000
=========== =========== =========== ============
</TABLE>
*Less than $.01 per common share
See accompanying notes to condensed financial statements
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VILLA PASTA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
-----------------------
2000 1999
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Net cash (used in) provided by operating activities $ (23,657) $ 8,532
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Cash flows from financing activities:
Proceeds from common stock sales..................... - 38,750
Advances from members/officers....................... 1,281 -
Repayments to members/officers (Note B).............. (840) (16,921)
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Net cash provided by financing activities 441 21,829
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Net change in cash (23,216) 30,361
Cash, beginning of period.............................. 36,084 4,010
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Cash, end of period $ 12,868 $ 34,371
========== =========
Supplemental disclosure of cash flow information:
Cash paid for interest............................... $ - $ -
========== =========
Cash paid for income taxes........................... $ - $ -
========== =========
See accompanying notes to condensed financial statements
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VILLA PASTA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2000
Note A: Presentation and reorganization
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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
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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 nine months ended September 30, 1999 has been presented
for purposes of comparability as if the Company had been a taxable entity for
all periods presented.
Note B: Related party transactions
--------------------------
At December 31, 1999, $1,822 was owed to an officer of the Company. During the
nine months ended September 30, 2000, the Company received additional advances
of $1,281 for working capital and repaid the officer $840, which increased the
obligation to $2,263 at September 30, 2000.
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VILLA PASTA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
September 30, 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 nine months ended September 30, 2000 resulting
in a deferred tax asset, which was fully allowed for; therefore, the net benefit
and expense resulted in $-0- income taxes.
7
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Part I. Item 2. Management's Discussion and Analysis
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VILLA PASTA, INC.
September 30, 2000
RESULTS OF OPERATIONS
---------------------
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. The Company's operations are
seasonal, with the largest percentage of sales occurring during the holiday
season, the Company's fourth quarter.
During the nine months ended September 30, 2000, the Company realized a net loss
of $29,565 on revenues of $49,137. That represents an increase in the net loss
from the nine months ended September 30, 1999, when the Company recognized a net
loss of $24,013. Sales decreased during the first nine months of 2000 as
compared to the same period for 1999, approximately 22.8 percent. Payroll and
professional fees increased during the three and nine months ended September 30,
2000 as compared to the same periods for 1999 due to the Company's
reorganization and becoming a reporting company during 1999. Management believes
substantial additional marketing is necessary to raise sales significantly.
Management plans to increase marketing efforts beginning in January 2001.
The Company's gross margin remained constant at approximately 48 percent for the
first three-quarters of 2000 and 1999. Increases in manufacturing and officer
wages and professional fees related to the Company's filings contributed to
higher expenses in 2000, which resulted in a higher net loss as compared to
1999.
FINANCIAL CONDITION
-------------------
At September 30, 2000, the Company had working capital of $22,731, consisting of
current assets of $30,061 less current liabilities of $7,330. The working
capital balance at September 30, 2000 has decreased $26,525 since December 31,
1999 and has decreased $32,531 since September 30, 1999. The decreases resulted
from the net losses.
Capital requirements for the next twelve months include cash to pay vendors,
employees and other general and administrative expenses. Sources of cash will
include cash sales and collection of accounts receivable. Most of the Company's
customers are large supermarket chains or established specialty food stores, so
bad debts has not been an issue for the Company to date.
Liabilities of the Company at September 30, 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. The Company plans to
rely on shareholder advances to finance short-term capital requirements. The
shareholder is also an officer of the Company.
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VILLA PASTA, INC.
September 30, 2000
PART II - OTHER INFORMATION
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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
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SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three months and nine months ended
September 30, 2000 have been included.
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: November 6, 2000 BY: /s/ Craig Van Scoten
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Craig Van Scoten
President
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