SKINTEK LABS INC
10QSB, 2000-11-21
NON-OPERATING ESTABLISHMENTS
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                       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 September 30, 2000

[  ]     Transition report under Section 13 or 15(d)  of the Securities Exchange
         Act of 1934 For the transition period from _________ to ________

                        Commission file number: 0-023532

                               SKINTEK LABS, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

              Delaware                                    65-0636227
              --------                                    ----------
     (State or Other Jurisdiction of                    (I.R.S. Employer
      Incorporation or Organization)                   Identification No.)

                                959 Shotgun Road
                                Sunrise, FL 33326
                    (Address of Principal Executive Offices)

                                 (800) 555-8826
                (Issuer's Telephone Number, Including Area Code)

              ----------------------------------------------------

              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant  was required to file such report),  and (2) has been
subject to such filing requirements for the past 90 days.

                   Yes       X                        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,  $.001 par value 9,127,187  shares  outstanding as of November 13,
2000.

Transitional Small Business Disclosure Format:       Yes ___  No        X
                                                                       ---
                          PART 1. FINANCIAL INFORMATION


Item 1.  FINANCIAL STATEMENTS.



<TABLE>
<CAPTION>


                               Skintek Labs, Inc.
                                and Subsidiaries
                      Condensed Consolidated Balance Sheets
                                   (Unaudited)

   ASSETS

                                                                                    Sept. 30, 2000             Dec. 31, 1999
<S>                                                                                 <C>                        <C>
CURRENT ASSETS

     Cash                                                                  $            (307,873)      $            143,992

     Accounts Receivable                                                                 824,822                    324,270

     Inventory                                                                         1,917,063                  1,230,189

     Prepaid Expenses and Other                                                           30,933                     50,578

     Due from Stockholders                                                                81,689                    107,311

              TOTAL CURRENT ASSETS                                                     2,546,634                  1,856,340

PROPERTY AND EQUIPMENT, net                                                            1,343,597                  1,135,514

OTHER ASSETS                                                                             130,033                    149,086

                          TOTAL ASSETS                                     $           4,020,264       $          3,140,940
                                                                                    ===================         ===================
                                                                                    ===================         ===================

                 LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

                                                                                 Sept. 30, 2000             Dec. 31, 1999

CURRENT LIABILITIES

     Accounts Payable                                                         $           535,453       $            397,413

     Payroll Taxes Payable                                                                207,856                     32,968


     Line of Credit                                                                       500,000                    100,000

     Notes Payable                                                                        525,847                  1,956,819

     Current Portion of Long Term Debt                                                      3,965

     Other Accrued Expenses                                                               103,755                     26,930

     Deferred Income Taxes                                                                 21,194                     21,194

          TOTAL CURRENT LIABILITIES                                                     1,898,070                  2,535,324

LONG TERM DEBT                                                                            141,181                    135,219

          TOTAL LIABILITIES                                                             2,039,251                  2,670,543

STOCKHOLDERS' EQUITY (DEFICIT)

     Common Stock, $0.001 Par Value, 50,000,000 Shares

          Authorized, 9,321,271 Shares Issued & Outstanding

          in 2000 and in 1999                                                               9,321                      9,321

     Preferred Stock, $0.001 Par Value, Non-Voting,

          1,000,000 Shares Authorized,

          0 Shares Issued & Outstanding                                                         -                          -

     Additional Paid in Capital                                                         2,756,164                  1,295,510

     Retained Earnings (Accumulated Deficit)                                             (634,970)                  (487,153)

     Stock Subscriptions Receivable                                                      (309,744)                  (374,287)

     Interest of Nonconverting Company Stockholder                                        160,242                     27,006

          TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                          1,981,013                    470,397

                 TOTAL LIABILITIES & STOCKHOLDERS'

                 EQUITY (DEFICIT)                                             $         4,020,264       $          3,140,940
                                                                                ====================           =================
                                                                                ====================           =================
</TABLE>




<TABLE>
<CAPTION>

                               Skintek Labs, Inc.
                                and Subsidiaries
                 Condensed Consolidated Statement of Operations
                                   (Unaudited)

                                                               For the Three Months Ended       For the Nine Months Ended

                                               Sept. 30, 2000            Sept. 30, 1999     Sept. 30, 2000            Sept. 30, 1999
<S>                                            <C>                        <C>               <C>                       <C>



SALES                                        $      2,089,690      $    1,489,318         $      5,319,575      $    3,964,742

COST OF SALES                                       1,277,205           1,042,479                3,442,302           2,707,677

         GROSS PROFIT                                 812,485             446,839                1,877,273           1,257,065

OPERATING EXPENSES

     Selling and Marketing                            164,537             126,389                  403,291             311,907

     Research and Development                               -               1,500                    2,835               4,111

 General and  Administrative                          609,909             387,487                1,504,533           1,109,718


          TOTAL OPERATING EXPENSES                    774,446             515,376                1,910,659           1,425,736


          INCOME (LOSS) FROM

          OPERATIONS                                   38,039             (68,537)                 (33,386)           (168,671)

OTHER INCOME AND EXPENSE

     Miscellaneous Income                                   -              86,941                      160              57,597

     Interest Income                                    1,126               1,061                    3,447               2,738

     Interest Expense                                 (55,249)           (140,307)                (118,038)           (104,867)

          TOTAL OTHER INCOME (EXPENSE)                (54,123)            (52,305)                (114,431)            (44,532)

          NET INCOME (LOSS) BEFORE

          PROVISION FOR INCOME TAXES                  (16,084)           (120,842)                (147,817)           (213,203)

Provision for (Benefit from) Income Taxes                   -                   -                        -              58,103

             NET INCOME  (LOSS)              $        (16,084)     $     (120,842)        $       (147,817)     $     (155,100)
                                                  ============      ==============          ================      ==============
                                                  ============      ==============          ================      ==============

COMMON SHARE

     Basic                                   $          (.002)     $        (.013)        $          (.016)     $        (.019)
                                                 =============      ==============          ================       =============
                                                 =============      ==============          ================       =============
     Diluted                                 $          (.002)     $        (.013)        $          (.015)     $        (.019)
                                                 =============      ==============          ================       =============
                                                 =============      ==============          ================       =============


SHARES USED IN COMPUTING

NET INCOME (LOSS) PER

COMMON SHARE

     Basic                                          9,321,271           9,253,775                9,321,271           8,251,248
                                                =============       ==============          ===============       ==============
                                                =============       ==============          ===============       ==============
     Diluted                                       10,321,271           9,416,819               10,043,899           8,306,193
                                                =============       ==============          ===============       ==============
                                                =============       ==============          ===============       ==============
</TABLE>



<TABLE>
<CAPTION>


                               Skintek Labs, Inc.
                                and Subsidiaries
                 Condensd Consolidated Statements of Cash Flows
                                   (Unaudited)

                                                                 For the Nine Months Ended

                                                                 Sept. 30, 2000            Sept. 30, 1999
<S>                                                              <C>                       <C>
CASH FLOWS FROM OPERATING

ACTIVITIES:

     Net Income (Loss)                                         $        (147,817)        $       (155,100)

     Adjustments to Reconcile Net Income

       (Loss) to Net Cash Provided by

       (Used in) Operating Activities

        Depreciation and Amortization                                    204,710                   94,428

        Increase in Accounts Receivable                                 (500,552)                (263,514)

        Increase in Inventory                                           (686,874)                (296,614)

        Decrease in Prepaid Expenses and Other                            19,645                   71,450

        Decrease (Increase) in Security Deposits                          17,425                  (36,898)

        Increase (Decrease) in Accounts Payable                          138,040                  (74,933)

        Increase (Decrease) in Payroll Taxes Payable                     174,888                   (1,648)

        Increase in Other Accrued Expenses                                76,825                   83,159

        Decrease in Deferred Income Taxes                                                         (58,414)

             NET CASH USED IN


             OPERATING ACTIVITIES                                       (703,710)                (638,084)

CASH FLOWS FROM INVESTING


ACTIVITIES:

     Loan Repayments from Stockholders (Net)                              25,622                    1,069

     Purchases of Property and Equipment                                (410,745)                (316,558)

     Purchases of Intangible Assets                                         (420)                  (1,717)

             NET CASH USED IN

             INVESTING ACTIVITIES                                       (385,543)                (317,206)

CASH FLOWS FROM FINANCING

ACTIVITIES:

     Proceeds from Stockholders' Contributions                         1,593,890

     Proceeds from Payments on Stock Subscriptions                        64,543

     Proceeds from (Principal Payments on)                            (1,030,972)                 807,165

       Notes Payable (Net)                                                 9,927                    9,436

     Proceeds from Sale of Common Stock                                                           125,180

             NET CASH PROVIDED BY

             FINANCING ACTIVITIES                                        637,388                  941,781

NET INCREASE (DECREASE) IN CASH                                         (451,865)                 (13,509)

CASH, BEGINNING OF PERIOD                                                143,992                   65,522

CASH, END OF PERIOD                                            $        (307,873)        $         52,013
                                                                   ===============            ================
                                                                   ===============            ================


SUPPLEMENTAL DISCLOSURES OF CASH

FLOW INFORMATION

     Cash paid during the period for:

        Interest                                               $         118,038         $        104,867
                                                                  ================              ===============
                                                                  ================              ===============
        Income Taxes                                           $               0         $          7,424
                                                                  ================              ===============
                                                                  ================              ===============
</TABLE>






                       SKINTEK LABS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



1.       Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and with the  instructions  to Form  10-QSB and
Regulation S-B of the Securities and Exchange Commission.  Accordingly,  they do
not include all of the information and footnotes  required by generally accepted
accounting  principles for complete  financial  statements and should be read in
conjunction with Notes to Financial Statements contained in the Company's latest
Form 8-K. In the opinion of management, all adjustments considered necessary for
a fair  presentation  have been included.  Operating results for the nine months
ended September 30, 2000 are not necessarily  indicative of the results that may
be expected for the year ended December 31, 2000.

The preparation of financial  statements in accordance  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

The accompanying financial statements retroactively reflect the consolidation of
Ultimate Warlock, Inc., which was acquired by the Company on September 13, 2000,
as if the acquisition took place on January 1, 1999.






<PAGE>


                           FORWARD LOOKING STATEMENTS

To the extent that financial  information and management discussion and analysis
of  financial  conditions  and  results of  operation  contain  forward  looking
statements,  such statements  involve risks and uncertainties  which could cause
the Company's  actual result to differ  materially from the anticipated  results
discussed herein.  Factors that might cause such a difference  include,  but are
not limited to,  changes and demands of the  Company's  products  and  services,
changes in the level of operating expenses,  competitive conditions, and product
supply, and the failure of the Company to successfully  integrate the operations
of Ultimate  Warlock,  Inc. You are cautioned not to place undue reliance on the
forward-looking statements made herein.

Item 2.  MANAGEMENT DISCUSSION AND ANALYSIS OF PLAN OF OPERATION.

The following  discussion and analysis  should be read in  conjunction  with the
Financial Statements and notes thereto appearing elsewhere herein.

General.

On September 13, 2000, the Company acquired 91%  of the outstanding common stock
of Ultimate Warlock, Inc. in exchange for 3,400,000  shares of its common stock.
Ultimate  Warlock,  Inc.  manufactures  and sells  world-class  high performance
powerboats.

Results of Operations.

For the period ended  September 30, 2000 compared to the period ended  September
30, 1999:

Net Sales.  Net sales of $2,089,690  for the quarter  ended  September 30, 2000,
increased  $600,372 or 39% over net sales of  $1,489,318  for the quarter  ended
September  30, 1999.  Year to date net sales of  $5,319,575 for the period ended
September  30, 2000,  increased  $1,354,833 or 34% over the same period in 1999.
This  year-to-date  increase is due to increased  sales of powerboats  due to an
improved and expanded dealer network.

Gross  Profit.  The gross profit for the quarter ended  September 30, 2000,  was
$812,485.  This is an increase in profits of $365,646  over the third quarter of
1999 gross profit of $446,839.  Gross  profit  for the first nine months of 2000
was $1,877,273  compared to gross profit of $1,251,065 for the first nine months
of 1999.  The  increase  in both  comparison  periods can be  attributed  to the
increase in sales of powerboats.

Sales and Marketing  Expenses.  Sales and marketing  expenses  increased for the
quarter ending September 30, 2000. Sales and marketing expenses of $164,537 were
$38,148 or 30% higher than for the quarter ended  September 30, 1999.  For the 9
months ended September 30, 2000, sales and marketing expenses were $403,291,  an
increase  of $91,384 or 30% higher  than for the 9 months  ended  September  30,
1999. Such increases are related to the Company's  increased national television
advertising through the American Powerboat Association racing.

General and Administrative Expenses. General and administrative expenses for the
third quarter of 2000 were $609,909,  an increase of $220,922 or 57% higher than
the quarter ended  September 30, 1999.  General and  administrative  expenses of
$1,507,368 for the 9 months ended September 30, 2000, increased $393,539, or 35%
over the 9 months ended September 30, 1999. The increases in both periods relate
to increase in legal and  accounting  fees related to the Company's  status as a
public company and its acquisition of Ultimate Warlock, Inc.

Net Income  (Loss).  The  Company's net loss of ($16,084) for the 3 months ended
September  30,  2000 is a  favorable  change  of  $104,758  over the net loss of
($120,842)  for the 3 months ended  September  30, 1999.  For the 9 months ended
September 30, 2000, the Company's net loss of ($147,817) was a favorable  change
of $7,283 over the net loss of ($155,100)  for the 9 months ended  September 30,
1999.  The  decrease  in net loss  for  both  periods  are  attributable  to the
Company's increased sales of powerboats.

Liquidity and Capital Resources.
-------------------------------

The  Company's  working  capital as of September 30, 2000,  was  $648,564.  This
compares to ($678,984) for the period ended  September 30, 1999.  Such change is
due to a decrease  in current  liabilities  and an  increase  in  inventory  and
accounts receivable.

The Company's  current  liabilities as of September 30, 2000 were $1,898,070,  a
decrease of $637,254 from December 31, 1999,  and reflect the Company's  payment
of certain of its debt.

The Company's accounts  receivable as of September 30, 2000, was $824,822.  This
represents  an  increase  of  $500,552  or 37% over  accounts  receivable  as of
December 31, 1999.  This  increase is primarily  attributed to the change in the
mix of dealer and retail  sales of  powerboats. Generally,  Payment from dealers
is not due until 10 days after delivery.

The  Company's  inventory  as  of  September  30,  2000,  was  $1,917,063.  This
represents  an increase of $686,874  or 56% over  inventory  as of December  31,
1999.  The increased  sales of  powerboats  have  necessitated  that the Company
increase its inventory of powerboats and parts.

As the Company's  sales of its powerboat grows the Company  anticipates  that it
will experience cash flow problems  related to such sales from time to time. The
Company is hopeful  that it will be able to obtain  banking  financing  to cover
such cash flow shortages.

                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

                  27   Financial Data Schedule filed herewith

(b)      Reports on Form 8-K:  Form  8-K filed  on September  22, 2000, covering
         Items 1, 2, and 7.






                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:    November 21, 2000                SKINTEK LABS, INC.

                                       By: /s/ Carter Read
                                       -------------------------------------
                                               Carter Read, President

                                       By: /s/ Richard S. Granville
                                       -------------------------------------
                                               Richard S. Granville,
                                               Chief Financial Officer/Treasurer


THIS SCHEDULE CONTAINS  SUMMARY FINANCIAL INFORMATION  EXTRATED FROM THE BALANCE
SHEET AND STATEMENT OF  OPERATIONS AS OF SEPTEMBER 30, 2000, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.




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