FORM 10-QSB
________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996.
Commission File No. 1-8129.
US 1 INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 95-3585609
(State of Incorporation) (IRS Employer Identification No.)
1000 Colfax, Gary, Indiana 46406
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 944-6116
Indicate by check mark 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 ___
As of October 31, 1996, 9,829,336 shares of common stock were outstanding.
TOTAL OF SEQUENTIALLY
NUMBERED PAGES: 15
Part I
Item 1. FINANCIAL STATEMENTS.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
ASSETS
September 30, December 31,
1996 1995
(Unaudited)
CURRENT ASSETS:
Cash $ 467,506 $ 53,602
Restricted cash - former officer defense fund 5,448 43,315
Accounts receivable--trade less allowance for
doubtful accounts of $150,000 and $150,139 1,619,842 1,525,626
Other receivables 288,639 144,561
Deposits 155,299 172,180
Prepaid expenses 135,701 133,437
------------ ------------
Total current assets 2,672,435 2,072,721
------------ ------------
FIXED ASSETS:
Equipment 15,828 15,828
Less accumulated depreciation and amortization (7,143) (5,730)
------------ ------------
Net fixed assets 8,685 10,098
------------ ------------
ASSETS HELD FOR SALE:
Land 1,215,000 1,215,000
Valuation allowance (1,011,000) (1,011,000)
------------ ------------
Net assets held for sale 204,000 204,000
------------ ------------
TOTAL ASSETS $ 2,885,120 $ 2,286,819
============ ============
The accompanying notes are an integral part of the consolidated condensed
financial statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
September 30, December 31,
1996 1995
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 3,230,349 $ 2,929,321
Accrued expenses 119,222 252,269
Short-term debt 2,151,600 1,822,519
Insurance and claims 261,729 209,678
Accrued interest 40,015 43,529
Accrued compensation 22,476 41,291
Estimated fuel and other taxes 220,252 163,027
----------- -----------
Total current liabilities 6,045,643 5,461,634
----------- -----------
LONG-TERM DEBT 448,183 515,767
NEGATIVE EQUITY IN PARTNERSHIP INVESTMENT 458,968
REDEEMABLE PREFERRED STOCK,
authorized 5,000,000 shares no par value;
Series A shares outstanding: 1,094,224
Liquidation preference $0.3125 per share. 547,112 547,112
SHAREHOLDERS' EQUITY (DEFICIENCY):
Common stock authorized 20,000,000 shares,
no par value; shares outstanding 9,829,336 40,489,296 40,489,296
Accumulated deficit (44,645,114) (45,185,958)
------------ ----------
Total shareholders' equity (deficiency) (4,155,818) (4,696,662)
------------ ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,885,120 $ 2,286,819
============ ===========
The accompanying notes are an integral part of the consolidated condensed
financial statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
1996 1995 1996 1995
OPERATING REVENUES $ 3,990,436 $ 3,783,870 $11,733,831 $11,405,940
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Purchased transportation 3,049,586 2,777,333 8,863,860 8,641,432
Insurance and claims 216,722 179,692 479,306 426,291
Salaries, wages, and other 154,407 240,718 462,340 391,127
Commissions 311,708 270,228 1,039,393 938,805
Operating supplies and expense 263,916 167,527 524,911 490,998
Operating taxes and licenses (2,040) 68,383 66,524 249,240
Communications and utilities 16,839 13,750 49,224 53,591
Rents 11,500 11,500 29,267 39,750
Depreciation and amortization 471 361 1,412 1,082
------------ ------------ ------------ -----------
Total operating expenses 4,023,109 3,729,492 11,516,237 11,232,316
------------ ------------ ------------ -----------
OPERATING INCOME (LOSS) (32,673) 54,378 217,594 173,624
------------ ------------ ------------ -----------
NON-OPERATING INCOME (EXPENSE):
Interest income 1,710 5,494 18,698 20,253
Interest expense (65,039) (41,064) (217,162) (139,932)
Gain on sale of land 560,870 560,870
Other income 7,932 15,013 62,746 73,176
------------ ------------ ------------ -----------
Total non-operating income (55,397) 540,313 (135,718) 514,367
------------ ------------ ------------ -----------
INCOME FROM CONTINUING OPERATIONS (88,070) 594,691 81,876 687,991
DISCONTINUED OPERATIONS:
Net loss from LRS Transportation (758,675) (1,199,515)
Loss on disposition of LRS (329,085) (329,085)
------------ ------------ ----------- -----------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (88,070) (493,069) 81,876 (840,609)
------------ ------------ ----------- -----------
EXTRAORDINARY ITEM:
Gain on debt forgiveness on
termination of Paltrans Partnership 458,968 458,968
------------ ------------ ----------- -----------
NET INCOME (LOSS) $ 370,898 $ (493,069) $ 540,844 $ (840,609)
============ ============ ============ ============
EARNINGS (LOSS) PER COMMON SHARE:
Continuing operations $ (0.01) $ .06 $ 0.01 $ .07
Discontinued operations (.11) (.16)
Extraordinary item 0.05 0.05
------------ ------------ ------------ ------------
Net earnings (loss) $ 0.04 $ (.05) $ 0.06 $ (.09)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 9,829,336 9,829,336 9,829,336 9,829,336
============ ============ ============ ============
The accompanying notes are an integral part of the consolidated condensed financial statements.
</TABLE>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
Nine Months Ended
September 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from continuing operations $ 540,844 $1,075,473
Adjustments to reconcile net income (loss) to net
cash provided from (used for) operations:
Depreciation and amortization 1,413 1,082
Gain on the sale of property (560,870)
Extraordinary item (458,968)
Changes in operating assets and liabilities:
Accounts receivable - trade (94,216) 330,333
Other receivables (144,078) 42,524
Prepaid assets (2,264) (55,223)
Deposits 16,881 75,195
Accounts payable 301,028 29,764
Accrued expenses (133,047)
Accrued interest (3,514)
Insurance and claims 52,051 (145,925)
Other accrued compensation (18,815) (36,637)
Fuel and other taxes 57,225 (489,807)
Other 37,867
---------- ----------
Net cash flows from (used for) continuing operations 152,407 265,904
Net loss from discontinued operations (1,528,600)
Adjustments to reconcile net income (loss) to net
cash provided from discontinued operations:
Depreciation and amortization 33,333
Write off of goodwill and other assets 216,667
---------- ----------
Net cash flows from operating activities 152,407 (1,012,691)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 560,870
Purchase of L.R.S. Transportation (50,000)
Additions to property and equipment (14,552)
Distributions in excess of investment in joint venture 35,672
---------- ----------
Net cash used for investing activities 531,990
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 155,584 (208,700)
Proceeds from other related party loans 105,913 814,716
Acquisition of L.R.S. Transportation, Inc. (200,000)
Proceeds from issuance of preferred stock 4,425
---------- ----------
Net cash provided from financing activities 261,497 410,441
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 413,904 (70,260)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 53,602 124,250
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 467,506 $ 53,990
========== ==========
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
Nine Months Ended
September 30,
1996 1995
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION-
Cash paid during period for interest $ 220,676 $ 184,974
========== ==========
See accompanying notes are an integral part of the consolidated condensed
financial statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
1. BASIS OF PRESENTATION
The accompanying consolidated condensed balance sheet as of September 30, 1996
and the consolidated condensed statements of operations for the three and nine
months ended September 30, 1996 and 1995 and cash flows for the nine month
periods ended September 30, 1996 and 1995 are unaudited, but in the opinion of
management, include all adjustments (consisting of normal, recurring accruals)
necessary for a fair presentation of the financial position and the results of
operations for such periods. These statements should be read in conjunction
with the Company's audited consolidated financial statements for the year ended
December 31, 1995 and the notes thereto included in the Company's annual report
on Form 10-K. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted, as permitted by the requirements of
the Securities and Exchange Commission, although the Company believes that the
disclosures included in these financial statements are adequate to make the
information not misleading. The results of operations for the three and nine
months ended September 30, 1996 and 1995 are not necessarily indicative of the
results for a full year.
2. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company experienced
significant revenue declines since 1992, cumulative losses, and negative cash
flows during the three-year period ended December 31, 1995. At September 30,
1996 and 1995, the Company's current liabilities exceeded its current assets by
$3.4 million and $3.4 million, respectively. At September 30, 1996, the
shareholder deficit was $4.2 million. While there have been improved results
from continuing operations and a significant decrease in operating costs, the
Company's recurring shareholders' deficiency, pending litigation, negative cash
flows, and inability to remain in compliance with financial covenants with its
lenders continue to raise substantial doubt about its ability to continue as a
going concern.
3. RESTATEMENT OF OLD TRADE PAYABLES
During 1995, the Company took into income certain old trade payables that the
Company believed it would never have to pay. However, these amounts were
reinstated as accounts payable during the fourth quarter of 1995. To reflect
this reinstatement for the nine months ended September 30, 1995, income from
continuing operations has been reduced by approximately $387,482 ($0.04 per
share) from the amount which was previously reported.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
4. RELATED PARTY TRANSACTIONS
During 1995, the Company leased a portion of their staff and management from
K&A, Inc., an employee leasing company owned by the Company's President and a
general partner of August Investment Partnership ("AIP"). Total fees for
certain other leased employees charged by K&A, by AIP, and by the Company's
primary insurance provider during the nine months ended September 30, 1995 were
$147,094. These amounts have been classified as salaries, wages, and other in
the accompanying consolidated statements of operations. These employees are
now employed by the Company. Services provided to related party companies
amounting to approximately $157,647 are included in revenue for the nine months
ended September 30, 1996.
The Company's primary insurance provider ("AIFE") is managed by a Gener
Partner of AIP. These policies were in place before AIP provided management to
the Company. The terms and conditions of the policies have not changed
significantly. AIFE converted outstanding accounts payable at December 31,
1994 and premium and deductibles from LRS into a note payable during 1995. The
balance of these notes was $246,183 and $280,070 at September 30, 1996 and
December 31, 1995,respectively, as disclosed in Note 6.
5. SHORT-TERM DEBT
Short-term debt at September 30, 1996 and December 31, 1995 consisted of:
September 30, December 31,
1996 1995
---------- ----------
Line of credit $1,248,800 $1,093,216
Current portion of long-term debt 48,000 14,303
Due to Landair 200,000 200,000
Due to August Investment Partnership 100,000 100,000
Due to Antonson/Kibler 554,800 415,000
---------- ----------
Total $2,151,600 $1,822,519
========== ==========
Due to Landair--Mortgage note payable to seller of L.R.S. Transportation, Inc.,
interest at 8.5% until January 10, 1996 and at the prime rate published on
January 10, 1996 thereafter, due in two installments of $100,000 each on
January 10, 1996 and 1997. The Company has not made the January 1996 payment.
See Note 8 and 10 regarding pending litigation and subsequent settlement with
regards to this liability.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
6. LONG-TERM DEBT
Long-term debt at September 30, 1996 and December 31, 1995 consists of:
September 30, December 31,
1996 1995
--------- ------------
Mortgage note payable to August Investment
Partnership collateralized by land,
interest at prime + .75%, interest only
payments required, principal balance due
July 31, 1999 $250,000 $250,000
Mortgage note payable to AIFE,
collateralized by land, interest at 9%,
monthly repayments of $5,000, including
interest, remaining principal balance
due July 31, 1999 246,183 280,070
-------- --------
Total debt 496,183 530,070
Less current portion 48,000 14,303
-------- --------
Total long-term debt $448,183 $515,767
======== ========
7. DISCONTINUED OPERATIONS
On January 11, 1995, the Company purchased certain assets of the less-than-
truckload (LTL) refrigerated operations of Landair Services, Inc. The Company
formed the wholly owned subsidiary, L.R.S. Transportation, Inc. (LRS), which
included these operations. The acquisition was made for $50,000 in cash and a
$200,000 promissory note payable in two installments of $100,000 each on
January 10, 1996 and 1997 to Landair Services, Inc. Interest on the
installment note was 8.5% through January 10, 1996 and at the prime rate
published on January 10, 1996 thereafter. Collateral for the note consists of
unimproved land in Texas owned by the Company.
On August 15, 1995, LRS ceased operations. As of December 31, 1995, LRS
remaining liabilities were approximately $1.5 million. Of this amount $520,000
are loans payable to related parties as discussed in footnotes 5 and 6. Also
included in this amount is approximately $530,000 due to the seller of LRS for
the financing of the purchase price, back rent, and early termination fees on
leased assets used by LRS prior to its closure. Reference is made to footnotes
8 and 10 for disclosure of related litigation and subsequent events.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
8. COMMITMENTS AND CONTINGENCIES
Over the past few years, the Company has had a significant number of lawsuits
instituted or threatened against it as a result of its poor financial condition
and its inability to meet certain financial obligations. For the most part,
these suits have been settled through cash payments of a reduced amount or
through the institution of payment plans. The undisputed claims that have not
been settled are reflected as liabilities in the Company's financial statements
and are included in accrued expenses in the accompanying consolidated balance
sheets. The litigation that is currently pending (for which the Company
believes it has accrued adequate reserves) includes:
Landair Transport, Inc. v. US 1 Industries, Inc. and LRS Transportation. On
March 15, 1996, Landair Transportation filed suit in U.S. District Court for
$623,414 against the Company for breach of contract arising out of an asset
purchase agreement, related promissory note, and leases. This suit has been
settled out of court as of October 15, 1996. See footnote 10 Subsequent
Events.
Paltrans. On March 27, 1996, the mortgage holder on the property owned by the
Paltrans partnership, of which the Company is a general partner, filed to put
the property into receivership. This matter was settled during the quarter
ended September 30, 1996. The mortgage holder has taken title to the property
and the Company has no further liability in the matter. As a result, the
Company has recorded into income its negative equity in partnership investment
of $458,968.
There has been no material change in the status of the remaining litigation
since that reported in the form 10-K for December 31, 1995. The Company
believes it has adequately reserved for its potential claims, however,
additional liability is possible and the ultimate disposition of open
litigation may have a material adverse effect to the Company's results of
operations, cash flows and financial position.
The Company carries insurance for public liability and property damage, and
cargo loss and damage through various programs. The Company's insurance
liabilities are based upon the best information currently available and are
subject to revision in future periods as additional information becomes
available. Management believes it has adequately provided for insurance
claims.
9. EXTRAORDINARY INCOME
The Company recorded as extraordinary income the forgiveness of debt by the
mortgage holder on the property formerly owned by the Paltrans partnership.
This property was foreclosed on in the third quarter relieving the Company of
any recourse with regards to its mortgage.
10. SUBSEQENT EVENTS
Landair has agreed to accept as payment in full for the Company's liabilities
for the financing of the purchase price, back rent, and early termination fees
on leased assets used by LRS prior to its closure, a payment of $175,000 due
and payable by December 31, 1996 and the title to the Company's property in
Dallas. The Company will realize income in the fourth quarter of approximately
$155,000 from this settlement.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
Results of Operations
The financial statements and related notes contained elsewhere in this Form
10-Q and in the Company's Form 10-K for its fiscal year ended December 31, 1995
are essential to an understanding of the comparisons and are incorporated by
reference into the discussion that follows.
Three Month Period 1996 Compared to 1995
The Company's operating revenues increased from $3.8 million for the period
ended September 30, 1995 to $4.0 million for the same period in 1996. The
Company's operating revenues are generated principally from its truckload
carrier, Keystone, which generates sales through independent agents who
originate shipments that then are transported by independent contractors who
own their own equipment. The increase in operating revenues resulted from the
increase in the number of agents working for the Company.
Total operating expenses increased from $3.7 million in 1995 to $4.0 in 1996.
The largest component of operating expenses is purchased transportation, which
generally varies in proportion to operating revenues at approximately 76%.
Commissions generally vary in proportion to operating revenues. Insurance and
claims also generally vary in proportion to operating revenues, although they
also depend on claims experience. Taxes and license expense in 1996 has
decreased over 1995 because the Company has not had to absorb the cost of
unused plates due to the general increase in the number of trucks during the
year and certain tax refunds received in 1996.
Non-operating income and (expenses) decreased from an income of $0.50 million
in 1995 to an expense of $0.06 million in 1996. Interest expense increased
from $.04 million for the three months ended September 30, 1995 to $.07 million
for the same period in 1996. Interest expense varies in proportion to the
Company's outstanding interest-bearing indebtedness which increased during
1995 as the result of the LRS losses. In 1995, the Company sold properties for
a gain of $0.6 million.
In 1996, the Company reported an extraordinary income on the closure of it
interest in the Paltrans Partnership of $0.5 million.
The LRS discontinued operations resulted in a loss of $1.1 million which
affected the overall operating results for the third quarter of 1995. Overall
operating results for the three month period ended September 30, 1996 increased
to $0.4 million from a loss of $0.5 million. The remaining difference in
overall operating results of approximately $0.2 million was do to the overall
increase in expenses during 1996 over 1995.
Nine Month Period 1996 Compared to 1995
The Company's operating revenues increased from $11.4 million for the nine
month period ended September 30, 1995 to $11.7 million for the same period in
1996. The Company's operating revenues are generated principally from its
truckload carrier, Keystone, which generates sales through independent agents
who originate shipments that then are transported by independent contractors
who own their own equipment. The increase in operating revenues resulted from
the increase in the number of agents working for the Company.
Total operating expenses increased from $11.2 million in 1995 to $11.5 million
in 1996. The largest component of operating expenses is purchased
transportation, which generally varies in proportion to operating revenues at
approximately 76%. Commissions generally vary in proportion to operating
revenues. Insurance and claims also generally vary in proportion to operating
revenues, although they also depend on claims experience. Taxes and license
expense in 1996 has decreased over 1995 because the Company has not had to
absorb the cost of unused plates due to the general increase in the number of
trucks during the year and certain tax refunds received in 1996.
Non-operating income/(expense) decreased from an income of $0.5 million in 1995
to an expense of $0.14 million in 1996. Interest expense increased from $.1
million for the nine months ended September 30, 1995 to $.2 million for the
same period in 1996. Interest expense varies in proportion to the Company's
outstanding interest-bearing indebtedness which increased during 1995 as the
result of the LRS losses. In 1995 the Company had an income from the sale of
properties of $0.56 million.
In 1996, the Company reported an extraordinary income on the closure of it
interest in the Paltrans Partnership of $0.5 million.
The LRS discontinued operations resulted in a loss of $1.5 million, which
affected the overall operating results for the nine month period ended
September 30, 1995. Overall operating results for the nine month period ended
September 30, 1996 increased to $.54 million from a loss of $.84 million. The
remaining difference in overall operating results of approximately $0.15
million was do to the decrease in non-operating income between 1996 and 1995.
Future Prospects
The Company's management is pleased with recent results - third quarter sales
were better than the comparable quarter during the prior year and almost
exceeding second quarter results - and is continuing to implement various plans
to increase revenue and improve operating results. Its financial condition,
although tenuous, has stabilized with the settlement of a majority of its
lawsuits. However, the Company needs a capital infusion in the fourth quarter
to pay for its settlements, needs improved sales from its addition of various
agent recruiters, and needs a reworked amendment to the Company's financing
agreement for 1997 results to improve.
Liquidity and Capital Resources
As of September 30, 1996, the Company's financial position remained precarious.
The Company had a deficit in shareholders' equity of $4.2 million and its
current liabilities of $6.0 million exceeded its current assets by $3.4
million. As described above, the Company has currently begun increasing sales
but previous significant revenue declines, operating losses in prior years and
losses from discontinued operations leave the Company in its current position.
The Company's borrowing from the partners of AIP and the Company's president to
alleviate the current cash shortages has enabled the Company to continue in
operation. While the Company's current situation is not good, current growth
plans are designed to expand sales for the Company while remaining profitable,
which should enable the Company to improve its liquidity position.
The Company continues to suffer from a poor cash flow from operations although
the cash flow improved from a negative of $.07 million during the nine months
ended September 30, 1995 to a positive of $.41 million during the same period
of 1996. A positive cash flow for the period ended September 30, 1996 was
provided by operating profits.
The Company's principal source of outside liquidity is its $3 million line of
credit with FINOVA. The availability of the line of credit is based on 80% of
Keystone's eligible accounts receivable. At September 30, 1996, the
outstanding borrowings were $1.2 million, which essentially was the entire
amount that Keystone was eligible to borrow. The line of credit expires on May
31, 1997. Because of the loss sustained at LRS, Keystone is currently in
violation of several covenants of the lender. Management has been notified by
the lender that it is their intention to evaluate the current situation rather
than take immediate action. The Company is currently negotiating an amendment
to change the covenants and to allow borrowing by other subsidiaries of the
Company. Additional liquidity has been provided by loans from AIP and the
Company's president and is expected from common stock issuance during the
fourth quarter.
Shareholders and potential investors in the Company are cautioned that the
Company's financial condition remains precarious and that an increase in
operating performance and sales remain essential to its long-term survival.
Unfortunately, there can be no assurance that these goals will be achieved.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See footnote 8 to the unaudited financial statements included herein.
Item 6(b). Reports on Form 8-K
No Reports on Form 8-K have been filed during the quarter.
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 there unto duly authorized.
US 1 Industries, Inc.
Michael E. Kibler
President
James C. Day
Chief Financial Officer
November 12, 1996
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