SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
UNDER REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Period Ended: Commission File No.
September 30, 1996 2-78287-NY
FOOD CONCEPTS, INC.
exact name of registrant as specified in its charter
NEVADA 13-3124057
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6601 Lyons Road
Suite C-12
Coconut Creek, Florida 33073
(address of principal executive office)
Registrant's telephone number, including area code:(954)420-0882
Indicate by check mark whether the registrant has filed all annual, quarterly
and other reports required to be filed with the Commission within the past
ninety days and in addition, has filed the most recent annual report required
to be filed.
Yes [x] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check marks whether the registrant has filed all
documents and reports required to be filed by Sections 2, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock $.0001 par value, 5,986,744
(Title of Class) (Shares outstanding at
September 30, 1996)
<PAGE> 1
FOOD CONCEPTS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30 AND JUNE 30,
<TABLE>
<CAPTION>
SEPTEMBER JUNE
1996 1996
ASSETS
<S>
<C> <C>
Current Assets
Cash and Cash Equivalents $ 6,812 $ (11,201)
Accounts Receivable 165,020 127,387
Inventory (Note 1) 300,627 180,946
Prepaid Expenses 375 375
Total Current Assets 472,834 297,507
Property, Plant & Equipment (Note 2)
(Net of Accumulated
Depreciation of $27,221) 34,432 36,165
Other Assets
Refundable Deposits 6,660 6,660
Total Assets 513,926 340,332
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S>
<C> <C>
Current Liabilities
Accounts Payable &
Accrued Expenses $ 218,140 $ 134,988
Notes Payable 12,789 51,792
Total Current Liabilities 230,929 198,523
Long Term Liabilities
Note Payable 125,000 -0-
Total Liabilities 355,929 198,523
Shareholders' Equity
Common Stock - $.001 par value;
authorized 20,000,000; issued and
outstanding - 3,894,744 and
5,986,744 respectively 5,987 3,895
Additional Paid-in capital 893,128 895,219
Accumulative Deficit (741,118) (757,305)
Total Shareholders' Equity 157,997 141,809
Total Liabilities &
Shareholders' Equity $ 513,926 $ 340,332
See Accompanying Notes to consolidated Financial Statements.
</TABLE>
<PAGE> 2
FOOD CONCEPTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
<S>
<C> <C>
Revenue $ 153,839 $ - 0 -
Cost of Sales 138,905 - 0 -
Gross Margin 185,818 - 0 -
General & Administrative Expenses 194,884 - 0 -
Net Income 16,188 - 0 -
Earnings Per Share (.003) NIL
Weighted Average Shares outstanding 4,940,744 3,327,300
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE> 3
FOOD CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATE STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash Flows From Operations:
Net Income $ 16,188 $ - 0 -
Adjustments to Reconcile Net Income To
Net Cash Used for Operating Activities:
Depreciation 2,855 - 0 -
(Increase) Decrease in
Accounts Receivable (37,634) - 0 -
(Increase) Decrease in Inventory (119,681) - 0 -
Increase in Accounts Payable
/Accrued Expenses 71,409 - 0 -
Increase in Notes Payable 85,997 - 0 -
Net Cash (Used) for Operations 19,134 - 0 -
Cash Flows From Financing Activities: (1,121) - 0 -
Net Increase (Decrease) in Cash 18,013 - 0 -
Cash - Beginning of Year (11,201) 13
Cash - End of Year 6,812 13
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE> 4
FOOD CONCEPTS, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business
Food Concepts, Inc. was organized under the laws of the State of Nevada
on June 16, 1982. On October 27, 1995 the Company reorganized and
acquired Savon Coffee, Inc., as a wholly owned subsidiary. On
January 1, 1996, the Company acquired Palm Reach Gourmet Coffee, Inc. as
a wholly owned subsidiary. The principal business of the Company is
direct sales distributing of Gourmet Coffee, offering more than seventy
coffee blends as well as gift coffee packages, private label coffee and
special coffee roasting services.
B. Significant Accounting Policies
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-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal reoccurring
accruals) considered necessary for a fair presentation have been
included. Operation results for the three month period ended
September 30, 1996, are not necessarily indicative of the results that
may be expected for the year ended June 30, 1997. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K
for the year ended June 30, 1996.
Basis of Accounting:
The Company policy is to prepare its financial statements using the
accrual basis of accounting in accordance with generally accepted
accounting principles.
Inventory:
Inventory is valued at the lower of cost or market determined by the
weighted average method.
Property, Equipment and Depreciation:
Property and equipment are recorded at cost. The company charges
expenditures for additions or major replacements to the asset accounts.
The Company provides for depreciation using the straight-line method
over the estimated useful lives of the assets (5-10 years).
<PAGE> 5
FOOD CONCEPTS, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
JUNE 30, 1996
<S> <C>
Consists of the Following:
Equipment $ 55,118
Office Furniture and Equipment 1,235
Leasehold Improvements 7,033
Total 63,386
Less: Accumulated Depreciation (27,221)
$ 36,165
</TABLE>
NOTE 3 - NOTES PAYABLE
<TABLE>
1996
<S> <C>
Note due to First Union
secured by inventory and equipment $ 13,789
Loan factor 38,003
Total Notes Payable 51,792
</TABLE>
NOTE 4 - MAJOR CUSTOMERS
Major customers include the Christmas Tree Shop and Anron
Coffee & Tea, Inc.
NOTE 5 - LAWSUIT COFFEE HOLDING COMPANY
Coffee Holding Company has filed a lawsuit against
Savon/Coffee in the amount of $7,524 plus a percentage of
gross profit for not fulfilling an agreement to purchase
coffee exclusively from Coffee Holding Company.
NOTE 6 - ACQUISITIONS
A. On October 27, 1995, the Company acquired all of the issued and
outstanding common stock of Savon Coffee, Inc. whose principal
business consists of manufacture and direct sales distributing of
Gourmet Coffee, for 20,000,000 shares (pre-split) of common stock.
The acquisition was accounted for under the pooling of interest
method and the acquired company activity for the full period
reported on is included.
B. On January 1, 1996, the Company acquired all of the issued and
outstanding common stock of Palm Reach Gourmet Coffee, Inc,, whose
principal business is direct sales of Gourmet Coffee, in exchange
for 50,000 shares of common stock of the Company. The acquisition
was accounted for under the pooling of interests method. Under the
pooling method the acquired company activity for the full period
reported on is included.
<PAGE> 6
FOOD CONCEPT, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
NOTE 7 - LEASING ARRANGEMENTS
Operating Lease
The Company conducts it operation from facilities that are leased
under a five year lease ending April 30, 2001. The lease calls for
monthly rent payments starting in February, 1996 of $2,692.00 per
month plus a pro-rata share of real property taxes. The Company
also has various leases with various expiration dates,
Future Minimum Lease Payments
Future minimum lease payments for operating leases at June 30,
1996 are:
<TABLE>
<CAPTION>
Year Ended Operating
June 30 Leases
<C> <C>
1997 $ 47,841
1998 50,391
1999 45,663
2000 41,789
2001 30,758
Total Minimum Payments $216,442
</TABLE>
NOTE 8 - COMMITMENTS AND CONTINGENCIES
A Subsidiary of the Company has incurred approximately $5,210 plus
interest and penalties of unpaid payroll tax liabilities to the
Internal Revenue Service. A payment plan of $500 per month has been
worked out with the government on the satisfaction of this
outstanding liability. It is to begin September 15, 1996.
NOTE 9 - DEFERRED
As discussed in Note 1, the Company has applied the provision of
Statement 109. The significant components of deferred income tax
expense (benefit) for the year ended June 30, 1996:
Current Loss $ 149,162
Valuation Allowance (149,162)
$ - 0 -
The valuation allowance has been estimated at 100%.
<PAGE> 7
