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 February 28, 1998
Commission file number 2-92261
WESTBRIDGE RESEARCH GROUP
- -------------------------------------------------------------------------------
California 95-3769474
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1150 Joshua Way
Vista, California 92083
- --------------------------------------- -------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number,
including area code: (760) 599-8855
-------------------
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 ______
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of a recent date: 2,103,438 shares of common stock, no par
value, as of February 28, 1998.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
FEBRUARY 28, NOVEMBER 30,
1998 1997
(unaudited) (audited)
----------- -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 125,246 $ 251,781
Trade accounts receivable, less
allowance for doubtful accounts of
$206 and $206 respectively 124,118 191,036
Inventories 148,857 82,059
Prepaid expenses and other
current assets 27,940 14,391
---------- -----------
Total Current Assets 426,161 539,267
PROPERTY AND EQUIPMENT 427,395 416,517
Less accumulated depreciation [345,251] [341,117]
Net Property and Equipment 82,144 75,400
PROCESSES AND FORMULAS, net of accumulated
amortization of $2,990,252 and
$2,970,168 respectively 107,116 127,200
PREPAID ROYALTY, net of accumulated
amortization of $27,081 and $22,302
respectively 168,861 173,640
LONG TERM ACCOUNTS RECEIVABLE, net 130,000 130,000
---------- ----------
TOTAL ASSETS $ 914,282 $1,045,507
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(continued)
<TABLE>
FEBRUARY 28, NOVEMBER 30,
1998 1997
(unaudited) (audited)
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 87,997 $ 57,396
Notes payable - related parties 241,201 236,914
Notes payable 29,530 29,106
Accrued expenses 68,030 95,190
Current portion of capital
lease obligation 3,308 3,845
Current portion of long-term debt 40,352 39,475
----------- ------------
TOTAL CURRENT LIABILITIES 470,418 461,926
Long-term debt 15,315 26,067
Deferred rent 321 1,284
Capital lease obligations:
net of current portion 9,771 11,650
----------- ------------
TOTAL LIABILITIES 495,825 500,927
SHAREHOLDERS' EQUITY
Preferred stock, 5,000,000 shares
authorized, no shares outstanding
in 1998 and 1997
Common stock, no par value:
Authorized 9,375,000 shares
Issued and outstanding 2,103,438 shares 8,479,854 8,479,854
Paid in Capital: Warrants 95,000 95,000
Accumulated deficit [8,156,397] [8,030,274]
------------ -----------
TOTAL SHAREHOLDERS' EQUITY 418,457 544,580
------------ -----------
TOTAL LIABILITIES & SHAREHOLDERS' $ 914,282 $1,045,507
EQUITY ============ ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
THREE MONTHS
ENDED FEBRUARY 28
1998 1997
<S> <C> <C>
NET SALES $ 161,538 $ 272,662
COST OF SALES 66,427 68,468
GROSS PROFIT 95,111 204,194
OPERATING EXPENSES
Research and development 34,211 22,232
Selling 100,530 52,284
General and administration 57,016 51,301
Royalties 11,777 14,475
Amortization of formula 20,084 20,084
TOTAL OPERATING EXPENSES 223,618 160,376
Operating (loss) income [128,507] 43,818
OTHER INCOME (EXPENSE)
Interest expense [6,172] [8,808]
Interest income 2,226 606
Other income 6,330 6,050
Net (loss) income $[126,123] $ 41,666
Net (loss)income per common share $ [.06] $ .02
Weighted average common and common
equivalent shares outstanding 2,103,438 2,103,438
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
THREE MONTHS ENDED
FEBRUARY 28, FEBRUARY 28,
1998 1997
========================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net [loss] income $ [126,123] $ 41,666
Adjustments to reconcile net [loss]
income to net cash used in
operating activities:
Amortization of prepaid royalty 4,779 4,779
Depreciation and amortization 24,218 24,217
Changes in Operating Assets and Liabilities:
Decrease (increase) in trade accounts
receivable 66,918 [161,437]
Increase in inventories [66,798] [22,315]
Increase in prepaid expenses [13,549] [4,977]
Increase in accounts payable 30,601 59,679
Decrease in accrued liabilities [27,160] [27,291]
Net cash used in operating activities [107,114] [85,679]
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment [10,878] [1,374]
Net cash used in investing activities [10,878] [1,374]
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable [9,451] [11,010]
Decrease in deferred rent [963] [1,284]
Payments on capital lease obligation [2,416] [1,445]
Borrowings on notes payable-related
parties 4,287 8,217
Net Cash (used in) financing activities [8,543] [5,522]
DECREASE IN CASH [126,535] [92,575]
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 251,781 115,719
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 125,246 $ 23,144
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation:
The consolidated balance sheet as of February 28, 1998, the
consolidated statement of operations for the three-month period ended
February 28, 1998, and 1997, respectively, and the consolidated
statements of cash flows for the three-month period then ended have
been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments except as noted in management's discussion and analysis of
financial condition and results of operations) necessary to present
fairly the financial position, results of operations and changes in
cash flows have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the 1997
Annual Report on Form 10-KSB. The results of operations for the quarter
ended February 28, 1998, are not necessarily indicative of the
operating results for the full year.
B. Reclassification:
Certain amounts on the November 30, 1997 consolidated condensed
statement of liabilities and shareholders' equity have been
reclassified to conform to the current period presentation.
C. Stock Split:
On July 17, 1997 the shareholders of the Company voted to execute a
one-for-four reverse stock split. The reverse stock split was effective
for shareholders of record on February 6, 1998. Per share amounts in
the accompanying financial statements have been restated to give effect
for the reverse stock split as if it occurred on December 1, 1996.
<PAGE>
D. Subsequent Events:
None
MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations:
Net sales for the first quarter of fiscal 1998 were $161,538,
representing a decrease of 41% over the same period in 1997. The
decrease in net sales is due to a reduction in sales to foreign
agricultural markets due to El Nino flooding.
Cost of sales as a percentage of net sales increased to 42% for the
quarter ended February 28, 1998 as compared with 26% for the same
period in the prior year. This increase is due to the fact that few
high margin products were sold during the first quarter of fiscal 1998
as compared to the first quarter of fiscal 1997.
Operating expenses for the three month period ended February 28, 1998
increased by 40% over the same period in the prior year. This increase
is primarily due to an increase in selling expenses discussed below.
Research and development expenses increased by $11,979, or 54% over the
prior year's first quarter. This increase is due to an increase in the
research and development staff, thereby increasing salaries and wages,
and related expenses.
Selling expenses as a percentage of net sales for the three month
period ended February 28, 1998 were approximately 63% compared with 20%
for the same period in the prior year. This increase is primarily due
to an expansion in sales and marketing staff and advertising directed
toward our domestic market, combined with a reduction in sales during
the period, as discussed above.
<PAGE>
General and administrative expenses during the three month period ended
February 28, 1998 increased by $5,715 or 12%, as compared with the same
period in the prior year. This increase is primarily due to increased
legal expenses incurred due to the reverse stock split of the companys'
common stock.
Net loss for the quarter ended February 28, 1998 was $126,123 or $.06
per common share compared with net income of $41,666, or $.02 per
common share for the same period in the prior year. This decrease is
due to a reduction in net sales combined with an increase in sales and
marketing expenses as discussed above.
Income taxes have not been provided for in the accompanying financial
statements of operations due to the net operating loss carryforwards
generated in prior years that are available for carryforward against
current year income.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources:
The Company has no material commitments for capital expenditures.
Working capital was ($44,257) at February 28, 1998, down from $77,341
at November 30, 1997.
Based on current cash flow projections management expects that the
Company can continue operations for the current year without infusions
of additional cash.
Impact of Inflation
The Company does not believe inflation has had a significant effect on
its operations.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
None
B. REPORTS ON FORM 8-K
The Company filed Form 8-K for a change in accountants during
January 1998.
<PAGE>
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.
WESTBRIDGE RESEARCH GROUP
(Registrant)
/s/ Christine Koenemann
--------------------------------------
Christine Koenemann, President
Principal Executive Officer
Principal Financial Officer
Date: April 17, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> FEB-28-1998
<CASH> 125,246
<SECURITIES> 0
<RECEIVABLES> 124,118
<ALLOWANCES> 412
<INVENTORY> 148,857
<CURRENT-ASSETS> 426,161
<PP&E> 427,395
<DEPRECIATION> (345,251)
<TOTAL-ASSETS> 914,282
<CURRENT-LIABILITIES> 470,418
<BONDS> 0
0
0
<COMMON> 8,479,854
<OTHER-SE> 418,457
<TOTAL-LIABILITY-AND-EQUITY> 914,282
<SALES> 161,538
<TOTAL-REVENUES> 95,111
<CGS> 66,427
<TOTAL-COSTS> 66,427
<OTHER-EXPENSES> 223,618
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,172)
<INCOME-PRETAX> (128,507)
<INCOME-TAX> 0
<INCOME-CONTINUING> (126,123)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (126,123)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
