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<PAGE> 1
Page 1 of 12 pages
(sequentially
numbered document)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-Q SB
[x] QUARTERLY REPORT PURSUANT TO Section 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO Section 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition from __________ to__________
Commission File Number: 0-15807
-------
HEALTH & LEISURE, INC.
----------------------
(Exact name of Small Business Issuer as specified in its charter)
Delaware 31-1190725
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
203 East Broad Street, Columbus, Ohio 43215
--------------------------------------------
(Address of principal executive offices)
(614) 228-2225
--------------
(Issuer's telephone number)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the Issuer was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Common stock, par value $0.01 17,325,427
- ----------------------------- ----------------------------
(Class) (Outstanding at May 8, 1996)
<PAGE> 2
Page 2 of 12 pages
HEALTH & LEISURE, INC.
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page #
------
PART I - FINANCIAL INFORMATION
---------------------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 1996
and December 31, 1995 3 - 4
Consolidated Statements of Operations for
the three months ended March 31, 1996
and 1995 5
Consolidated Statements of Changes in
Shareholders' Equity for the period March 13,
1985 (date of inception) to March 31, 1996 6 - 7
Consolidated Statements of Cash Flows for the
three months ended March 31, 1996 and 1995 8
Notes to the Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II - OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K 11
Signature Page 12
</TABLE>
<PAGE> 3
Page 3 of 12 pages
PART I - FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
HEALTH & LEISURE, INC.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
ASSETS
------
<TABLE>
<CAPTION>
March 31,
1996 December 31,
(Unaudited) 1995
----------- ------------
<S> <C> <C>
Current Assets:
Cash $ 3,215 $ 3,178
---------- ----------
Furniture and Fixtures, less
accumulated depreciation -0- -0-
---------- ----------
Total Assets $ 3,215 $ 3,178
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
Page 4 of 12 pages
LIABILITIES
-----------
<TABLE>
<CAPTION>
March 31,
1996 December 31,
(Unaudited) 1995
----------- ------------
<S> <C> <C>
Current Liabilities:
Accounts payable - trade $ 24,528 $ 22,733
Accrued officer wages 276,000 270,000
Accrued interest - officer 48,250 44,135
Current portion of long-term debt 10,630 12,000
---------- ----------
Total current liabilities 359,408 348,868
---------- ----------
Other Liabilities:
Long-term debt, less current
portion:
Officer 201,615 205,615
Bank 2,149
---------- ----------
201,615 207,764
---------- ----------
SHAREHOLDERS' EQUITY (DEFICIT)
------------------------------
Preferred Stock, $.01 par value:
Authorized - 10,000,000 shares
Issued and outstanding - none
Common Stock, $.01 par value:
Authorized - 20,000,000 shares
Issued and outstanding - 17,325,427
shares 173,254 173,254
Additional Paid-In Capital 1,213,236 1,213,236
Deficit Accumulated During the Develop-
ment Stage (1,944,298) (1,939,944)
---------- ----------
Total shareholders' equity
(deficit) (557,808) (553,454)
---------- ----------
Total Liabilities and Shareholders'
Equity (Deficit) $ 3,215 $ 3,178
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 5
Page 5 of 12 pages
HEALTH & LEISURE, INC.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
1996 1995
---- ----
<S> <C> <C>
Consulting Income $ 29,000 $ 9,000
Operating Expenses:
Administrative and general 28,851 33,930
---------- ----------
Operating income (loss) 149 (24,930)
---------- ----------
Other Income (Expense):
Other income 65
Interest expense (4,503) (4,342)
---------- ----------
(4,503) (4,277)
---------- ----------
Net Loss $ (4,354) $ (29,207)
========== ==========
Net Loss Per Common Share $ (0.000) $ (0.002)
========== ==========
Weighted Average Shares Out-
standing During the Period 17,325,427 17,325,427
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
<TABLE>
Page 6 of 12 pages
HEALTH & LEISURE, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
(Unaudited)
For the period March 13, 1985 (date of inception)
through March 31, 1996
<CAPTION>
Common Stock Deficit
------------------------ Accumulated Total
Issued Capital in During Shareholders'
------------------------ Excess of Development Equity
Shares Amount Par Stage (Deficit)
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Proceeds from Initial
Issuance of Common
Stock on March 13,
1985, inception 300,000 $ 3,000 $ 3,000 $ 6,000
Retroactive Effect of
Recapitalization of
Health & Leisure,
Inc. 7,700,000 77,000 (3,000) $ (27,049) 46,951
---------- ------- --------- --------- --------
Balance, March 13,
1985, inception,
as restated 8,000,000 80,000 (27,049) 52,951
Net Loss for the
Period (96,722) (96,722)
---------- ------- --------- --------
Balance, December 31,
1985 8,000,000 80,000 (123,771) (43,771)
Proceeds from Issuance
of Common Stock, net
of related costs of
$25,610 1,000,000 10,000 64,390 74,390
Proceeds from Exercise
of Series A Warrants 625,427 6,254 614,661 620,915
Net Loss for the Year (230,969) (230,969)
---------- ------- --------- --------- --------
Balance, December 31,
1986 9,625,427 96,254 679,051 (354,740) 420,565
Proceeds from Exercise
of Options 140,000 1,400 (550) 850
Proceeds from Exercise
of Series A Warrants 10,000 100 9,900 10,000
Issuance of Shares
Pursuant to Finders
Fee Agreement 200,000 2,000 2,000
Costs Incurred in
Obtaining Capital (25,580) (25,580)
Net Loss for the Year (374,614) (374,614)
---------- ------- --------- --------- --------
Balance, December 31,
1987 9,975,427 99,754 662,821 (729,354) 33,221
Dividend, 498,771
Shares of Entrepreneur,
Inc. (14,689) (14,689)
Net Loss for the Year (242,711) (242,711)
---------- ------- --------- --------- --------
Balance, December 31,
1988 9,975,427 99,754 662,821 (986,754) (224,179)
</TABLE>
See notes to consolidated financial statements.
<PAGE> 7
<TABLE>
Page 7 of 12 pages
HEALTH & LEISURE, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - Continued
(Unaudited)
For the period March 13, 1985 (date of inception)
through March 31, 1996
<CAPTION>
Common Stock Deficit
------------------------- Accumulated Total
Issued Capital in During Shareholders'
------------------------- Excess of Development Equity
Shares Amount Par Stage (Deficit)
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31,
1988 9,975,427 99,754 662,821 (986,754) (224,179)
Debt Conversion 2,000,000 20,000 100,000 120,000
Common Shares Issued 1,500,000 15,000 95,000 110,000
Contribution of
Capital 106,415 106,415
Net Loss for the Year (156,153) (156,153)
---------- ------- --------- ---------- --------
Balance, December 31,
1989 13,475,427 134,754 964,236 (1,142,907) (43,917)
Common Shares Issued 3,850,000 38,500 241,500 280,000
Net Loss for the Year (490,642) (490,642)
---------- ------- --------- ---------- --------
Balance, December 31,
1990 17,325,427 173,254 1,205,736 (1,633,549) (254,559)
Net Loss for the Year (22,323) (22,323)
---------- ------- --------- ---------- --------
Balance, December 31,
1991 17,325,427 173,254 1,205,736 (1,655,872) (276,882)
Net Loss for the Year (78,322) (78,322)
---------- ------- --------- ---------- --------
Balance, December 31,
1992 17,325,427 173,254 1,205,736 (1,734,194) (355,204)
Donated Capital 7,500 7,500
Net Loss for the Year (85,884) (85,884)
---------- ------- --------- ---------- --------
Balance, December 31,
1993 17,325,427 173,254 1,213,236 (1,820,078) (433,588)
Net Loss for the Year (61,810) (61,810)
---------- ------- --------- ---------- --------
Balance, December 31,
1994 17,325,427 173,254 1,213,236 (1,881,888) (495,398)
Net Loss for the Year (58,056) (58,056)
---------- ------- --------- ---------- --------
Balance, December 31,
1995 17,325,427 173,254 1,213,236 (1,939,944) (553,454)
Net Loss for the Period (4,354) (4,354)
---------- ------- --------- ---------- --------
Balance, March 31, 1996 17,325,427 $173,254 $1,213,236 $(1,944,298) $(557,808)
========== ======= ========= ========== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 8
Page 8 of 12 pages
HEALTH & LEISURE, INC.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (4,354) $(29,207)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
Increase (decrease) in
liabilities:
Accounts payable 1,795 7,617
Accrued expenses 10,115 9,876
------- -------
Net cash provided (used)
by operating activities 7,556 (11,714)
------- -------
Cash Flows From Financing Activities:
Principal payments on bank debt (3,519) (2,534)
Proceeds of borrowings from officer 30,000
Repayment of borrowings from officer (4,000)
------ -------
Net cash provided (used)
by financing activities (7,519) 27,466
------- -------
Net Increase in Cash 37 15,752
Cash, beginning of period 3,178 -0-
------- -------
Cash, end of period $ 3,215 $ 15,752
======= =======
Supplemental Disclosure of Cash Flows
Information:
Cash paid for interest $ 388 $ 466
====== ======
</TABLE>
See notes to consolidated financial statements.
<PAGE> 9
Page 9 of 12 pages
HEALTH & LEISURE, INC.
(a development stage company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - BASIS OF PRESENTATION
---------------------
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The information
provided in this report reflects all adjustments that are, in the
opinion of management, necessary to present fairly the results of
operations for these periods. The results for the three months ended
March 31, 1996, are not necessarily indicative of the results to be
expected for the full fiscal year.
These financial statements should be read in conjunction with the
audited financial statements of the Company contained in its report on
Form 10-K for the year ended December 31, 1995.
<PAGE> 10
Page 10 of 12 pages
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
- ---------------------
The Company is a "developmental stage company." In July 1987, the Company
began marketing to the general public, in the United States, disposable
chemical heat pads as hand and body warmers. The market for the heat pads did
not develop on a scale anticipated by management and the distribution of the
heat pads did not result in profitable operations. As a result, in February
1990, the Company entered into a new line of business, the marketing of long
distance telephone services. Because of the lack of revenues and cash flow,
the need for additional capitalization and the risk of liability exposure,
management of the Company though it was in the best interest to discontinue its
involvement. In 1992, the Company transferred its interest in the long
distance telephone service joint venture to its former partner in the joint
venture, in exchange for a full release of liability and an indemnification.
As a result, the Company is no longer in the business of marketing long
distance telephone services. During the quarter ended March 31, 1996, the
Company continued to provide pharmaceutical consulting to pharmacy chains in
order to fund Company expenses, but the Company does not consider this
consulting ongoing business operations and is searching for a business with
which the Company can combine, acquire or otherwise affiliate.
During the first quarter of 1996, the Company provided pharmaceutical
consulting which resulted in consulting revenue of $29,000 compared to
consulting revenues of $9,000 during the first quarter of 1995. The increase
was due to increased effort by the Company's president.
Administration and general expense decreased from $33,930 for the three months
ended March 31, 1995 to $28,851 for the three months ended March 31, 1996, or
approximately 15%. The decrease occurred because in 1995 the Company had
incurred additional expenses in order to file Form 10-Ks and 10-Qs for the
periods from December 31, 1991 through December 31, 1994 and these expenses
did not reoccur in 1996. The Company is continuing to search for businesses
with which it can combine. The expenses incurred during the quarter ended March
31, 1996, by the Company, include the salary of the Company's president,
$6,000, that was accrued but not paid, professional fees, travel, and other
administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the quarter ended March 31, 1996, the Company's operations were funded
by receipt of consulting fees, unpaid salaries to the Company's president
in the amount of $6,000 and accrued interest payable to the Company's
president in the amount of $4,115.
<PAGE> 11
Page 11 of 12 pages
PART II - OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits - None
b) No Form 8-K reports were filed or required during the quarter.
<PAGE> 12
Page 12 of 12 pages
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTH & LEISURE, INC.
Date May 10, 1996 by /S/ Robert M. Feldman
------------------ -----------------------------
Robert M. Feldman
President and Director
Date May 10, 1996 by/S/ Burton Schildhouse
------------------ -----------------------------
Burton Schildhouse
Secretary, Treasurer and
Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000774657
<NAME> HEALTH & LEISURE, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 3215
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3215
<CURRENT-LIABILITIES> 359408
<BONDS> 201615
<COMMON> 0
0
173254
<OTHER-SE> 1213236
<TOTAL-LIABILITY-AND-EQUITY> 3215
<SALES> 0
<TOTAL-REVENUES> 29000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 28851
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4503
<INCOME-PRETAX> (4354)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4354)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4354)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
|
|