<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
[X] QUARTERLY REPORT
OR
[ ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended April 30, 1999
Commission File No. 33-4460-NY
--------------------------
TASTY FRIES, INC.
(Exact name of registrant as specified in its charter)
-------------------------
NEVADA 65-0259052
State or other jurisdiction (I.R.S. Employer Identification No.)
incorporation or organization
650 SENTRY PARKWAY, SUITE ONE
BLUE BELL, PENNSYLVANIA 19422
(Address Of Principal Executive Offices)(Zip Code)
(610) 941-2109
(Registrant's telephone number, include area code)
ADELAIDE HOLDINGS, INC.
11098 Biscayne Boulevard, Suite 403
Miami, Florida
(305) 899-0200
(Former name and address)
Check whether the registrant (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 reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES X NO
--- ---
As of April 30, 1999: 20,195,606 shares of common stock were
outstanding.
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TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(Unaudited)
ASSETS
April 30, January 31,
1999 1999
----------- -----------
(Unaudited)
Current assets:
Cash $ 197,791 $ 66,394
Prepaid expenses 58,753 123,313
-------------- -------------
Total current assets 256,544 189,707
------------- -------------
Property and equipment, net 29,144 24,777
-------------- --------------
Other assets:
Vending machines 195,000 195,000
Loan costs, net of accumulated amortization 110,093 129,831
-------------- -------------
305,093 324,831
------------- -------------
$ 590,781 $ 539,315
============== =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable and accrued expenses $ 870,739 $ 1,070,751
------------- -------------
Unearned revenue 261,000 261,000
------------- -------------
Stockholders' deficiency:
Common stock, $.001 par value;
authorized 25,000,000 shares;
issued and outstanding 20,195,606
shares at April 30, 1999 and
17,995,606 at January 31, 1999 20,196 17,996
Additional paid-in capital 14,084,763 13,426,963
Deficit accumulated in development stage (14,645,917) (14,237,395)
------------ --------------
(540,958) (792,436)
-------------- --------------
$ 590,781 $ 539,315
============== ==============
See notes to financial statements 1
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TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
1999 1998
---- ----
Revenues $ $
------------ --------------
Costs and expenses:
Research, machine and product development 6,431 67,598
Selling, general and administrative 402,091 475,514
---------- ----------
408,522 543,112
---------- ----------
Net loss before other income (expense) (408,522) (543,112)
Other income (expense):
Interest income 687
Interest expense (27,535)
(26,848)
Net loss $(408,522) $(569,960)
========== ==========
Net loss per share of common stock $ (0.02) $ (0.06)
========== =============
Weighted average shares outstanding 18,870,145 9,889,910
========== =============
See notes to financial statements 2
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TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED APRIL 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Total
Common Paid-In Deficit Stockholders'
Stock Capital Accumulation Deficit
-------- ------- ------------ -------------
<S> <C> <C> <C> <C>
Balance, February 1, 1999 $17,996 $13,426,963 $(14,237,395) $(792,436)
Issuance of 1,900,000 shares 1,900 598,100 600,000
Issuance of 300,000 shares
for services 300 59,700 60,000
Net loss for three months (408,522) (408,522)
--------- ----------- -------------- ----------
Balance, April 30, 1999 $20,196 $14,084,763 $(14,645,917) $(540,958)
======= =========== ============= ==========
</TABLE>
See notes to financial statements 3
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TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(408,522) $(569,960)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 22,890 22,687
Common stock issued for services 60,000 57,000
Common stock issued for interest on convertible notes 26,427
Changes in assets and liabilities:
Other assets 64,560 (36,503)
Accounts payable and accrued expenses (200,012) 104,250
---------- ----------
Net cash used by operating activities (461,084) (396,099)
---------- ----------
Net cash used by investing activities:
Purchase of furniture and equipment (7,519)
----------
Cash flows from financing activities:
Sale of common stock 600,000
Loan receivable, officers . 21,180
Net cash provided by financing activities 600,000 21,180
Net increase (decrease) in cash 131,397 (374,919)
Cash, beginning balance 66,394 380,136
---------- ----------
Cash, ending balance $ 197,791 $ 5,217
========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 0 $ 0
========== ===========
Supplemental disclosure of non-cash financing activities:
Issuance of common stock for services $ 60,000 $ 57,000
========== ==========
</TABLE>
See notes to financial statements 4
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TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
1. Basis of presentation:
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions for 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 recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three months ended April 30, 1999 are not
necessarily indicative of the results that may be expected for the year
ended January 31, 2000. The unaudited financial statements should be
read in conjunction with the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended
January 31, 1999.
2. Description of business and significant account policies:
The Company is a development stage company, having not yet completed
the process of manufacturing and marketing its sole product, a vending
machine which will cook and dispense French fries. The Company has
incurred research and development costs from inception to April 30,
1999 totaling $2,141,209. The Company produced 10 preproduction
machines for demonstration and sales purposes. These machines have a
book value of $7,000 each. The Company is currently in the process of
completing its first 25 machines, which are in process and included in
inventory at $125,000.00. The difference between the anticipated
manufacturing price per machine ($7,000) and the cost to obtain the
machines has been charged to research, machine and product development
costs. The Company had no revenues from operations since inception and
its ability to continue as a going concern is dependent on the
continuation of equity financing to fund the expenses relating to
successfully manufacturing and marketing the vending machine.
3. Issuance of common stock:
The Company issued an aggregate of 2,200,000 shares during the quarter
ended April 30, 1999. 1,900,000 shares were sold in private placements
by the Company and 300,000 shares were issued in payment of services.
After the return to treasury of a total 287,500 shares, an aggregate of
2,199,424 shares were issued during the quarter ended April 30, 1999.
The following shares were issued during the quarter: 1,736,924 shares
were issued pursuant to the terms of the Company's convertible note
financing (this figure includes shares issued for interest on the
notes); 212,500 shares were issued in payment of services; and 250,000
shares were issued as consideration for the re-acquisition of an
existing distributorship.
5
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TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
4. April 1998 financing:
In April 1998, the Company entered into an agreement to receive
$1,500,000 in proceeds from the sale of restricted stock to a U.S.
corporation. The Company issued 3,000,000 shares of common stock as
consideration for the investment. The Company also issued warrants to
purchase 1,500,000 post-split shares of common stock at an exercise
price of $1.90; the warrants expire April 12, 2001. The Company also
issued 150,000 post-split shares of restricted stock as a commission on
the transaction. The Company and the investor have entered into an
escrow agreement for this transaction and all of the shares were issued
into escrow, pending funding. As of April 30, 1999, $1,000,000 of the
$1,500,000 in proceeds has been received by the Company and 2,000,000
of the 3,000,000 shares of restricted common stock held in escrow have
been released to the investor. The balance of funds due are anticipated
to be received by June 15, 1999.
6
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ITEM 2. PLAN OF OPERATION
General
The Company is a development-stage company having not yet completed the
exercise of manufacturing, marketing and selling its sole product, a
vending machine which will cook and dispense French fries (the
"Machine"). The Company has tested the Machine both internally and on
various beta locations since December of 1995. During the period ending
April 30, 1999, the Company entered into the production stage of its
lifecycle, having spent the latter half of fiscal 1997 preparing for
commercial manufacturing through the process of pre-production tooling
and completion of final production design work.
Liquidity and Capital Resources
Since its inception, the Company has had virtually no revenues from
operations and has relied almost exclusively on shareholder loans,
limited distribution deposits and sale of securities to raise working
capital to fund operations. At April 30, 1999 the Company had
approximately $197,791 in cash.
While management currently anticipates that the April 1998 financing
will allow it to complete the Company's initial production run of
machines, no assurances can be given that the Company will be able to
do so. Further, the Company will need to secure additional funds to
allow it to enter into its second production run of machines, in line
with management's current plan of operation. No assurances can be given
that the Company will be able to secure adequate financing from any
source to pursue its current plan of operation, to meet its obligations
or to expand its marketing efforts over the next 12 months. Based upon
its past history, management believes that it may be able to obtain
funding in such manner but is unable to predict with any certainty the
amount and terms thereof. If the Company is unable to obtain needed
funds, it could be forced to curtail or cease its activities.
The Company has, in the past, issued shares of common stock and
warrants to purchase common stock to various parties as payment for
services rendered. The Company intends to continue this practice.
ITEM 3. FORWARD-LOOKING STATEMENTS
When used in this report and in future filings by the Company with the
Commission, in the Registrant's press releases or other public or
stockholder communications, and in oral statements made with the
approval of an authorized executive officer, the words or phrases "will
likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject
to certain risks and uncertainties, including the Company's liquidity
constraints, potential increases in manufacturing costs and delays,
pending litigation, availability of raw materials, competition, demand
for the Machine and other proprietary products, and delays in the
distribution process that could cause actual results to differ
materially from those presently anticipated or projected. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that actual
<PAGE>
results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current
statements.
The Company does not undertake - and specifically, declines any
obligation - to publicly release the result of any revisions which may
be made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 17, 1998, California Food and Vending, Inc. ("CFV") filed a
multi-count law suit in the United States District Court for the
Central District of California against the Company. CFV asserted, in
essense, that Tasty Fries and its Chief Executive Officer, Edward C.
Kelly breached the terms of the settlement reached with it in the prior
litigation by failing to sell distributorships, failing to accede to
CFV's to maintain its option at the pre-reverse split level
notwithstanding the fact that the Company's stock went through a
reverse split after the settlement and misrepresenting the Company's
condition at the time of the settlement. CFV's First Amended Complaint
was dismissed with leave to amend only some of the counts. It is the
opinion of the Company's counsel that CFV's law suit lacks merit and
that the Company will prevail.
On August 28, 1996, the Company, Edward C. Kelly and Premier Design,
Ltd., were added as defendants to a civil lawsuit in the Riverside
County Branch of the Superior Court of the State of California brought
by Prize Fries, Inc., William Bartfield and Larry Wirth. The suit also
named as defendants approximately 25 other parties, all allegedly
involved, in some manner, in the pursuit of the French fry vending
machine concept and/or business. The case was removed to Federal Court.
The Company successfully moved for dismissal of the claim on behalf of
itself and Mr. Kelly; the case was dismissed on June 2, 1997. The case,
which was removed to Federal Court, has now been remanded by the
Federal Court to the State Court for disposition where it will be
vigorously contested.
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
See Part II, Item 1. Above
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the exchange act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Tasty Fries, Inc.
--------------------------------------
Edward C. Kelly
Date: April 24, 2000 President and Principal Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-START> FEB-01-1999
<PERIOD-END> APR-30-1999
<CASH> 197,791
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 256,544
<PP&E> 77,696
<DEPRECIATION> 48,552
<TOTAL-ASSETS> 590,781
<CURRENT-LIABILITIES> 870,739
<BONDS> 0
0
0
<COMMON> 20,196
<OTHER-SE> (561,154)
<TOTAL-LIABILITY-AND-EQUITY> 590,781
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (408,522)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (408,522)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (408,522)
<EPS-BASIC> (0.02)
<EPS-DILUTED> 0
</TABLE>
