<PAGE>1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
Commission file number 01-15109
MAGNOLIA FOODS, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 73-1251800
(State of other jurisdiction of (I.R.S. Employer Idendification No.)
incorporation or organization)
6421 Avondale Blvd., Suite 210, Oklahoma City, OK 73116
(Address of principal executive offices)
(405) 840-9655
(Registrant's telephone number, including area code)
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 the latest practicable date.
Common Stock, Par Value $.005 per share
44,393,035 Shares outstanding as of March 31, 1997
Transitional Small Business Disclosure Format Yes No X
<PAGE> 2
MAGNOLIA FOODS, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
March 31 December 31
1997 1996
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Temporary Investments $ - $ 1,299
___________ ___________
Total current assets - 1,299
PROPERTY AND EQUIPMENT
Furniture and Equipment 22,331 22,331
Less: Accumulated Depreciation (18,937) (18,762)
----------- ----------
3,394 3,569
OTHER ASSETS
Deposits 400 400
----------- ----------
Total Assets 3,794 5,268
=========== ==========
</TABLE>
See Accompanying Notes
<PAGE> 3
MAGNOLIA FOODS, INC.
BALANCE SHEET CONTINUED
<TABLE>
March 31 December 31
1997 1996
(Unaudited) (Unaudited)
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Cash Overdraft $ 4,666 $ -
Accounts Payable 71,534 46,654
Accrued Expenses 59,555 75,495
Notes Payable 518,302 509,802
----------- -----------
Total Liabilities 654,057 631,954
Stockholders' Equity
Series B 10 % Cumulative Convertible
Preferred Stock - Par Value $.10,
25,000 Shares Authorized, Issued and
Outstanding 2,500 2,500
Common Stock - Par Value $.005,
50,000,000 Shares Authorized
44,397,565 and 44,197,565 Shares
Issued, 44,393,035 and 44,193,035
Shares Outstanding 221,988 220,988
Additional Paid-In Capital 5,259,387 5,250,387
Retained Earning (Deficit) (6,132,936) (6,099,356)
----------- -----------
(649,061) (625,481)
Less: Treasury Stock - 4530 shares
at cost 1,202 1,202
----------- -----------
Total Liabilities and Stockholders' Equity $ 3,794 $ 5,268
=========== ===========
</TABLE>
Accoumpanying Notes are an integral part of these statments
<PAGE> 4
MAGNOLIA FOODS, INC.
STATMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31
(Unaudited)
------------------
1997 1996
-------- --------
<S> <C> <C>
REVENUES $ - $ -
COST AND EXPENSES
General & Administrative 19,707 43,805
Interest 13,698 8,919
Depreciation 175 175
-------- --------
NET LOSS $(33,580) $(52,899)
========= =========
LOSS PER COMMON SHARE $ (0.00) $ (0.00)
========= =========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 44,259,702 24,922,588
</TABLE>
See Accompanying Notes
<PAGE> 5
MAGNOLIA FOODS, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
(Unaudited)
--------------------
1997 1996
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net Loss $ (33,580) $ (52,899)
Items not affecting cash from
operating activities:
Depreciation 175 175
Changes in Operating Assets and
Liabilities:
Payables and Accruals 8,940 14,150
Receivables - 18,275
---------- -----------
Net Cash used by Operating Activities (24,465) (20,299)
INVESTING ACTIVITIES
Joint Venture Investments - (112,666)
---------- -----------
Net Cash used by Investing Activities - (112,666)
FINANCING ACTIVITIES
Proceeds from Notes 12,500 131,666
Payment on Notes (4,000) (10,000)
Exercise of Warrants 10,000 -
Issuance of Stock - 5,320
----------- ------------
Net Cash from Financing Activities 18,500 126,986
----------- ------------
Increase (Decrease) in Cash (5,965) (5,979)
Cash Beginning at Period 1,299 10,987
----------- -----------
Cash End of Period $ (4,666) $ 5,008
=========== ===========
</TABLE>
See Accompanying Notes
<PAGE> 6
MAGNOLIA FOODS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Three Months Ended March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Series B Additional
Preferred Common Paid-In Accumulated Treasury
Stock Stock Capital (Deficit) Stock Total
--------- ------- --------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance
1/01/97 $ 2,500 $220,988 $5,250,387 $(6,099,356) $(1,202) $(626,683)
Exercised
Warrants 1,000 9,000 10,000
Net Loss (33,580) (33,580)
--------- -------- ---------- ------------- -------- ----------
Balance
3/31/97 $ 2.500 $221,988 $5,259,387 $(6,132,936) $(1,202) $(650,263)
========= ======== ========== ============ ======== ==========
</TABLE>
See Accompanying Notes
<PAGE> 7
MAGNOLIA FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
Item 1. Business of Presentation:
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments(consisting only of normal recurring accruals)
necessary to present the financial position as of March 31, 1997 and the results
of operations and statements of cash flows for the three months ended March 31,
1997 and is not necessarily indicative of the results to be expeced for the
full year.
A. Presentation of Prior Year Information:
As of December 31, 1996 Bagelco, Inc. was no longer an operating
entity and the parent company, Magnolia Foods, Inc. was not liable for any of
the subsidiary's outstanding obligations. Prior year information is restated
without the subsidiary and represents the financial position and the sales of
operations and cash flow for the parent only. For further discussion see Form
10-KSB for December 31, 1996.
B. Accounting Policies:
During interim periods the Company follows the accounting
policies set forth in its consolidated financial statments included in its
annual report on Form 10-KSB. Reference should be made to such financial stat-
ments for information on such accounting policies and further financial details.
Item 2. Management's Discussion and Analysis of Plan of Operations
A. Operations: As of March 31, 1996 Magnilia Foods, Inc. had no
operating restaurants and is in the process of repositioning itself in the
industry. Future growth is expected to come from joint-venture agreements with
proven, successful restaurant businesses.
B. Liquidity: The company had a working capital deficit of $654,057
as of March 31, 1997 compared to a deficit of $630,652 as of December 31, 1996.
The increase in deficit is due to the operation loss for the quarter.
<PAGE> 8
Part II Other Information
Item 3. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
11) Statement re: computation of earnings per share
(b) The Company did not file any reports on Form 8-K during the quarter.
<PAGE> 9
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the under-
signed thereunto duly authorized.
MAGNOLIA FOODS, INC.
DATED: September 15, 1997 By: /s/Joseph J. Johnston
President and Chief Financial Officer
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
EX - 11 STATEMENT RE: COMPUTATION OF EARNINS PER SHARE
</TABLE>
<PAGE> 11
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
For the Three Months Ended
March 31
(Unaudited)
--------------------------
1997 1996
---------- ---------
<S> <C> <C>
Net Loss for Computing Earnings
per Common Share $ (33,582) $ (52,899)
========== ==========
Weighted Average Number of Common Shares
Outstanding during each period without
dilution 44,259,702 24,922,588
Addition from assumed exercise of Common
Stock Warrants 1,075,000 1,245,000
Addition from assumed conversion of
Preferred Stock 300,000 300,000
----------- ----------
45,634,702 26,467,588
============ ===========
Net Income Per Common Stock
Without Dilution $ (0.00) $ (0.00)
Fully Diluted $ (0.00) $ (0.00)
</TABLE>
