<PAGE>
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 September 30, 1997
Commission file number 01-15109
Cala Corporation (formerly Magnolia Foods, Inc.)
(Exact name of registrant as specified in its charter)
Oklahoma 73-1251800
(State of other jurisdiction of (I.R.S. Employer Identification 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
48,063,035 Shares outstanding as of September 30, 1997
Transitional Small Business Disclosure Format Yes No X
---
<PAGE>
MAGNOLIA FOODS, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
September 30 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 (19,287) (18,762)
--------- ---------
3,044 3,569
OTHER ASSETS
Deposits 400
--------- ---------
Total Assets 3,044 5,268
--------- ---------
--------- ---------
</TABLE>
See Accompanying Notes
<PAGE>
MAGNOLIA FOODS, INC.
BALANCE SHEET CONTINUED
<TABLE>
<CAPTION>
September 30 December 31
1997 1996
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Cash Overdraft $ 11,040 $ -
Accounts Payable 81,204 46,654
Accrued Expenses 83,580 75,495
Notes Payable 535,436 509,802
----------- -----------
Total Liabilities 711,260 631,954
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, 48,063,035 and 44,193,035
Shares Outstanding 240,338 220,988
Additional Paid-In Capital 5,386,237 5,250,387
Retained Earning (Deficit) (6,336,089) (6,099,356)
----------- -----------
(707,014) (625,481)
Less: Treasury Stock - 4530 shares
at cost 1,202 1,202
----------- -----------
Total Liabilities and Stockholders' Equity $ 3,044 $ 5,268
----------- -----------
----------- -----------
</TABLE>
Accompanying Notes are an integral part of these statements
<PAGE>
MAGNOLIA FOODS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30
(Unaudited)
-------------------------------
1997 1996
-------- --------
<S> <C> <C>
REVENUES
Food & Beverage Sales $ - $ 1,079,389
Interest & Other 162 344
------------ ------------
Total Operating Revenues 162 1,079,733
COST AND EXPENSES
Cost of Sales 380,650
Restaurant Operating 707,188
General & Administrative 164,774 489,694
Interest 71,596 48,873
Depreciation 525 64,881
Loss on Restaurant Sale - 200,963
------------ ------------
Total Costs & Expenses 236,895 1,892,249
------------ ------------
NET LOSS $ (236,733) $ (812,516)
------------ ------------
------------ ------------
LOSS PER COMMON SHARE $ (0.00) $ (0.03)
------------ ------------
------------ ------------
AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 45,842,479 28,754,955
</TABLE>
See Accompanying Notes
<PAGE>
MAGNOLIA FOODS, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30
(Unaudited)
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net Loss $(236,895) $(321,011)
Items not affecting cash from
operating activities:
Depreciation 525 51,713
Changes in Operating Assets and
Liabilities:
Payables and Accruals 53,675 43,340
Receivables - 6,715
Inventories - 11,121
Other Assets (400) 6,548
Reserve for Closed Locations - (25,199)
--------- ---------
Net Cash used by Operating Activities (183,095) (226,765)
INVESTING ACTIVITIES
Joint Venture Investments - (16,309)
Sale of Equipment - 3,500
--------- ---------
Net Cash (used) by Investing Activities - 12,809
FINANCING ACTIVITIES
Proceeds from Notes 181,663 235,396
Payment on Notes (9,867) (25,000)
Exercise of Warrants 10,000 3,937
Issuance of Stock - -
Offering Costs - (15,507)
--------- ---------
Net Cash from Financing Activities 181,796 199,276
--------- ---------
Increase (Decrease) in Cash (1,299) (40,298)
Cash Beginning at Period (1,299) 78,926
--------- ---------
Cash End of Period $ 0 $ 38,628
--------- ---------
--------- ---------
</TABLE>
See Accompanying Notes
<PAGE>
MAGNOLIA FOODS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months Ended September 30, 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 19,350 135,850 155,200
Net Loss (236,733) (236,733)
----------- ----------- ----------- ----------- ----------- -----------
Balance
9/30/97 $ 2,500 $ 240,338 $ 5,386,237 $(6,336,089) $ (1,202) $ (708,216)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
See Accompanying Notes
<PAGE>
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 September 30, 1997 and the
results of operations and statements of cash flows for the nine months ended
September 30, 1997 and is not necessarily indicative of the results to be
expected 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 statements included in its
annual report on Form 10-KSB. Reference should be made to such financial
statements 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 September 30, 1996 Magnolia 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 $707,014 as
of September 30, 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 last three
quarters.
<PAGE>
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.
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
undersigned thereunto duly authorized.
CALA CORPORATION
DATED: December 1, 1999 By: /s/ Joseph J. Johnston
President and Chief Financial Officer
<PAGE>
11) Statement re: COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30
(Unaudited)
-------------------------
1997 1996
---------- ---------
<S> <C> <C>
Net Loss for Computing Earnings
per Common Share $ (236,733) $ (812,516)
------------ ------------
------------ ------------
Weighted Average Number of Common Shares
Outstanding during each period without
dilution 45,842,479 28,754,955
Addition from assumed exercise of Common
Stock Warrants 3,570,000 245,000
Addition from assumed conversion of
Preferred Stock 300,000 300,000
------------ ------------
49,712,479 29,299,955
------------ ------------
------------ ------------
Net Income Per Common Stock
Without Dilution $ (0.00) $ (0.03)
Fully Diluted $ (0.00) $ (0.03)
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 22,331
<DEPRECIATION> 19,287
<TOTAL-ASSETS> 3,044
<CURRENT-LIABILITIES> 711,260
<BONDS> 0
0
2,500
<COMMON> 240,338
<OTHER-SE> (951,054)
<TOTAL-LIABILITY-AND-EQUITY> 3,044
<SALES> 162
<TOTAL-REVENUES> 162
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 165,299
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,596
<INCOME-PRETAX> (236,733)
<INCOME-TAX> 0
<INCOME-CONTINUING> (236,733)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (236,733)
<EPS-BASIC> (.008)
<EPS-DILUTED> (.008)
</TABLE>
