SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission file number 01-15109
CALA CORPORATION
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(Exact name of registrant as specified in its charter)
Oklahoma 73-1251800
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 N Broadway, Suite 1890
Oklahoma City, Oklahoma 73102
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(Address of principal executive offices)
(405) 235-4960
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(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 45,352,404
Par Value $0.005 Shares outstanding as of
per share March 31, 2000
Transitional Small Business Disclosure Format Yes __ No _X_
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<TABLE>
<CAPTION>
Cala Corporation
Balance Sheet
Comparative Balances for December 31,1999 and March 31, 2000
Unaudited
ASSETS
March 31, 2000 December 31, 1999
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<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 61,670 $ 96,699
Accounts Receivable 95,754 --
Inventory 9,578 16,069
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Total Current Assets 167,002 112,768
PROPERTY AND EQUIPMENT, net 63,700 65,795
OTHER ASSETS
Organizational costs, net -- 4,000
Deposits 10,548 6,622
Lease Assignment, net 947,331 972,330
Other investments 1,512,161 16,800
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Total other assets 2,470,040 999,752
Total Assets $ 2,700,742 $ 1,178,315
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 80,670 $ 82,233
Accrued expenses 122,834 268,642
Notes payable 414,783 893,635
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Total current liabilities 618,287 1,244,510
LONG-TERM DEBT, less current of $47,197 -- 86,528
STOCKHOLDERS' EQUITY
Series A 10 % cumulative preferred stock,
Par value $.01, 250,000 shares authorized,
Issued and outstanding 2,500 2,500
Series AA 6 % cumulative convertible preferred
Stock, par value $0.10, 10,000 shares
authorized, 1,485 shares issued and outstanding 148,500 149
Common Stock - par value $.005, 50,000,000 shares
authorized, 45,352,404 shares issued and outstanding 226,762 123,311
Additional paid-in capital 9,672,514 7,446,903
Retained Earnings (deficit) (7,966,621) (7,724,384)
Less: Treasury stock - 4,530 shares at cost (1,202) (1,202)
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Total Stockholders' Equity $ 2,700,742 $ 1,178,315
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</TABLE>
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<TABLE>
<CAPTION>
Cala Corporation
Statement of Operations
For the Year Ended December 31, 1999 and the Three Months Ended March 31, 2000
Unaudited
March 31, 2000 December 31, 1999
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<S> <C> <C>
REVENUES $ 140,289 $ 978,322
COST OF SALES 89,217 365,103
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GROSS PROFIT 51,072 613,219
OPERATING COSTS AND EXPENSES
General, selling, and administrative 308,550 474,544
Maintenance & Operations 49,267 580,058
Depreciation 9,718 63,331
Amortization 24,999 27,670
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Total Expenses 392,534 1,145,603
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Net Loss (before extra-ordinary items) 341,462 532,384
EXTRA-ORDINARY ITEMS
Gain on sale of Restaurant 96,225 --
Forgiveness of Debt 3,000 --
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Net Loss (after extra-ordinary items) $ (242,237) $ (532,384)
=========== ===========
Loss per share $ (0.005) $ (0.04)
=========== ===========
Fully Diluted Loss Per Share $ (0.005) $ (0.04)
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<PAGE>
Cala Corporation
Statement of Cash Flows
For the Year Ended December 31, 1999 and the Three Months Ended March 31, 2000
Unaudited
March 31, 2000 December 31, 1999
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Cash flows from operating activities $ 242,237 $ 532,384
Net loss
Adjustments to reconcile
net income to net cash
Provided by operating activities:
Depreciation and amortization 34,717 91,001
Changes in assets and liabilities
(Increase) decrease in:
Accounts Receivable (95,754) --
Inventory 6,491 (2,503)
Deposits and Organizational Costs 3,926 22,830
Increase (decrease) in
Accounts Payable (1,563) (99,102)
Accrued expenses (145,808) 128,053
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(197,991) 140,279
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Net cash used by operating activities $ 440,228 $ 392,105
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Cash flows from investing activities
Purchase and disposal of property/equipment $ 26,945 $ 78,895
Acquisition of other investments 1,496,361 (1,000,000)
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Net cash used by investing activities (1,523,306) (921,105)
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Cash flows from financing activities
Principal payments on long term debt $ (478,852) $ (80,203)
Issuance of stock 2,477,415 1,494,637
Error Correction -- (900)
Net cash provided by financing activities 1,998,563 1,413,534
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Net decrease/increase in cash and cash equivalents $ 35,029 $ 100,324
Cash and cash equivalents at beginning of period 96,699 (3,625)
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Cash and cash equivalents at end of period $ 61,670 $ 96,699
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Supplemental cash flow information:
Cash paid during the year for interest $ 0 $ 0
===========
Cash paid during the year for income taxes $ 0 $ 0
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<PAGE>
Cala Corporation
Statement of Stockholders' Equity
For the Three Months Ended March 31, 2000
Unaudited
Series A Series AA Common Stock Retained
Preferred Preferred ----------------------- Paid-in Earnings Treasury
Stock Stock Shares Amount Capital (Deficit) Stock
----------- ----------- ---------- ----------- ----------- ----------- -----------
Beginning Balance, 1/01/00 $ 2,500 $ 149 24,662,156 $ 123,311 $ 7,446,903 $(7,724,384) $ (1,202)
Common stock issued for
Payment of expense debt
And debt financing 20,690,248 105,263 2,372,152
Prior Period Adjustment 148,351 1,812 146,539 900
Net Loss (242,237) (532,384)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Ending Balance, 3/31/00 $ 2,500 $ 148,500 $45,352,404 $ 226,762 $ 9,672,516 ($7,966,621) ($ 1,202)
=========== =========== =========== =========== =========== =========== ===========
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PART I
CALA CORPORATION
NOTES TO FINANCIAL STATEMENTS
Item 1. Business:
In the opinion of the Company, the accompanying unaudited financial
statements contain the adjustments (with normal recurring accruals and one time,
non-recurring adjustments) necessary to present the financial position as of
March 31, 2000 and the results of operations and statements of cash flows for
the three months ending March 31, 2000 and it is not necessarily indicative of
the results to be expected for the full year.
A. Presentation of Prior Year Information:
As of December 31, 1999, the Company owned and operated the following
businesses:
Two Ground Floor Cafes
Located in Oklahoma City
For further discussion see form 10-KSB for December 31, 1999.
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:
On January 19, 2000, Cala Corporation announced its plan to design and
build the world's first Undersea Resort & Casino. Cala Corporation
hired Wimberly, Allison, Tong and Goo, a leading design consultant for
the hospitality/leisure and entertainment industry to design the
prototype Undersea Resort & Casino. On March 22, 2000 the Company
executed a contract with the Naval Architecture firm of Guido Perla
and Associates of Seattle, Washington. Also in the 1st Quarter, the
Company executed a service contract with Economic Research Associates,
San Francisco, California, to conduct worldwide feasibility studies
for proposed Undersea Resort & Casino locations.
<PAGE>
On January 19, 2000, Cala Corporation, from its new offices in the
Bank One Tower (100 N. Broadway, Suite 1890, Oklahoma City, Oklahoma
73102), announced it had made an offer to the Board of Directors of
Twin Hills Golf and Country Club to purchase the Perry Maxwell
designed course. On January 25, 2000, Cala Corporation and the Board
of Directors of Twin Hills Golf and Country Club executed a "Proposal
to Purchase Stock of the Club" letter agreement, which called for Cala
Corporation to pay a $15,000 good faith deposit to cover a portion of
the Club's costs to be incurred in the proposed acquisition. The
letter agreement called for the preparation of a definitive agreement
and the initiation of a period of due diligence on the part of both
buyer and seller. An initial draft of the definitive agreement was
delivered to Cala Corporation February 25, 2000. Upon completion of
Cala Corporation's due diligence and review of an extensive study of
national golf course values provided by John Del Favero, California
business consultant, the Company declined to execute the definitive
agreement. Instead, on March 26, 2000, the Company submitted its
"Final Offer to Purchase the Twin Hills Golf and Country Club" in the
amount of $3.2 million. The Board of Directors of Twin Hills Golf and
Country Club voted to reject the $3.2 million offer.
In January 2000 the Ground Floor Cafe Corporation, a wholly owned
subsidiary of Cala Corporation, sold its restaurant located in
Leadership Square, downtown Oklahoma City, to Restaurant Acquisition
Corp. (RAC) for a combination of cash, stock and debt forgiveness.
In February 2000, Cala Corporation announced its plans to acquire Cala
Hotels, Inc. of Hawaii. Cala Hotels, Inc. had done extensive research
and development work on the Undersea Resort & Casino since 1996.
Consideration for the transaction was set at $6,000,000 which was to
be paid in accordance with a phased, performance related schedule. The
first payment calls for the issuance of 10,000,000 shares of
restricted common stock.
On February 15, 2000 the Company engaged the services of Vincienzo
Cala of Milan, Italy to complete floor plans and layout drawings of a
popular Italian bakery/coffee shop concept. Cala Corporation plans to
develop a US version of this business and convert its Nichols Hills
Ground Floor Cafe as soon as the drawings are finished. The name
selected for the bakery/coffee shop is L'Italiano Caffee.
In the 1st Quarter, 2000, Cala Corporation filed 10-QSB reports for
the March 31, June 30, and September 30, 1999 Quarters. Whereupon,
West America Securities of California filed the required C-211 form
with the NASD requesting that Cala Corporation be listed on the Over
the Counter Electronic Bulletin Board (OTC:BB). In the 1st Quarter
2000, the Company hired Corporate Stock Transfer of Denver, Colorado
as its independent stock transfer agent.
In the 1st Quarter, 2000 the Company experienced lengthy facility
related design delays on the Cascina Restaurant project under
development near Fisherman's Warf in San Francisco, California.
<PAGE>
Also in the 1st Quarter, Mr. Cala began a program of exchanging the
notes payable from Cala Corporation that he acquired in the Fourth
Quarter of 1999 transaction between himself and ten (10) of Cala
Corporation's (formerly Creative Restaurant Concepts, Inc.)
shareholders. In that transaction, outlined in the Company's 12/31/99,
10-KSB, Mr. Cala acquired the rights to 6,210,819 shares of the
Company's common stock plus $775,994 in notes payable by (CRC) Cala
Corporation. In the 1st Quarter, Mr. Cala retired these notes in
exchange for restricted common shares of the Company's stock.
In addition, the Company retired $38,000 in other notes and accounts
payable in the 1st Quarter 2000 through the issuance of 100,562 shares
of restricted common stock.
As of March 31, 1999, the Company operated two Ground Floor Cafes in
Oklahoma City, Oklahoma. As of March 31, 2000, the Company operated
one Ground Floor Cafe in Oklahoma City, Oklahoma.
Revenues for the three months ended March 31, 2000 were $140,289 vs.
$175,102 for the same period in 1999. The decrease in sales reflects
the sale of one Ground Floor Cafe restaurant in January 2000. Costs of
goods sold for the first quarter of 2000 were $89,217 or 63.60 % vs.
$68,725 or 39.25 % for the same period in 1999. The percentage
increase was attributed to accounts payable adjustments made in the
first quarter, 2000. General and Administrative costs for the March
31, 2000 Quarter were $308,552 vs. $474,544 for the same quarter last
year. The change was attributed to the Company operating one less
restaurant in 2000 than 1999, plus the booking of expenses
attributable to the various new projects initiated in the 2000
quarter.
B. Liquidity:
The Company had a working capital deficit of $451,285 as of March 31,
2000 as compared to a deficit of $1,131,742 as of December 31, 1999.
The decrease in deficit is due to the conversion of current debt into
common stock.
Part II OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are included herein:
(a) Statement re: Computation of Earnings Per Share.
(27) Exhibit 27
The Company did not file any reports on Form 8-K during the quarter.
<PAGE>
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: May 15, 2000 By: /s/ Joseph J. Johnston
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Joseph J. Johnston, Vice-President
<PAGE>
(a) Statement re: Computation of Earnings Per Share.
THREE MONTHS ENDED THREE MONTHS ENDED
March 31 March 31
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2000 1999
---- ----
Net income (loss) for computing
earnings per common share (242,237) $ (109,991)
Weighted average number of
common shares outstanding
during each period without
dilution 45,352,404 11,143,060
Addition from assumed exercise
of Common Stock warrants 245,000 400,500
300,000 225,000
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45,564,404 11,768,568
========== ==========
Net income per common share
Without Dilution $ (0.005) $ (0.01)
Fully diluted $ (0.005) $ (0.01)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 61,670
<SECURITIES> 0
<RECEIVABLES> 95,754
<ALLOWANCES> 0
<INVENTORY> 9,578
<CURRENT-ASSETS> 167,002
<PP&E> 328,104
<DEPRECIATION> 292,074
<TOTAL-ASSETS> 2,700,742
<CURRENT-LIABILITIES> 618,287
<BONDS> 0
0
151,000
<COMMON> 226,762
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,700,742
<SALES> 140,289
<TOTAL-REVENUES> 140,289
<CGS> 89,217
<TOTAL-COSTS> 89,217
<OTHER-EXPENSES> 392,534
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 107,858
<INCOME-PRETAX> (242,237)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 99,225
<CHANGES> 0
<NET-INCOME> (242,237)
<EPS-BASIC> (0.005)
<EPS-DILUTED> (0.005)
</TABLE>
