SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
--------------- ---------------
Commission File No. 33-8964
AM-PAC INTERNATIONAL, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 16-1260971
- -------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
431 East Central Boulevard, Suite 900
Orlando, Florida 32801
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(Address of principal executive offices)
(407) 841-1350
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(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (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 May 1, 1997, 7,940,522 shares of Common Stock of the issuer were
outstanding.
<PAGE>
AM-PAC INTERNATIONAL, INC.
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1997 and
December 31, 1996............................................. 1
Consolidated Statements of Operations - For the
three months ended March 31, 1997 and 1996..................... 3
Consolidated Statements of Cash Flows - For the three
months ended March 31, 1997 and 1996........................... 4
Notes to Consolidated Financial Statements..................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 6
PART II - OTHER INFORMATION.............................................. 7
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
ASSETS
March 31, December 31,
1997 1996
--------- -------------
CURRENT ASSETS:
Cash $ 11,721 $ 47,651
Accounts receivable 0 0
Inventory 15,161 0
Prepaid expenses 3,538 0
--------- --------
Total current assets 30,420 47,651
PROPERTY AND EQUIPMENT
Buildings and improvements 195,562 171,614
Land and improvements 204,841 204,841
Furniture and equipment 2,000 2,000
Less accumulated depreciation (105,601) 103,313
--------- --------
Net property and equipment 296,802 275,142
OTHER ASSETS
Escrow deposits 11,412 6,228
Loan receivable - stockholder 237,847 238,398
Related party receivable 14,400 0
Organizational costs, net 1,837 1,837
--------- --------
Total other assets 265,496 246,463
Total assets $ 592,718 $569,256
========= ========
1
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheet - Continued
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1997 1996
--------- -------------
CURRENT LIABILITIES:
Accounts payable $ 146,958 $ 111,287
Other liabilities 9,871 22,915
Current portion long term debt 9,290 9.075
----------- -----------
Total current liabilities 166,119 143,277
LONG TERM DEBT
Mortgages payable 432,418 435,719
Loans payable - related party 304,209 114,459
----------- -----------
Total long-term debt 736,627 550,178
Total liabilities 902,746 693,455
STOCKHOLDERS' EQUITY:
Common Stock, $.001 par value;
149,000,000 shares authorized,
7,740,547 shares issued and
outstanding 7,740 7,740
Additional paid in capital 973,058 973,058
Accumulated deficit (1,290,826) (1,104,997)
----------- -----------
Total stockholders equity
(deficit) (310,028) (124,199)
----------- -----------
Total liabilities and stockholder equity $ 592,718 $ 569,256
=========== ===========
See accompanying notes to consolidated financial statements
2
<PAGE>
AM-PAC INTERNATIONAL
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---------- -----------
Revenue:
Sales $ 80,152 $ 0
Franchise fees 11,058 15,565
Commissions 113 0
Rental property income 0 21,450
---------- ---------
Total revenue $ 91,323 $ 37,015
========== ----------
Cost and expenses:
Cost of sales $ 22,743 $ 0
Rental property expenses 0 18,655
Operating, general and
administrative expenses 254,396 10,044
---------- ----------
Total costs and expenses 277,139 38,698
---------- ----------
Net income (loss) (185,816) $ 8,317
========== ==========
Net loss per share $ (.02) $ (.01)
========== ==========
Weighted average number of shares
outstanding 7,740,547 8,131,661
========== ==========
See accompanying notes to consolidated financial statements
3
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
------------ -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (185,816) $ 8,317
Adjustments to reconcile net loss
to cash provided by (used in)
operating activities
Depreciation and amortization 2,288 1,971
Changes to operating assets and liabilities
Increase in prepaids (8,721) (4,793)
Increase in inventory (15,161) 0
Decrease in receivable 35,671 6,928
Increase (decrease) in accounts payable 35,671 (1,029)
Decrease in other current liabilities (13,043) (4,200)
------------ -------
Net cash provided by (used in)
operating activities (184,782) 7,194
------------ -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of building improvements (23,948) 0
------------ -------
Net cash provided by (used in)
investing activities (23,948) 0
------------ -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans to related parties (13,849) 0
Proceeds from borrowings 189,750 0
Repayment of debt (3,101) (1,941)
------------ -------
Net cash provided by (used in)
financing activities 172,800 (1,941)
------------ -------
Increase (decrease) in cash (35,930) 5,253
Cash at beginning of period 47,651 33,840
------------ -------
Cash at end of period $ 11,721 $39,093
============ =======
See accompanying notes to consolidated financial statements
4
<PAGE>
AM-PAC INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
1. The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10- QSB. The March 31, 1996 balance sheet data was
derived from unaudited financial statements and does not include all
disclosures required by generally accepted accounting principles. The
interim financial statements and notes thereto should be read in
conjunction with the financial statements and footnotes thereto included in
the Company's report on Form 10-KSB for the year ended December 31, 1996.
In the opinion of management, the interim financial statements reflect all
adjustments of a normal recurring nature necessary for a fair statement of
the results for the interim periods presented.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Form 10-QSB contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward looking statements.
Results of Operations - Three months ended March 31, 1997 compared to the three
months ended March 31, 1996.
The Company, through its subsidiaries, is engaged in the franchising of
pizzeria restaurants and the operation of a Florida restaurant/bar.
Revenues. Sales during the three months ended March 31, 1997 totaled
$80,152, compared to net sales of $0.00 during 1996. This increase resulted from
the Company's operations of a restaurant and bar in Orlando, Florida.
Franchise fees for the three months ended March 31, 1997 totaled $11,058
compared to franchise fees of $15,565 during 1996. The decrease resulted from a
dispute with an Ohio franchisee, which was settled by the write-off of certain
accrued franchise fees.
Commissions during the three months ended March 31, 1997 totaled $113
compared to commissions of $0 during 1996. The increase in commission resulted
from a new agreement with a supplier which supplies food products to certain
franchisees.
Rental property income during the three months ended March 31, 1997 totaled
$0 compared to rental income of $21,450 during 1996. The decrease in rental
income resulted from the Company purchasing the business which previously had
been paying rent and canceling the inter-company lease.
Cost of Sales. Cost of Sales during the three months ended March 31, 1997
totaled $22,743 compared to cost of sales of $0 during 1996. The increase in
cost of sales resulted from the Company's operation of the restaurant and bar in
Orlando, Florida.
Rental Property Expense. Rental property expenses during the three months
ended March 31, 1997 totaled $0 compared to rental property expenses of $18,655
during 1996. The decrease in rental income resulted from the Company's
purchasing the business which previously had been paying rent and canceling the
inter-company lease.
Operating, general and administrative expenses ("SG&A") during the three
months ended March 31, 1997 totaled $254,396, as compared to $10,044 during
1996. The increase in SG&A was due to increased legal and accounting fees;
operating expenses associated with the restaurant and bar in Orlando, Florida;
and corporate overhead expenses.
Liquidity and Capital Resources
At March 31, 1997, the Company had a deficit in working capital of $135,699
and a cash balance of $11,721 compared to a working capital deficit of $95,626
and a cash balance of $47,651 at March 31, 1996. The change in working capital
was attributable to a decline in cash.
At March 31, 1997, the Company's primary obligation consisted of payment of
mortgages and loans totaling $736,627 incurred in the acquisition of the
restaurant and bar in Orlando, Florida and the payable incurred in the operation
of its business.
The Company is actively seeking funds through the sale of shares or the
placement of debt to advance its business objectives. The Company anticipates
equity financing of up to $2,000,000 during the summer of 1997.. Without
additional financing the company will be unable to advance its business
objectives.
6
<PAGE>
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
AM-PAC INTERNATIONAL, INC.
Date: June 2, 1997 /s/ Thomas Tedrow
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Thomas Tedrow
Chief Executive Officer
Date: June 2, 1997 /s/ Michael J. Martella
----------------------------------------
Michael J. Martella
Chief Financial Officer
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,721
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 15,161
<CURRENT-ASSETS> 30,420
<PP&E> 402,403
<DEPRECIATION> 105,601
<TOTAL-ASSETS> 592,718
<CURRENT-LIABILITIES> 166,119
<BONDS> 0
0
0
<COMMON> 7,740
<OTHER-SE> (302,288)
<TOTAL-LIABILITY-AND-EQUITY> 592,718
<SALES> 80,152
<TOTAL-REVENUES> 91,323
<CGS> 22,743
<TOTAL-COSTS> 22,743
<OTHER-EXPENSES> 254,396
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (185,816)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (185,816)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
