SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
QUARTER REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Unaudited)
For the Quarter Ended
February 29, 1996 Commission File No. 0-5141
PRINCETON AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 22-1848644
(State or other jurisdiction of (IRS Employer Iden-
incorporation or organization) tification Number)
2222 East Camelback Road, Suite 200, Phoenix, AZ 85016
(Address of principal executive offices)
(602) 954 2600
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the Registrant (l) 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 close of the period covered by
this report.
3,310,480<PAGE>
PRINCETON AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
February 29, 1996
(Unaudited)
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Rule 10-01 of
Regulation SB. 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 month period
ended February 29, 1996 are not necessarily indicative of the
results that may be expected for the year ended May 31, 1996. For
further information refer to the consolidated financial
statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the year ended May 31, 1995.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
THREE MONTHS ENDED FEBRUARY 29, 1996
OPERATING RESULTS
The Company's rental revenue increased 16.6% during the quarter
ended February 29, 1996 to $150,903, compared to the same quarter
of fiscal year 1995 which was $125,926, primarily as the result
of increasing rental rates and occupancy in the commercial office
buildings. The Company's rental expenses decreased by 54.65% to
$55,430 compared to the same quarter in fiscal 1995 of $105,285,
primarily due to reduction in commission expenses which were
incurred during the same quarter in 1995. The 20,000 square foot
office building remains 50% occupied; however, leasing proposals
are pending for the balance of the vacant area and the Company
anticipates completion of leasing during the fourth quarter of
this fiscal year.
The Company does not anticipate any unusual or extraordinary
expenses relating to these properties but will continue to
upgrade and maintain these properties as revenues justify this.
It is anticipated that the commercial office buildings will
produce positive cash flows during the current fiscal year based
upon the present revenues.
Revenues for the Personal Care Products Division decreased 240%
to 29,447 during the quarter ended February 29,1996 compared with
the same quarter in fiscal 1995 primarily as the result of a
large shipment of product of Nature's Hair+ during the previous
1995 quarter which distorted the normal sales curve; additionally
the Biosome Products division was undergoing inventory buildup
prior to shipping orders which have now been delivered. Sales in
this division will substantially increase during the current
quarter and the closing of the Organifyl Labs acquisition on May
1, 1996 will accelerate sales during the coming fiscal year 1997.
The costs of sales increased substantially as the result of the
inventory buildup in the Biosome Division and is distorted due to
the timing of sales as previously discussed.
Selling and G & A expenses increased by 191% to $475,898 during
the quarter ended February 19, 1996 as compared to the same
quarter in fiscal 1995, which was $248,811, due primarily to
increased salaries and expenses of acquiring and administering
the growth of the Company.
The net loss for the quarter of $485,155 as compared to the
$70,815 for the same quarter of fiscal 1995 is distorted by the
recovery of $266,444 reported in the 1995 quarter. By
eliminating this distortion the comparison would reflect an
increased loss of $145,896 which is reflected in the increased G &
A expenses and reduced sales for the quarter by the Personal Care
Products Division. The Company believes that the operating results
for the quarter are not typical of the results which may be
expected when sales and expenses connected to the development of
the operations of the Company have stabilized sufficiently to
reflect normal operating results.
LIQUIDITY AND CAPITAL RESOURCES
The Company's current ratio (current assets divided by current
liabilities) increased to .76 to 1 from .61 to 1 at the end of the
fiscal year ended May 31, 1995. This change is reflected by an
increase in cash from $49,057 at May 31, 1995 to $125,711 in the
current quarter. Inventory increases commensurate with the
building of the Personal Care Products Division and substantial
increases of prepaid expenses connected to advertising and public
relations of the Company increased current assets by $768,596.
Since the date of this report the Company has raised sufficient
capital to reduce long term debt and accrued expenses substantially
and these changes will be reflected in the annual report Form 10-K
for the year ending May 31, 1996. Long term debt increased as the
result of financing completed on the Company's commercial office
buildings.
The Company's Board of Directors declared a reverse split of its
stock on a 1 for 10 exchange effective December 4, 1995. As a
result of that the Company was able to maintain its listing on the
NASDAQ stock exchange. The Company is currently able to raise
necessary operating capital through private placement of its common
stock along with revenues from operations. Although these
financing sources appear to be adequate for the present needs of
the Company there can be no assurance that these sources will
continue to provide all the liquidity necessary for future
operations.
The Company is continuing to pursue acquisitions of operating
companies and properties which will contribute revenues to the
Company. Although no assurance can be made that the Company will
be able to accomplish any acquisitions, it is management's opinion
that these acquisitions will become available from time to time.
These acquisitions may necessitate additional requirements for
funding and there can be no assurance that any such funding will be
available.
FORM 10-QSB
PRINCETON ELECTRONIC PRODUCTS, INC.
FOR THE NINE MONTHS ENDED FEBRUARY 29, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PRINCETON ELECTRONIC PRODUCTS, INC.
S/ DALE E. EYMAN
DALE E. EYMAN, Chairman, CEO
April 11, 1996
Date
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<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> FEB-29-1996
<CASH> 125,711
<SECURITIES> 251,533
<RECEIVABLES> 104,535
<ALLOWANCES> 0
<INVENTORY> 232,011
<CURRENT-ASSETS> 1,404,357
<PP&E> 1,532,232
<DEPRECIATION> 49,000
<TOTAL-ASSETS> 4,797,506
<CURRENT-LIABILITIES> 917,333
<BONDS> 0
<COMMON> 10,848,675
0
2,316,119
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,797,506
<SALES> 568,211
<TOTAL-REVENUES> 568,211
<CGS> 54,267
<TOTAL-COSTS> 1,706,333
<OTHER-EXPENSES> 128,143
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 128,143
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,158,553)
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