<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
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Commission file number 0-19082
OPTIMAX INDUSTRIES, INC.
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(Exact Name of small business issuer as Specified in its Charter)
Colorado 84-1059458
- ------------------- -----------------------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification number
132 Lincoln Street, Boston, Massachusetts 02111
- ----------------------------------------- -----------------------
(Address of Principal Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 695-2950
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16361 Norris Road, Loxahatchee, Florida 33470
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(Former name, former address and dormer fiscal year, if changed
since last report.)
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. [ X ] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 of 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 31, 1997, Registrant had 6,020,591 shares of common stock, $ .02
par value, outstanding.
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INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of
December 31, 1996 and March 31, 1997 (Unaudited)
Consolidated Statement of Operations, Three Months
Ended March 31, 1996 and 1997 (Unaudited)
Consolidated Statement of Cash Flows, Three Months
Ended March 31, 1996 and 1997 (Unaudited)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
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<TABLE>
OPTIMAX INDUSTRIES, INC. AND CONSOLIDATED SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
<CAPTION>
ASSETS
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March 31, December 31,
1997 1996
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(unaudited)
<S> <C> <C>
Current assets
Cash $ 179,107 $ 312,867
Accounts receivable, net of allowance
for doubtful accounts of $ 0 and
$ 2,500 156,262 181,506
Inventories 796,640 300,811
Prepaid expenses 73,330 8,549
------------ ------------
Total current assets 1,205,339 803,733
Property and equipment, net of
accumulated depreciation
of $ 380,158 and $ 358,602 3,169,399 2,594,286
Goodwill, net of accumulated
amortization of $ 26,303
and $ 23,380 149,048 151,971
Organization costs, net of accumulated
amortization of $ 3,499 and $ 1,926 29,120 21,959
Security deposits and other assets 10,581 6,607
------------ ------------
Total assets $ 4,563,487 $ 3,578,556
============ ============
</TABLE>
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<TABLE>
OPTIMAX INDUSTRIES, INC. AND CONSOLIDATED SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
March 31, December 31,
1997 1996
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(unaudited)
<S> <C> <C>
Current liabilities
Payroll taxes payable $ 171,223 $ 182,053
Accounts payable and accrued expenses 392,548 335,963
Current portion of notes payable 1,224,043 218,842
------------ ------------
Total current liabilities 1,787,814 736,858
Long-term liabilities
Notes payable, net of current portion 548,055 378,526
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Total liabilities 2,335,869 1,115,384
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Stockholders' equity
Preferred shares - $.001 par value,
5,000,000 shares authorized;
none issued and outstanding - -
Common shares - $.02 par value,
20,000,000 shares authorized;
6,020,591 issued and outstanding 120,412 120,412
Additional paid-in capital 9,863,583 9,864,750
Accumulated deficit (7,756,377) (7,521,990)
------------ ------------
Total stockholders' equity 2,227,618 2,463,172
------------ ------------
Total liabilities and
stockholders' equity $ 4,563,487 $ 3,578,556
============ ============
</TABLE>
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<TABLE>
OPTIMAX INDUSTRIES, INC. AND CONSOLIDATED SUBSIDIARIES
------------------------------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31,
(unaudited)
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Sales $ 238,845 $ 103,402
Cost of sales 142,549 67,766
------------ ------------
Gross profit 96,296 35,636
Operating expenses
Depreciation and amortization 26,061 18,953
Salaries, not included in cost of
sales 102,263 66,595
Other operating expenses 200,796 48,649
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Total operating expenses 329,120 134,197
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Net loss before other income (expenses) (232,824) (98,561)
Other income (expense)
Interest expense, net of income (1,563) (1,869)
Other non-operating income - 21,499
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Total other income (expense) (1,563) 19,630
------------ ------------
Net loss $ (234,387) $ (78,931)
============ ============
Net loss per share $ (.04) $ (.05)
============ ============
Weighted average shares outstanding 6,020,591 1,703,091
============ ============
</TABLE>
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<TABLE>
OPTIMAX INDUSTRIES, INC. AND CONSOLIDATED SUBSIDIARIES
-------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended March 31,
(unaudited)
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (234,387) $ (78,931)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 26,061 18,952
Increase in accounts payable and
accrued expenses 45,755 -
Decrease in accounts receivable 25,244 -
Increase in inventories (495,829) -
Increase in prepaid expenses (64,781) -
------------ ------------
Net cash used in operating activities (697,937) (59,979)
------------ ------------
Cash flows from investing activities:
(Acquisition) disposition of property
and equipment (596,668) 21,930
Increase in organization costs (8,734) -
Increase in security deposits and
other assets (3,984) -
------------ ------------
Net cash provided by (used in)
investing activities (609,386) 21,930
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Cash flows from financing activities:
Issuance of common stock and capital
contributions - 15,278
Payment of deferred financing costs (1,167) -
Issuance of notes payable 1,186,614 39,602
Repayment of notes payable (11,884) -
------------ ------------
Net cash provided by financing activities 1,173,563 54,880
------------ ------------
Increase (decrease) in cash (133,760) 16,831
Cash, January 1, 312,867 (5,786)
------------ ------------
Cash, March 31, $ 179,107 $ 11,045
============ ============
Interest paid $ - $ -
============ ============
Income taxes paid $ - $ -
============ ============
</TABLE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The financial statements reflect the financial condition and results of
operations of Optimax Industries, Inc. and its four (4) wholly-owned operating
divisions: horticultural, giftware, truck part accessories and property
development (hereinafter referred to as the "Company"). The balance sheet at
March 31, 1997 and the statements of operations and cash flows for the three
month periods ended March 31, 1997 and 1996, respectively, have been prepared
by the Registrant without audit.
In the opinion of management, all adjustments (which include only normal
recurring transactions) necessary to present fairly the financial position,
results of operations and cash flows and changes in stockholders' equity for
all periods presented have been made. Balance sheet information at December
31, 1996 was derived from the Company's audited financial statements contained
in its Annual Report on Form 10-KSB.
Liquidity and Capital Resources: March 31, 1997 versus December 31, 1996
The Company's assets increased from $ 3,578,556 at December 31, 1996 to $
4,563,487 at March 31, 1997, an increase of $ 984,931. This increase was
principally attributable to the acquisition of eighteen (18) acres of real
property, to be utilized as a plant foliage nursery, located in Homestead,
Florida, and the initial purchase of an inventory of foliage plants to be
finished and sold from the Homestead, Florida nursery. The Company's
cash decreased from $ 312,867 at December 31, 1996 to $ 179,107 at March
31, 1997 resulting principally from the investment of cash resources into
the Company's various operating divisions. Accounts receivable decreased
from $ 181,506 at December 31, 1996 to $ 156,262 at March 31, 1997.
Inventories increased from $ 300,811 at December 31, 1996 to $ 796,640 at
March 31, 1997, resulting from additional purchases of foliage plants at
the Loxahatchee, Florida nursery, the initial purchase of an inventory of
foliage plants at the Homestead, Florida nursery and an increase in raw
materials and work-in-process inventory at the Boston, Massachusetts
giftware facility. Current assets increased from $803,733 at December 31,
1996 to $ 1,205,339 at March 31, 1997, resulting from expanded business
operations and new business developments.
The Company's investment in property, plant and equipment increased from $
2,594,286 at December 31, 1996 to $ 3,169,339 at March 31, 1997, an
increase of $ 575,053. This increase was principally attributable to the
acquisition of eighteen (18) acres of real property, to be utilized as a
plant foliage nursery, located in Homestead, Florida, the purchase of
equipment and vehicles for utilization at the Homestead, Florida nursery
and continuing renovations and improvements to the Loxahatchee, Florida
nursery.
The Company's liabilities increased from $ 1,115,384 at December 31, 1996
to $ 2,335,869 at March 31, 1997, an increase of $ 1,220,485. This
increase is principally attributable to the issuance of various notes
payables for the acquisition of the Homestead, Florida real property,
initial foliage plant inventory at the Homestead, Florida nursery and
general working capital for the Company's operating divisions.
The Company's working capital decreased from $ 66,875 at December 31,
1996 to a deficit of $(582,475) at March 31, 1997. The Company's current
ratio decreased from 1.09 at December 31, 1996 to .7 at March 31, 1997.
Stockholders' equity decreased from $ 2,463,172 at December 31, 1996 to
$ 2,227,618 at March 31, 1997, a decrease of $ 235,554, attributable to
the Company's net loss for the three month period ended March 31, 1997.
The Company's ability to recommence previously suspended operations and
undertake new business activities are expected to have a positive impact
upon its future results of operations.
Other than the foregoing, the Company knows of no trends, demands,
commitments or uncertainties that will result in or are reasonably likely
to result in the Company's liquidity increasing or decreasing in any
material way and the Company knows of no material trends, demands,
commitments, events or uncertainties that will result in or that are
reasonable likely to result in a change in the mix or cost of such
resources.
Material Changes in Results of Operations
The Company's sales were $ 238,845 and $ 103,412 for the three month periods
ended March 31, 1997 and 1996, respectively. The sales increase was
principally attributable to product sales in 1997 of the Company's new
subsidiaries, Vine Street Stores, Inc. (horticultural products) and Art Smart,
Inc. (giftware products), as of July 23, 1996 and November 15, 1996,
respectively, for which there were no operations or sales during the comparable
prior reporting period.
Gross profits were $ 96,296 (40.3% of sales) and $ 35,636 (34.4% of sales) for
the three month periods ended March 31, 1997 and 1996, respectively. The
related percentage improvements were principally attributable to the
introduction of new merchandise products, lower raw material costs for
inventories resulting from purchase volume discounts and improved financial
management controls.
Operating and non-operating expenses, exclusive of interest income and expense,
were $ 329,120 and $ 112,668 for the three month periods ended March 31, 1997
and 1996, respectively, an increase of $ 216,452. The Company is aggressively
investing its available cash resources into sales and marketing activities for
its various operating divisions, particularly for its horticultural and
giftware products. The Company aggressively implements and monitors cost
containment programs and expects to continue with these measures in order to
further control the Company's operating expenses.
The Company's net losses were $ (234,387) and $ (78,931) for the three months
ended March 31, 1997 and 1996, respectively. Although the net loss for the
comparable prior reporting period increased by $ 155,456, net loss per share
decreased from $ (.05) for the three months ended March 31, 1996 to $ (.04) for
the three months ended March 31, 1997.
Other than the foregoing, the Company knows of no trends, demands or
uncertainties that will result in or are reasonably likely to result in a
change in the Company's operations.
Subsequent Event
On March 4, 1997, the Company consummated the purchase of an eighteen (18) acre
nursery located in Homestead, Florida. The purchase included the real estate,
and all structures and improvements, including irrigation systems, located on
the property. The purchase price for the nursery was $ 482,000, of which
approximately $ 283,000 was paid in cash at closing, with a balance of $
199,000 evidenced by an eight percent promissory note payable in forty-eight
(48) monthly installments. In addition, the Company purchased the existing
inventory on the nursery in consideration of future payments due upon
liquidation of that inventory.
The Homestead, Florida nursery was acquired by the Company through its newly-
formed wholly-owned subsidiary, Flying Cow Farms II, Inc. The nursery will be
utilized in a similar manner to its Loxahatchee, Florida nursery owned by
Plants for Tomorrow, Inc.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
None.
ITEM 2. CHANGES IN SECURITIES
---------------------
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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None.
ITEM 5. OTHER INFORMATION
-----------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
Exhibits:
Reports on Form 8-K:
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SIGNATURE
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 hereunto duly authorized.
OPTIMAX INDUSTRIES, INC.
Dated: May 16, 1997 By: /s/ David W. Dube
------------- -----------------------------
David W. Dube, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENT OF OPERATIONS FOUND ON
PAGES 3 TO 5 OF THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 179,107
<SECURITIES> 0
<RECEIVABLES> 156,262
<ALLOWANCES> 0
<INVENTORY> 796,640
<CURRENT-ASSETS> 1,205,339
<PP&E> 3,549,557
<DEPRECIATION> (380,158)
<TOTAL-ASSETS> 4,563,487
<CURRENT-LIABILITIES> 1,787,814
<BONDS> 548,055
0
0
<COMMON> 120,412
<OTHER-SE> 2,107,206
<TOTAL-LIABILITY-AND-EQUITY> 4,563,487
<SALES> 238,845
<TOTAL-REVENUES> 238,845
<CGS> (142,549)
<TOTAL-COSTS> 329,120
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,563
<INCOME-PRETAX> (234,387)
<INCOME-TAX> 0
<INCOME-CONTINUING> (234,387)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (234,387)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
