SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarter ended Commission file number
June 30, 1995 33-20344-LA
O.T.S. HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1077242
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4535 W. Sahara #200
Las Vegas, Nevada 89102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (702) 893-4747
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
As of June 30, 1995, there were 6,835,585 shares of common stock, no par
value outstanding.
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of June 30, 1995 and
December 31, 1994 3-4
Statement of Income for the three
and six months ended June 30, 1995 and 1994 5
Statement of Cash Flows for the three
and six months ended June 30, 1995 and 1994 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults by the Company upon its
Senior Securities 9
Item 4. Submission of Matter to a Vote of
Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports of Form 8-K 9
SIGNATURES 10
2
O.T.S. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1995 1994
CURRENT ASSETS: ---------- ------------
Cash and cash equivalents $ 18,080 $ 89,150
Trade receivables 21,666 21,666
Inventory - finished products 20,898 20,898
Inventory - raw goods 42,484 42,484
Note receivable - Stockholders 3,446 15,001
Accounts receivable- other 228,400 243,600
Income tax refund 17,560 17,560
--------- ----------
TOTAL CURRENT ASSETS 352,534 450,359
--------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Land 0 121,000
Mobile home 0 42,000
Leasehold improvements 25,841 25,841
Furniture and fixtures 15,832 15,257
Vehicles 24,981 40,981
Equipment and machinery 492,609 403,909
Artwork 1,747,199 1,361,474
Residential rental 239,400 239,400
---------- ----------
2,545,862 2,249,862
Less accumulated depreciation and
amortization (93,169) (93,169)
---------- ----------
TOTAL PROPERTY, PLANT AND EQUIPMENT 2,452,693 2,156,693
---------- ----------
INTANGIBLE ASSETS:
Prepaid advertising 780,755 805,000
Noncompete agreement (net of accumulated
amortization of $4,384 and $2,192 at
December 31, 1994 and 1993 respectively 6,576 6,576
Licensing rights 50,000 50,000
---------- ----------
TOTAL INTANGIBLE ASSETS 837,331 861,576
---------- ----------
OTHER ASSETS:
Coal reserves 800,000 800,000
Investment in affiliates 1,460,605 700,000
Investment in oil and gas leases 531,250 531,250
Deposits 5,535 5,535
Investment in stock 257,000 257,000
---------- ----------
TOTAL OTHER ASSETS 3,054,390 2,293,785
---------- ----------
TOTAL ASSETS $6,696,489 $5,762,413
========== ==========
-3-
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1995 1994
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 795,774 $ 787,529
Notes payable 555,108 613,466
Indebtedness to related parties 371,654 314,958
Indebtedness to affiliate 138,867 138,867
current maturities of long-term debt 299,000 299,000
---------- ----------
TOTAL CURRENT LIABILITIES 2,160,403 2,153,820
---------- ----------
LONG-TERM DEBT:
Long-term debt, less current maturities 229,362 238,614
---------- ----------
TOTAL LONG-TERM DEBT 229,362 238,614
---------- ----------
TOTAL LIABILITIES 2,389,765 2,392,434
---------- ----------
REDEEMABLE PREFERRED STOCK:
Involuntary liquidation is at Par or stated
value
Cumulative preferred stock with redemption
value of $73,485; 150,000 shares issued
and outstanding 60,000 60,000
---------- ----------
PREFERRED STOCK, AND ACCUMULATED DEFICIT:
Involuntary liquidation is at Par or stated
value
Preferred stock, $0.10 par value, 10,000,000
shares authorized; 331,600 and 342,379
shares issued and outstanding at June 30,
1995 and December 31, 1994 respectively 33,160 34,237
Common stock, no par value; 100,000,000
shares authorized; 6,835,585 and 6,680,584
shares issued and outstanding at June 30,
1995 and December 31, 1994 respectively 1,407,013 1,175,631
Paid in capital 5,882,866 4,100,663
Accumulated deficit (3,075,857) (2,000,552)
---------- ----------
TOTAL PREFERRED STOCK, COMMON STOCK,
AND ACCUMULATED DEFICIT 4,307,182 3,309,979
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $6,696,948 $5,762,413
========== ==========
The accompanying notes are an integral part of these financial statements.
-4-
O.T.S. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
Three Months ended Six Months Ended
June 30, June 30,
1994 1995 1994 1995
REVENUES:
Sales - food products 91,331 34,652 140,658 73,361
Sales - leasing 4,129 2,341 7,790 4,113
Management and consulting fees 0 0 0 0
Other revenues 71,071 5,414 77,929 10,825
-------- -------- -------- --------
166,531 42,407 226,377 88,299
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of products sold 54,579 44,179 99,458 82,908
(net of depreciation)
Selling, general admin. 155,757 251,957 305,505 394,295
Depreciation and amortization 9,716 0 19,431 0
-------- -------- -------- --------
220,052 296,136 424,394 477,203
-------- -------- -------- --------
Income (loss) from operations ( 53,521) (253,728) (198,017) (388,904)
OTHER INCOME (EXPENSE):
Interest income 0 0 0 0
Interest expense (11,353) (31,728) (27,103) (75,531)
Loss on disposition of asset 0 0 0 0
Gain on disposal of asset 0 0 0 0
-------- -------- -------- --------
Net loss before equity in
earnings of affiliate ( 64,874) (285,456) (225,120) (464,435)
EQUITY IN LOSSES OF AFFILIATES: 0 0 0 0
-------- -------- -------- --------
Loss before income taxes ( 64,874) (285,456) (225,120) (464,435)
INCOME TAXES: 0 0 0 0
-------- -------- -------- --------
NET LOSS ( 64,874) (258,456) (255,120) (464,435)
======== ======== ======== =========
The accompanying notes are an integral part of these financial statements.
-5-
O. T. S. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENEDED JUNE
1995 1994
----------- -----------
CASH FLOWS FROM OPERATION ACTIVITIES:
Net Income (Loss) ($464,435) ($255,120)
Adjustment to reconcile net loss:
Depreciation and amortization 0 19,431
Issuance of stock for services 231,382
Changes in Assets and Liabilities
(Increase) decrease in inventory 0 0
(Increase) decrease in liabilites (2,669) 58,779
-------- --------
($235,722) ($146,910)
-------- --------
CASH FLOWS FROM INVESTMENT ACTIVITIES:
Purchase of furniture and equipment 4,075 ($130,562)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 160,577 $241,583
-------- --------
Net Increase (decrese) in cash ($ 71,070) ($ 35,889)
Cash, beginning of year $ 89,150 $ 10,689
--------- ---------
Cash, end of period $ 18,080 ($ 25,200)
========= =========
The accompanying notes are an intigral part of these financial statements.
-6-
O.T.S. HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30,
1995, the results of operation for the three months and six months ended June
30, 1995 and 1994 and the cash flows for the six months ended June 30, 1995 and
1994. These results have been determined on the basis of generally accepted
accounting principles and practices and applied consistently with those used in
the preparation of the Company's 1994 Annual Report on Form 10-K.
Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that the
accompanying consolidated financial statement be read in conjunction with the
financial statements and notes thereto incorporated by reference in the
Company's 1994 Annual Report on Form 10-K.
-7-
O.T.S. HOLDINGS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Sales for the quarter ended June 30, 1995 were $88,299 compared to sales
for the quarter ended June 30, 1994 of $226,377. Sales in 1995 consisted
primarily of revenues from its subsidiary All-Pure Foods, Inc. A continued lack
of financial resources has inhibited the Company from its plans to
significantly increase sales. The Company has had to rely on short term loans
for working capital.
The Company's SCOR Form U-7 Offering in the State of Nevada for its
subsidiary, All-Pure Foods, Inc., to raise $1,000,000 to be utilized for
working capital, purchase of manufacturing equipment, increased inventory
levels, research and development of new products, and to repay debt became
effective on March 30, 1995. As of June 30, 1995, the Company has rasied
$160,000 for the SCOR Offering.
The Company purchased $100,000 worth or advertising in the Food
Distributor Magazine to promote the products of All-Pure Foods, Inc. The
response from the advertising has been successful in obtaining new distribution
outlets for the products.
The Company has received a Purchase Order from the ITEX, USA Corporation
for $1,000,000 worth of Fridge Fresh. The company has 12 months to begin
production and complete the order. The Company will be using funds raised
through the SCOR Offering to complete this order.
The interim financial statements reflect no change in inventory from
December 31, 1994 to June 30, 1995. The company adjusts inventory only at year
end after the physical inventory has been counted. Accounts receivable have
been insignificant and therefore are adjusted only at year end.
-8-
O.T.S. Holdings, Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults by the company upon its Senior Securities
None.
Item 4. Submission of Matter to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports of Form 8-K
None.
-9-
O.T.S. HOLDINGS, INC.
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.
O.T.S. HOLDINGS, INC.
(Registrant)
Gerald H. Levine Marie A. Levine
President and Principal Financial and
Chief Operations Officer Accounting Officer
Date: 10/01/95 Date: 10/01/95
-10-
