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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal quarter ended August 31, 1996
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Commission file number 0-17642
CREATIVE LEARNING PRODUCTS, INC.
(Name of small business issuer as specified in its charter)
New Jersey 22-2930106
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Morris Avenue, Suite 205, Springfield, NJ, 07081
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(Address of principal executive offices)
(201) 467-0266
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(Issuer's telephone number)
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 _____
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As of October 4, 1996, 16,642,483 shares of the Common Stock
were outstanding.
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CREATIVE LEARNING PRODUCTS, INC. AND SUBSIDIARIES
Item 2.
Management's Discussion and Analysis or Plan of Operations
RESULTS OF OPERATIONS
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The following discussion relates to operations.
SALES
Sales for the quarter ended August 31, 1996 decreased by
$236,019 or 65% as compared with sales for the corresponding
prior year period. The decrease was principally due to lower
sales volume resulting from increased competition and a shift in
emphasis from marketing videos and other products to gaming
projects.
GROSS PROFIT
Gross profit for the quarter ended August 31, 1996 decreased by
$143,609 or 67% as compared with gross profit for the
corresponding prior year period. Gross profit margin for the
quarter ended August 31, 1996 was 55% as compared with 59% for
the corresponding year period. The decline was principally due to
fixed overhead costs applied to the lower sales volume for the
current period.
SELLING EXPENSES
Selling expenses decreased for the quarter ended August 31,
1996 by $65,624 or 66% as compared with these expenses for the
corresponding prior year period. The decrease was principally due
to a shift in expenses from marketing videos and other products
to emphasis on potential gaming projects which have not as yet
produced revenues.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased for the quarter
ended August 31, 1996 by $25,994 or 6% as compared with these
expenses for the corresponding prior year period. The increase
was principally due to financial and gaming consulting costs
incurred during the current period.
RESERVE FOR INVESTMENT IN GAMING PROJECTS
Reserve for investment in gaming projects for the quarter ended
August 31, 1996 decreased by $18,568 or 25% as compared with this
expense for the corresponding prior year period. The decrease was
principally due to the reduction of Seneca Facility costs during
the current period.
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DEBT CONVERSION EXPENSE
Debt conversion expense of $42,561 for the quarter ended August
31, 1995 was due to debt converted to the Common Stock during the
quarter to reflect the excess of the then current market values
of the Common Stock over the transaction prices when issued.
INTEREST EXPENSE
Interest expense for the quarter ended August 31, 1996
increased by $6,761 or 32% as compared with interest expense for
the corresponding prior year period. The increase was principally
due to the interest on the mortgage on property purchased in
February 1996.
NAFTA
The North American Free Trade Act does not have a significant
effect on the consolidated operations.
INFLATION
Inflation does not have an impact on the consolidated
operations.
LIQUIDITY AND CAPITAL RESOURCES
CLP's cash position was $670,363 as of August 31, 1996 as
compared with $541,610 as of May 31, 1996 or an increase of
$128,753. Cash flows from operating activities during the quarter
ended August 31, 1996 used cash of $982,597 due to the net loss
of $540,786 adjusted for depreciation and amortization of
$61,375, reserve for gaming projects of $55,785, an increase in
prepaid expenses (principally financial and gaming consulting
fees) and other current assets of $437,082, a reduction in
accounts payable of $126,074 and a net change in other operating
items providing cash of $4,185.
During the quarter ended August 31, 1996, CLP expended $159,351
for gaming projects as the sole net cash used in investing
activities.
The net cash provided by financing activities during the
quarter ended August 31, 1996 was $1,270,701, consisting of net
short-term borrowings of $67,657 and proceeds of $1,250,000 from
issuances of stock offset by the repayment of long-term debt of
$46,956. These proceeds funded operational requirements, gaming
project costs and the repayment of debt. Operating liabilities of
$109,983 were converted to Common Stock during the quarter ended
August 31, 1996.
The Company received, as of October 4, 1996, $1,400,000 in
gross proceeds from private placements and the exercises of
warrants. The Company also seeks to receive additional funds from
private placements and the exercises of other warrants and
options during the balance of fiscal 1997, as to which exercises
there can be no assurance. As a result of these sources of funds
the Company believes that it has sufficient resources to fund its
operations, including those related to the gaming projects, for
at least the balance of fiscal 1997. However, there can be no
assurance as to when, if at all, the gaming projects and other
activities will generate sufficient cash flow from operations so
as not to be dependent on additional financing. In addition, to
open and operate all aspects of the gaming projects and other
activities may require additional financing after fiscal 1997,
even if the gaming projects and other activities are then
generating
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sufficient cash flow from operations to fund CLP's
operating requirements, which is not the current projection.
Should additional financing be required, there can be no
assurance that it will be available or, if available, available
on acceptable terms. See the sections "Branson Project", "Gaming
Vessel Project" and "Other Gaming Projects" in Item 1 to the Form
10-KSB.
As of August 31, 1996 and the date of this filing, there were
no commitments for material capital expenditures other than those
related to the Branson Project (see the sections "Branson
Project", in Item 1 and the section "Liquidity and Capital
Resources" in Item 6 to the Form 10-KSB).
CLP expects that the proceeds from the planned sales of equity
securities during the next 12 months will provide adequate funds
to meet operating requirements. There can be no assurance,
however, that CLP will consummate such security sales to meet the
above.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: March 17, 1997
CREATIVE LEARNING PRODUCTS, INC.
By: /s/ PETER J. JEGOU
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Peter J. Jegou
President and Chief Executive Officer
By: /s/ WALTER J. KRZANOWSKI
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Walter J. Krzanowski
Chief Financial Officer
