U .S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED FEBRUARY 28, 1999
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 NUMBER 0-18412
PLAYORENA INC.
(Name of small business issuer in its charter)
New York 11-2602120
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Vanderbilt Motor Parkway, Suite 311, Hauppauge, NY 11788
(Address of principal executive offices) (Zip Code)
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 / /.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 9,198,679 shares of Common
Stock, par value $.001, outstanding as of March 31, 1999.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
PLAYORENA, INC.
For the Quarter ended February 28, 1999
The following financial statements and schedules of the registrant and
its consolidated subsidiaries are submitted herewith:
PART I- FINANCIAL INFORMATION
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Form 10-QSB
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Item 1. Financial Statements:
Balance Sheet/Liabilities and Shareholder's Equity -- February 28, 1999
(unaudited) 3
Statement of Operations for the three months ended
February 28, 1999, and 1998 (unaudited) 4
Statement of Cash Flows for the three months ended February 28, 1999,
and 1998 (unaudited) 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of Operation 7
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PLAYORENA, INC.
BALANCE SHEET
ASSETS
February 28, November 30,
1999 1998
------------ ------------
(Unaudited)
CASH $ 578 $ 678
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Notes payable $ 85,000 $ 85,000
Due to shareholder 7,500 --
Liabilities of discontinued operations 66,226 66,226
Accrued expenses 230,501 228,376
------------ ------------
TOTAL CURRENT LIABILITIES 389,227 379,602
------------ ------------
SHAREHOLDERS' EQUITY (DEFICIENCY):
Common stock, $.001 par value:
15,000,000 shares authorized,
9,198,679 shares issued and outstanding 9,199 9,199
Additional paid-in-capital 5,273,780 5,273,780
Accumulated deficit (5,671,628) (5,661,903)
------------ ------------
TOTAL SHAREHOLDERS' DEFICIENCY (388,649) (378,924)
------------ ------------
$ 578 $ 678
============ ============
See Notes to Financial Statements.
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PLAYORENA, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
February 28,
------------------------------
1999 1998
------------ ------------
EXPENSES:
General and administrative $ 7,600 $ 5,000
Interest expense 2,125 21,884
------------ ------------
TOTAL EXPENSES 9,725 26,884
------------ ------------
NET LOSS $ (9,725) $ (26,884)
============ ============
BASIC NET LOSS PER SHARE: $ (0.00) $ (0.04)
============ ============
WEIGHTED AVERAGE SHARES USED IN COMPUTATION 3,522,928 638,145
------------ ------------
See Notes to Financial Statements.
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PLAYORENA, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
------------------------------
February 28, February 28,
1999 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,725) $ (26,884)
Change in operating assets and liabilities 2,125 26,884
------------ ------------
CASH USED IN OPERATING ACTIVITIES (7,600) --
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from officer's advances 7,500 --
------------ ------------
CASH PROVIDED BY FINANCING ACTIVITIES 7,500 --
------------ ------------
NET DECREASE IN CASH (100) --
CASH AT BEGINNING OF YEAR 678 --
------------ ------------
CASH AT END OF PERIOD $ 578 $ --
============ ============
See Notes to Financial Statements.
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PLAYORENA, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED FEBRUARY 28, 1999
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying financial statements are unaudited, but reflect all
adjustments which, in the opinion of management, are necessary for a
fair presentation of financial position and the results of operations
for the interim periods presented. Unless noted, all such adjustments
are of a normal and recurring nature. These financial statements should
be read in conjunction with the financial statements and related
footnotes for the year ended November 30, 1998 included in the Form
10-KSB for the year then ended. The results of operations for any
interim period are not necessarily indicative of the results attainable
for a full fiscal year.
6
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ITEM 2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
In light of the fact that the Company divested all of its operations
and sold all of its assets in July 1998, the Company is accounting for the
historical results of the business as discontinued operations. In this regard,
the following discussion and analysis presents a general, overall financial
summary of the discontinued operations, rather than a detailed discussion of the
results of operations recently disposed of. As presented in the Company's recast
financial statements, certain expenses, consisting of minimal general and
administrative expense and debt service costs have been evaluated to be expenses
attributable to the continuing entity after consideration of the divestiture of
operations.
In light of the fact that the Company has discontinued its operations,
no remedial measures will be necessary or taken to address the Year 2000
computer issue.
The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
report.
RESULTS OF OPERATIONS -
COMPARISON OF QUARTERS ENDED FEBRUARY 28, 1999 AND FEBRUARY 28, 1998
During both the three months ended February 28, 1999 and the three
months ended February 28, 1998, revenues of discontinued business were $ 0.
The Company stopped operating its discontinued business in fiscal year
ended November 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
At February 28, 1999, the Company had a working capital deficit of
$388,649 compared to $378,924 for the fiscal year ended November 30, 1998. The
Company is seeking an acquisition or merger with an operating business. Given
the Company's retention of substantial liabilities following the consummation of
the sale of substantially all its assets in July, 1998, the Company is concerned
about its ability to attract such an operating company, and is examining all
options available to it in response thereto.
7
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the officers and
directors, neither the Company nor any of its officers and directors
are party to any legal proceeding or litigation. The officers and
directors know of no such litigation being threatened or contemplated.
Item 2. Changes in Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders.
As contemplated in connection with the proposed acquisition of two
separate companies which are providers of wireless voice and data
products and systems to the private two-way land mobile radio industry
(the "Acquisitions"), as more particularly described in the Company's
most recent Annual Report on Form 10- KSB, a proxy statement was mailed
to shareholders of the Company on or about February 9, 1999, calling a
special meeting of shareholders for February 19, 1999 (the "Meeting"),
and requesting approval by the Company's shareholders of the following,
effective upon consummation of the Acquisitions: (A) an amendment to
the Company's Certificate of Incorporation (i) to change the name of
the Company to "SK Global Technologies, Inc.", (ii) to recapitulate the
purposes for which the Company was formed; (iii) to change the location
of the office of the Company; (iv) to increase the authorized number of
shares of Common Stock from 15,000,000 to 20,000,000 and; (iv) to
change the address to which the Secretary of State of New York shall
mail a copy of any process against the Company served upon him; (v) to
effect the New Reverse Stock Split, as defined below; and (vi) to
authorize the issuance, in one or more series, of an aggregate of
5,000,000 shares of Preferred Stock, $.001 par value per share, each
such series having the designation, relative rights, preferences or
limitations, as shall be determined by the Board of Directors and (B)
approval of the adoption of the Company's 1998 Stock Option Plan. The
consummation of the Acquisitions is contingent upon each share of
Common Stock issued and outstanding, without any action on the part of
any holder thereof, being converted into .0106065 of a share of Common
Stock (the "New Reverse Stock Split"). Shareholders holding shares of
Common Stock in an amount not divisible by 0.0106065 will receive the
next highest whole number of shares.
8
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As a result of certain uncertainties concerning the Acquisitions, on
February 19, 1999, the Meeting was duly called to order, upon which the
shareholders of the Company voted to adjourn the Meeting until March
11, 1999. On March 11, 1999, the Meeting was called to order and the
shareholders voted to adjourn the Meeting to April 12, 1999. On April
12, 1999 the Meeting was called to order and the shareholders voted to
adjourn the Meeting to May 18, 1999.
The agreements concerning the Acquisitions permit the Company to
terminate these agreements since the Acquisitions were not consummated
by March 31, 1999. The Company has not yet determined whether or not to
exercise this right. It remains unclear when or if the Acquisitions
will be consummated.
Item 5. Other Information. The Company consummated the sale of assets in
July, 1998. As a result thereof, as previously approved by the
shareholders, a reverse stock split of 1 for 20 was effected on July
31, 1998. As part of, and subsequent to, such consummation, an
additional 8,612,624 shares (on a post-split basis) were issued to
certain creditors of the Company. Additional stock issuances to other
creditors and service providers are anticipated in the near future.
Item 6. (A) Exhibits
Exhibit No. Description
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27.1 Financial Data Schedule
(B) Reports on Form 8-K. None.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: April 15, 1999 PLAYORENA, INC.
By: /s/ Lawrence Kaplan
------------------------------
Lawrence Kaplan, President and
Secretary
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EXHIBIT INDEX
27.1 Financial Data Schedule
11
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<ARTICLE> 5
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 578
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 578
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 578
<CURRENT-LIABILITIES> 389,227
<BONDS> 0
0
0
<COMMON> 9,199
<OTHER-SE> (397,848)
<TOTAL-LIABILITY-AND-EQUITY> 578
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,125
<INCOME-PRETAX> (9,725)
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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