UNITED STATES
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 quarterly period ended October 3, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from July 4, 1998 to October 3, 1998
Commission file number 0-19616
UTOPIA MARKETING, INC.
(Exact name of registrant as specified in its charter)
Florida 94-3060101
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
301 Clematis Street, Suite 205, West Palm Beach, FL 33401
(Address of principal executive offices, including zip code)
(561) 659-5272
(Registrant's telephone number, including area code)
PO Box 803, Katonah, New York, 10536
(Registrant's previous address,
if changed since prior filing)
(914) 763-0082
(Registrant's previous telephone number,
if changed since prior filing)
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 October 3, 1998 there were 14,216,367 shares of Common
Stock outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UTOPIA MARKETING, INC.
CONDENSED BALANCE SHEET
(In Thousands)
<TABLE>
<CAPTION>
ASSETS
October 3, September 26,
1998 1997
---------- ------------
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 2,204 $ 2,471
Miscellaneous receivable 11 39
Merchandise inventories 0 0
Prepaid expenses 46 0
--------- --------
Total current assets 2,261 2,510
Property and equipment, net 0 0
Other assets 0 0
-------- --------
Total Assets $ 2,261 $ 2,510
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 44 $ 12
Accrued expenses 5 60
-------- --------
Total current liabilities 49 72
-------- --------
Long-term obligations 0 0
-------- --------
Shareholders' Equity:
Common Stock 14 14
Additional paid-in capital 32,947 32,943
Accumulated deficit (30,749) (30,519)
-------- --------
Total shareholders' equity 2,212 2,438
-------- --------
Total Liabilities and Equity $ 2,261 $ 2,510
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
UTOPIA MARKETING, INC.
CONDENSED STATEMENT OF OPERATIONS
(In thousands except per share data, unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
Oct.3, Sept.26, Oct.3, Sept.26,
1998 1997 1998 1997
------- ------- ------ --------
<S> <C> <C> <C> <C>
Net revenue $ 0 $ 22 $ 0 $ 119
Cost of sales $ 0 0 0 58
------- ------- ------ --------
Gross profit 0 22 0 61
SG&A expenses (108) (112) (258) (854)
------- ------- ------- --------
Opererating(loss) (108) (90) (258) (793)
Interest income $ 31 28 96 76
------- ------- ------- --------
Income/(loss) before
income taxes (77) (62) (162) (717)
Income taxes 0 0 0 0
------- ------- ------- --------
Net (loss) before
extraordinary item (77) (62) (162) (717)
======= ======= ======= ========
Extraordinary gain,
net of income taxes 0 0 0 0
------- ------- ------- --------
Net (loss) $ (77) $ (62) (162) (717)
======= ======= ======= ========
Net(loss) per share $(0.01) $ (0.00) (0.01) (0.05)
======= ======= ======= ========
Weighted average shares outstanding
14,216 13,816 14,216 13,816
======= ======= ======= ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
UTOPIA MARKETING, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands except per share data, unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-------------------
Oct.3, Sept. 26,
1998 1997
------- --------
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) $ (162) $ (717)
Adjustments to reconcile net income
to net cash used by
Operating activities:
Depreciation and amortization 0 0
Deferred compensation expense 0 0
Changes in assets and liabilities:
Due from factor, net 0 107
Miscellaneous receivables 29 254
Merchandise inventories 0 36
Prepaid expenses (46) 31
Accounts payable and accrued
expenses (6) (85)
Other current liabilities 0 0
------- -------
Net cash used by
operating activities (185) (374)
------- -------
Cash Flows From Investing Activities:
Purchase of property and equipment 0 0
------- -------
Net cash used by
investing activities 0 0
------- -------
Cash Flows From Financing Activities:
Repayment of long-term obligations 0 (7)
Proceeds from issuance of common
stock, net 0 0
------- -------
Net cash provided (used)by
financing activities 0 (7)
------- -------
Net Increase (Decrease) in cash &
cash equivalents (185) (381)
Cash:
Beginning of period 2,389 2,852
End of period $ 2,204 $ 2,471
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTH PERIODS ENDED October 3, 1998 AND September 26, 1997
(Unaudited)
1. Summary of Accounting Policies
The accompanying unaudited condensed financial statements
have been prepared from the records of the Company without
audit and, in the opinion of management, include all
adjustments (consisting of normal recurring accruals)
necessary to fairly present the Company's financial position
at October 3, 1998 and the results of operations and its
cash flows for the nine month periods ended October 3, 1998
and September 26, 1997.
Accounting policies followed by the Company are
described in Note 1 to the audited financial statements for
the year ended January 3, 1998. As permitted by the rules
and regulations of the Securities and Exchange Commission,
certain information and footnote disclosures included in
annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted for the purposes of these condensed interim
financial statements. The condensed interim financial
statements should be read in conjunction with the audited
financial statements, including the notes thereto, for the
year ended January 3, 1998.
The results of operations for the nine month period
ended October 3, 1998 is not necessarily indicative of the
results to be expected for any other period or for the full
year.
2. Significant Events
On August 3, 1998 the Company changed its state of
incorporation from California to Florida.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations General
The following discussion of the Company's results of
operations for the three and nine month periods ended
October 3, 1998 and September 26, 1997 includes the
consolidated results of operations of Utopia Marketing, Inc.
Commencing in May, 1996, when the Company commenced
in-depth negotiations with Maxwell Shoe Company,Inc. for the
sale of Utopia's trademarks, which would result in the
termination of its then present business, Utopia's
management began to explore new avenues of business for
Utopia. The management of Utopia looked into business
combination opportunities in the apparel, industrial,
manufacturing, financial services and scientific fields.
Additionally, in the event that the sale of the trademarks
was not successfully concluded, the Company also explored
various business combination opportunities in the footwear
industry. The Company evaluated internally approximately
fifty possible business combinations, all of which were
rejected for one or more of the following reasons: (i)
management believed that Utopia's assets would not be
sufficient to allow the merged entities to succeed without
additional substantial dilution to Utopia's shareholders;
(ii) Utopia's equity ownership interest would not be
significant; (iii) the expected multiple of earnings for the
merged entities would have diminished the Utopia's value:
and/or (iv) the need for cash required a strategic partner
or such heavy debt that the risk of failure of the merged
entities appeared to be an unacceptable risk. None of these
explorations resulted in formal business combination talks
being completed. The Company is continuing its search for
new ventures.
Sale of Trademark
On July 2, 1996, Utopia Marketing , Inc. (formerly
Sam & Libby, Inc.) entered into an agreement with Maxwell
Shoe Company Inc. to sell all worldwide rights to the
Company's trademarks, trade names and intellectual property
rights free and clear of all liens, mortgages, encumbrances
and security interests. Maxwell Shoe Company will not
assume any of the Company's liabilities or obligations. In
August 1996, the Company received cash of $5.3 million. The
balance of $0.2 million was received on April 30, 1997.
Operations
The Company's operations for the nine months ended
October 3, 1998 consisted of searching for new business
opportunities. On August 3, 1998 the Company changed its
state of incorporation from California to Florida.
<PAGE>
Selling, General, and Administrative Expenses
These expenses in 1998 consisted primarily of the
administrative expenses connected with searching for
investment opportunities.
The company is currently occupying temporary space in
the State of Florida. Presently the Company's mailing
address is 301 Clematis Street, Suite 205, West Palm Beach,
FL 33401.
Interest Revenue
Interest revenue for the third quarter 1998 was revenue
associated with the interest earned in the Company's money
market account. This amount at October 3,1998 was $2,188,344
and was included in the balance sheet caption "Cash and Cash
Equivalents".
Liquidity and Capital Resources
At October 3, 1998 the Company's basic asset is "Cash
and cash equivalents". The Company has no need for
additional liquid resources at this time.
Management is seeking investment opportunities to
either acquire an operating business or to start a new
business. The Company has no plans to pay a dividend at this
time.
Management expects to incur a loss in the fourth
quarter.
<PAGE>
UTOPIA MARKETING, INC.
PART II. OTHER INFORMATION
Item 1.
There are no legal proceedings pending against the
Company or its properties, or to which the Company is a
party.
Item 6.
Exhibits and Reports on Form 8-K
(a)Exhibits
Exhibit #27 Financial Data Schedule.
(b)Reports on Form 8-K
None.
EXHIBIT INDEX
Exhibit 27 Financial Data Schedule
SIGNATURES
Pursuant to the requirement of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed by the undersigned thereto duly
authorized.
UTOPIA MARKETING, INC.
(Registrant)
Dated: October 22, 1998 /s/Samuel L. Edelman
Samuel L. Edelman
Chairman of the Board
Chief Executive Officer
Dated: October 22, 1998 /s/Vance F. Kistler
Vance F. Kistler
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in Part I., Item 1. of this Form 10-QSB and is qualified in its
entirety by reference to such financial statements.
(In thousands except per share data, unaudited)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-2-1999
<PERIOD-END> OCT-3-1998
<CASH> 2,204
<SECURITIES> 0
<RECEIVABLES> 11
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,261
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,261
<CURRENT-LIABILITIES> 49
<BONDS> 0
0
0
<COMMON> 14
<OTHER-SE> 2,198
<TOTAL-LIABILITY-AND-EQUITY> 2,261
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 258
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (96)
<INCOME-PRETAX> (162)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (162)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
