SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 1, 1996
( ) 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 1-23020
THE APPLETREE COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0205933
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
5732 Curlew Drive
Norfolk, Virginia 23502
(Address of principal executive offices) (Zip Code)
(757) 466-9200
(Registrant's telephone number including area code)
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______
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the Common Stock of the issuer outstanding as of
December 1, 1996 was 118,856,323.
THE APPLETREE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 1, 1996 and September 1, 1996
(rounded to thousands except share data)
ASSETS December 1, September 1,
1996 1996
------------ -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ - $ 248,000
Accounts receivable (net of allowance for
doubtful accounts and spoilage of $693,000
and $693,000, respectively) 1,182,000 1,431,000
Inventories 1,003,000 1,067,000
Prepaid expenses and other current assets 145,000 41,000
----------- ------------
Total current assets 2,330,000 2,787,000
Property and equipment, net 4,149,000 4,351,000
Deposits and other assets 322,000 324,000
----------- -----------
Total assets $6,801,000 $7,462,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Notes payable $ 24,000 $ 56,000
Convertible debentures due on demand 2,700,000 1,050,000
Current portion of capitalized lease obligations 204,000 176,000
Current portion of long-term debt 232,000 201,000
Accounts payable 2,833,000 3,029,000
Accounts expenses 1,774,000 1,931,000
Reclassification of long-term debt 3,062,000 3,061,000
----------- -----------
Total current liabilities 10,829,000 9,504,000
Capitalized lease obligations, net of
current portion 927,000 964,000
Long-term debt, net of current portion 165,000 215,000
Convertible debentures 400,000 500,000
----------- -----------
Total liabilities 12,321,000 11,183,000
----------- -----------
Commitments and contingencies
Stockholders' equity deficiency:
Preferred stock - par value $.001 per share,
10,000,000 shares authorized, 85,494 shares
issued and outstanding as of December 1, 1996
(liquidation preference of $3,856,140);
85,389 shares issued and outstanding as of
September 1, 1996 (liquidation preference of
$3,740,640)
Common Stock - par value $.001 per share,
120,000,000 shares authorized, 118,865,088
shares issued and 118,856,323 shares
outstanding as of December 1, 1996;
115,089,087 shares issued and 115,080,322
outstanding as of September 1, 1996 119,000 115,000
Additional paid-in capital 36,163,000 35,933,000
Accumulated deficit (41,643,000) (39,610,000)
Less treasury stock, at cost (159,000) (159,000)
----------- -----------
Total stockholders' equity deficiency (5,520,000) (3,721,000)
----------- -----------
Total liabilities and stockholders'
equity deficiency $ 6,801,000 $7,462,000
=========== ==========
See accompanying notes to condensed consolidated financial statements.
THE APPLETREE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three-month periods ended December 1, 1996
and December 3, 1995
(rounded to thousands except per share data)
(Unaudited)
1996 1995
------------ ------------
Net sales $ 5,338,000 $ 8,030,000
Costs of goods sold 3,407,000 5,124,000
------------ ------------
Gross profit 1,931,000 2,906,000
------------ ------------
Operating expenses:
Selling, general and administrative 3,411,000 4,320,000
Professional fees 75,000 171,000
------------ ------------
Total operating expenses 3,486,000 4,491,000
------------ ------------
Loss from operations ( 1,555,000) (1,585,000)
------------ ------------
Other expense:
Interest expense 160,000 257,000
Other expense 2,000 15,000
------------ ------------
Total other expense 162,000 272,000
------------ ------------
Net loss $( 1,717,000) $( 1,857,000)
============ ============
Net loss per common share:
Net loss applicable to common stockholders $( 1,798,000) $( 1,860,000)
============ ============
Weighted average number of common shares
outstanding 118,151,000 23,900,000
============ ============
Net loss per common share $ (0.02) $ (0.08)
============ ============
See accompanying notes to condensed consolidated financial statements.
THE APPLETREE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three-month periods ended December 1, 1996
and December 3, 1995
(rounded to thousands)
1996 1995
------------- -------------
Cash flows from operating activities $( 1,717,000) $( 1,857,000)
Net loss
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 219,000 208,000
Amortization expense - 7,000
Bad debt expense 24,000 36,000
Gain on sale of fixed assets - (3,000)
Changes in operating assets and liabilities,
net of effects of acquisition:
Accounts receivable 225,000 320,000
Inventories 64,000 (280,000)
Prepaid expenses and other current assets (104,000) (103,000)
Other assets 2,000 ( 26,000)
Accounts payable and accrued expenses (535,000) (425,000)
------------ ------------
Net cash used in operating activities (1,822,000) (2,123,000)
------------ ------------
Cash flows from investing activities:
Payments for acquisition - (55,000)
Capital expenditures ( 17,000) (106,000)
Proceeds from sale of property and equipment 4,000
------------ ------------
Net cash used in investing activities ( 17,000) ( 157,000)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of convertible
debentures 1,650,000 1,050,000
Proceeds from issuance of note payable
and long-term debt - 603,000
Payments on note payable, long-term debt
and capitalized lease obligations ( 59,000) ( 106,000)
Deferred financing costs - ( 34,000)
Proceeds from issuance of preferred
and common stock - 1,015,000
------------ ------------
Net cash provided by financing activities 1,591,000 2,528,000
------------ ------------
Net increase (decrease) in cash
and cash equivalents (248,000) 248,000
Cash and cash equivalents at beginning of year 248,000 -
------------ ------------
Cash and cash equivalents at end of year $ - $ 248,000
============ ============
See accompanying notes to condensed consolidated financial statements.
THE APPLETREE COMPANIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three-Month Periods ended December 1, 1996
and December 3, 1995
(Unaudited)
Note 1 - BASIS OF PRESENTATION
In the opinion of management of the Company, the accompanying condensed
consolidated financial statements contain all adjustments, which consist
only of normal and recurring adjustments, necessary for a fair
presentation of results for the periods indicated. The results of any
interim period are not necessarily indicative of results for the full
year. The September 1, 1996 condensed consolidated balance sheet was derived
from audited financial statements. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes thereto for the year
ended September 1, 1996.
Note 2 - INVENTORIES
Inventories consist of the following:
December 1, 1996 September 1, 1996
---------------- -----------------
(Unaudited)
Raw materials and supplies $ 447,000 $ 467,000
Finished goods 556,000 600,000
---------- ----------
$1,003,000 $1,067,000
========== ==========
Note 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
December 1, 1996 September 1, 1996
---------------- -----------------
(Unaudited)
Land $ 472,000 $ 472,000
Buildings and improvements 1,221,000 1,215,000
Furniture, fixtures and equipment 1,154,000 1,154,000
Machinery and equipment 1,820,000 1,820,000
Transportation and delivery
equipment 1,346,000 1,340,000
---------- ----------
6,013,000 6,001,000
Accumulated depreciation and
amortization (1,864,000) (1,650,000)
---------- ----------
$4,149,000 $4,351,000
========== ==========
Note 4 - CONVERTIBLE DEBENTURES
The Company issued $1,650,000 of 8% debentures in the first quarter of
fiscal 1997, and $667,500 of 8% debentures in December 1996 and January
1997. The outstanding principal balance of each debenture is payable on
demand. Interest for the first year is waived, and thereafter, interest
is payable monthly. The debentures may be converted into common stock at
a conversion price of $.0125. The Company, however, currently does not
have sufficient authorized and unissued shares of common stock to issue
upon the conversion of any debentures. The Company may redeem the
debentures at any time prior to maturity for the principal amount
outstanding including accrued interest.
The Company issued 3,776,000 shares of its common stock during the first
quarter of fiscal 1997 in partial satisfaction of a convertible
debenture ($100,000) and accrued interest of $18,000.
Note 5 - PREFERRED STOCK TRANSACTIONS
The Company's 11% Convertible Preferred Stock ("COPS") has a dividend or
payment in lieu thereof, payable quarterly commencing June 30, 1996. In
September 1996, the Company issued 105 shares of COPS in payment of the
June 30, 1996 dividend. Through January 14, 1997, the Company had not
fulfilled the dividend requirements of the COPS for subsequent quarterly
dividends.
Note 6 - CASH FLOW DISCLOSURES
Non cash financing activities:
In connection with its acquisition of Sandwich Maker in October 1995,
the Company acquired assets and assumed liabilities as follows:
1995
----------
Fair value of assets acquired $931,000
Liabilities assumed (593,000)
Issuance of note to seller (263,000)
--------
Net consideration paid 75,000
Net other purchase price adjustments and
amounts to be paid after December 3, 1995 (20,000)
--------
Cash paid for acquisition $ 55,000
========
During the three-month period ended December 1, 1996, $100,000 of
convertible debentures and accrued interest of $18,000 were converted
into 3,776,000 shares of common stock.
During the three-month period ended December 1, 1996, the Company issued
105 shares of its convertible preferred stock valued at approximately
$116,000 as payment for dividends accrued through June 30, 1996 on 2,575
shares of its convertible preferred stock. The Company has not yet
declared dividends for the three-month periods ended September 30, 1996
or December 30, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three-Month Period Ended December 1, 1996 compared to December 3, 1995
Net sales decreased $2,692,000 (approximately 33.5%) from $8,030,000 for
the three-month period ended December 3, 1995 to $5,338,000 for the
three-month period ended December 1, 1996. The principal reason for the
decrease in net sales is the elimination of unprofitable routes which
accounted for approximately $890,000 of the decrease. Food service sales
reductions resulting principally from the discontinuation of the
institutional beef business accounted for approximately $600,000 and
approximately $324,000 was due to reduced vending sales.
Cost of goods sold as a percentage of net sales for the three-month
period ended December 1, 1996 was approximately 64% compared with
approximately 64% for the three-month period ended December 3, 1995.
Operating expenses decreased $1,005,000 (approximately 22%) to $3,486,000
(approximately 65% of net sales) for the three-month period ended
December 1, 1996 from $4,491,000 (approximately 56% of net sales) for the
three-month period ended December 3, 1995. This decrease was attained by
management's elimination of duplicative expenses, consolidation of
departments, elimination of unprofitable routes during the latter part of
fiscal 1996, relocation of home office from Florida to Virginia,
reduction of executive and other salaries, and a reduction of
professional fees and electricity.
Other expenses decreased to $162,000 for the three month period ended
December 1, 1996 compared with $272,000 for the three-month period ended
December 3, 1995. The principal factor in this decrease was reduced
interest expense in 1996, caused by the issuance of convertible debt
which is noninterest bearing in its first year and conversion of amounts
outstanding during the three-month period ended December 3, 1995 into
common stock during fiscal 1996.
The Company's net loss per common share decreased from $.08 in fiscal
1995 to $.02 in fiscal 1996. The principal cause for the decrease was
the significant number of shares issued during the year ended September
1, 1996 and subsequent thereto through conversions of convertible
debentures and additional sales of common stock.
FINANCIAL CONDITION
The Company has experienced significant losses from operations since its
inception. The Company has had numerous demands on its capital through
the fiscal year ended September 1, 1996 and the three-month period ended
December 1, 1996 and it has a working capital deficit of $8,499,000 as of
December 1, 1996. Net cash used in operating activities was $1,822,000
for the three-month period ended December 1, 1996 compared with
$2,123,000 in the three-month period ended December 3, 1995. Management
anticipates negative cash flows from operating activities will continue
until the Company has completed its cost reduction plan currently under
way. This plan includes relocating the Company's home office to its
Norfolk operations center in August 1996, dismissing several executive
and administrative employees, reducing administrative overhead,
eliminating unprofitable routes, reducing distribution costs, and further
consolidation of certain departments to reduce selling, general and
administrative expenses.
In an effort to achieve profitability, the Company examined its gross
profit by product and eliminated the unprofitable items, and revised
sales prices during the first quarter of fiscal 1997. Management expects
this will enhance the Company's profitability and annual operating cash
flows. In addition, management continues to explore other opportunities
to increase food service and vending sales revenues. Further, the
Company restructured its route system effective in September 1996 to
eliminate unprofitable sales centers which will result in reduced payroll
and overhead costs. The Company's viability as a going concern is
dependent upon the successful implementation of these plans and obtaining
a significant increase in working capital.
Net cash used in investing activities was $17,000 for the three-month
period ended December 1, 1996 compared with $157,000 in fiscal 1996. Of
the fiscal 1996 amount, $55,000 was used to fund an acquisition. Capital
expenditures were $17,000 and $106,000 during fiscal 1997 and 1996,
respectively. Management has evaluated the Company's current facilities
and equipment and anticipates that additional capital expenditures may be
necessary in the near future. No material contractual commitments for
capital expenditures existed at year-end. There is no assurance that
financing or equity capital will be available at terms acceptable to the
Company to fund any significant capital expenditures.
During fiscal 1996, the Company financed its investments and operating
deficits through funds obtained by the issuance of common stock and
convertible debentures, and an additional $604,000 loan from Strategica
Capital Corporation ("Strategica"). The Company received $4.7 million
from the issuance of common stock. The Company also received $3.3
million from the issuance of convertible debentures. Most of the
debentures are payable on demand and are noninterest bearing for the
first year of the instrument. During the three-month period ended
December 1, 1996, the Company issued $1.6 million of convertible
debentures.
The Strategica loan agreement, originated in May 1995, requires monthly
interest payments at 12.5% and contains substantial restrictions on the
conduct of business and other activities of the Company other than in the
ordinary course of business without the prior consent of the lender. The
loan is collateralized by substantially all the Company's tangible and
intangible assets. The loan agreement also limits the Company's ability
to encumber assets or borrow additional funds without prior consent of
the lender. Pursuant to the agreement the Company may not declare or pay
any dividends or make distributions of any kind in cash or stock. The
lender also has the right to nominate at least two members of the
Company's board of directors (or three members if the board is expanded
to seven members). In connection with this financing, the Company also
issued warrants to purchase common stock. On November 22, 1995, the
Company and its lender amended this loan agreement to provide for an
additional future advance of up to $1 million, of which $604,000 was
advanced to the Company. The balance of the advance is not expected to
be disbursed by the lender. During 1996, the Company repaid $194,000 of
this note from the proceeds of a sale of property. On January 10, 1997,
the Company was notified that the lender considers the loan to be in
default; however, since September 3, 1995, the Company has classified
the loan as a current liability due to the agreement's burdensome and
ambiguous terms.
As of January 14, 1997, the Company is obligated under Convertible
Debentures aggregating $3,767,500. Of this balance, $400,000 is
uncollateralized and due in 1998 with interest at 10%, and $3,367,500 is
due on demand with interest at 8% after the first year and collateralized
by a security agreement junior to the lien granted Strategica discussed
above.
As a result of its severe liquidity problems, the Company frequently has
been unable to make timely payments to its trade and other creditors. As
of January 13, 1997, the Company had past due accounts payable (greater
than 30 days) totaling approximately $2 million. Certain vendors have
suspended deliveries to the Company and have agreed to make deliveries
only on a cash basis. As a result, the Company was not always able to
make product shipments on a timely basis, and although no significant
orders have been canceled to date, lack of product has had an adverse
effect on sales. Should the Company experience a significant volume of
suspended vendor deliveries resulting in reduced sales volume, the
Company's ability to maintain its current level of operations would be
jeopardized.
The Company has considered a number of alternatives to improve its
liquidity and cash positions. The Company is closely monitoring its
liquidity position to ensure that existing cash is employed in a way
management believes will be most effective. In order to conserve cash,
management has postponed certain capital expenditures for plant and
facility improvements and instituted other cost-saving measures, some of
which may adversely impact the Company's future operating results.
The Company recognizes that additional funds will be required to pay
trade payables, purchase products and make payments for materials.
Accordingly, management continues to seek additional capital to maintain
its current operations and achieve the needed growth in revenues. The
Company acknowledges there can be no assurance that the Company will be
able to obtain additional capital or other financing when it is needed,
or that such financing will be available on acceptable terms. In the
event the Company is unable to generate the necessary revenues to support
ongoing operations, or raise additional capital, there could be a serious
adverse impact on the Company's future operations and further impact on
the Company's status as a "going concern."
PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
(a) On March 30, l994, the Company filed an action in the Circuit
Court of Broward County, Florida, to seek recovery against Michael Salit,
a former director and the Company's former Chairman, Chief Executive
Officer and Secretary; Donna Salit, wife of Salit (collectively the
"Salits"); David Lobel ("Lobel"), the Company's former Chief Financial
Officer and a former Director; and Lola Lobel, wife of Lobel
(collectively the "Lobels"), for an alleged diversion of the Company's
assets and for any other damages resulting from certain alleged
improprieties and misstatements made by Messrs. Salit and Lobel. The
Company believes it will be successful in this litigation. Salit has
filed a counterclaim against the Company and certain individual officers.
In addition, Salit and Lobel have filed certain affirmative defenses
against the Company's claim. All of these actions have been consolidated
in the Circuit Court of Broward County, Florida ("State Actions"). The
individual officers and directors have retained their own independent
counsel. The Company believes it will be successful on the merits of its
claims and will be successful in defending the counterclaim. Pursuant to
its by-laws, the Company is indemnifying the fees and costs of the
officers named in the counterclaim.
(b) The Company and certain executive officers and former executive
officers, including Mr. Lobel and Mr. Salit, have been named as
defendants in four actions filed in March 1994 in the United States
District Court for the Southern District of Florida by certain
individuals ("Federal Actions"). The complaints, which are similar,
allege violations of various sections of the state and federal securities
laws including Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and the rules promulgated thereunder, as well as common law claims
of fraud, misrepresentation and breach of fiduciary duty. The Federal
Actions allege that the Company and certain executive officers made
untrue statements of material facts and omitted to state material facts
necessary to make statements made not misleading in its public disclosure
documents relating in particular to the matters complained of by the
Company against Mr. Salit and Mr. Lobel. The Federal Actions have been
consolidated. However, at this time, the attorneys for the Company and
the attorneys for the Company's directors (which include those who have
been named in the Federal Actions, which include Paul B. Kravitz, but
which do not include Messrs. Salit and Lobel (referred to herein as the
"Company's Directors") have tentatively agreed with the attorneys for the
plaintiffs in the Federal Actions, on a settlement to resolve the claims
against the Company and the Company's Directors arising out of the
Federal Actions. The terms and details of the proposed settlement
contemplate that the Company will issue warrants ("Settlement Warrants")
to enable the plaintiffs ("Federal Action Plaintiffs") and their
attorneys to obtain 228,280 shares of the Company's common stock at an
exercise price of 75% of the market price of the Company's common stock
as of the date of the Settlement Order and, in addition to the Settlement
Warrants, 228,280 shares of common stock ("Settlement Shares") and pay
certain administrative costs associated with the settlement.
(c) Based on information supplied to the Securities and Exchange
Commission by the Company, on April 26, 1994, the SEC issued an order for
a private investigation of the Company and certain of its former officers
and directors to determine whether violations of the securities laws may
have occurred and so as to enable the SEC to issue subpoenas and obtain
documents. In November 1996, the Company consented to the entry of a
final judgment of permanent injunction and other relief in the United
States District Court Southern District of Florida relating to this
matter, neither admitting nor denying the allegations of the complaint.
The consent has been submitted to the court for final affirmation and
approval by the judge.
(d) The Company is a party to certain other proceedings arising in the
normal course of business which it believes will not have a material
adverse impact on its financial condition or results of operations.
ITEM 3- DEFAULTS UPON SENIOR SECURITIES
The Company's 11% Convertible Preferred Stock ("COPS") has a dividend or
payment in lieu thereof, payable quarterly commencing June 30, 1996. In
September 1996, the Company issued 105 shares of COPS in payment of the
June 30, 1996 dividend. Through January 14 1997, the Company had not
fulfilled the dividend requirements of the COPS for subsequent quarterly
dividends. As of December 31, 1996, the amount in arrears totaled
approximately $162,000, of which approximately $79,000 is more than 30
days in arrears.
The Company has a $3,062,000 loan payable to Strategica which requires
monthly interest payments at 12%. On January 10, 1997, Strategica
advised the Company that it considered the loan in default due to the
results of operations reported in this Form 10-Q. The Company has
classified this loan as a current liability since September 3, 1995. See
also Management's Discussion and Analysis of Financial Condition and
Results of Operations in Part I, Item 2 and Note 8 to the Company's
consolidated financial statements for the fifty-two week period ended
September 1, 1996 included in the Company's Form 10-KSB.
ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
3.1 Certificate of Incorporation, as amended(1)
3.2 Bylaws of the Company, as amended(2)
3.3 Certificate of Amendment of Certificate of Incorporation dated
September 28, 1995(3)
3.4 Certificate of Correction of Certificate of Incorporation dated
January 25, 1996(3)
3.5 Certificate of Amendment of Certificate of Incorporation dated
February 23, 1996(3)
3.6 Certificate of Designation for 11% Convertible Preferred Stock(3)
3.7 Amended Certificate of Designation for 11% Convertible Preferred
Stock(3)
4.1 Form of Common Stock Certificate(4)
4.2 Limited Secured Convertible Debenture, dated as of November
22, l994, issued by the Company to Europe American Capital
Corp.(5)
4.3 Amendment, dated January 17, 1995, to the Limited Secured
Convertible Debenture, dated as of November 22, 1994 issued by
the Company to Europe American Capital Corp.(6)
4.4 Convertible Debenture, dated January 17, 1995 issued by the
Company to Abikon, Ltd.(6)
4.5 Promissory Note dated January 31, 1995 issued by the Company to
TransAtlantic Commerce Corp. (6)
4.6 Loan Agreement and Warrant Agreement dated May 22, 1995, between
the Company and Strategica Capital Corp. (7)
4.7 Promissory Note dated May 22, 1995, issued by the Company to
Strategica Capital Corp.(7)
4.8 Amendment to Loan Agreement and Warrant Agreement dated November
22, 1995, between the Company and Strategica Capital Corp. (8)
4.9 Promissory Note dated November 22, 1995, issued by the Company to
Strategica Capital Corp. (8)
4.10 Convertible Debenture dated August 23, 1995 issued by the
Company to Liba Developments, Inc. (8)
4.11 Convertible Debenture dated September 14, 1995 issued by
the Company to LaSalle Investments Ltd. (8)
4.12 Convertible Debenture dated October 2, 1995 issued by the
Company to International Future Holdings Corporation, Ltd. (8)
4.13 Convertible Debenture dated November 8, 1995 issued by the
Company to Amarante S.A. (8)
4.14 Convertible Debenture dated October 30, 1995 issued by the
Company to Flurina Developments Inc. (8)
4.15 Letter Agreement from Strategica Capital Corporation dated
December 1, 1995 modifying Loan Agreement (3)
4.16 Form of Convertible Debenture issued by the Company in 1996
(14)
4.17 Form of Security Agreement issued by the Company in 1996 (14)
4.18 Form of Warrant Agreement issued by the Company in 1996 (14)
4.19 Form of Subscription Agreement issued by the Company in
1996 (14)
10.1 Lease dated August 21, 1992 between Glades Road Associates
and the Company.(2)
10.2 Order Approving Sale of Assets to Modami Stewart Foods,
Inc., dated December 12, l993.(9)
10.3 Exercise of Conversion Rights Agreement, dated November 30,
l993, between Optical Express, Inc. and the Company. (10)
10.4 Stock Exchange Agreement, dated January 31, l994, between
the Company and certain officers of Optical Express, Inc. (11)
10.5 Stock Exchange Agreement, dated February 9, l994, between
Modami Stewart Foods Inc., the Company, and Robert W. Lackey(11)
10.6 Share Purchase Agreement, dated as of November 22, l994,
between Americas Foods, Inc. and Pepperidge Farm, Incorporated.
(5)
10.7 Letter Agreement, dated as of November 22, l994, between
the Company and Europe American Capital Corp. re: issuance of
Americas Foods and The AppleTree Companies, Inc. warrants.(1)
10.8 1993 Stock Option Plan(1)
10.9 Consulting Agreement, dated as of July 31, 1994, between the
Company and Michael Lapp.(1)
10.10 1995 Key Employees Stock Option Plan(6)
10.11 1995 Executive Stock Option Plan(6)
10.12 1995 Directors Stock Option Plan(6)
10.13 Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A. Legal
Fee Agreement dated March 20, 1995(6)
10.14 Employment Agreement dated March 30, 1995 between the Company and
Paul Kravitz(6)
10.15 Employment Agreement dated March 30, 1995 between the Company and
Justin A. DiMacchia(6)
10.16 Consulting and Financial Advisory Services Agreement dated May
22, 1995 between the Company and Strategica Capital Corp.(7)
10.17 Asset Purchase Agreement between the Company and Sandwich Makers
of Arizona, Inc. and Sandwich Makers of California, Inc. (8)
10.18 Consulting Agreement dated as of September 23, 1994 between the
Company and Alan Berkun.(13)
10.19 Amendment to Asset Purchase Agreement between the Company and
Sandwich Makers of California, Inc. dated January 23, 1996(3)
21.1 Subsidiaries of the Company(6)
23.1 Consent of Coopers & Lybrand, L.L.P. (14)
27.1 Financial Data Schedule
______________________
(1) Incorporated by reference to the Company's Form 10-KSB for the year ended
August 31, 1994
(2) Incorporated by reference to the Company's Form 10-K for the year ended
August 31, 1992
(3) Incorporated by reference to the Company's Form 10-QSB for the quarterly
period ended March 3, 1996
(4) Incorporated by reference to the Company's Registration Statement on Form
S-18, File No. 33-44902-A
(5) Incorporated by reference to the Company's Form 8-K, dated November 22,
l994
(6) Incorporated by reference to the Company's Form 10-QSB for the quarterly
period ended February 28, 1995
(7) Incorporated by reference to the Company's proxy statement dated July 7,
1995
(8) Incorporated by reference to the Company's Form 10-KSB for the year ended
September 3, 1995
(9) Incorporated by reference to the Company's Form 8K, dated on December 30,
1993
(10) Incorporated by reference to the Company's Form 10-QSB for the quarterly
period ended November 30, 1993
(11) Incorporated by reference to the Company's Form 10-QSB for the quarterly
period ended February 28, l994
(12) Incorporated by reference to the Company's Registration Statement on Form
S-8, File No. 33-83076
(13) Incorporated by reference to the Company's Registration Statement on Form
S-8, File No. 33-84668
(14) Incorporated by reference to the Company's Form 10-KSB for the year ended
September 1, 1996
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report be signed on its behalf by the
undersigned thereunto duly authorized.
THE APPLETREE COMPANIES, INC.
January 15, 1997 /s/ John W. Donlevy
----------------------------
John W. Donlevy
President/C.E.O.
(Principal Executive Officer)
January 15, 1997 /s/ Justin A. DiMacchia
----------------------------
Justin A. DiMacchia
Vice President/C.F.O.
(Principal Finance and Accounting
Officer)
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