<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 10 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: May 31, 1996
Commission file number: 33-68570
LEGGOONS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MISSOURI 43-1239043
----------------------- ---------------------------------------
(State of incorporation) (I.R.S. Employer Identification number)
400 South Lindell, Vandalia, Missouri, 63382
----------------------------------------------------
(Address of principal executive offices and Zip Code)
(573) 594-6418
---------------------------------------------------
(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___
Number of shares of common stock outstanding as of June 30, 1996: 2,787,000
<PAGE>
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
LEGGOONS, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
May 31, August 31,
1996 1995
--------- --------
ASSETS
<S> <C> <C>
Current Assets:
Cash $ 1,530 $ 9,881
Receivables (net of allowance for doubtful
accounts of $10,000) 215,258 216,117
Inventories 162,756 554,296
Deferred Charges 0 145,218
Prepaid Expenses 0 89,233
---------- ---------
Total current assets 379,544 1,014,745
Property, plant and equipment, net of
accumulated depreciation of $319,781 and
$293,718 72,755 98,817
Trademarks, net of accumulated amortization
of $320,452 and $240,284 214,003 294,171
Investment in and advances to partnership 0 111,940
---------- -----------
Total Assets $ 666,302 $ 1,519,673
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Note payable to bank $ 363,275 $ 513,553
Note payable to stockholder 724,643 467,887
Current portion of long-term debt 165,722 206,625
Accounts payable 306,791 544,941
Accrued expenses 98,522 82,520
Estimated loss on discontinued operations 132,408 0
--------- ---------
Total current liabilities 1,791,361 1,815,526
========= =========
Stockholders' Equity:
Common stock, $.01 par value, authorized
10,000,000 shares; issued and outstanding,
2,787,000 27,870 27,870
Preferred stock, $.01 par value, authorized
5,000,000 shares; issued and outstanding
- none 0 0
Additional paid-in capital 2,390,070 2,390,070
Accumulated deficit (3,542,999) (2,713,793)
----------- ----------
Total stockholders' equity (1,125,059) (295,853)
----------- ------------
Total Liabilities and Stockholders'
Equity $ 666,302 $1,519,673
</TABLE>
<PAGE>
LEGGOONS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
May 31, May 31,
1996 1995 1996 1995
--------- -------- ------- --------
<S> <C> <C> <C> <C>
General and
administrative expenses $ 54,541 6,420 $ 68,907 $ 16,450
-------- ------- ------- ---------
Loss from continuing operations (54,541) (6,420) (68,907) (16,450)
--------- ------- -------- ---------
Discontinued operations:
Income (loss) from discontinued
apparel operations 0 (350,116) (289,302) (447,428)
Loss on disposal of apparel
operations, including a
provision of $150,000 for
operating losses during
phase-out period 0 0 (565,720) 0
-------- -------- -------- ---------
Income (loss) from discontinued
operation before extraordinary
items 0 (350,116) (855,022) (447,428)
-------- --------- --------- ---------
Extraordinary item - gain on
restructuring of liabilities 3,750 0 94,723 0
--------- --------- --------- ----------
Net loss $( 50,791) $(356,536) $(829,206) $(463,878)
Loss from continuing
operations per share $ (.02) $ (.00) $ (.02) $ (.00)
Net income (loss) per share $ (.02) $ (.13) $ (.30) $ (.17)
Weighted average shares
outstanding 2,787,000 2,787,000 2,787,000 2,717,000
3
</TABLE>
<PAGE>
LEGGOONS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
May 31, May 31,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (829,206) $ (463,878)
Adjustments to reconcile
net loss to net cash provided
(used) by operating activities:
Depreciation and amortization 106,230 106,912
Gain on restructuring of liabilities (94,723) 0
Estimated loss on discontinued operations 339,071 0
Changes in assets and liabilities:
Receivables 859 229,047
Inventories 391,540 119,124
Deferred charges 145,218 84,470
Prepaid expenses 89,233 (31,191)
Accounts payable (238,150) 91,521
Accrued expenses 16,002 (54,458)
Net cash provided (used) by operating --------- ---------
activities (73,926) 81,547
--------- ---------
Cash Flows From Investing Activities:
Capital expenditures for property,
plant & equipment 0 0
(Increase) decrease in other assets 0 (5,199)
Net Cash provided (used) by investing --------- ---------
activities 0 (5,199)
--------- ---------
Cash Flows From Financing Activities:
Book overdraft 0 (28,512)
Net proceeds (payments) on note
payable to bank (150,278) 96,116
Principal payments on long-term debt (40,903) (49,569)
Advances from (payments on) note payable
to stockholder 256,756 (22,673)
------- --------
Net cash provided by financing activities 65,575 (4,638)
------- -------
Net increase (decrease) in cash (8,351) 71,710
Cash and cash equivalents at beginning of period 9,881 0
------- --------
Cash and cash equivalents at end of period $ 1,530 $ 71,710
</TABLE>
Supplemental Disclosure of Noncash Financing Activities
On January 13, 1995, the Company issued 140,000 shares of its common stock to
an officer and director of the Company in exchange for a note payable of
$140,000.
4
<PAGE>
LEGGOONS, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
1. Unaudited Interim Periods:
The information furnished herein relating to interim periods has not been
audited by independent Certified Public Accountants. In the opinion of the
Company's management, the financial information in this report reflects any
adjustments that are necessary for a fair statement of results for the
interim periods presented in accordance with generally accepted accounting
principles. All such adjustments, except the recognition of the estimated
loss on disposal of the apparel operations (Note 4), are of a normal and
recurring nature. The accounting financial statements included in the
company's Annual Repot Form 10-K filed with the SEC on December 14, 1995.
2. Inventories:
Inventories at May 31, 1996, and August 31, 1995, are summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Finished goods $ 284,636 $ 553,547
Work in process 0 0
Raw materials 42,703 300,749
-------- --------
327,339 854,296
Reserve for obsolescence (164,583) (300,000)
--------- ---------
$ 162,756 $ 554,296
</TABLE>
3. Note Payable to Bank:
On November 30, 1993, the revolving loan agreement with the bank was
renegotiated. The maximum commitment under the revolving line of credit
was reduced from $3,000,000 to $1,000,000 (restricted by a borrowing base)
and the restrictive covenants were relaxed. In addition, the principal
shareholder of the Company was no longer a co-maker of the loan, but has a
personal guaranty limited to a maximum of $500,000. Substantially all of
the assets of the Company, except inventories, are pledged as collateral
under the loan agreement. The restrictive covenants of the loan agreement
call for: a ratio of liabilites to net worth (as defined) of not more than
1.5 to 1.0, a ratio of long-term debt to net worth of not more than .40 to
1.0 a ratio of current assets to current liabilites of not less than 1.75 to
1.0 a minimum net worth of 1,750,000, and a minimum working capital of
1,750,000. The new loan agreement expired November 30, 1994, but had been
extended to March 31, 1995. There was $363,275 outstanding under the
revolving loan agreement at May 31, 1996, and the company was in violation of
the minimum tangible net worth, ratio of current assets to current liabilites
and minimum working capital financial
5
<PAGE>
covenants . In addition, the Companys outstanding balance on the revolving
note agreement was in excess of the borrowing base by approximately
$217,000 at May 31, 1996.
4. Discontinued Operations
On January 19, 1996, the Company adopted a formal plan to discontinue the
designing, selling, manufacturing and distribution of its apparel products.
As part of such plan, the Company discontinued production on April 30, 1996
and will either sell or liquidate the operations within twelve months of that
date.
As a result, the Company recorded a second quarter charge of $565,720 to
write down the Company's assets to be sold to their estimated net realizable
values and to accrue for $150,000 of estimated operating losses through the
anticipated phase-out period. No income tax benefits have been allocated to
the Company's losses because there are no realizeable taxable benefits
available to allocate to the discontinued operations. No adjustment of the
carrying amount of the Company's trademark has been made, as the current
disposal plan contemplates retaining the trademark subject to the licensing
agreement discussed in note 5.
Revenues from discontinued operations were $352,569 and $1,000,314 for the
three and nine months ended May 31, 1996, and $536,988 and $1,845,310 for the
three and nine months ended May 31, 1995. In the three months ended May 31,
1996, the $17,592 loss from discontinued operations was charged against the
estimated loss on disposition accrual included on the balance sheet. In the
nine months ended May 31, 1996, the losses from discontinued operations were
$855,022. Losses from discontinued operations were $350,116 and $447,428 for
the three and nine months ended May 31,1995.
5. Related Party Transactions:
On January 19, 1996, the Company entered into a Licensing Agreement with
Robert Tamsky, a former director and officer of the Company. Pursuant to the
terms of the Licensing Agreement, the Company granted Mr. Tamsky effective
January 1, 1996, the right to use the LEGGOONS trademark in connection with
the design, production, marketing, sales and sublicensing of all clothing,
wearing apparel and accessories bearing the "LEGGOONS" symbol. This right
will continue until December 31, 1998, and may be extended thereafter each
year for an additional year. In consideration for the license, Mr. Tamsky,
according to the Licensing Agreement, shall pay to the Company a royalty of
five percent of the net sales of "LEGGOONS" products. The Licensing
Agreement provides that the Company will fulfill all its obligations for
orders existing prior to the date of the agreement. The collection of the
royalty is the only apparel business the Company intends to engage in after
such current orders and obligations are fulfilled.
The Company had a 50% ownership in Cintura Partners, a company that
merchandises a unique line of faux leather belts. The other 50% interest
was owned by a former employee of the Company. In April 1996 the Company
assumed the assets and liabilities of the other 50% ownerships' interest to
become the 100% owner of Cintura. All assets and liabilities of Cintura are
included as part of the Company's financial records at May 31, 1996, and are
included as part of the plan to discontinue operations. The net value of the
6
<PAGE>
assumption of the assets and liabilities of Cintura in April 1996 was
approximately $0 and resulted in no significant adjustment to the Company's
financial records. The net value of all assets and liabilities related to
Cintura is $24,209 at May 31, 1996. The Company's 50% share in Cintura's
results of operations for the three months ended May 31, 1996 and 1995,
was $17,182 and $3,500 respectively, and is included in the other expense
(income) category on the statements of operations. Included in other assets
on the balance sheets at May 31, 1996, and August 31, 1995, is approximately
$0 and $74,700 respectively, which represents the Company's Investment in
Cintura and share of Cintura's earnings/losses.
6. Restructuring of Liabilities:
During the nine months ended May 31, 1996, the Company entered into
agreements with certain vendors under which those vendors agreed to reduce
the aggregate amount owed to them by the Company by up to seventy five
percent in exchange for the Company's commitment to pay the reduced amount
over varying periods through December, 1998. The Company has recognized a
$94,723 gain from the restructuring of these liabilities based on the
payments that were made and accepted in December 1995 through May 1996.
This gain has been classified as an extraordinary item in the statement
of operations.
7
<PAGE>
7. Subsequent Events: Assignment for the Benefit of Creditors
On June 12, 1996, the Company transferred all of its assets and liabilities
to a third party assignee, under an "Assignment for the Benefit of Creditors."
An Assignment is a business liquidation device available as an alternative to
bankruptcy. The third party assignee, a Nebraska corporation, also named
Leggoons, Inc. (the "Assignee"), will be required to properly, timely, and
orderly dispose of all remaining assets for the benefit of creditors. The
Company will continue to maintain its status as a shell corporation.
Following is a proforma condensed balance sheet reflecting the effect of the
foregoing transaction as if it occurred on May 31, 1996:
LEGGOONS, INC.
Proforma Balance Sheet
<TABLE>
<CAPTION>
May 31, Proforma
1996 May 31, 1996
ASSETS (Unaudited) Adjustments
(Unaudited)
-----------
<S> <C> <C> <C>
Current Assets:
Cash $ 1,530 (1,530) $ 0
Accounts receivable 215,258 (215,258) 0
Inventories 162,756 (162,756) 0
------- --------
Total current assets 379,544 0
Property, plant and equipment, net 72,755 (72,755) 0
Trademarks, net 214,003 (214,003) 0
--------- ---------
$ 666,302 $ 0
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
Current Liabilities:
Note payable to bank $ 363,275 (363,275) $ 0
Note payable to stockholder 724,643 (724,643) 0
Current portion of long-term debt 165,722 (165,722) 0
Accounts payable 306,791 (306,791) 0
Accrued expenses 98,522 (98,522) 0
Estimated loss on discontinued
operations 132,408 (132,408) 0
--------- --------
Total current liabilities 1,791,361 0
--------- --------
Stockholders' Equity:
Common stock 27,870 27,870
Preferred stock - -
Additional paid-in capital 2,390,070 2,390,070
Accumulated deficit (3,542,999) 1,125,059 (2,417,940)
Total stockholders' equity (1,125,059) 0
----------- ----------
$ 666,302 $ 0
</TABLE
8
<PAGE>
8. Subsequent Events: Stock Purchase Agreement
On May 22, 1996 the Company entered into an Addendum to the Stock Purchase
Agreement it initially entered into on September 5, 1995 with Infinitron
Investments International, Inc. of Vancouver B.C. ("Infinitron"). Pursuant
thereto 100% of the shares of common stock of Infinitron would be exchanged
for approximately 4,797,500 shares of common stock of the Company which would
represent approximately 95% of the post-split Company's outstanding common
stock. The Addendum provides, among other things, that Leggoons will use
its best efforts to obtain SEC clearance of its proxy statement by July 22,
1996 and Infinitron will use its best efforts to fully cooperate with the
Company in obtaining such clearance.
On July 3, 1996 counsel for Infinitron informed the Company that Infinitron
does not intend to proceed with the transaction contemplated by the Stock
Acquisition Agreement. Counsel for Infinitron stated that the basis for
that action was that he noted "a number of irregularities in the relationships
and dealings among the principals of Leggoons and Infinitron," however he did
not provide any specifics relating to that allegation. The Company believes
these claims to be baseless and without merit.
The Company and its counsel currently are considering what action, if any,
is appropriate in view of the recent communication from Infinitron.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General:
The Company's financial results are largely determined by the level of sales
and related pricing flexibility of the Company's various lines of merchandise.
Sales can be impacted by merchandise trends, seasonality swings and the
general state of the economy.
Results of Continuing Operations:
The general and administrative expenses of continuing operations for the
three months ended May 31, 1996, is comprised of $54,541 in expenses related
to the Company's public company status. These expenses are primarily
accounting and legal fees incurred in connection with the preparation of a
preliminary proxy statement. For the three months ended May 31, 1995, the
public company expense was $6,420.
The loss from continuing operations per share was $.02 for the three months
ended May 31, 1996, compared to $.00 net loss per share for the three months
ended May 31, 1995.
The general and administrative expenses of continuing operations for the
nine months ended May 31, 1996, is comprised of $68,907 in expenses related
to the Company's public company status. These expenses are primarily
accounting and legal fees incurred in connection with the preparation of a
preliminary proxy statement. For the nine months ended May 31, 1995, the
public company expense was $16,450.
Due to the exchange of common stock for debt in January 1995, the weighted
average shares outstanding was higher in the nine months ended May 31, 1996,
compared to the Nine months ended May 31, 1995. The loss from continuing
operations per share was $.02 for the nine months ended May 31, 1996,
compared to $.00 for the nine months ended May 31, 1995.
Results of Discontinued Operations:
Net sales decreased by $184,419, or 34.0% during the three months ended May
31, 1996, compared to the same period last year. The decrease was primarily
due to lower sales of the Company's closeout merchandise and the overall
decreased demand in the industry of children's apparel.
Selling, general and administrative expenses decreased $227,074, during the
three months ended May 31, 1996, compared to the same period last year. The
decrease was a result of decreased selling expenses related to the decreased
sales during the period combined with lower administrative expenses related
to reduced personnel salary costs and other cost containment actions that
were enacted as part of the plan for discontinued operations.
As the result of lower sales with a lower gross margin offset by decreased
selling, general and administrative expenses incurred, and the provision for
loss on disposal of operations, the loss from discontinued apparel
operations during the three months ended May 31, 1996, was $0 compared to a
loss of $350,116 during the three months ended May 31, 1995.
10
<PAGE>
Net sales decreased by $844,996, or 46.0% during the nine months ended May
31, 1996, compared to the same period last year. The decrease was due to
obtain raw materials on a timely basis, lower sales of the Company's closeout
merchandise and the overall decreased demand in the industry of children's
apparel.
Selling, general and administrative expenses decreased $418,314, during the
nine months ended May 31, 1996, compared to the same period in the prior
year. The decrease was a result of decreased selling expenses related to the
decreased sales during the period combined with lower administrative expenses
related to reduced personnel salary costs and other cost containment actions
that were enacted as part of the plan for discontinued operations.
As a result of lower sales with lower gross margins and decreased selling,
general and administrative expenses incurred, and the provision for loss on
disposal of operations, the loss from discontinued apparel operations during
the nine months ended May 31, 1996, was $855,022 compared to a loss from
discontinued operations of $447,428 during the nine months ended May 31, 1995.
Financial Condition, Liquidity and Capital Resources:
As is customary in the apparel manufacturing and marketing industry, the
Company's primary needs for liquidity are to finance its inventories and
accounts receivable. The Company's primary sources for working capital are
cash flow from operations and borrowings under the Company's revolving loan
agreements.
As described in Note 4, the Company renegotiated its revolving loan
agreement effective November 30, 1993. The agreement provides for a maximum
revolving credit amount of $1,000,000 based on eligible accounts receivable,
subject to certain restrictions and financial covenants. The approximate
average borrowings on this loan were $424,000 during the quarter ended May
31, 1996, compared to $660,000 during the quarter ended May 31, 1995. The
revolving credit agreement matured on November 30, 1994, and was extended to
March 31, 1995. The loan agreement will not be further extended and the
Company is presently attempting to obtain the necessary funds to pay the
May 31, 1996, loan balance of $363,275. The Company and the bank have been
working together to provide for the payment of this balance without the bank
having to enforce default proceedings.
Due to the renegotiation of the revolving loan agreement, which had
previously provided for borrowings on accounts receivable and inventories,
the Company entered into a revolving line of credit agreement with an
officer and director of the Company and received advances of $115,000 during
May 1994 and $250,000 during July 1994. The loan provided for maximum
borrowings of $365,000 at an interest rate of two percent over the New York
prime rate of interest with a security interest granted in inventories and
the Company's interest in Cintura Partners. In July 1995 the loan agreement
was amended to provide for maximum barrowings of $500,000 with an additional
security interest in trademarks of the Company. The loan is a demand note
with a balance of approximately $725,000 at May 31,1996. The Company
and the stockholder have ammended the loan agreement to provide for maximum
barrowings of $850,000.
11
<PAGE>
The Company's term loan agreement with the Missouri Department of Economic
Development (DED) contains certain restrictive covenants, including the
maintenance of certain financial ratios. Specifically, the Company must
maintain minimum tangible net worth (including debt from shareholder) of
$1,300,000, capital expenditures not to exceed $200,000 in any fiscal year
and a ratio of total liabilities to tangible net worth of not greater than
3 to 1. On May 31, 1996, the Company was not in compliance with the minimum
tangible net worth and ratio of total liabilities to tangible net worth
covenants contained in the term loan agreement. In addition, the Company
has received a notice of default and penalty interest assessment due to the
delinquency of required monthly payments after March 1994. The Company is
presently working with DED and the Missouri Attorney General's office to work
out a resolution to the loan balance of $103,600 that is acceptable to both
parties. Substantially all of the assets (excluding building and trademark)
of the Company are pledged as collateral under the DED term loan agreement.
The Company's term loan agreement with the Community State Bank of Bowlling
Green was in default at August 31, 1995, based on the discontinuance of loan
payments after April 1995. The bank declared the loan in default in August
1995 and initiated foreclosure proceedings on the building located in
Vandalia, Missouri. In September 1995 an agreement was reached where the
Company would bring the loan payments current at that time and the bank
would discontinue foreclosure proceedings for ninety days. The Company has
presently negotiated a similar agreement for an extension based on the
Company resuming monthly payments. The Company has made the monthly payments
in December, January, February, March, April, and May to bring the loan
balance to approximately $58,000 at May 31, 1996. It is the Company's
intention to continue with the monthly payments until the loan is paid in
full.
On August 22, 1995, the Company signed a Letter of Intent to acquire all of
the outstanding shares of Infinitron Investments International, Inc. by
exchanging newly issued Leggoons shares. Upon completion of the transaction,
present Infinitron shareholders will own a majority of the combined companies.
Privately owned Infinitron, based in Vancouver, British Columbia, is a
computer software and technologies company which develops Internet oriented
multimedia database programs. On May 22, 1996, an addendum to the stock
acquisition agreement was entered into that provided for, among other items,
the Company and Infinitron using thier best efforts to obtain clearance by
the Securities and Exchange Commission of the Company,s proxy sstatement
by July 22, 1996, and the Company transfering all of its assets and
liabilites from the corporation to a third party assignee for the benefit of
creditors prior to June 21, 1996. The addendum further stated that in the
absence of further agreements, if the above transactions did not take place
on or before the times indicated, the stock acquisition agreement will
without further action be terminated and will no longer be in force or effect.
The company is in the process of obtaining regulatory approval of the
preliminary proxy statement related to this transaction. Management expects
to be mailing the difinitive proxy statement to shareholders in July 1996.
The Company believed it was necessary to obtain a revised credit facility
in order to meet working capital needs in 1996. In addition, the Company
pursued a private placement of equity as a source to replace the working
capital loss from operations of 1995 and 1994. In addition, if the
Infinitron transaction is consummated, the Company intends to pursue
additional financing through Infinitron. The Company has been unable to
secure additional financing and achieve profitable operations and the
ability of the Company to continue as a going concern is in substantial doubt.
12
<PAGE>
The Company has negotiated settlements on several unsecured liabilities at
a considerable discount from their original amount and is still pursuing
settlement on the remaining unsecured liabilities for a similar resolution.
The Company has realized an extraordinary gain of $94,723 during the nine
months ended May 31, 1996, in connection with the settlement of the
liablilities are current at May 31, 1996.
As discussed in Notes 4 and 5, on January 19, 1996, the Company adopted a
formal plan to discontinue the designing, selling, manufacturing and
distribution of its apparel products. As part of such plan, the Company
discontinued production on April 30, 1996 and will either sell or liquidate
the operations within twelve months of that date. In addition, the Company
entered into a Licensing Agreement with Robert Tamsky, a former director and
officer of the Company. Pursuant to the terms of the Licensing Agreement,
the company grants Mr. Tamsky effective January 1, 1996, the right to use
the LEGGOONS trademark in connection with the design, production, marketing,
sales and sublicensing of all clothing, wearing apparel and accessories
bearing the "LEGGOONS" symbol. This right will continue until December 31,
1998, and may be extended thereafter each year for an additional year. In
consideration for the license, Mr. Tamsky, according to the Licensing
Agreement, shall pay to the Company a royalty of five percent of the net
sales (gross sales less allowances, returns, samples and seconds) of
"LEGGOONS" products. This payment shall be based on monthly sales and shall
be due thirty days after the end of each month. There is no minimum royalty
provided for in the Licensing Agreement. The Licensing Agreement provides
that the Company will fulfill all its obligations for orders existing prior
to the date of the agreement. The collection of the royalty is the only
apparel business the Companyintends to engage in after such current orders
and obligations are fulfilled.
The company considers the following as measures of liquidity and capital
resources for the quarter ended May 31, 1996, and May 31, 1995:
</TABLE>
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Working capital (1,411,817) 483,798
Current Ratio .21 1.32
</TABLE>
On June 12, 1996 the Company transferred all of its assets and liabilities
to Leggoons, Inc., a Nebraska corporation, as part of the Stock Purchase
Agreement with Infinitron Investments International, Inc. ("Infinitron").
See Note 7 to Financial Statements.
On July 3, 1996 the Company was informed by Infinitron that it does not
intend to proceed with the transaction whereby 100% of the outstanding
common stock of Infinitron would be exchanged for approximately 95% of the
outstanding common stock of the Company after the transaction. See Note 8
to Financial Statements.
13
<PAGE>
FORM 10-QSB
LEGGOONS, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None.
(b) Reports on Form 8-K - None
Financial Data Schedule
SIGNATURE:
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.
(Registrant) LEGGOONS, INC.
BY (Signature) /s/ Steven D. Walters
(Date) July 17, 1996
(Name and Title) Steven D. Walters
Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 1,530
<SECURITIES> 0
<RECEIVABLES> 225,258
<ALLOWANCES> 10,000
<INVENTORY> 162,756
<CURRENT-ASSETS> 379,544
<PP&E> 392,536
<DEPRECIATION> 319,781
<TOTAL-ASSETS> 666,302
<CURRENT-LIABILITIES> 1,791,361
<BONDS> 0
2,787,000
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 666,302
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 54,541
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
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</TABLE>
