U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the
Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997 .
[ ] Transition report under Section 13 or 15(d) of the
Exchange Act
For the transition period from _______________ to
_______________.
Commission file number 1-12580 .
THE VERMONT TEDDY BEAR CO., INC.
(Exact name of small business issuer as specified in its
charter)
New York 03-0291679
(State or other jurisdiction (I.R.S.
Employer
of incorporation or organization) Identification
No.)
2236 Shelburne Road, Post Office Box 965
Shelburne, Vermont 05482
(Address of principal executive offices)
(802) 985-3001
(Issuer's telephone number)
Not Applicable
<PAGE>
(Former name, former address, and former fiscal year, if
changed since
last report)
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
issuers classes of
common equity, as of the latest practicable date: 5,160,750
shares of
Common Stock, $.05 par value per share, as of May 1, 1997.
Transitional Small Business Disclosure Format (check one):
Yes ; No X .
<PAGE>
The Vermont Teddy Bear Co., Inc.
Index to Form 10-QSB
March 31, 1997
Page
No.
Part I - Financial Information
Financial Statements
Balance Sheet as of March 31, 1997 3
Statements of Operations for the Three and Nine
Months ended March 31, 1997 and 1996 4
Statements of Cash Flows for the Nine Months
ended March 31, 1997 and 1996 5
Notes to Financial Statements 6
Management's Discussion and Analysis 9
Part II - Other Information
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
12
Signatures 16
<PAGE>
<TABLE>
The Vermont Teddy Bear Co., Inc.
Balance Sheet
March 31, 1997
(Unaudited)
ASSETS
<S>
<C>
Cash and cash equivalents (includes restricted cash of
$365,000) $1,089,713
Accounts receivable, trade
26,057
Inventories
3,566,517
Prepaid expenses and other current assets
313,149
Deferred income taxes
240,585
------------
Total Current Assets
5,236,021
Property and equipment, net
10,074,382
Deposits and other assets
333,818
Note receivable
95,000
------------
Total Assets
$15,739,221
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current portion of:
Long-term debt
$3,473,184
Capital lease obligations
104,550
<PAGE>
Accounts payable
3,299,411
Accrued expenses
687,522
Income taxes payable
51,658
------------
Total Current Liabilities
7,616,325
Long-term debt,net of current portion
409,390
Capital lease obligations, net of current portion
235,286
Deferred income taxes
240,585
------------
Total Liabilities
$8,501,586
Stockholder's Equity:
Preferred stock, $.05 par value:
Authorized 1,000,000 Series A; issued and outstanding,
$900,000
90 shares.
Authorized 375,000 Series B; issued and outstanding,
204,912 shares.
10,245
Common stock, $.05 par value:
Authorized 20,000,000 shares; issued 5,172,750 shares;
outstanding 5,160,750 shares
258,638
Additional paid-in capital
10,565,482
Treasury stock at cost, 12,000 shares
(106,824)
Accumulated deficit
(4,389,906)
------------
Total Stockholder's Equity
$7,237,635
Total Liabilities and Stockholder's Equity
$15,739,221
============
<PAGE>
3
<PAGE>
</TABLE>
<TABLE>
The Vermont Teddy Bear
Co., Inc.
Statements of
Operations
For the Three and Nine Months Ended
March 31, 1997 and 1996
(Unaudited)
Three
Months Ended Nine
Months Ended
Mar. 31,
1997 Mar. 31, 1996 Mar. 31,
1997 Mar. 31, 1996
<S> <C>
<C> <C>
<C>
Net Revenues
$5,330,093 $5,131,152
$12,739,326 $12,858,227
Cost of Goods Sold
2,222,211 2,271,826
5,287,271 5,800,519
----------
-- ------------ ----------
-- ------------
Gross Profit
3,107,882 2,859,326
7,452,055 7,057,708
Selling, General and Administrative Expenses:
Selling Expenses
2,607,506 1,678,539
6,174,596 4,782,714
General and Administrative Expenses
774,117 771,378
2,138,566 2,231,369
----------
-- ------------ ----------
-- ------------
3,381,623 2,449,917
8,313,162 7,014,083
----------
-- ------------ ----------
<PAGE>
-- ------------
Operating Income (Loss)
(273,741) 409,409
(861,107) 43,625
Interest Income
10,829 9,313
41,757 31,812
Interest Expense
(117,639) (116,736)
(344,530) (331,516)
Other Income (Expense)
3,135 392
(9,896) 7,237
----------
-- ------------ ----------
-- ------------
Income (Loss) Before Income Taxes
(377,416) 302,378
(1,173,776) (248,842)
Income Tax Provision
(318,544) 0
0 0
----------
-- ------------ ----------
-- ------------
Net Income (Loss)
(695,960) 302,378
(1,173,776) (248,842)
Preferred Stock Dividends
(18,000) (18,000)
(54,000) (54,000)
----------
-- ------------ ----------
-- ------------
Net Income (Loss) -- Common Stockholders
($713,960) $284,378
($1,227,776) ($302,842)
============ ============
============ ============
Net Income (Loss) Per Common Share
($0.14) $0.06
($0.24) ($0.06)
============ ============
============ ============
Weighted Average Number of Common
Shares Outstanding
5,160,750 5,160,583
5,160,750 5,160,528
============ ============
<PAGE>
============ ============
4
<PAGE>
</TABLE>
<TABLE>
The Vermont Teddy Bear Co.,
Inc.
Statements of Cash Flows
For the Nine Months Ended March 31, 1997
and 1996
(Unaudited)
1997 1996
------------ ----------
--
<S>
<C> <C>
Cash flows from operating activites:
Net loss
(1,173,776)
(248,842)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
<PAGE>
Depreciation and amortization
701,164
601,904
Loss on disposal of fixed assets
18,191
4,769
Changes in assets and liabilities:
Accounts receivable, trade
105,493
54,988
Inventories
(1,591,786)
729,966
Prepaid and other current assets
(35,647)
(61,422)
Deposits and other assets
(235,732)
22,984
Accounts payable
1,945,713
(788,515)
Accrued expenses and other liabilities
100,044
(380,861)
Income taxes
14,293
24,537
------------ ----------
--
Net cash used for operating activities
(152,043)
(40,492)
Cash flows from investing activities:
Acquisition of property and equipment
(493,419)
(503,895)
Proceeds from sale of fixed assets
0
38,455
------------ ----------
--
Net cash used for investing activities
(493,419)
(465,440)
Cash flows from financing activities:
Borrowings of short-term debt
1,159,760
1,616,572
<PAGE>
Borrowings of long-term debt
357,104
3,724,150
Payments of short-term debt
(1,216,613)
(4,772,375)
Payments of long-term debt
(110,584)
(106,235)
Principal payments on capital lease obligations
(77,124)
(96,674)
Issuance of common stock
0
766
Issuance of preferred stock
501,132
0
------------ ----------
--
Net cash provided by financing activities
613,675
366,204
Net decrease in cash and cash equivalents
(31,787)
(139,728)
Cash and cash equivalents, beginning of period
1,121,500
1,070,862
------------ ----------
--
Cash and cash equivalents, end of period
1,089,713
931,134
============
============
Cash paid for interest
343,504
357,688
Cash paid for taxes
1,718
2,890
Non-cash financing -- capital lease
0
42,933
<PAGE>
5
<PAGE>
</TABLE>
Notes to Financial Statements
(1) Basis of Presentation
The interim financial statements of The Vermont Teddy Bear
Co., Inc.
(the "Company") included herein have been prepared, without
audit,
pursuant to the rules and regulations of the Securities and
Exchange
Commission ("SEC") and, in the opinion of management,
reflect all
adjustments necessary to present fairly the financial
condition and
results of operations for such interim periods. Certain
information and
footnote disclosures normally included in the financial
statements
prepared in accordance with generally accepted accounting
principles
have been condensed or omitted pursuant to such rules and
regulations.
It is suggested that these financial statements be read in
conjunction
with the audited financial statements and notes thereto for
the fiscal
year ended June 30, 1996, included in the Company's filing
with the SEC
on Form 10-KSB. The Company's sales are seasonal in nature
and,
therefore, the results for these interim periods are not
necessarily
indicative of the results for the respective years.
(2) Use of Estimates
The preparation of financial statements in conformity with
generally
<PAGE>
accepted accounting principles requires management to make
estimates and
assumptions that affect the reported amounts of assets and
liabilities
and disclosure of contingent assets and liabilities at the
date of the
financial statements and the reported amounts of revenues
and expenses
during the reporting period. Actual results could differ
from those
estimates.
(3) Net Earnings Per Share
Net earnings per common share is determined by dividing the
net earnings
available to common stockholders by the weighted number of
shares of
Common Stock and Common Stock equivalents, where dilutive,
outstanding
during the period. In February 1997, the Financial
Accounting Standards
Board issued FASB No. 128, "Earnings per Share" and SFAS No.
129,
"Disclosure Information about Capital Structure" effective
for fiscal
years ending after December 15, 1997. Earlier adoption is
not
permitted. SFAS No. 128 modifies the calculations of
primary and fully
diluted earnings per share and replaces them with basic and
diluted
earnings per share. Basic earnings per share includes no
dilution and
is calculated by dividing net income by the weighted average
number of
common shares outstanding for the period. Diluted earnings
per share
reflects the potential dilution of stock options that could
share in the
earnings of an entity, similar to fully diluted earnings per
share.
Earnings per share in these financial statements would not
be affected
under the new pronouncement. The adoption of SFAS No. 129
will have no
impact on the Company's current disclosures.
(4) Income Taxes
The Company accounts for income taxes in accordance with the
Statement
<PAGE>
of Financial Accounting Standards No. 109, "Accounting for
income
taxes," which requires the use of the liability method.
This standard
determines deferred income taxes based on the estimated
future tax
effects of any differences between the financial statement
and the basis
of tax assets and liabilities, given the provisions of the
enacted tax
laws. Based upon the Company's recent losses, a valuation
allowance has
been provided to fully reserve its deferred tax assets. If
the Company
is able to achieve sufficient profitability to realize all
or a portion
of its deferred assets, the valuation allowance will be
reduced through
a credit to income in future periods.
(5) Inventories
Inventories are stated at the lower of cost or market using
the first-
in, first-out method. Inventories consisted of the
following at March
31, 1997:
<TABLE>
<S> <C>
Raw Materials $665,101
Work in process 149,877
Finished goods 2,751,539
----------
$3,566,517
==========
</TABLE>
(6) Debt and Borrowings
Effective March 31, 1997, the Company extended its
$1,000,000 line of
credit agreement with the Vermont National Bank through
September 26,
1997. The line of credit, originally established September
26, 1995,
bears interest at a variable rate of two percent above the
prime rate
and is secured by all assets of the Company. There was no
outstanding
borrowing on the line at March 31, 1997.
<PAGE>
On September 26, 1995, the Company executed a financing
agreement with
the Vermont National Bank, consisting of a $3.5 million
commercial
mortgage loan secured by a first mortgage on the Company's
Shelburne,
Vermont facility, as well as business assets. The original
terms of the
mortgage called for repayment based on a thirty-year
amortization
schedule, with a balloon payment due on September 26, 1997.
On May 14,
1997, the Company received a revised commitment from the
Vermont
National Bank to extend the maturity of its mortgage loan
through
September 26, 1998. The May 14, 1997 commitment replaced an
earlier
commitment letter dated April 10, 1997, which was to expire
May 15, 1997.
On December 26, 1995, Green Mountain Capital L.P. agreed to
lend the
Company up to $500,000 over a twelve-month period commencing
upon the
date of agreement. As of March 31, 1997, the entire
$500,000 had been
borrowed. The notes bear interest at twelve percent per
annum, are
repayable in monthly installments through December 26, 2000,
and are
secured by a subordinated security interest in the Company's
personal
property. In conjunction with the issuance of the notes,
Green Mountain
Capital received warrants to purchase 20,000 shares of
Common Stock, at
an exercise price of $3.375 per share. The right to
exercise these
warrants begins December 26, 1997, and expires the earlier
of December
26, 2000, or five years after full repayment of the notes.
(7) Statement of Financial Accounting Standards No. 123
In December 1995, the Financial Accounting Standards Board
issued SFAS
No. 123, Accounting for Stock-Based Compensation, which is
to become
effective for fiscal years beginning after December 15,
1995. SFAS No.
123 requires employee stock-based compensation to be either
recorded or
<PAGE>
disclosed at its fair value. Management intends to continue
to account
for employee-based compensation under Accounting Principles
Board
Opinion No. 25 and will not adopt the new accounting
provision for
employee stock-based compensation under SFAS No. 123, but
will include
the additional required disclosures in the Form 10-KSB
filing for fiscal
1997.
Management's Discussion and Analysis
The following discussion and analysis provides information
that the
Company's management believes is relevant to an assessment
and
understanding of the Company's results of operations and
financial
condition. The discussion should be read in conjunction
with the
financial statements and footnotes which appear elsewhere in
this
report, as well as the 10-KSB filing for the fiscal year
ending June 30,
<PAGE>
1996. This report contains forward-looking statements
within the
meaning of the Private Securities Litigation Reform Act of
1995, Section
27A of the Securities Act of 1993 and Section 21E of the
Securities
Exchange Act of 1934. The words "believe," "expect,"
"anticipate,"
"intend," "estimate," and other expressions which are
predictions of or
indicate future events and trends and which do not relate to
historical
matters identify forward-looking statements. Such
statements involve
risks and uncertainties that could cause actual results to
differ
materially from those set forth in such forward-looking
statements. The
Company undertakes no obligation to publicly update or
revise any
forward-looking statement, whether as a result of new
information,
future events or otherwise.
Results of Operations
Comparison of the three-month periods ended March 31, 1997
and 1996.
Net revenues for the Company for the three-month period
ended March 31,
1997 totaled $5,330,000, a 3.9 percent increase from net
revenues of
$5,131,000 for the three-month period ended March 31, 1996.
By business
segment, retail store revenues increased $230,000, with new
locations in
North Conway, New Hampshire and New York, New York providing
additional
sources of revenue. Licensing revenues rose $81,000, and
wholesale
sales increased $22,000. Direct mail revenues decreased
$58,000, and
Bear-Gram revenues declined by $76,000.
Gross margin increased to $3,108,000 for the quarter ended
March 31,
1997, from $2,859,000 for the quarter ended March 31, 1996.
As a
percentage of net revenues, gross margin increased to 58.3
percent from
55.7 percent, for the three months ended March 31, 1997, and
1996,
<PAGE>
respectively.
Selling expenses increased to $2,608,000 for the three-month
period
ended March 31, 1997, from $1,679,000 for the three-month
period ended
March 31, 1996. This $929,000 increase was attributable
primarily to
higher costs associated with handling telephone traffic for
the
Valentine's Day holiday, as well as operating costs related
to the
Company's stores in North Conway, New Hampshire and New
York, New York,
which were not in operation during the prior fiscal year.
Additionally,
the Company increased spending on radio advertising and
catalog
production for Valentine's Day, as compared to the
comparable quarter of
the prior year. As a percentage of net revenues, selling
expenses were
48.9 percent and 32.7 percent for the three months ended
March 31, 1997,
and 1996, respectively.
General and administrative expenses were $774,000 for the
quarter ended
March 31, 1997, compared to $771,000 for the quarter ended
March 31,
1996. As a percentage of net revenues, general and
administrative
expenses were 14.5 percent and 15.0 percent for the three
months ended
March 31, 1997, and 1996, respectively.
The Company recorded an income tax provision of $319,000 for
the quarter
ended March 31, 1997. The likelihood that the Company will
end the year
with a loss has caused the Company to reverse an income tax
benefit of
$319,000 which had accrued over the first six months of the
Company's
fiscal year. No tax provision was recorded for the
comparable quarter of
1996.
As a result of the foregoing factors, the net loss to common
stockholders totaled $714,000, or fourteen cents per common
share, for
the quarter ended March 31, 1997, compared to net income to
common
<PAGE>
stockholders of $284,000, or six cents per common share, for
the quarter
ended March 31, 1996.
Comparison of the nine-month periods ended March 31, 1997
and 1996.
Net revenues for the Company for the nine-month period ended
March 31,
1997 totaled $12,739,000, a 0.9 percent decrease from net
revenues of
$12,858,000 for the nine-month period ended March 31, 1996.
By business
segment, direct mail revenues rose $1,191,000, as the number
of
circulated pages for the 1996 Holiday catalog was
substantially larger
than the catalog mailed in the same period of the prior
fiscal year.
Retail store revenues increased $479,000, with the addition
of two new
locations providing new sources of revenue. Licensing
revenues
increased $81,000. Wholesale sales decreased $482,000; the
Company did
not have an appearance on the QVC television network in the
current
nine-month period, as it had had in the comparable nine-
month period of
the prior fiscal year. Bear-Gram revenues declined by
$1,388,000.
Gross margin increased to $7,452,000 for the nine months
ended March 31,
1997, compared to $7,058,000 for the nine months ended March
31, 1996.
As a percentage of net revenues, gross margin increased to
58.5 percent
from 54.9 percent, for the nine months ended March 31, 1997,
and 1996,
respectively.
Selling expenses increased to $6,175,000 for the nine-month
period ended
March 31, 1997, from $4,783,000 for the nine-month period
ended March
31, 1996. This $1,392,000 increase was attributable
primarily to
additional costs associated with the production of the
larger 1996
Holiday catalog, higher costs for handling telephone traffic
at
<PAGE>
Valentine's Day, as well as operating costs related to the
Company's two
new retail stores, which were not in operation during the
prior fiscal
year. As a percentage of net revenues, selling expenses
were 48.5
percent and 37.2 percent for the nine months ended March 31,
1997, and
1996, respectively.
General and administrative expenses were $2,139,000 for the
nine months
ended March 31, 1997, compared to $2,231,000 for the nine
months ended
March 31, 1996. As a percentage of net revenues, general and
administrative expenses were 16.8 percent and 17.4 percent
for the nine
months ended March 31, 1997, and 1996, respectively.
The Company recorded an income tax provision of $319,000 for
the quarter
ended March 31, 1997, which reversed an income tax benefit
of $319,000
that had accrued over the first six months of the Company's
fiscal year.
As a result of these offsetting income tax benefits and
provisions, the
Company has recorded no income tax provision for the nine
months ended
March 31, 1997. The Company did not record any income tax
provision
during the comparable nine-month period of the prior fiscal
year. The
Company had $2,360,000 in Net Operating Loss Carryforwards
("NOLs") at
June 30, 1996.
As a result of the foregoing factors, net loss to common
stockholders
totaled $1,228,000, or twenty-four cents per common share,
for the nine
months ended March 31, 1997, compared to a loss of $303,000,
or six
cents per common share, for the nine months ended March 31,
1996.
Liquidity and Capital Resources
As of March 31, 1997, the Company's cash position decreased
to
$1,090,000, from $1,122,000 at June 30, 1996. Each of these
amounts
<PAGE>
include $365,000 classified as restricted cash, the largest
component of
which is a $300,000 certificate of deposit required as part
of the
Company's loan agreement with the Vermont National Bank.
Proceeds from
a preferred stock issuance were more than offset by
increases in
inventory, deposits, and the acquisition of property and
equipment.
Inventories increased to $3,567,000 at March 31, 1997, from
$1,975,000
at June 30, 1996. The increase is primarily the result of
merchandise
purchased for resale for the Company's catalog and retail
stores, as
well as the stocking of its off-site retail locations and
preparations
for the upcoming Mother's Day selling season. Accounts
payable totaled
$3,299,000 at March 31, 1997, compared to $1,354,000 at June
30, 1996.
The increase in accounts payable relates primarily to the
increase in
inventory build as well as advertising costs which were
incurred for the
Valentine's Day selling season.
Effective March 31, 1997, the Company extended its
$1,000,000 line of
credit agreement with the Vermont National Bank through
September 26,
1997. The line of credit, originally established September
26, 1995,
bears interest at a variable rate of two percent above the
prime rate
and is secured by all assets of the Company. There was no
outstanding
borrowing on the line at March 31, 1997 or at June 30, 1996.
On September 26, 1995, the Company executed a financing
agreement with
the Vermont National Bank, consisting of a $3.5 million
commercial
mortgage loan secured by a first mortgage on the Company's
Shelburne,
Vermont facility, as well as business assets. The original
terms of the
mortgage called for repayment based on a thirty-year
amortization
schedule, with a balloon payment due on September 26, 1997.
On May 14,
<PAGE>
1997, the Company received a revised commitment from the
Vermont
National Bank to extend the maturity of its mortgage loan
through
September 26, 1998. The May 14, 1997 commitment replaced an
earlier
commitment letter dated April 10, 1997, which was to expire
May 15, 1997.
The Company is currently negotiating alternatives to replace
this
mortgage loan and related line of credit financing, and
management
believes it will be successful in securing an alternative
financing
source or sources to replace its current mortgage loan and
line of
credit with the Vermont National Bank.
On December 26, 1995, Green Mountain Capital L.P. agreed to
lend the
Company up to $500,000 over a twelve-month period commencing
upon the
date of agreement, in the form of five-year term notes. As
of March 31,
1997, the entire $500,000 had been borrowed. The notes bear
interest at
twelve percent per annum, are repayable in monthly
installments through
December 26, 2000, and are secured by a subordinated
security interest
in the Company's personal property. In conjunction with the
issuance of
the notes, Green Mountain Capital received warrants to
purchase 20,000
shares of Common Stock, at an exercise price of $3.375 per
share. The
right to exercise these warrants begins December 26, 1997,
and expires
the earlier of December 26, 2000, or five years after full
repayment of
the notes.
Management believes that the amount and structure of
financing available
to the Company, as well as cash flows from operations, will
be
sufficient to meet the Company's working capital needs and
planned
capital expenditures for the next twelve months, provided
the Company is
successful in securing an alternative to its line of credit
financing
with the Vermont National Bank prior to September 26, 1997.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(6a) Exhibits
3.3 Restated Certificate of Incorporation of the Company
(filed with
the Securities and Exchange Commission as exhibit 4.1
to the
Company's 1996 Annual Report on Form 10-KSB (File No.
33-69898)
and incorporated herein by reference)
3.4 Amended and Restated By-Laws of the Company (filed
with the
Securities and Exchange Commission as exhibit 3.4 to
the Company's
10-QSB for the quarter ended December 31, 1996 and
incorporated
herein by reference)
4.1 Representative's Warrant issued to Barington Capital
Group, L.P.
upon the consummation of the initial public offering
of the
Company's Common Stock in November, 1993 (filed with
the
Securities and Exchange Commission as exhibit 4.1 to
the Company's
1993 Annual Report on Form 10-KSB (File No. 33-69898)
and
incorporated herein by reference)
4.2 Form of Common Stock Certificate (filed with the
Securities and
Exchange Commission as exhibit 4.2 to the Company's
Registration
Statement on Form SB-2 (File No. 33-69898) and
incorporated herein
by reference)
4.3 Form of Warrant, issued in connection with the private
placement
of 204,912 shares of the Company's Series B
Convertible Preferred
Stock (filed with the Securities and Exchange
Commission as
exhibit 4.3 to the Company's 1996 Annual Report on
Form 10-KSB
(File No. 33-69898) and incorporated herein by
reference)
<PAGE>
4.4 Form of Subscription Agreement issued in connection
with the
private placement of 204,912 shares of the Company's
Series B
Convertible Preferred Stock (filed with the Securities
and
Exchange Commission as exhibit 4.4 to the Company's
1996 Annual
Report on Form 10-KSB (File No. 33-69898) and
incorporated herein
by reference)
4.5 Waiver of Joan H. Martin, dated April 12, 1996, issued
in
connection with waiver of accrued dividends on Series
A Preferred
Stock (filed with the Securities and Exchange
Commission as
exhibit 4.5 to the Company's 1996 Annual Report on
Form 10-KSB
(File No. 33-69898) and incorporated herein by
reference)
4.6 Warrant to purchase 43,826.087 shares of the Company's
Common
Stock, dated April 12, 1996, issued in connection with
Joan H.
Martin's waiver of accrued dividends on Series A
Preferred Stock
(filed with the Securities and Exchange Commission as
exhibit 4.6
to the Company's 1996 Annual Report on Form 10-KSB
(File No. 33-
69898) and incorporated herein by reference)
10.2 Stock warrants issued to Edmund H. Shea, Jr. IRA, Allan
Lyons and
William Maines in connection with the bridge financing
prior to
the initial public offering of the Company's Common
Stock in
November, 1993 (a form of which was filed with the
Securities and
Exchange Commission as exhibit 10.2 to the Company's
Registration
Statement on Form SB-2 (File No. 33-69898) and
incorporated herein
by reference)
10.10 Incentive Stock Option Plan adopted by the Company
on August 16,
1993, with form of Incentive Stock Option Agreement
(filed with
<PAGE>
the Securities and Exchange Commission as exhibit
10.10 to the
Company's Registration Statement on Form SB-2 (File
No. 33-69898)
and incorporated herein by reference)
10.11 Securities Purchase Agreement, dated June 10, 1987
between the
Company and VTB Investment Group and Joan Hixon Martin
(filed with
the Securities and Exchange Commission as exhibit
10.11 to the
Company's Registration Statement on Form SB-2 (File
No. 33- 69898)
and incorporated herein by reference)
10.12 Agreement, dated as of June 19, 1995, between the
Company and John
N. Sortino, providing the terms of Mr. Sortino's
separation
agreement with the Company (filed with the Securities
and Exchange
Commission as exhibit 10.12 to the Company's 10-KSB
for the
transition period ending June 30, 1995 and
incorporated herein by
reference)
10.13 Employment Agreement and Loan Arrangement, dated
July 31, 1995,
between the Company and R. Patrick Burns providing the
terms of
Mr. Burns' employment with the Company as Chief
Executive Officer
(filed with the Securities and Exchange Commission as
exhibit
10.13 to the Company's 10-KSB for the transition
period ending
June 30, 1995 and incorporated herein by reference)
10.17 Commitment Letter issued by Vermont National Bank,
Burlington,
Vermont, dated September 18, 1995, in connection with
a commercial
mortgage loan and a line of credit loan (filed with
the Securities
and Exchange Commission as exhibit 10.17 to the
Company's 10-KSB
for the transition period ended June 30, 1995 and
incorporated
herein by reference)
10.18 Loan Agreement, dated September 26, 1995, between
the Company and
<PAGE>
Vermont National Bank regarding $3,500,000 Term Loan
and
$1,000,000 Line of Credit Loan (filed with the
Securities and
Exchange Commission as exhibit 10.18 to the Company's
10-KSB for
the transition period ended June 30, 1995 and
incorporated herein
by reference)
10.19 Commercial Term Note, dated September 26, 1995,
issued in
connection with the $3,500,000 Term Loan of Vermont
National Bank
(filed with the Securities and Exchange Commission as
exhibit
10.19 to the Company's 10-KSB for the transition
period ended June
30, 1995 and incorporated herein by reference)
10.20 Commercial Time Note, dated September 26, 1995,
issued in
connection with the $1,000,000 Line of Credit Loan of
Vermont
National Bank (filed with the Securities and Exchange
Commission
as exhibit 10.20 to the Company's 10-KSB for the
transition period
ended June 30, 1995 and incorporated herein by
reference)
10.24 Amended 1993 Incentive Stock Option Plan of the
Company, amended
as of November 28, 1995 (filed with the Securities and
Exchange
Commission as exhibit 10.24 to the Company's 10-QSB
for the
quarter ended March 31, 1995 and incorporated herein
by reference)
10.25 Loan Agreement, dated March 26, 1995, between
Green Mountain
Capital, L.P. and the Company in connection with a
$500,000 Term
Loan (filed with the Securities and Exchange
Commission as exhibit
10.25 to the Company's 10-QSB for the quarter ended
March 31, 1995
and incorporated herein by reference)
10.26 Convertible Note, dated March 26, 1995, in the
principal amount of
$200,000, issued in connection with the $500,000 Term
Loan of
<PAGE>
Green Mountain Capital (filed with the Securities and
Exchange
Commission as exhibit 10.26 to the Company's 10-QSB
for the
quarter ended March 31, 1995 and incorporated herein
by reference)
10.27 Stock Purchase Warrant Agreement, dated March 26,
1995, in
connection with the $500,000 Term Loan of Green
Mountain Capital
(filed with the Securities and Exchange Commission as
exhibit
10.27 to the Company's 10-QSB for the quarter ended
March 31, 1995
and incorporated herein by reference)
10.28 Employment and Loan Agreements, dated June 30,
1996, between the
Company and R. Patrick Burns (filed with the Securities
and
Exchange Commission as exhibit 10.28 to the Company's
1996 Annual
Report on Form 10-KSB (File No. 33-69898) and
incorporated herein
by reference)
10.29 Employment Agreement, dated July 1, 1996, between
the Company and
Elisabeth B. Robert (filed with the Securities and
Exchange
Commission as exhibit 10.29 to the Company's 1996
Annual Report on
Form 10-KSB (File No. 33-69898) and incorporated
herein by
reference)
10.30 Amended 1993 Incentive Stock Option Plan of the
Company, amended
as of November 22, 1996 (filed with the Securities and
Exchange
Commission as exhibit 10.30 to the Company's 10-QSB
for the
quarter ended December 31,1996 and incorporated herein
by
reference)
10.31 Non-Employee Directors Stock Option Plan adopted
by the Company on
November 22, 1996 (filed with the Securities and
Exchange
Commission as exhibit 10.31 to the Company's 10-QSB
for the
<PAGE>
quarter ended December 31, 1996 and incorporated
herein by
reference )
10.32 Employment Agreement, dated as of July 1, 1996,
between the
Company and Spencer C. Putnam (filed with the
Securities and
Exchange Commission as exhibit 10.32 to the Company's
10-QSB for
the quarter ended December 31,1996 and incorporated
herein by
reference )
10.33 Convertible Note, dated November 19, 1996, in the
principal amount
of $300,000, issued in connection with the $500,000
Term Loan of
Green Mountain Capital (filed with the Securities
and Exchange
Commission as exhibit 10.33 to the Company's 10-QSB
for the
quarter ended December 31,1996 and incorporated herein
by
reference )
(6b) Reports
There were no reports filed on Form 8-K during the quarter
ended March
31, 1997.
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.
The Vermont Teddy Bear Co., Inc.
Date: May 14, 1997
/s/ Elisabeth B. Robert,
Elisabeth B. Robert,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE MARCH 31, 1997 BALANCE SHEET
AND THE NINE MONTH STATEMENT OF OPERATIONS ENDED
MARCH 31, 1997 FOR THE VERMONT TEDDY BEAR CO., INC.
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,089,713
<SECURITIES> 0
<RECEIVABLES> 26,057
<ALLOWANCES> 0
<INVENTORY> 3,566,517
<CURRENT-ASSETS> 5,236,021
<PP&E> 12,404,775
<DEPRECIATION> 2,330,393
<TOTAL-ASSETS> 15,739,221
<CURRENT-LIABILITIES> 7,616,325
<BONDS> 4,222,410
0
910,245
<COMMON> 258,638
<OTHER-SE> 6,068,752
<TOTAL-LIABILITY-AND-EQUITY> 15,739,221
<SALES> 12,739,326
<TOTAL-REVENUES> 12,739,326
<CGS> 5,287,271
<TOTAL-COSTS> 5,287,271
<OTHER-EXPENSES> 8,323,058
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 302,773
<INCOME-PRETAX> (1,173,776)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,227,776)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,227,776)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> (0.24)
</TABLE>
