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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from __________________
to __________________
Commission File Number 0-26454
PL BRANDS, INC.
(Exact Name of Small Business Issuer as specified in its Charter)
Delaware 98-0142664
(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.)
10 Planchet Road, Unit 6, Concord Ontario, Canada LK4 2C8
(Address of principal executive offices) (Zip Code)
(905) 761-0888
(Issuer's telephone number)
Check whether the Issuer (1) 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
<PAGE>
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 No X
Indicate the number of shares outstanding of each of the issuer's
classes of Common Equity, as of the latest practicable date.
Common Stock, $.001 par value 4,120,000
- ---------------------------------- --------------------
Title of Class Number of Shares outstanding
at January 31, 1997
<PAGE>
<TABLE>
<CAPTION>
PL BRANDS, INC.
Consolidated Balance Sheets
As at As at
April 30, 1996 Jan 31, 1997
ASSETS
CURRENT
<S> <C> <C>
Cash $ 4,047 $ 6,493
Accounts receivable 386,811 467,568
Inventory 143,907 137,228
Prepaids 8,429 10,543
Total Current Assets 543,194 621,832
FIXED ASSETS
Machinery & Equipment $ 709,369 $ 719,244
Leasehold Improvements 58,572 59,388
Office Furniture & Equipment 35,882 36,381
$ 803,823 $ 815,013
Less: Accumulated Depreciation $ 547,827 $ 599,324
Total Fixed Assets $ 255,996 $ 215,689
Total Assets $ 799,190 $ 837,521
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Bank Indebtedness $ 146,843 $ 158,670
Accounts payable 564,332 542,632
Total Current Liabilities $ 711,175 $ 701,302
Long Term Liabilities
Equipment Bank Loan $ 214,857 $ 182,494
Amounts received for the issuance of Convertible
Debentures and Capital Stock 203,850 313,500
TotalhLongrTermoLiabilities 1,121,685 1,338,972
STOCKHOLDERS' EQUITY
Common Stock: $.001 par value,
authorized 20,000,000 $ 4,120 $ 4,120
Additional Paid-In Capital 889,066 889,066
Accumulated Deficit (1,957,998) (2,084,347)
<PAGE>
Cumulative Translation Adjustment 31,142 (11,592)
Total Stockholders' Equity $ (1,033,670) $ (1,202,753)
Total Liabilities and Stockholders' Equity $ 799,190 $ 837,521
</TABLE>
See Accompanying Notes
<PAGE>
<TABLE>
<CAPTION>
PL BRANDS, INC.
Consolidated Statements of Operations
For the three For the three For the nine For the nine
months ending months ending months ending months ending
Jan 31, 1997 Jan 31, 1996 Jan 31, 1997 Jan 31, 1996
<S> <C> <C> <C> <C>
Sales $ 370,262 $ 259,102 $ 1,945,856 $ 1,645,838
Cost of Sales $ 352,245 $ 248,557 $ 1,756,004 $ 1,473,549
Gross Profit $ 18,017 $ 10,545 $ 189,852 $ 172,289
Operating Expenses:
Salaries $ 25,955 $ 14,959 $ 77,636 $ 122,394
Accounting & Legal 11,542 17,400 53,951 55,907
Consulting 26,763 0 62,865 57,134
Telephone 6,056 7,623 21,424 21,270
Insurance 1,915 1,315 5,564 5,552
Bank Charges & Interest 6,644 9,019 23,584 59,850
Travel 864 5,398 3,611 19,805
Vehicles 5,416 5,742 20,720 25,453
Offices Expenses (820) 23,864 13,198 80,997
Business Taxes 3 0 2,569 0
Marketing 3 (6,488) 1,872 5,587
Miscellaneous 0 913 0 3,862
Debenture Interest 0 0 0 0
$ 84,341 $ 79,745 $ 286,994 $ 457,811
Profit (Loss) from Operations $ (66,324) $ (69,200) $ (97,142) $ (285,522)
Other Income (Expenses)
Interest Income $ 0 $ 18 $ 6 $ 302
Gain (Loss) on Foreign Exchange (5,005) (745) 14,486 28,700
Depreciation and Amortization (14,610) (2,627) (43,669) (8,213)
(19,615) (1,864) (29,207) (20,789)
Net Profit (Loss) for the Period (85,939) (71,064) (126,349) (264,733)
</TABLE>
See Accompanying Notes
<PAGE>
<TABLE>
<CAPTION>
PL BRANDS, INC.
Consolidated Statements of Cash Flows
For the three For the three For the nine For the nine
months ending months ending months ending months ending
Jan 31, 1997 Jan 31, 1996 Jan 31, 1997 Jan 31, 1996
Operating Activities:
<S> <C> <C> <C> <C>
Net Profit (Loss) For the Period $ (85,939) $ (71,064) $ (126,349) $ (246,733)
Adjustment to reconcile:
Depreciation and
Amortization 13,533 2,696 51,497 35,210
Foreign Currency
Translation 5,005 0 (14,486) 3,090
Change in assets and liabilities affecting cash flows:
Accounts Receivable (38,284) 24,564 (80,757) (7,164)
Inventory 34,001 24,050 6,679 (12,169)
Prepaid Expenses (2,216) 114 (2,114) (2,185)
Deposits 0 9,733 0 (8,699)
Accounts Payable 28,642 (12,564) (21,700) (583,697)
Bank Indebtedness (59,215) 0 11,827 0
Net Cash Provided By
Operating Activities $ (104,473) $ (22,471) $ (175,403) $ (840,347)
Investing Activities:
Purchase of Fixed Assets $ 1,519 $ 11,265 $ (11,190) $ (9,794)
Net Cash Provided By
Investing Activities $ 1,519 $ 11,265 $ (11,190) $ (9,794)
Financing Activities:
Bank Loan-Equipment $ (27,566) $ (9,350) $ (32,363) $ 840
Convertible Debentures
and Capital Stock 0 0 109,650 (829,186)
Common Share (conversion) 0 0 0 970,164
Shareholder Loan 0 38,269 140,000 666,250
Foreign Exchange Gain (Loss) (5,005) 0 14,486 0
Net Cash Provided By
Financing Activities $ (32,571) $ 28,919 $ 231,773 $ 808,068
Effect of Exchange
Rate Changes on Cash $ 10,789 $ 0 $ (42,734) $ 0
Increase (Decrease) in Cash $ (124,736) $ 17,713 $ 2,446 $ (42,073)
Cash Balance - Beginning $ 131,229 $ 128,710 $ 4,047 $ (68,924)
Cash Balance - Ending $ 6,493 $ (110,997) $ 6,493 $ (110,997)
</TABLE>
See Accompanying Notes
<PAGE>
PL BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For The Three and Nine Months Ended January 31, 1996 and 1997
NOTE 1 - UNAUDITED INTERIM FINANCIAL INFORMATION
The unaudited interim financial statements are unaudited, but in the
opinion of the management of the Company, contain all adjustments, consisting of
only normal recurring accruals, necessary to present fairly the financial
position at January 31, 1997, the results of operations of the three and nine
months ended January 31, 1996 and 1997, and the cash flows for the three and
nine months ended January 31, 1996 and 1997. The results of operations for the
three months ended January 31, 1997 are not necessarily indicative of the
results of operations to be expected for the full fiscal year ended April 30,
1997. Reference is made to the Company's Form 10-KSB, for the year ended April
30, 1996.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Results of Operations
Sales increased in the 1997 periods compared to 1996 due to increased sales
volume. Gross margin was lower due to increased prices of materials which the
Company was unable to recoup by raising prices. Operating expenses were
significantly lower in the 1997 period due to management cost cutting efforts.
Liquidity
As of January 31, 1997, the Company's working capital deficit was 79,740.
The Company's working capital position was enhanced as compared to April 30,
1997 by the sale of securities and proceeds from a shareholder loan. The Company
has also obtained an operating line of credit from a bank in the amount of
$250,000 (CAN).
The Company anticipates its need for cash over the next 12 months for
general and administrative expenses to be $50,000 per month. This amount is
expected to be provided from operations and provided by private placements of
debt or equity. The Company has no specific plans for any placement of its
securities.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTER TO A VOTE OF
SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
<PAGE>
SIGNATURES
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.
Date: March 14, 1997 By: /s/ Robert Brown
----------------
Robert Brown
Vice
President
Administration
and Finance
(chief
financial
officer and
accounting
officer and
duly
authorized
officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 1997 AND AS OF
JANUARY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000930817
<NAME> PL BRANDS, INC.
<MULTIPLIER> 1
<CURRENCY> US dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Apr-30-1997
<PERIOD-START> Nov-01-1997
<PERIOD-END> Jan-31-1997
<EXCHANGE-RATE> 1
<CASH> 6,493
<SECURITIES> 0
<RECEIVABLES> 467,568
<ALLOWANCES> 0
<INVENTORY> 137,228
<CURRENT-ASSETS> 621,832
<PP&E> 815,013
<DEPRECIATION> 599,324
<TOTAL-ASSETS> 837,521
<CURRENT-LIABILITIES> 701,302
<BONDS> 0
0
0
<COMMON> 4,120
<OTHER-SE> (1,206,873)
<TOTAL-LIABILITY-AND-EQUITY> 837,521
<SALES> 1,945,856
<TOTAL-REVENUES> 1,945,856
<CGS> 1,756,004
<TOTAL-COSTS> 286,994
<OTHER-EXPENSES> (29,207)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (126,349)
<INCOME-TAX> 0
<INCOME-CONTINUING> (126,349)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (126,349)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
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