SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 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 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 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 9,143,279
Title of Class Number of Shares outstanding
at October 31, 1997
<PAGE>
<TABLE>
<CAPTION>
PL BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED
As At As At
April 30, 1997 Oct. 31, 1997
Assets
Current Assets
<S> <C> <C>
Cash $ 1,638 $ 14,893
Accounts Receivable $ 431,053 $ 492,763
Inventory $ 241,543 $ 358,962
Prepaid Expenses $ 7,070 $ 7,705
------------------- -----------------
Total Current Assets $ 681,304 $ 874,323
------------------- -----------------
Fixed Assets
Machinery & Equipment $ 713,442 $ 708,785
Leasehold Improvements $ 57,080 $ 56,643
Office Furniture & Equipment $ 34,968 $ 34,700
------------------- -----------------
$ 805,490 $ 800,128
Less: Accumulated Depreciation $ 592,082 $ 606,926
------------------- -----------------
Total Fixed Assets $ 215,408 $ 193,202
------------------- -----------------
Total Assets $ 896,712 $ 1,067,525
Liabilities and Stockholders' Equity
Current Liabilities
Bank Indebtedness $ 151,212 $ 198,297
Accounts Payable $ 520,363 $ 745,502
Notes Payable $ 64,576 $ 7,279
------------------- -----------------
Total Current Liabilities $ 736,151 $ 951,078
------------------- -----------------
Long Term Liabilities
Equipment Bank Loan $ 170,750 $ 114,649
------------------- -----------------
Total Long Term Liabilities $ 170,750 $ 114,649
------------------- -----------------
Stockholders' Equity
Common Stock: $.001 par value,
20,000,000 authorized $ 9,143 $ 9,143
Additional Paid-in Capital $ 2,128,906 $ 2,128,906
Accumulated Deficit $ (2,224,603) $ (2,225,389)
Cumulative Translation Adjustment $ 76,365 $ 89,138
------------------- -----------------
Total Stockholders' Equity $ (10,189) $ 1,798
------------------- -----------------
Total Liabilities and
Stockholders' Equity $ 896,712 $ 1,067,525
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PL BRANDS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
UNAUDITED
For the three For the three For the six For the six
months ending months ending months ending months ending
Oct. 31, 1997 Oct. 31, 1996 Oct. 31, 1997 Oct. 31, 1996
<S> <C> <C> <C> <C>
Sales $ 812,573 $ 589,626 $ 1,405,255 $ 1,575,594
Cost of Sales $ 751,664 $ 522,361 $ 1,238,609 $ 1,403,759
--------------------------------------------------------------------
Gross Profit $ 60,909 $ 67,265 $ 166,646 $ 171,835
--------------------------------------------------------------------
Operating Expenses:
Salaries $ 30,313 $ 26,194 $ 57,208 $ 51,681
Accounting & Legal $ 30,523 $ 21,174 $ 33,880 $ 42,409
Consulting $ (6) $ 15,497 $ 1,618 $ 36,102
Telephone $ 4,659 $ 7,815 $ 8,963 $ 15,368
Insurance $ 0 $ 1,930 $ 0 $ 3,649
Bank Charges & Interest $ 5,380 $ 7,655 $ 11,163 $ 16,940
Travel $ 6,042 $ 1,452 $ 6,042 $ 2,747
Vehicles $ 31 $ 7,321 $ 1,955 $ 15,304
Office Expenses $ 10,069 $ 10,374 $ 13,330 $ 14,018
Business Taxes $ 0 $ 1,383 $ 0 $ 2,566
Bad Debts $ 0 $ 0 $ 0 $ 0
Marketing $ 0 $ 1,869 $ 0 $ 1,869
Debenture Interest $ 0 $ 0 $ 0 $ 0
--------------------------------------------------------------------
$ 87,011 $ 102,664 $ 134,159 $ 202,653
--------------------------------------------------------------------
Profit (Loss) from Operations $ (26,102) $ (35,399) $ 32,487 $ (30,818)
--------------------------------------------------------------------
Other Income (Expenses)
Interest Income $ 0 $ 0 $ 0 $ 6
Gain (Loss) on Foreign Exchange $ (11,892) $ 32,131 $ (11,571) $ 19,491
Depreciation and Amortization $ (11,083) $ (14,743) $ (21,703) $ (29,089)
--------------------------------------------------------------------
$ (22,975) $ (17,388) $ (33,274) $ (9,592)
--------------------------------------------------------------------
Net Profit (Loss) For The Period $ (49,077) $ (18,011) $ (787) $ (40,410)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PL Brands, Inc.
Consolidated Statements of Cash Flows
Unaudited
For the three For the three For the six For the six
months ending months ending months ending months ending
Oct. 31, 1997 Oct. 31, 1996 Oct. 31, 1997 Oct. 31, 1996
------------- ------------- ------------- -------------
Operating Activities:
<S> <C> <C> <C> <C>
Net Profit (Loss) For The Period $ (49,077) $ (18,011) $ (787) $ (40,410)
Adjustment to Reconcile:
Depreciation and Amortization $ 5,604 $ 28,776 $ 16,844 $ 37,964
Foreign Currency Translation $ 11,892 $ (32,131) $ 11,571 $ (19,491)
Change in assets and liabilities affecting cash flows:
Accounts Receivable $ 17,160 $ 202,013 $ (61,710) $ (42,473)
Inventory $ (66,957) $ 13,337 $ (117,419) $ (27,322)
Prepaid Expenses $ (629) $ (206) $ (635) $ 102
Accounts Payable $ 131,234 $ (271,704) $ 167,842 $ (50,342)
Bank Indebtedness $ (25,136) $ 37,439 $ 47,085 $ 71,042
--------------------------------------------------------------------
Net Cash Provided By Operating Activities $ 24,091 $ (40,487) $ 62,791 $ (70,930)
--------------------------------------------------------------------
Investing Activities:
Purchase of Fixed Assets $ (1,697) $ (20,192) $ 5,362 $ (12,709)
--------------------------------------------------------------------
Net Cash Provided By Operating Activities $ (1,697) $ (20,192) $ 5,362 $ (12,709)
--------------------------------------------------------------------
Financing Activities:
Bank Loan-Equipment $ (11,717) $ 464 $ (56,100) $ (4,797)
Notes Payable $ 0 $ 0 $ 0 $ 0
Amts rec'd for deb & stock issuance $ 0 $ 0 $ 0 $ 0
Shareholder Loan $ 0 $ 140,000 $ 0 $ 140,000
Additional Paid In Capital $ 0 $ 0 $ 0 $ 0
Common Stock & Conv. Debentures $ 0 $ 56,850 $ 0 $ 109,650
Foreign Exchange Gain (Loss) $ (11,892) $ 32,131 $ (11,571) $ 19,491
--------------------------------------------------------------------
Net Cash Provided By Financing Activities $ (23,609) $ 229,445 $ (67,671) $ 264,344
--------------------------------------------------------------------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH $ 14,631 $ (39,623) $ 12,773 $ (53,523)
--------------------------------------------------------------------
INCREASE (DECREASE) IN CASH $ 13,416 $ 129,143 $ 13,255 $ 127,182
CASH BALANCE-BEGINNING $ 1,477 $ 2,086 $ 1,638 $ 4,047
CASH BALANCE-ENDING $ 14,893 $ 131,229 $ 14,893 $ 131,229
</TABLE>
4
<PAGE>
PL BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For The Three and Six Months Ended October 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
October 31, 1997, the results of operations of the three and six months ended
October 31, 1996 and 1997, and the cash flows for the three and six months ended
October 31, 1996 and 1997. The results of operations for the three and six
months ended October 31, 1997 are not necessarily indicative of the results of
operations to be expected for the full fiscal year ended April 30, 1998.
Reference is made to the Company's Form 10-KSB for the year ended April 30,
1998.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Sales increased in the six months ended October 31, 1997 compared to 1996 due
to increased sales volume in the second quarter. Gross margin was essentially
unchanged in 1996 as compared to 1995. Operating expenses were significantly
lower in the 1996 period due to management's continued cost cutting efforts.
Liquidity
As of October 31, 1997, the Company's working capital deficit was $76,755.
The Company's working capital position was enhanced as compared to April 30,
1996 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). As of October 31, 1997, the amount used on the line of credit
was $14,649.
The Company anticipates its need for cash over the next 12 months for general
and administrative expenses to be less than $10,000 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.
5
<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
6
<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: January 12, 1998 By: /s/ Robert Brown
-------------------------- ----------------
Robert Brown
Vice President Administration
and Finance
(chief financial officer and
accounting officer and duly
authorized officer)
7
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENTS FOR
THE THREE AND SIX MONTHS ENDED OCTOBER 31, 1997 AND AS OF OCTOBER 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> 6-MOS
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-START> Aug-01-1997
<PERIOD-END> Oct-31-1997
<EXCHANGE-RATE> 1
<CASH> 14,893
<SECURITIES> 0
<RECEIVABLES> 492,703
<ALLOWANCES> 0
<INVENTORY> 358,692
<CURRENT-ASSETS> 874,323
<PP&E> 192,202
<DEPRECIATION> 606,926
<TOTAL-ASSETS> 1,067,525
<CURRENT-LIABILITIES> 951,078
<BONDS> 0
0
0
<COMMON> 9,143
<OTHER-SE> (10,941)
<TOTAL-LIABILITY-AND-EQUITY> 1,067,525
<SALES> 1,405,255
<TOTAL-REVENUES> 1,405,255
<CGS> 1,238,609
<TOTAL-COSTS> 134,159
<OTHER-EXPENSES> (33,274)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (787)
<INCOME-TAX> 0
<INCOME-CONTINUING> (787)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (787)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
