BLINI HUT INC
Filing Type: 10QSB
Description: Quarterly Report
Filing Date: May 22, 2000
Period End: March 31, 2000
Primary Exchange: Over the Counter Includes
OTC and OTCBB
Ticker: BHUT
TABLE OF CONTENTS
__________________________________________________
10QSB
Part I...............................................1
ITEM 1...............................................2
Balance Sheet........................................2
Statements of Operations.............................3
Statements of Cash Flows.............................4
Notes To Financial Statements........................5
ITEM 2 ..............................................8
Part II..............................................10
ITEM 6...............................................10
EX-27.0
Exhibit 27 Table.....................................11
United States
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 March 31, 2000
Commission File number 0-27313
Blini Hut, Inc.
(Formerly "Bargain Products, Inc.")
(Exact name of small business issuer as specified in its
charter)
__Nevada______________________ 88-0335902_______
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
47-39 49th Street
Woodside, New York 11377
(Address of principal executive offices)
(718) 784-3344
(Issuer's Telephone Number)
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 [ ]
The number of shares outstanding of the issuer's common stock
par value $.01 per share, as of March 31, 2000 was 9,421,788.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No[x]
INDEX
Page
PART I. FINANCIAL INFORMATION 1
ITEM 1 - FINANCIAL STATEMENTS 2
Condensed Consolidated Balance Sheets 2
Condensed Consolidated Statements of 3
Operations
Condensed Consolidated Statements of Cash
Flows 4
Notes to Condensed Consolidated Financial
Statements 5
-1-
ITEM 2 - Management's Discussion and Analysis
or Plan of Operation 8
PART II. OTHER INFORMATION 10
ITEM 6 - Exhibits and Reports on Form 8K 10
Exhibit 27 - Financial Data Schedule 11
PART I. FINANCIAL INFORMATION
ITEM 1 - Financial Statements
BLINI HUT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2000 1999
(Unaudited)
ASSETS
Current Assets
Cash $7,072 $3,896
Accounts receivable net 35,273 45,000
Inventory 32,000 30,000
Total Current Assets 74,345 78,896
Plant Property and Equipment-at cost 314,063 314,063
Less: Accumulated Depreciation 107,812 97,416
206,251 216,647
Other Assets
Due from related party 1,020 -
Security deposit 49,660 49,660
TOTAL ASSETS $331,276 $345,203
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities
Bank overdraft $6,733 $ -
Deposit on stock purchase 100,000 -
8% Demand note payable 50,000 50,000
Current portion of equipment loan 2,918 2,918
Current portion of capital leases
payable 21,842 21,842
Accounts payable and accrued expenses 107,021 80,175
Payroll tax payable 2,952 2,095
Due to related party 16,850 -
Total Current Liabilities 308,316 157,030
Commitments and contingencies - -
Long Term Liabilities
Equipment loan less current portion 5,552 6,282
Capitalized leases less current
portion 23,265 25,786
TOTAL LIABILITIES 337,133 189,098
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BLINI HUT, INC.
ONDENSED CONSOLIDATED BALANCE SHEETS (continued)
Stockholders' Equity
Capital stock (10,000,000 shares
authorized, $0.01 par value,
9,508,461 issued and outstanding) 95,085 95,085
Capital in excess of par value 773,288 773,288
Deficit (874,230) (712,268)
Total Stockholders' Equity (Deficit) (5,857) 156,105
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $331,276 $345,203
See Notes to Financial Statements.
BLINI HUT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months
Ended March 31,
2000 1999
Sales revenues $200,339 $127,776
Cost of sales 150,783 55,709
Gross profit 49,556 72,067
General selling and administrative
expenses 211,518 136,937
Loss from operations (161,962) (64,870)
Other income and expenses - -
Loss before income tax (161,962) (64,870)
Provision for income tax - -
Net loss $(161,962) $(64,870)
Basic and diluted loss per common share $(0.02) $(0.09)
Basic and diluted weighted average shares
outstanding 9,508,461 741,794
See Notes to Financial Statements
-3-
BLINI HUT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three
Months Ended March 31,
2000 1999
Operating Activities
Net (loss) $(161,962) $(64,870)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
Depreciation and amortization 10,396 10,123
Decrease in accounts receivable 9,727 2,000
(Increase) decrease in inventory (2,000) 1,000
(Increase) in due from related
parties (1,020) -
Increase in due to related party 16,850 -
Increase in bank overdraft 6,733 10,894
Increase in accounts payable
and accruals 27,703 34,971
Net cash provided (used) by
operating activities (93,573) (5,882)
Financing Activities
Sale of common stock - 90,000
Deposit on stock purchase 100,000 -
(Payment) for equipment loans (2,521) (1,149)
(Payment) for capitalized leases (730) (509)
Net cash provided by financing
activities 96,749 88,342
Increase (decrease) in cash 3,176 82,460
Cash at beginning of period 3,896 7,540
Cash at end of period $7,072 $90,000
Supplemental Disclosures of
Cash Flow Information:
Cash paid during year for:
Interest $3,878 $1,593
Income taxes $ - $ -
See Notes to Financial Statements.
-4-
BLINI HUT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - ORGANIZATION AND OPERATIONS
The Company was incorporated as Bargain Products, Inc. in the
State of Nevada on April 6, 1995. The Company was engaged in
the business of selling low cost consumer products at the retail
level through a wholly owned subsidiary until September, 1996.
On March 28, 1996 the wholly owned subsidiary filed for the
protection of Chapter 11 of the Bankruptcy Code. In September,
1996 the Company spun off its wholly owned subsidiary to the
wholly owned subsidiary's creditors as part of the bankruptcy
settlement.
On May 18, 1999 the Company changed its name to Blini Hut,
Inc.
On December 2, 1999 the Company merged with Troika Food,
Inc. ("Troika") in exchange for 6,000,000 shares of the
Company's common stock. Troika Food, Inc. operates a
wholesale Eastern European food preparation business selling to
gourmet food stores and delicatessens.
In January, 2000 the Company opened a quick serve restaurant to
sell its Eastern European foods.
The accompanying unaudited financial statements have been
prepared by Blini Hut, Inc. in accordance with the rules and
regulations of the Securities and Exchange Commission for
interim financial statements. Accordingly, certain information and
footnote disclosures, normally included in financial statements
prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules
and regulations. In the opinion of management of the Company,
the unaudited financial statements reflect all adjustments,
consisting only of normal recurring adjustments, necessary for a
fair presentation of the Company's financial position at March 31,
2000, its operating results for the three months ended March 31,
2000 and 1999 and cash flows for the three months ended March
31, 2000 and 1999. The balance sheet at December 31, 1999 has
been derived from the Company's audited consolidated financial
statements as of that date. These financial statements and the
notes should be read in conjunction with the Company's audited
consolidated financial statements and notes thereto contained in the
Company's Form SB-10K filed with the Securities and Exchange
Commission on April 14, 2000.
The results of operations for the three months ended March 31,
2000 are not necessarily indicative of the results that may be
expected for future quarters or the year ending December 31,
2000.
-5-
BLINI HUT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
The consolidated financial statements include the accounts of the
Company and its subsidiary, Troika Food, Inc. All significant
intercompany transactions and balances have been eliminated in
consolidation.
For accounting purposes, the acquisition has been treated as an
acquisition of the Company by Troika and as a recapitalization of
Troika. The historical financial statements prior to December 2,
1999 are those of Troika giving effect to the acquisition as if the
acquisition took place on May 1, 1997.
Revenue Recognition:
Revenues are recorded at the time of shipment of products or
performance of services.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company
considers all highly liquid investments with a maturity of three
months or less at acquisition to be cash equivalents.
Inventories:
Inventories are stated at the lower of cost determined by the FIFO
method, or market.
Earnings (Loss) per Common Share:
Basic earnings (loss) per common share is based on the weighted
average number of common shares outstanding during the period
presented. Fully diluted loss per share has not been disclosed as it
is anti-dilutive.
Use of Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's
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 revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
-6-
BLINI HUT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Fair Value of Financial Instruments:
Cash and cash equivalents, accounts receivable, demand notes
payable, accounts payable and accrued liabilities are reflected in
the financial statements at fair value because of the short-term
maturity of these instruments.
Comprehensive Income:
Comprehensive income is the total of (1) net income plus (2) all
other changes in net assets arising from non-owner sources. The
Company has presented a statement of operations that includes
other comprehensive income.
Note 3 - ACCOUNTS RECEIVABLE
March 31, December 31,
2000 1999
Trade receivables $35,273 $47,647
Less allowance for uncollectable
accounts - (2,647)
$35,273 $45,000
Note 4 - INVENTORY
March 31, December 31,
2000 1999
Work in progress $ - $ -
Raw materials 5,256 6,409
Finished goods 29,783 36,295
35,039 42,704
Provision for obsolete
inventory (3,039) (12,704)
$32,000 $30,000
Note 5 - COMMON STOCK
On March 25, 1999, the Company sold to unrelated third parties,
under Rule 504 of the Securities and Exchange Act of 1933, as
amended, 3,000,000 shares of $.01 par value common stock for
$.03 per share for net proceeds of $90,000. The Company paid
$10,200 to a shareholder for legal fees which was charged to
Capital in Excess of Par as offering costs.
On December 2, 1999, the Company exchanged 6,000,000 shares
of its common stock, $0.01 par value for 100% of the common
stock of Troika Food, Inc. The Company valued the 6,000,000
shares of its common stock at $0.03 per share. Troika business
assets and liabilities were recorded at carryover basis except for
equipment and leasehold improvements, accumulated depreciation
and amortization which were restated. The value of the common
stock was based upon both current market prices at the time the
shares were issued and whether the shares were restricted. (No
discount for restricted common stock was taken).
-7-
BLINI HUT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Note 5 - COMMON STOCK (continued)
In January 2000, the Company and a private investor entered into
a stock subscription agreement whereby the investor will purchase
235,294 restricted shares of the Company's $.01 par value
common stock for a total of $1,000,000 or approximately $4.25
per share. In January, 2000 the Company received the initial
deposit of $100,000 required by the agreement. The balance is
due in December, 2000. The common shares sold will be held in
escrow until the transaction is closed upon the receipt of the
additional $900,000 due to the Company.
ITEM 2 - Management's Discussion and Analysis or Plan of
Operation
This form 10-QSB includes, without limitation, certain
statements containing the words 'believes', 'intends',
'anticipates', 'estimates', and words of a similar nature,
which constitute 'forward-looking' statements' within the
meaning of the Private Securities Litigation Reform Act of
1995. This Act provides a 'safe harbor' for forward-looking
statements to encourage companies to provide prospective
information about themselves so long as they identify these
statements as forward-looking and provide meaningful,
cautionary statements identifying important factors that could
cause actual results to differ from the projected results. All
statements other than statements of historical fact made in
this Form 10QSB are forward-looking. In particular, the
statements herein regarding the placing of equipment, future
cash requirements and future profitability are forward-looking
statements. Forward-looking statements reflect management's
current expectations and are inherently uncertain. The
Company's actual results may differ significantly from
management's expectations.
GENERAL
Blini Hut, Inc., formerly Bargain Products, Inc., was
organized as a Nevada corporation on April 6, 1995. The
Company was engaged in the business of selling low cost
consumer products at the retail level through its wholly
owned subsidiary of Dollar Mania from June 1995 through
September 1996. The Company has been inactive without
operations since September 1996. On May 18, 1999, the
Company changed its name to Blini Hut, Inc., and now intends
to engage in the marketing and distribution of various
Eastern/European specialty food through fast food
restaurants. On December 2, 1999 the Company and Troika
Food, Inc., a Delaware Corporation ("Troika"), consummated
an agreement making Troika a wholly-owned subsidiary of the
Company.
-8-
ACQUISITION
On April 10, 1999, the Company entered into an
agreement with the shareholders of Troika to issue them
6,000,000 shares of common stock in exchange for all the
outstanding shares of common stock of Troika. The
shareholders of Troika were Russian Chef, Inc., Simon
Kublanov, President and Director of the Company and Leonid
Kuvykin, Vice President, Secretary and Treasurer of the
Company. This agreement was consummated on December 2,
1999.
The Blini Hut/Troika acquisition was negotiated by the
shareholders and management of Blini Hut and Troika,
respectively. The consideration issued was negotiated by
the above parties based upon an arrangement whereby six
Bargain Products shares were to be issued for each of the
Troika shares. The Troika shares were valued higher based
on the management expertise of Troika in the
Eastern/European fast food business.
The principal shareholders of Troika were Russian
Chef, Inc., Simon Kublanov owning 300,000 shares and Leonid
Kuvykin, owning 700,000 shares. At the consummation of the
agreement, Simon Kublanov owned 270,000 shares in the
Company, Leonid Kuvykin 630,000 and Russian Chef Inc.,
5,100,000 respectively.
Presently, the Company has one restaurant in
operation and anticipates opening four restaurants during
mid-2001, at a cost of approximately $200,000 per
restaurant, which amount is anticipated to be expended in
the following manner:
Initial Lease
Payments.................................$40,000
(including 3 mo. security deposit)
Leasehold Improvements...................$50,000
Equipment................................$80,000
Inventory................................$10,000
Advertising/Promotions...................$20,000
TOTAL.................. $200,000
The cost of opening a restaurant may vary depending on
location, price of rent, condition of structure, and
existing equipment. Although one restaurant is currently
operational, the Company does not have sufficient capital at
this time to open any additional restaurants, but
anticipates raising capital for its restaurant operations
through public and/or private financing either through stock
offerings or loans from private parties. There is no
assurance that the Company will be successful in raising
capital for its additional restaurant operations. The
Company may also consider leasing its restaurant equipment.
The Company may also consider acquiring other quick-serve
operations and covert them to Eastern/European fast food
speciality restaurants. Acquisitions may be made through a
combination of stock and cash. The Company has no
agreements to acquire other quick-serve restaurants at this
time.
-9-
PART II. OTHER INFORMATION
ITEM 1 - Legal Proceedings
Not applicable.
ITEM 2 - Changes In Securities
Not applicable.
ITEM 3 - Defaults Upon Senior Securities
Not applicable.
ITEM 4 - Submission of Matters to a Vote of Security
Holders
Not applicable.
ITEM 5 - Other Information
Not applicable.
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
Forms 8-K and 8-K/A were filed with the Securities
and Exchange Commission on March 17, 2000 and March 28, 2000,
respectively. The Item reported was Changes In Registrant's
Certifying Accountant.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SIGNATURE TITLE DATE
_/s/ SIMON KUBLANOV President May 22, 2000
Simon Kublanov
_/s/ LEONID KUVYKIN Vice President, May 22, 2000
Leonid Kuvykin Secretary and Treasurer
-10-
EXHIBIT 27
[TYPE]EX-27
[DESCRIPTION] FDS-- FDS
[TEXT]
[ARTICLE]5 5
[LEGEND] This schedule contains summary financial
information extracted from the balance
sheets and statements of operations found on
pages 1-3 of the Company's Form 10KSB for year
to date and is qualified in its entirety by
reference to such financial statements
[NAME] BLINI HUT, INC.
[MULTIPLIER] 1
[CURRENCY] USD
[S] [C]
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-START] JAN-01-2000
[PERIOD-END] MAR-31-2000
[EXCHANGE-RATE] 1
[CASH] 7,072
[SECURITIES]
[RECEIVABLES] 35,273
[ALLOWANCES]
[INVENTORY] 32,000
[CURRENT-ASSETS] 74,345
[PP&E] 314,063
[DEPRECIATION] 107,812
[TOTAL-ASSETS] 331,276
[CURRENT-LIABILITIES] 308,316
[BONDS]
[PREFERRED-MANDATORY]
[PREFERRED]
[COMMON] 95,085
[OTHER-SE] (100,942)
[TOTAL-LIABILITY-AND-EQUITY] 331,276
[SALES] 200,339
[TOTAL-REVENUES] 200,339
[CGS] 150,783
[TOTAL-COSTS] 211,518
[OTHER-EXPENSES]
[LOSS-PROVISION]
[INTEREST-EXPENSE]
[INCOME-PRETAX] (161,962)
[INCOME-TAX]
[INCOME-CONTINUING] (161,962)
[DISCONTINUED]
[EXTRAORDINARY]
[CHANGES]
[NET-INCOME] (161,962)
[EPS-BASIC] (.02)
[EPS-DILUTED] (.02)
[/TABLE]
-11-
