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 June 30, 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 June 30, 2000 was 9,508,461.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No[x]
1
INDEX
Page
PART I. FINANCIAL INFORMATION 3
ITEM 1 - FINANCIAL STATEMENTS 3
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of 4
Operations
Condensed Consolidated Statements of Cash
Flows 5
Notes to Condensed Consolidated Financial
Statements 6
ITEM 2 - Management's Discussion and Analysis
or Plan of Operation 10
PART II. OTHER INFORMATION 12
ITEM 6 - Exhibits and Reports on Form 8K 12
Exhibit 27 - Financial Data Schedule 13
2
PART I. FINANCIAL INFORMATION
ITEM 1 - Financial Statements
<TABLE>
<CAPTION>
BLINI HUT, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
<S> <C> <C>
June 30, December 31,
2000 1999
ASSETS (Unaudited)
Current Assets
Cash $28,335 $ 3,896
Accounts receivable net 37,045 45,000
Inventory 41,965 30,000
Total Current Assets 107,345 78,896
Plant Property and Equipment-at
cost 358,913 314,063
Less: Accumulated Depreciation 130,313 97,416
228,600 216,647
Other Assets
Due from related party 53,524 -
Security deposit 49,660 49,660
TOTAL ASSETS $439,129 $345,203
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Bank overdraft $9,651 $ -
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 62,999 80,175
Payroll tax payable 36,913 2,095
Due to related party - -
Total Current Liabilities $284,323 $157,030
Commitments and contingencies - -
Long Term Liabilities
Equipment loan less current
portion 4,823 6,282
Capitalized leases less
current portion 21,084 25,786
TOTAL LIABILITIES $310,230 $189,098
Stockholders' Equity
Capital stock (10,000,000
shares authorized, $0.01 par
value, 9,659,188 and 9,508,461
issued and outstanding,
respectively) 96,612 95,085
Capital in excess of par
value 812,261 603,788
Deficit (779,974) (542,768)
Total Stockholders' Equity $128,899 $156,105
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $439,129 $345,203
See Notes to Financial Statements.
</TABLE>
3
<TABLE>
<CAPTION>
BLINI HUT, INC.
CONDENSED
CONSOLIDATED
STATEMENTS OF
OPERATIONS
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Sales revenues $212,795 $147,719 $413,134 $275,495
Cost of sales 148,638 33,788 299,421 89,497
Gross profit 64,157 113,931 113,713 185,998
General&administrative
expenses 150,138 104,872 361,656 241,809
Loss from operations (85,981) 9,059 (247,943) (55,811)
Other income &
expenses 10,737 - 10,737 -
Income (loss) before
income tax (75,244) 9,059 (237,206) (55,811)
Provision for income
tax - - - -
Net loss $(75,244) $9,059 $(237,206) $(55,811)
Basic loss per common
share (0.01) 0.00 (0.02) (0.01)
Basic weighted average
shares outstanding 9,550,419 9,508,461 9,528,451 8,116,196
</TABLE>
See Notes to Financial Statements.
4
<TABLE>
<CAPTION>
BLINI HUT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
OPERATING
ACTIVITIES
Net income or
(loss) $(75,244) $9,059 $(237,206) $(55,811)
Adjustments to
reconcile net
income or(loss)
to net cash
provided (used)
by operating
activities:
Changes in
operating
assets of
continuing
operations:
Depreciation
and
amortization 22,501 8,011 32,897 18,134
Accounts
receivable (1,772) (19,862) 7,955 (17,862)
Inventory (9,965) (5,000) (11,965) (4,000)
Due from related
parties (52,504) - (53,524) -
Due to related
party (16,850) - - -
Bank overdraft 2,918 (10,300) 9,651 594
Accounts payable
and accruals (10,061) 22,355 17,642 57,326
Net cash provided
(used) by
continuing
operations (140,977) 4,263 (234,550) (1,619)
INVESTING
ACTIVITIES:
Purchase of
plant and
equipment (44,850) - (44,850) -
Net cash
used by
investing
activities (44,850) 0 (44,850) 0
FINANCING
ACTIVITIES:
Sale of
common stock 210,000 - 210,000 90,000
Offering cost - (10,200) - (10,200)
Deposit on
stock purchase - - 100,000 -
(Payment) for
equipment loans 1,062 (70) (1,459) (1,219)
(Payment) for
capitalized
leases (3,972) (4,193) (4,702) (4,702)
Net cash
provided
(used) by
financing
activities 207,090 (14,463) 303,839 73,879
Increase
(decrease)
in cash 21,263 (10,200) 24,439 72,260
Cash at
beginning
of period 7,072 90,000 3,896 7,540
Cash at
end of period $28,335 $79,800 $28,335 $79,800
Supplemental
Disclosures of
Cash Flow
Information:
Cash paid during
year for:
Interest 4,172 3,412 6,765 5,005
Income taxes - - - -
</TABLE>
See Notes to Financial Statements.
5
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 June 30,2000, its operating results
for the three and six months ended June 30, 2000 and 1999 and cash
flows for the three and six months ended June 30, 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 10-KSB filed with the Securities and
Exchange Commission on April 14, 2000.
The results of operations for the threeand six months ended June 30,
2000 are not necessarily indicative of the results that may be expected
for future quarters or the year ending December 31, 2000.
6
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 the
Company. 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.
7
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.
<TABLE>
<CAPTION>
NOTE 3 - ACCOUNTS RECEIVABLE
June 30, December 31,
2000 1999
<S> <C> <C>
Trade receivables $39,692 $47,647
Less allowance for uncollectable
accounts (2,647) (2,647)
$37,045 $45,000
NOTE 4 - INVENTORY June 30, December 31,
2000 1999
Work in progress $ - $ -
Raw materials 7,072 6,409
Finished goods 42,422 36,295
49,494 42,704
Provision for obsolete inventory (7,529) (12,704)
$41,965 $30,000
</TABLE>
8
BLINI HUT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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). This transaction was restated as if it took place at
inception of the Company.
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.
In June 2000, the Company sold 152,727 restricted shares of common stock at
$1.375 per share to two investors.
9
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.
10
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.
11
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
No Reports on Form 8-K were filed with the Securities
and Exchange Commission during the quater ending June 30, 2000.
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 August 14, 2000
Simon Kublanov
_/s/ LEONID KUVYKIN Vice President, August 14, 2000
Leonid Kuvykin Secretary and Treasurer
12
EXHIBIT 27
[TYPE]EX-27
[DESCRIPTION] FDS-- FDS
[TEXT]
[ARTICLE]5 5
[LEGEND] This schedule contains summary
financial information extracted from
the condensed balance sheet as of June
30, 2000 and the related condensed
statement of operations for the six month
period ended June 30, 2000 and is qualified
in its entirety by reference to such financial
statements
[NAME] BLINI HUT, INC.
[MULTIPLIER] 1
[CURRENCY] USD
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-START] JAN-01-2000
[PERIOD-END] JUNE-30-2000
[EXCHANGE-RATE] 1
[CASH] 28,335
[SECURITIES]
[RECEIVABLES] 39,692
[ALLOWANCES] 2,647
[INVENTORY] 41,965
[CURRENT-ASSETS] 107,345
[PP&E] 358,913
[DEPRECIATION] 130,313
[TOTAL-ASSETS] 439,129
[CURRENT-LIABILITIES] 284,323
[BONDS]
[PREFERRED-MANDATORY]
[PREFERRED]
[COMMON] 96,612
[OTHER-SE] 32,287
[TOTAL-LIABILITY-AND-EQUITY] 439,129
[SALES] 413,134
[TOTAL-REVENUES] 413,134
[CGS] 299,421
[TOTAL-COSTS] 361,656
[OTHER-EXPENSES]
[LOSS-PROVISION]
[INTEREST-EXPENSE]
[INCOME-PRETAX] (237,206)
[INCOME-TAX]
[INCOME-CONTINUING] (237,206)
[DISCONTINUED]
[EXTRAORDINARY]
[CHANGES]
[NET-INCOME] (237,206)
[EPS-BASIC] (.02)
[EPS-DILUTED] (.02)
</TABLE>
13
