SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Period Ended September 30, 1996
Commission File Number 0-27542
FUN TYME CONCEPTS, INC.
(Exact name of Registrant as specified in its charter)
New York 11-3157259
(State of (I.R.S. employer
Incorporation) identification No.)
290 Wild Avenue
Staten Island, NY 10314
(718) 761-6100
(Address and Telephone Number of Principal Executive
Offices)
Check whether the Issuer: (1) has 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 and (2) has beensubject to such filing requirements for the
past 90 days. Yes X No___
On November 17, 1996 there were outstanding 2,676,000 shares of Common
Stock, par value $.001 per share.
Documents incorporated by reference: None.
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.
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PART I - Financial Information
ITEM 1 Financial Information. Annexed hereto
FUN TYME CONCEPTS, INC.
CONDENSED BALANCE SHEETS
31-Mar-96 30-Sep-96
<S> <C> <C>
ASSETS
Current Assets:
Cash 66,596 2,837,838
Inventories 14,735 13,102
Prepaid expenses and other current assets 27,635 42,804
Total Current Assets 108,966 2,893,744
Property and equipment (net of accumulated depreciation) 789,917 854,921
Deferred registration costs 226,333 0
Other Assets 25,324 61,488
Total Assets 1,150,540 3,810,153
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Expenses 131,457 13,210
Customer Deposits 15,008 8,549
Current portion of lease payable 16,857 37,243
Loans from Stockholders 1,468
Total Current Liabilities 164,790 59,002
Deferred Officers' Compensation 30,257
Notes Payable 200,000
Capital Lease Payable (Net of current portion) 49,222 79,055
Deferred Rent 22,560 22,560
Total Liabilities 466,829 160,617
STOCKHOLDERS' EQUITY
Preferred Stock - par value $.01, authorized 500,000 shares, none issued and
outstanding Common Stock - par value $.001, authorized 10,000,000 shares,
2,676,000 and
1,876,000, respectively shares issued and outstanding 1,876 2,676
Additional Paid -in Capital 932,189 4,033,298
Deficit (250,354) (386,438)
Total Stockholders' Equity 683,711 3,649,536
Total Liabilities and Stockholders' Equity 1,150,540 3,810,153
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The accompanying notes to financial statements are an integral part hereof.
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FUN TYME CONCEPTS, INC.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
September 30th September 30th
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Operating Revenue 219,222 135,355 400,140 305,156
Merchandise Revenue 49,777 47,213 105,649 103,554
Total Revenue 268,999 182,568 505,789 408,710
Operating Expenses (266,988) (195,301) (491,746) (412,523)
Cost of Merchadise Sold (35,654) (32,822) (72,242) (73,810)
Selling, General and Administrative Expenses (62,987) (41,239) (95,567) (87,258)
(Loss) from operations (96,630) (86,794) (153,766) (164,881)
Other Income & (Expense):
Interest Income 18,504 221 28,752 221
Interest Expense (3,400) (3,602) (8,141) (9,159)
(Loss) before income tax (81,526) (90,175) (133,155) (173,819)
Provision for Income Taxes (2,225) (1,211) (2,929) (1,211)
Net Income (Loss) (83,751) (91,386) (136,084) (175,030)
Net Income (Loss) per share (0.03) (0.05) (0.06) (0.10)
Weighted average common shares and equivalents 2,415,130 1,816,195 2,147,038 1,816,195
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The accompanying notes to financial statements are an integral part hereof.
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FUN TYME CONCEPTS, INC.
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED
September 30th.
1996 1995
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Cash flows from operating activities:
Net Income (Loss) (136,084) (175,030)
Adjustments to reconcile net (loss) to net cash (used in) Operating activities:
Depreciation and amortization 49,188 44,529
Decrease in inventories 1,633 15,837
(Increase) Decrease in prepaid expenses & other current assest (15,169) 30,907
Increase (decrease) in accounts payable and accrued expenses (118,247) 30,312
(Decrease) in customer deposits (6,459) (3,167)
Increase (Decrease) in other assets (36,164) 0
Decrease in deferred Officers Compensation (30,257) 0
Decrease in due from Officers 0 6,000
Increase in deferred rent 0 2,893
Net cash (used in) operating activities (291,559) (47,719)
Cash flows from investing activities:
Acquisition of fixed assets (49,322) (6,998)
Proceeds of issuance of preferred stock and warrants 0 261,476
Proceeds form issuance of common stock 0 8,300
Net proceeds of initial public offering 3,328,242
Proceeds of notes payable to stockholders (1,468) 35,000
Repayments of capital lease obligations (14,651) (6,022)
Repayments of notes payable to stockholders 0 (61,132)
Payment of deferred registration costs 0 (31,900)
Repayment of note payable (200,000) 0
Net cash provided by financing activities 3,112,123 205,722
NET INCREASE IN CASH 2,771,242 151,005
Cash - beginning of period 66,596 21,633
CASH - END OF PERIOD 2,837,838 172,638
Supplemental schedule of non cash investing and financing activities:
Equipment acquired by capital lease 64,870 4,524
Transfer to common stock of deferred registration costs 226,333 0
Supplemental disclosure of cash flow information:
Interest Paid 8,141 10,469
Taxes Paid 2,929 1,211
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The accompanying notes to financial statements are an integral part hereof.
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<CAPTION>
FUN TYME CONCEPTS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Preferred Common
Stock Stock
Number Number Common
of of Additional Stock
Shares (Par $.01) shares Par$.001 Paid-in Subscription
Issued Amount Issued Amount Capital (Deficit) Receivable Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances - March 31,
1996 0 $0 1,876,000 $1,876 $932,189 $(250,354) $0 $683,711
Net (Loss) for the
six months ended
September 30, 1996 $(136,084) $(136,084)
Issuance of Common
Stock 800,000 $800 $3,101,109 $3,101,909
Balances - September
30, 1996 0 $0 2,676,000 2,676 $4,033,298 3,649,536
Attention is directed to the foregoing accountants' report and to the
accompanying notes to financial statements.
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FUN TYME CONCEPTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
Note A - The Company:
Fun Tyme concepts, Inc. (the "Company") operates a children's
entertainment center in Staten Island, New York for children of ages two through
twelve under the trade name "Fun bubble, Party/Play Center" since October 1994.
The management of the company is at the present time in search of new sites in
the Tri-State Area.
Note B - Accompanying Financial Statements:
In the opinion of management, the accompanying Unaudited Condensed
Financial Statements of Fun Tyme Concepts, Inc. (the "Company") include all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the Company's financial position as of September 30, 1996, and
the results of its operations for the three months, and six months periods ended
September 30, 1996. Due to the seasonality of the Company's operation, the
results of its operations for the interim period ended September 30, 1996, may
not be indicative of total results for the full year.
While the Company believes the disclosures presented are adequate to
make the information not misleading, it is suggested that these condensed
financial statements be read in conjunction with the Company's registration
statement on Form SB-2.
Note C- Public Offering:
On August 15, 1995 the Registrant consummated a public offering (the
"Offering") of its securities, whereby it sold, through State Street Capital
Markets Corp. (the "Underwriter"), 1,250,000 Units (inclusive of 250,000 Units
by a certain selling securityholder and 200,000 shares by certain selling
stockholders), each Unit comprising one share of the Registrant's common stock,
par value $.001 per share (the "Common Stock") and one Common Stock Purchase
Warrant. The Registrant received net proceeds of $3,328,242 after the payment of
underwriting commissions, the non-accountable expense allowance and other cost
of the Offering. Also in connection with the Offering the Registrant sold
Underwriter's Warrants to purchase 125,000 Units to the Underwriter for a
nominal value.
The Registrant also entered into a two year consulting agreement with the
Underwriter commencing July 31, 1996 and ending July 30, 1998 with a yearly
consulting fee of $30,000, paid in advance at the closing.
The Units were to be separately tradable 90 days from issuance, which
date was October 28, 1996. Since August 1996, the Underwriter has ceased market
making activities. The lack of support for the Registrant's securities has
provided for limited liquidity in such securities and decreased quotations,
whereby the Units are trading below $1.00. Nasdaq has notified the Company that
unless it can provide a viable plan and/or see its stock price trade above $1.00
then within 90 days of such notice it will be delisted from the Nasdaq SmallCap
Stock Market and quoted on the OTC Bulletin Board. The Company has unilaterally
terminated its underwriting agreement with the Underwriter and is actively
seeking to find additional market makers for its securities.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
During the three months ended September 30, 1996 revenues of the Company
were $268,999 as compared with $182,568 during the comparable three months ended
in 1995. This increase of (47.3%) was attributable to both an increase in
operating revenues (62%) and an increase in merchandise revenue (5.4%).
Operating revenues increased during the three months ended September 30, 1996 as
a result of an increase in revenues from three new programs (Fun Bubble's Summer
Day Camp, After School Program and Little Miss Fun Bubble Pageant). These
programs started in the second quarter of fiscal 1996.
Revenue for the six months ended September 30, 1996 were $505,789, an
increases of 23.8% over the same period a year-ago. This increase was the result
of an increase in operating revenue of $94,984 or (31.1%) and an increase in
merchandise revenue of $2,095, or (2%) over the same period ended September 30,
1995. The increase is due to the new programs mentioned above, which brought
more children into the facility on a daily basis. The programs provided further
exposure to our already establish programs, as well as generated additional
revenue on their own.
Operating expenses for the six months ended September 30, 1996 increased
by $79,233, or 19% and for the three months by $71,687, or 37% , compared to the
same period a year-ago ended September 30, 1995. This increase was primarily
caused by new staffing salaries, additional lease payments, and additional costs
resulting from the new programs implemented.
Selling, general and administrative expenses, have also increased to
$21,748, or 53% for the quarter, and $8,309 or 9% for six months ended September
30, 1996 as compared to the same period ended September 30, 1995. The increase
is due to marketing expenses, professional fees and other corporate expenses.
The Company now has the corporate overhead in place which will enable it to
support additional facilities.
Cost of merchandise sold amounted to 71.0% and 68% and 69% and 71% of
merchandise revenue during the three months and six month periods ended
September 30, 1996 and 1995 respectively. Cost of merchandise sold varies based
on product mix and value discounts earned.
During the three months and the six months ended September 30, 1996 the
Company incurred a net loss of $83,751 or $0.03 per share, and $136,084 or
$0.06, respectively as compared with $91,386 or $0.05 per share, and $175,030 or
$0.10 during the comparable period a year-ago September 30, 1995. The primary
reason for the increase in the net loss and net loss per share was the result of
an increase in total operating expenses from new programs implemented and
additional corporate expenses from the three months and six months ended
September 30, 1996 to the comparable three month and six month in 1995.
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Financial Condition
At September 30, 1996 the Company had working capital of $2,834,742 and
shareholders' equity of $3,649,536.
During the six months ended September 30, 1996 the Company used cash for
operating activities of $291,559 as compared with cash used of $47,719 for
operating activities during the comparable six months in 1995. The increase in
cash used of $243,840 is primarily due to a decrease in accounts payable and
accrued officer's compensation. The Company acquired fixed assets of $49,322 and
$6,998 during the six month ended September 30, 1996 and 1995, respectively.
Cash was provided by financing activities of $205,722 during the six month ended
September 30, 1995 and $3,112,123 during the six month ended September 30, 1996.
At this time, The Company does not have any commitments for the
acquisition of play equipment of construction for any additional facilities. The
proceeds from the initial public offering will be used primarily for the opening
of additional facilities and working capital. Although no leases have been
entered into at this point, the Company is conducting feasibility studies and
demographic surveys on prospective future sites.
The Company believes that funds it generates from ongoing operations and
the proceeds from the initial public offering will be adequate to fund its
present operation and any additional operations it plans to commence in the
future.
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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 Matters to a Vote. None
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-k.
(a) None.
(b) None.
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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.
Dated: November 20, 1996
Fun Tyme Concepts, Inc.
By: /s/ Daniel Catalfumo
Daniel Catalfumo, President
By: /s/ Richard Rosso
Richard Rosso, Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
FINANCIAL DATA SCHEDULE
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> Apr-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,837,838
<SECURITIES> 0
<RECEIVABLES> 21,333
<ALLOWANCES> 0
<INVENTORY> 13,102
<CURRENT-ASSETS> 2,893,744
<PP&E> 1,040,632
<DEPRECIATION> 185,450
<TOTAL-ASSETS> 3,810,153
<CURRENT-LIABILITIES> 59,002
<BONDS> 0
0
0
<COMMON> 2,676
<OTHER-SE> 3,598,478
<TOTAL-LIABILITY-AND-EQUITY> 3,810,153
<SALES> 505,789
<TOTAL-REVENUES> 505,789
<CGS> 72,242
<TOTAL-COSTS> 587,313
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,141
<INCOME-PRETAX> 133,155
<INCOME-TAX> 2,929
<INCOME-CONTINUING> 136,084
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 136,084
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
