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 December 31, 1996
Commissioner 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 been subject 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.
<PAGE>
PART I - Financial Information
ITEM 1 Financial Information. Annexed hereto.
<PAGE>
FUN TYME CONCEPTS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Mar.31,1996 Dec.31,1996
ASSETS
Current Assets:
<S> <C> <C>
Cash 66,596 2,594,045
Inventories 14,735 17,410
Prepaid expenses and other current assets 27,635 42,156
Total Current Assets 108,966 2,653,611
Property and equipment(net of accum. dep.) 789,917 911,630
Deferred registration costs 226,333 0
Other Assets 25,324 128,081
Total Assets 1,150,540 3,693,322
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Expenses 131,457 27,045
Customer Deposits 15,008 4,067
Current portion of lease payable 16,857 35,191
Loans from Stockholders 1,468 0
Total Current Liabilities 164,790 66,303
Deferred Officers' Compensation 30,257 0
Notes Payable 200,000 0
Capital Lease Payable(Net of current portion) 49,222 79,055
Deferred Rent 22,560 22,560
Total Liabilities 466,829 167,918
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 -510,570
Total Stockholders' Equity 683,711 3,525,404
Total Liabilities and Stockholders' Equity 1,150,540 3,693,322
The accompanying notes to financial statements are and integral part hereof.
</TABLE>
<PAGE>
FUN TYME CONCEPTS, INC.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTH ENDED NINE MONTHS ENDED
December 31 December 31
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Operating Revenue 163,353 161,827 563,493 466,983
Merchandise Revenue 49,202 49,160 154,850 152,714
Total Revenue 212,555 210,987 718,343 619,697
Operating Expenses -298,639 -245,793 -790,385 -658,316
Cost of Merchandise Sold -34,102 -19,471 -106,344 -93,281
Selling, General and Admin.Exp. -37,002 -22,981 -132,569 -110,239
Compensation Charges 0 -52,500 0 -52,500
(Loss) from operations -157,188 -129,758 -310,955 -294,639
Other Income &(Expenses)
Interest Income 38,018 1,260 66,800 1,481
Interest Expense -1,916 -5,323 -10,057 -14,482
(Loss)before income tax -121,086 -133,821 -254,212 -307,640
Provision for Income Taxes -3,075 1,211 -6,004 0
Net Income(Loss) -124,161 -132,610 -260,216 -307,640
Net Income(Loss)per share -0.05 -0.07 -0.11 -0.17
Weighted average common shares
and equivalents 2,676,000 1,812,862 2,325,635 1,812,862
The accompanying notes to financial statements are an integral part thereof.
</TABLE>
<PAGE>
<TABLE>
FUN TYME CONCEPTS, INC.
CONDENSED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED
December 31st.
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net Income(Loss) -260,216 -307,641
Adjustments to reconcile net(loss)to
net cash (used in) Operating activities:
Depreciation and amortization 74,604 67,432
(Increase)Decrease in inventories -2,675 15,138
(Increase)Decrease in prep.exp.& other curr. assets -14,521 24,393
Increase(decrease) in A/P & accrued exp. -104,412 75,030
(Decrease)in customer deposits -10,941 668
(Decrease) in other assets -102,757 0
Decrease in deferred Officers Compensation -30,257 0
Decrease in due from Officers 0 6,156
Increase in deferred rent 0 3,655
Compensation charges 0 52,500
Net cash(used in) operating activities -451,175 -62,669
Cash flows from investing activities:
Acquisition of fixed assets -131,447 -34,805
Increase in security deposit 0 -2,271
Net cash(used in) investing activities -131,447 -37,076
Proceeds from issuance of preferred stock 0 261,476
Proceeds from issuance of common stock 0 8,300
Net proceeds of initial public offering 3,328,242 0
Proceeds of notes payable to stockholders -1,468 35,000
Repayments of capital lease obligations -16,703 -9,470
Repayments of notes payable to stockholders 0 -61,132
Payment of deferred registration costs 0 -106,565
Repayment of note payable -200,000 0
Net cash provided by financing activities 3,110,071 127,609
NET INCREASE IN CASH 2,527,449 27,864
Cash - beginning of period 66,596 21,633
CASH - END OF PERIOD 2,594,045 49,497
Supp'l sched. of non cash invest'g and
financing activities:
Equipment acquired by capital lease 64,870 4,524
Transfer to common stock of defer.reg.costs 226,333 0
Supplemental disclosure of cash flow info.:
Interest Paid 10,057 14,482
Taxes Paid 6,004 1,202
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
FUN TYME CONCEPTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 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/Party 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 December 31,1996, and the
results of its operations for the three months, and nine months periods ended
December 31,1996. Due to the seasonality of the Company's operation, the results
of its operations for the interim period ended December 31,1996, 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 15,1996 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 31,1998 with a yearly
consulting fee of $30,000, paid in advance at the closing.
<PAGE>
The Underwriting Agreement and Consulting agreement have been terminated by
mutual consent between the parties.
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 with 90 days of such notice by February 5, 1997 its securities may be
delisted from the NASDAQ Small Cap Stock Market and quoted on the OTC Bulletin
Board. The Company is actively seeking to find additional market makers for its
securities. The Company has submitted a plan to NASDAQ which includes among
other business undertaking a proposal to reverse split the outstanding shares on
a 1 for 3 basis. A Buyback of $150,000 worth of the Company's Common Stock
Outstanding which will be retired to treasury.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation.
Result of Operation
During the quarter ended December 31, 1996 revenues of the Company
were $212,555 as compared with $210,987 during the comparable quarter ended in
1995. This increase of $1,568 or (1%) was attributable to an increase in
operating revenues merchandise revenues as a result of renovation and new rides
at Staten Island Fun Bubble which increased admission in the period.
The Nine months ended December 31, 1996 revenue of $718,343 was an increase
by $98,646 or (15.9%) over the same period a year-ago. This increase was the
result of an increase in operating revenues of $96,510 or (20.7%) and an
increase in merchandise revenue of $2,136 or (1.4%) over the same period ended
December 31, 1995. The increase is due to the 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, which brought more
children into the facility on a daily basis. The programs provided further
exposure to our already established programs, as well generated additional
revenue on their own.
<PAGE>
Operating expenses for the nine months ended December 31, 1996 increased by
$132,069 or (20%) and for three months by $52,846 or (21.5%), compared to the
same period a year-ago ended December 31, 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
$37,002 or (61%) for the quarter, and $132,569 or(20.3%) for nine months ended
December 31,1996 as compared to the same period ended December 31,1995. 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 69.3% of merchandise revenue during
the quarter ended December 31,1996 compared to 39.6% for the same period ended
December 31,1995 and 68.7% of merchandise revenue during the nine months ended
December 31,1996 compared to 61.1% in nine months ended December 31,1995. Cost
of merchandise sold varies based on product mix and value discounts earned.
During the three months and the nine months ended December 31,1996 the
Company incurred a net loss of $124,161 or($0.05) per share, and $260,216 or
($0.11) per share respectively as compared with $132,610 or($0.07) per share,
and $307,640 or($0.17) during the comparable period a year-ago December 31,1995.
The primary reason for the decrease in the net loss and net loss per share was
the result of an increase in revenues over operating expenses. In addition to
the new programs implemented and decreased corporate expenses for the three
months and nine months ended December 31,1996 to the comparable three months and
nine months in 1995.
Financial Condition
At December 31,1996 the Company had working capital of $2,587,308 and
shareholders' equity of $3,525,404.
During the nine months ended December 31,1996 the Company used cash for
operating activities of $451,175 a compared with cash used of $62,669 for
operating activities during the comparable of nine months in 1995. The increase
in cash used of $388,506 is primarily due to IPO related expense, decrease in
accounts payable and accrued officer's compensation. The Company acquired fixed
assets of $131,447 and $34,805 during the nine month ended December 31,1996 and
1995, respectively. Cash was provided by financing activities of $127,609 during
the nine month ended December 31,1995 and $3,110,071 during the nine month ended
December 31,1996.
At this time, the Company has commitments for the acquisition of play
equipment and construction for an additional facilities. The proceeds from the
initial public offering will be used primarily for the opening of additional
facilities and working capital. In January 1997 the Company signed a lease to
build a 15,000 square ft. facility in East Brunswick, New Jersey.
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.
<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 Matters to a Vote. None.
ITEM 5. Other Information. None.
ITEM 6. Exhibit and Reports on Form 8-k.
(a) None.
(b) 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
Dated: February 20, 1997
Fun Tyme Concepts, Inc.
By: \s\ Daniel Catalfumo
Daniel Catalfumo, President
By: \s\ Richard Rosso
Richard Rosso, Treasurer
<PAGE>
FINANCIAL DATA SCHEDULE
<TABLE>
<CAPTION>
<S> <C>
PERIOD-TYPE 9 MOS
FISCAL-YEAR-END MARCH 31,1997
PERIOD-START APRIL 1,1996
PERIOD-END DECEMBER 31,1996
CASH 2,594,045
SECURITIES 0
RECEIVABLES 10,033
ALLOWANCES 0
INVENTORY 17,410
CURRENT-ASSETS 2,653,611
PP&E 1,129,996
DEPRECIATION 218,365
TOTAL-ASSETS 3,693,322
CURRENT-LIABILITIES 66,303
BONDS 0
COMMON 2,676
PREFERRED-MANDATORY 0
PREFERRED 0
OTHER-SE 3,522,728
TOTAL-LIABILITY-AND-EQUITY 3,693,322
SALES 718,343
TOTAL REVENUE 718,343
CGS 106,344
TOTAL COST 922,954
OTHER-EXPENSES 0
LOSS-PROVISION 0
INTEREST-EXPENSE 10,057
INCOME-TAX 6,004
INCOME-CONTINUING -260,216
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME -260,216
EPS-PRIMARY -0.11
EPS-DILUTED -0.11
</TABLE>
<PAGE>
