<PAGE>
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
-------------
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1939
For the transition period from __________ to __________
Commission File Number: 1-13984
-------
CREATIVE BAKERIES, INC.
(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
New York 22-3576940
-------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
20 Passaic Avenue, Fairfield, NJ 07004
----------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (973) 808-9292
-------------------
Former name: William Greenberg Jr. Desserts and Cafes, Inc.
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
--- ---
Indicate the number of Shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at June 30, 2000
-------------------------- ----------------------------
<S> <C>
Common Stock, par value $0.001
per share 5,245,250
</TABLE>
<PAGE>
INDEX
Part I. Financial information
<TABLE>
<S> <C> <C>
Item 1. Condensed consolidated financial statements:
Balance sheet as of June 30, 2000 F-2
Statement of operations for the six and
three months ended June 30, 2000 and 1999 F-3
Statement of stockholders' equity for the
period January 1, 1999 to June 30, 2000 F-4
Statement of cash flows for the six
months ended June 30, 2000 and 1999 F-5
Notes to condensed consolidated financial
statements F-6 - F-12
Item 2. Management's discussion and analysis of
financial condition
Item 3. Legal proceedings
</TABLE>
Part II. Other information
Signatures
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET - JUNE 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 172,674
Accounts receivable, less allowance for doubtful
accounts of $9,000 405,060
Inventories 269,555
Prepaid expenses and other current assets 23,452
------------
Total current assets 870,741
------------
Property and equipment, net 559,950
------------
Other assets:
Goodwill, net of amortization 849,485
Security deposits 5,464
------------
854,949
------------
$ 2,285,640
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, bank $ 128,284
Loans payable, other 7,500
Accounts payable 545,262
Payroll taxes payable 45,370
Accrued expenses 241,189
------------
Total current liabilities 967,605
------------
Other liabilities:
Deferred rent 126,864
Net liabilities of discontinued operations less
assets to be disposed of 404,771
------------
531,635
------------
Stockholders' equity:
Preferred stock, $.001 par value, authorized 2,000,000
shares; none issued
Common stock, $.001 par value, authorized 10,000,000
shares, issued 5,245,250 shares 5,245
Additional paid in capital 11,364,074
Deficit (10,482,603)
------------
886,716
Common stock held in treasury, 178,500 shares (100,316)
------------
786,400
------------
$ 2,285,640
============
</TABLE>
See notes to condensed consolidated financial statements.
F-2
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX AND THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 2,108,727 $ 2,036,252 $ 1,284,124 $ 1,128,817
Cost of sales 1,680,344 1,611,200 998,887 892,486
----------- ----------- ----------- -----------
Gross profit 428,383 425,052 285,237 236,331
Selling, general and administrative
expenses 523,295 529,842 287,933 232,736
----------- ----------- ----------- -----------
Income (loss) from continuing
operations and other income (expenses) (94,912) (104,790) (2,696) 3,595
----------- ----------- ----------- -----------
Other income (expenses):
Sale of marketable securities 3,216
Miscellaneous income 4,500 42,345 3,243 6,213
Interest income 2,881 4,248 1,466 2,171
Interest expense (6,986) (5,629) (3,743) (3,422)
----------- ----------- ----------- -----------
395 44,180 966 4,962
----------- ----------- ----------- -----------
Income (loss) from continuing
operations (94,517) (60,610) (1,730) 8,557
Discontinued operations:
Income (loss) from operations of
New York facility to be disposed of (24,465) 23,815 (2,488) 53,537
----------- ----------- ----------- -----------
Net income (loss) ($ 118,982) ($ 36,795) ($ 4,218) $ 62,094
=========== =========== =========== ===========
Earnings per common share:
Primary and fully diluted:
Income (loss) on continuing
operations ($ 0.02) ($ 0.01) $ 0.00 $ 0.00
Income (loss) from discontinued
operations 0.00 0.00 0.00 0.01
----------- ----------- ----------- -----------
Net income (loss) per common share ($ 0.02) ($ 0.01) $ 0.00 $ 0.01
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 5,245,250 5,241,360 5,245,250 5,304,508
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
F-3
<PAGE>
CREATIVE BAKERIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
JANUARY 1, 1999 TO JUNE 30, 2000
<TABLE>
<CAPTION>
Common stock
----------------------
Number Additional Total
of Paid in Accumulated Treasury Stockholders'
Shares Amount Capital Deficit Stock Equity
------ ------ ------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 5,101,750 $ 5,102 $11,206,588 ($10,482,200) ($247,369) $482,121
Exercise of warrants on January 26, 1999 150,000 150 187,350 187,500
Common stock issued in settlement of accrued
obligations 53,500 53 111,760 111,813
Cancellation of shares regarding the purchase of
Chatterley Elegant Desserts, Inc. (60,000) (60) 60
Fair market value of warrant to acquire 8,610
shares of common stock issued to a lender in
order to obtain financing for the purchase of
the operating assets of Greenberg Desserts
Associates Limited Partnership, valued at
$.500 per share 4,305 4,305
Purchase of treasury stock (95,625) (95,625)
Treasury stock issued in settlement of accrued
obligations 8,750 8,750
Net income for the year ended December 31, 1999 118,579 118,579
--------- -------- ----------- ----------- -------- --------
Balance at December 31, 1999 5,245,250 5,245 11,510,063 (10,363,621) (334,244) 817,443
Purchase of treasury stock (94,061) (94,061)
Treasury stock issued upon exercise of warrant (145,989) 327,989 182,000
Net loss for the six months ended June 30, 2000 (118,982) (118,982)
--------- -------- ----------- ----------- -------- --------
(5,245,250) $ 5,245 $11,364,074 ($10,482,603) ($100,316) $786,400
========= ========= =========== =========== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Operating activities:
Loss from continuing operations ($ 94,517) ($ 60,610)
Adjustments to reconcile loss from
continuing operations to cash used in continuing
operations:
Depreciation and amortization 107,230 98,501
Gain on sale of marketable securities 3,216
Changes in other operating assets and liabilities
from continuing operations:
Accounts receivable (90,921) (133,272)
Inventory 13,729 55,315
Prepaid expenses and other current assets 64,278 6,810
Accounts payable 29,670 8,760
Accrued expenses and other current liabilities (38,629) 77,229
Deferred rent (10,722) (6,847)
--------- ---------
Net cash provided by (used in) operating
activities (19,882) 49,102
Net cash provided by (used in) discontinued
operations 9,150 (125,686)
--------- ---------
Net cash used in operating activities (10,732) (76,584)
--------- ---------
Investing activities:
Proceeds from sale of marketable securities 4,533
Purchase of property and equipment (16,229)
---------
Net cash used in investing activities (11,696)
---------
Financing activities:
Proceeds from issuance of common stock and
warrants 182,000 187,500
Purchase of treasury stock (94,061)
Payment of debt (19,504) (19,494)
--------- ---------
Net cash provided by financing activities 68,435 168,006
--------- ---------
Net increase in cash and cash equivalents 57,703 79,726
Cash and cash equivalents, beginning of period 114,971 129,626
--------- ---------
Cash and cash equivalents, end of period $ 172,674 $ 209,352
========= =========
Supplemental disclosures:
Cash paid during the period:
Interest paid during the period
Continuing operations $ 4,379 $ 5,629
========= =========
Discontinued operations $ 0 $ 0
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
F-5
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
1. The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. The
results of operations for the three months ended is not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report for the year
ended December 31, 1999 included in its Annual Report filed on Form
10-KSB.
2. Principles of consolidation:
The accompanying consolidated financial statements include the account
of the Company and all of its wholly owned subsidiaries. Intercompany
transactions and balances have been eliminated in consolidation.
3. Nature of operations, risks and uncertainties:
The Company is a manufacturer of baking and confectionery products which
are sold to supermarkets, food distributors, educational institutions,
restaurants, mail order and to the public. Although the Company sells
its products throughout the United States, its main customer base is on
the East Coast of the United States.
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of estimates
and assumptions regarding certain types of assets, liabilities,
revenues and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated
amounts.
The Company maintains all of its cash balances in New Jersey financial
institutions. The balances are insured by the Federal Deposit Insurance
Company (FDIC) up to $100,000. At June 30, 2000, the Company had
uninsured cash balances of $72,674.
F-6
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
4. Accounts receivable:
Following is a summary of receivables at June 30, 2000:
<TABLE>
<S> <C>
Trade accounts $414,060
Less allowance for doubtful accounts ( 9,000)
--------
$405,060
========
</TABLE>
At June 30, 2000, accounts receivable in the amount of $414,060 was
pledged as collateral in connection with the Company's line of credit.
5. Inventories:
Inventories at June 30 consist of :
<TABLE>
<S> <C>
Finished goods $ 94,344
Raw materials 72,780
Supplies 102,431
--------
$269,555
========
</TABLE>
6. Property and equipment:
<TABLE>
<S> <C>
Baking equipment $1,442,972
Furniture and fixtures 78,864
Leasehold improvements 180,422
----------
1,702,258
Less: Accumulated depreciation
and amortization 1,142,308
----------
$ 559,950
==========
</TABLE>
F-7
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
6. Property and equipment (continued):
Depreciation expense charged to operations was $54,274 and $58,045 in
2000 and 1999, respectively.
Machinery and equipment with a cost of $197,000 is pledged as collateral
for the Company's line of credit.
The useful lives of property and equipment for purposes of computing
depreciation are:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Machinery and equipment 10
Furniture and computers 5
Leasehold improvements 10-15
</TABLE>
7. Intangible assets:
The acquisition agreement of Greenberg's - L.P. contained a provision
for a covenant not to compete of $125,000 which management is
amortizing over its five year term. Amortization of the covenant
charged to operations was $12,500 in 2000 and 1999.
The excess cost over the fair value of the net assets acquired from J.M.
Specialties, Inc. aggregated $1,213,565. This goodwill has been
amortized over its estimated useful life of fifteen years. Amortization
charged to operations amounted to $40,456 in 2000 and 1999.
8. Note payable, bank:
As of June 30, 2000, the Company had an available revolving line of
credit with Hudson United Bank in the amount of $150,000, of which
$128,284 had been utilized at June 30, 2000. The interest rate at June
30, 2000 was 9.50%.
F-8
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
9. Commitments and contingencies:
The Company is obligated under a triple net lease for use of 29,362
square feet of office and plant space in New Jersey with the lease
commencing January 31, 1994 and expiring December 31, 2004.
The minimum future rentals on the baking facility is as follows:
<TABLE>
<CAPTION>
Facility
--------
<S> <C>
June 30, 2001 $200,000
June 30, 2002 200,000
June 30, 2003 200,000
June 30, 2004 200,000
Thereafter 130,000
--------
$930,000
========
</TABLE>
Rent expense for all operating leases amounted to $104,498 in 2000 and
$105,895 in 1999.
10. Income taxes:
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS No. 109") "Accounting for Income
Taxes", which requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets
and liabilities are computed annually for differences between the
financial statement and income tax basis of assets and liabilities that
will result in taxable or deductible amounts in the future based on
enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized. Income tax expense is
the tax payable or refundable for the period, plus or minus the change
during the period in deferred tax assets and liabilities. There was no
cumulative effect of adoption or current effect in continuing
operations mainly because the Company has accumulated a net operating
loss carryforward of $8,942,204. The Company has made no provision for
a deferred tax asset due to the net operating loss carryforward because
a valuation allowance has been provided which is equal to the deferred
tax asset. It cannot be determined at this time that a deferred tax
asset is more likely that not to be realized.
The Company has a loss carryforward of $8,942,204 that may be offset
against future taxable income. The carryforward losses expire at the
end of the years 2010 through 2013.
F-9
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
12. Earnings per share:
Primary earnings per share is computed based in the weighted average
number of shares actually outstanding plus the shares that would have
been outstanding assuming conversion of the common stock purchase
warrants which are considered to be common stock equivalents. However,
according to FASB 128, effective for financial statements issued and
annual periods issued after December 15, 1997, entities with a loss
from continuing operations, the exercise of any potential shares
increases the number of shares outstanding and results in a lower loss
per share. Thus, potential issuances are excluded from the calculation
of earnings per share. These common stock purchase warrants amounted to
1,339,575 in 2000 and 2,485,000 in 1999.
Reconciliation of shares used in computation of earnings per share:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Weighted average of shares actually
outstanding 5,245,250 5,271,360
Common stock purchase warrants
--------- ---------
Primary and fully diluted weighted
average common shares outstanding 5,245,250 5,271,360
========= =========
</TABLE>
13. Supplemental schedule of non-cash investing and financing activities:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Issuance of common shares in consideration
of legal, consulting fees and other
obligations $ 0 $111,812
------- --------
$ 0 $111,812
======= ========
</TABLE>
F-10
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
14. Discontinued operations:
In 1998, the Company adopted a formal plan to close WGJ Desserts and
Cafes, Inc., its New York manufacturing facility, which was done in
July of 1998 and to dispose of its one remaining retail store, which
was accomplished in November 1998. The New Jersey facility was
unaffected and still continues to sell and manufacture.
The sale of the final retail location resulted in a selling price of
$405,000 which includes a note receivable of $295,000. The sale
resulted in a gain of $321,350 which is included in other income.
On November 3, 1998, the Company sold its one remaining retail facility
for $405,000 which represented disposition of equipment and a license
to sell under the "William Greenberg, Jr. Desserts and Cafes" name. The
agreement called for a cash down payment of $110,000 with the remainder
being paid on a note receivable due in semi-annual installments of
$36,875 plus interest at prime.
The maturities of the notes are as follows:
<TABLE>
<S> <C>
June 30, 2001 $ 73,750
June 30, 2002 110,625
--------
$184,375
========
</TABLE>
In the event that the licensee opens and operates any additional retail
store(s) utilizing the license (other than the original retail store)
and the annual gross retail sales of any such store(s) exceeds
$400,000, then the licensee shall pay the licensor (the Company) a five
percent royalty on all sales in excess of the $400,000 of sales in each
store. The licensee shall pay the licensor a royalty on a semi-annual
basis of 3% of all mail order sales in excess of $100,000.
Net liabilities, less assets to be disposed of, of WGJ Desserts, Inc.
consisted of the following as of June 30, 2000:
<TABLE>
<S> <C>
Liabilities:
Accounts payable $185,120
Accrued expenses 405,648
--------
590,768
--------
Assets:
Notes receivable 184,375
Interest receivable 1,622
--------
185,997
--------
$404,771
========
</TABLE>
F-11
<PAGE>
CREATIVE BAKERIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
14. Discontinued operations (continued):
Information relating to discontinued operations for WGJ Desserts and
Cafes, Inc. for the six months ended June 30, 2000 and 1999 is as
follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Operating expenses $33,615 $66,181
------- -------
Net loss from operations ( 33,615) ( 66,181)
Settlement income 79,065
Interest income 9,150 10,931
------- -------
Net income (loss) from discontinued
operations ($24,465) $23,815
======= =======
F-12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of
Operation:
The Company is continuing to seek new and profitable avenues of growth. As a
result of the new strategy and concentration on growing Batter Bake-Chatterley,
there has been an increase in new business. During 1999 the Company secured
approximately $1,000,000 in new annualized business from a national supermarket
chain for which it started producing in June 1999. Another $800,000 in
annualized business began for a fund raising company in September 1999. This is
a seasonal business, which was delivered between September and December.
Reception to our new mini cakes has been overwhelming. Future plans call for
producing these products sugar free for people on special diets.
The Company is still on a stock repurchase program. It will continue
repurchasing stock at opportune moments. This stock will be used to cover
options/acquisitions. The Company will continue to seek out potential candidates
for merger or acquisition that meet its specific needs.
At June 30, 2000 to the extent the Company may have taxable income in future
periods, there is available a net operating loss for federal income tax purposes
of approximately $8,942,204 which can be used to reduce the tax on income up to
that amount through the year 2011.
b. Results of Operations (continuing ) for three months ending June 30, 2000 vs.
three months ended June 30, 1999:
The Company's consolidated revenues aggregated $1,284,124 vs. $1,128,817. The
cost of goods sold was $998,887 vs. $892,486. Operating expenses were $291,676
vs. $232,736. As a result, the loss from operations for the second quarter 2000
was $6,439 vs. a gain of 3,595 for second quarter 1999.
The net interest expense for the quarter was $0.
Net loss from discontinued operations was $2,488 for 2nd quarter 2000 or ($.005)
per share vs. gain of $53,537 for 2nd quarter 1999 or $.01 per share.
The resulting net loss aggregated $4,218 for 2nd quarter 2000 or ($.005) per
share vs. a net gain of $62,094 for 2nd quarter 1999 or $.02 per share. The
gains in 1999 were a result one time net other income.
Batter Bake-Chatterley Inc., (the BBC subsidiary) offers a line of batter and
frozen finished cakes, muffins, tart shells and other desserts. BBC's financial
records and affairs are kept separate from the parent but included in the
consolidated financial statements at June 30, 2000 and 1999.
<PAGE>
c. Plan of Operation:
Exit from Retail Operations:
After analyzing the Company's retail operations, management concluded that the
unprofitable retail division was diverting management's attention away from
pursuing profitable opportunities in the Company's other division.
Therefore, by December 31, 1997, the company closed down four of its six stores.
A fifth store, in Macy's cellar was taken over by Ferrara Bakery from April 1,
1998. The commissary was closed down on June 30, 1998 and the last remaining
store on Madison Avenue was sold in early November, 1998.
The Company retains a 50% stake in the Wholesale and Mail Order Business which
it will develop jointly with the new owners.
In connection with the restructuring plan, management has written down property
& equipment at the WGJ subsidiary as of June 30, 2000 to $0.
We took a step back at the retail end in order to move forward. We are now at a
point where we have minimized the losses and are pursuing ways of growing the
business profitably.
Wholesale Operations:
The next phase in the company's plan of action is to build up the wholesale end
of its business with fewer but profitable products. This process includes the
following:
Calling on supermarket headquarters and chain restaurant accounts. Brokers have
been appointed and sales calls and visits are being made.
Continue to expand the fat free product line targeting existing as well as new
customers and
Enter into co-packing arrangements whereby the company would introduce private
label products of other bakery operations.
Liquidity and Capital Resources:
Since its inception the Company's only source of working capital has been the
$8,642,500 received from the issuance of its securities.
<PAGE>
In June 1995, The Company issued 180,000 shares of common stock to unrelated
parties for $600,000 and in August 1995, the Company issued 60,000 shares of its
common stock to unrelated parties for $200,000. In connection with the
acquisition of Greenberg's- L.P., the Company received $2,000,000 from the sale
of two notes to InterEquity Capital Partners, L.P. ("InterEquity"). During
October 1995, the Company received net proceeds of $4,900,000 from the sale of
1,150,000 shares of its common stock in an initial public offering. During
January 1997 the Company received net proceeds of $1,747,500 from the private
placement of 1,875,500 common stock purchase warrants at $1.10 per warrant.
During October 1997 the Company received net proceeds of $883,000 from the
exercise of a portion of these common stock warrants. During January 1999, the
Company received a further $187,500 from the exercise of another 150,000 of
these warrants. Of the $5,700,000 proceeds from the aforementioned stock sales:
(i) $2,125,000 was issued to repay the Inter-Equity debt including interest;
(ii) $2,615,000 was used in operations; (iii) $765,00 was used to purchase
property, equipment and leaseholds; and (iv) $195,000 was used for general
corporate purposes. The $1,650,000 proceeds from the private placement warrants
was used to acquire JMS. Of the $1,071,000 proceeds from the exercise of
warrants $325,000 was used for consolidation and merger of JMS and Chatterley
and the balance is being used for corporate purposes and to fund new business.
As of June 30, 2000, the Company (continuing operations) has a negative working
capital of approximately $96,863 as compared to a negative working capital of
$199,750 at June 30, 1999. During 1997, 1998 and 1999 Management took actions
aimed at restructuring the Company in order to reduce operating costs and
enhance the Company's focus and efficiency. Pursuant to the restructuring a new
management team was put into place, executive contracts and leases were
renegotiated and certain positions were eliminated and an exit strategy out of
retailing was completed. The Company is continuing to seek new and profitable
avenues of growth during 2000.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on August 14, 2000.
CREATIVE BAKERIES, INC.
By: /s/ Philip Grabow
-----------------------
Philip Grabow
President and Chief
Executive Officer
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
indicated on May 15, 2000.
Signatures Title
---------- -----
/s/Philip Grabow President, Chief Executive Officer/Director
-----------------------
Philip Grabow
-----------------------
Director
-----------------------
Richard Fechtor
/s/Raymond J. McKinstry Director
-----------------------
Raymond J. McKinstry
/s/Kenneth Sitomer Director
-----------------------
Kenneth Sitomer
/s/Karen Brenner Director
-----------------------
Karen Brenner
/s/ Yona Gonen Director
-----------------------
Yona Gonen
</TABLE>
