SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the transition period from
__________________ to
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Commission File Number 0-26454
PL BRANDS, INC.
(Exact Name of Small Business Issuer as specified in its Charter)
Delaware 98-0142664
(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.)
10 Planchet Road, Unit 6, Concord, Ontario Canada CK4 2C8
(Address of principal executive offices) (Zip Code)
(905) 761-0888
(Issuer's telephone number)
Check whether the Issuer (1) 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 (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 Equity, as of the latest practicable date.
Common Stock, $.001 par value 4,120,000
Title of Class Number of Shares outstanding
at July 31, 1996
No exhibits included.
PL BRANDS, INC.
Consolidated Balance Sheets
As at As at
April 30, 1996 July 31,1996
ASSETS
CURRENT
Cash $ 4,047 $ 2,086
Accounts receivable 386,811 631,297
Inventory 143,907 184,566
Prepaids 8,429 8,121
Total Current Assets 543,194 826,070
FIXED ASSETS
Machinery & Equipment $ 709,369 $ 702,765
Leasehold Improvements 58,572 58,027
Office Furniture & Equipment 35,882 35,548
$ 803,823 $ 796,340
Less: Accumulated Depreciation $ 547,827 $ 557,015
Total Fixed Assets $ 255,996 $ 239,325
Total Assets $ 799,190 $ 1,065,395
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Bank Indebtedness $ 146,843 $ 180,446
Accounts payable 564,332 785,694
Total Current Liabilities $ 711,175 $ 966,140
Long Term Liabilities
Equipment Bank Loan $ 214,857 $ 209,596
Amounts received for the issuance of Convertible
Debentures and Capital Stock 203,850 256,650
Shareholders' Loan (Note 10) 702,978 702,978
Total Long Term Liabilities 1,121,685 1,169,224
STOCKHOLDERS' EQUITY
Common Stock: $.001 par value,
authorized 20,000,000 $ 4,120 $ 4,120
Additional Paid-In Capital 889,066 889,066
Accumulated Deficit (1,957,998) (1,980,396)
Cumulative Translation Adjustment 31,142 17,241
Total Stockholders' Equity $ (1,033,670) $ (1,069,969)
Total Liabilities and Stockholders' Equity $ 799,190 $ 1,065,395
2
PL BRANDS, INC.
Consolidated Statements of Earnings
For the three For the three
months ending months ending
July 31, 1996 July 31,1995
Sales $ 985,969 $ 828,389
Cost of Sales $ 881,398 $ 705,499
Gross Profit $ 104,571 $ 122,890
Operating Expenses:
Salaries $ 25,487 $ 45,854
Accounting & Legal 21,235 13,918
Consulting 20,605 61,189
Telephone 7,553 6,805
Insurance 1,719 1,830
Bank Charges & Interest 9,285 8,579
Travel 1,295 9,952
Vehicles 7,983 6,171
Offices Expenses 3,644 30,482
Business Taxes 1,183 0
Marketing 0 10,237
Miscellaneous 0 1,238
Debenture Interest 0 13,820
$ 99,989 $ 210,075
Profit (Loss) from Operations $ 4,582 $ (87,185)
Other Income (Expenses)
Interest Income $ 6 $ 0
Gain (Loss) on Foreign Exchange (12,640) (6,542)
Depreciation and Amortization (14,346) (13,528)
(26,980) (20,070)
Net Profit (Loss) for the Period (22,398) (107,255)
3
PL BRANDS, INC.
Consolidated Statements of Cash Flows
For the three For the three
months ending months ending
July 31, 1996 July 31,1995
Operating Activities:
Net Profit (Loss) For the Period $ (22,398) $ (107,255)
Adjustment to reconcile:
Depreciation and Amortization 9,188 9,758
Foreign Currency Translation 12,640 6,542
Change in assets and liabilities affecting cash flows:
Accounts Receivable (244,486) (224,425)
Inventory (40,659) (23,626)
Prepaid Expenses 308 0
Deposits 0 (23,604)
Accounts Payable 221,362 332,559
Bank Indebtedness 33,603 (110,483)
Net Cash Provided By Operating Activities $ (30,442) $ (140,534)
Investing Activities:
Purchase of Fixed Assets $ 7,483 $ (5,973)
Net Cash Provided By Investing Activities $ 7,483 $ (5,973)
Financing Activities:
Bank Loan-Equipment $ (5,261) $ (5,375)
Amounts received for the issuance of convertible
debentures and capital stock 52,800 0
Proceeds from Shareholder Loan 0 231,764
Foreign Excahnge Gain (Loss) (12,640) (6,5423)
Net Cash Provided By Financing Activities $ 34,899 $ 219,847
Effect of Exchange Rate Changes on Cash $ (13,901) $ (229)
Increase (Decrease) in Cash $ (1,961) $ 73,111
Cash Balance - Beginning $ 4,047 $ 41,559
Cash Balance - Ending $ 2,086 $ 114,670
4
PL BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For The Three Months Ended July 31, 1996 and 1995
NOTE 1 - UNAUDITED INTERIM FINANCIAL INFORMATION
The unaudited interim financial statements are unaudited, but in
the opinion of the management of the Company, contain all adjustments,
consisting of only normal recurring accruals, necessary to present fairly the
financial position at July 31, 1996, the results of operations of the three
months ended July 31, 1996 and 1995, and the cash flows for the three months
ended July 31, 1996 and 1995. The results of operations for the three months
ended July 31, 1996 are not necessarily indicative of the results of operations
to be expected for the full fiscal year ended April 30, 1997. Reference is made
to the Company's Form 10- KSB.
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Overview
Net revenues in the three months ended July 31, 1996 were higher
than in the 1995 period due to increased sales volume. Cost of sales for the
three months ended July 31, 1996 were 89% of sales, respectively, compared to
85% for the 1995 periods, primarily as a result of increases in materials and
pressures on sales prices. Operating expenses for the three months ended July
31, 1996 were significantly lower than in 1995 as a result of management's cost
cutting efforts.
The Company is not expected to become profitable, if at all, until
sales grow sufficiently (of which there can be no assurance) to support the
administrative burden. Consulting fees were paid for professional consultants,
not affiliated with the Company, regarding private label products, obtaining
customers, and potential acquisitions of private label product lines.
Liquidity
As of July 31, 1996, the Company's working capital deficit was
$167,981. The Company's working capital position was enhanced by the sale of
$52,800 in securities. The Company has also obtained an operating line of credit
from a bank in the amount of $250,000 (CAN). As of July 31, 1996, the line of
credit amount was US $146,893. The Company intends to sell debt or equity to
meet its cash requirements.
5
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 MATTER TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
6
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.
Date: October 1, 1996 By: /s/ Robert Brown
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Robert Brown
Vice President-Administration and Finance
(chief financial officer and
accounting officer and duly authorized officer)