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 July 4, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from March 28, 1998 to July 4, 1998
Commission file number 0-19616
UTOPIA MARKETING, INC.
(Exact name of registrant as specified in its charter)
Florida 94-3060101
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
301 Clematis Street, Suite 205, West Palm Beach, FL 33401
(Address of principal executive offices, including zip code)
(561) 569-5272
(Registrant's telephone number, including area code)
PO Box 803, Katonah, New York, 10536
(Registrant's previous address,
if changed since prior filing)
(914) 763-0082
(Registrant's previous telephone number,
if changed since prior filing)
Indicate by check mark whether the registrant (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 (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 _ _
As of July 4, 1998 there were 14,216,367 shares of Common Stock
outstanding
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UTOPIA MARKETING, INC.
CONDENSED BALANCE SHEET
(In Thousands)
ASSETS
JULY 4, June 30,
1998 1997
---------- --------
(UNAUDITED)
Current Assets:
Cash and cash equivalents $ 2,342 $ 2,470
Due from factor 0 0
Miscellaneous receivable 6 21
Merchandise inventories 0 0
Prepaid expenses 0 31
-------- --------
Total current assets 2,348 2,521
Property and equipment, net 0 0
Other assets 0 0
-------- --------
Total Assets $ 2,348 $ 2,521
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 35 $ 10
Accrued expenses 24 11
-------- --------
Total current liabilities 59 21
-------- --------
Long-term obligations 0 0
-------- --------
Shareholders' Equity:
Common Stock 14 14
Additional paid-in capital 32,947 32,943
Accumulated deficit (30,672) (30,457)
-------- --------
Total shareholders' equity 2,289 2,500
-------- --------
Total Liabilities and Shareholders' Equity $ 2,348 $ 2,521
======== ========
See notes to condensed consolidated financial statements.
UTOPIA MARKETING, INC.
CONDENSED STATEMENT OF OPERATIONS
(In thousands except per share data, unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- -----------------------
July 4, June 30, July 4, June 30,
1998 1997 1998 1997
------- --------- -------- ---------
Net revenue $ 0 $ 25 $ 0 $ 97
Cost of sales $ 0 17 0 58
-------- -------- -------- --------
Gross profit 0 8 0 39
Selling, general and administrative expenses (96) (349) 150 (742)
-------- -------- -------- --------
Operating income (loss) (96) (341) (150) (703)
Interest income/(expense) $ 32 23 65 48
-------- -------- -------- --------
Income (loss) before income
Taxes and extraordinary item (64) (318) (85) (655)
Income taxes 0 0 0 0
-------- -------- -------- --------
Net income (loss) before
Extraordinary item (64) (318) (85) (655)
======== ======== ======== ========
Extraordinary gain, net of
Income taxes 0 0 0 0
-------- -------- -------- --------
Net income (loss) $ (64) $ (318) (85) (655)
======== ======== ======== ========
Net income (loss) per share $ (0.00) $ (0.03) (0.01) (0.05)
======== ======== ======== ========
Weighted average shares outstanding 14,216 13,741 14,216 13,741
======== ======== ======== ========
See notes to condensed consolidated financial statements.
UTOPIA MARKETING, INC.
CONDENSED STATEMENT OF CASH FLOWS
(In thousands except per share data, unaudited)
Six Months Ended
-------------------------
July 4, June 30,
1998 1997
-------- ---------
Cash Flows From Operating Activities
Net income (loss) $ (85) $ (655)
Adjustments to reconcile net income
to net cash used by
Operating activities:
Depreciation and amortization 0 0
Deferred compensation expense 0 0
Changes in assets and liabilities:
Due from factor, net 0 107
Accounts receivable 34 272
Merchandise inventories 0 36
Prepaid expenses 0 0
Other assets 0 0
Accounts payable and accrued
expenses 4 (135)
Other current liabilities 0 0
------- -------
Net cash used by
operating activities (47) (375)
------- -------
Cash Flows From Investing Activities:
Purchase of property and equipment 0 0
------- -------
Net cash used by
investing activities 0 0
------- -------
Cash Flows From Financing Activities:
Repayment of long-term obligations 0 (7)
Proceeds from issuance of common
stock, net 0 0
------- -------
Net cash provided (used)by
financing activities 0 (7)
------- -------
Net Increase (Decrease) in cash &
cash equivalents (47) (382)
Cash:
Beginning of period 2,389 2,852
End of period $ 2,342 $ 2,470
======= =======
See notes to condensed consolidated financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SIX MONTH PERIODS ENDED JULY 4, 1998 AND JUNE 30, 1997
(Unaudited)
1. Summary of Accounting Policies
The accompanying unaudited condensed financial statements have
been prepared from the records of the Company without audit and,
in the opinion of management, include all adjustments (consisting
of normal recurring accruals) necessary to fairly present the
Company's financial position at July 4, 1998 and the results of
operations and its cash flows for the six month periods ended July
4, 1998 and June 30, 1997.
Accounting policies followed by the Company are described in
Note 1 to the audited financial statements for the year ended
January 3, 1998. As permitted by the rules and regulations of the
Securities and Exchange Commission, certain information and
footnote disclosures included in annual financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted for the purposes of
these condensed interim financial statements. The condensed
interim financial statements should be read in conjunction with
the audited financial statements, including the notes thereto, for
the year ended January 3, 1998.
The results of operations for the six month period ended July
4, 1998 is not necessarily indicative of the results to be
expected for any other period or for the full year.
2. Subsequent Events
On August 3, 1998 the Company changed its state of
incorporation from California to Florida.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations General
The following discussion of the Company's results of
operations for the three and six month periods ended July 4, 1998
and June 30, 1997 includes the consolidated results of operations
of Utopia Marketing, Inc.
Commencing in May, 1996, when the Company commenced in-depth
negotiations with Maxwell shoe Company, Inc. for the sale of
Utopia's trademarks, which would result in the termination of its
then present business, Utopia's management began to explore new
avenues of business for Utopia. The management of Utopia looked
into business combination opportunities in the apparel,
industrial, manufacturing, financial services and scientific
fields. Additionally, in the event that the sale of the
trademarks was not successfully concluded, the Company also
explored various business combination opportunities in the
footwear industry. The Company evaluated internally approximately
fifty possible business combinations, all of which were rejected
for one or more of the following reasons: (i) management believed
that Utopia's assets would not be sufficient to allow the merged
entities to succeed without additional substantial dilution to
Utopia's shareholders; (ii) Utopia's equity ownership interest
would not be significant; (iii) the expected multiple of earnings
for the merged entities would have diminished the Utopia's value:
and/or (iv) the need for cash required a strategic partner or such
heavy debt that the risk of failure of the merged entities
appeared to be an unacceptable risk. None of these explorations
resulted in formal business combination talks being completed. The
Company is continuing its search for new ventures.
Sale of Trademark
On July 2, 1996, Utopia Marketing , Inc. (formerly Sam &
Libby, Inc.) entered into an agreement with Maxwell Shoe Company
Inc. to sell all worldwide rights to the Company's trademarks,
trade names and intellectual property rights free and clear of all
liens, mortgages, encumbrances and security interests. Maxwell
Shoe Company will not assume any of the Company's liabilities or
obligations. In August 1996, the Company received cash of $5.3
million. The balance of $0.2 million was received on April 30,
1997.
Operations
The Company's operations for the Quarter ended March 28, 1998
consisted of searching for new business opportunities. On August
3, 1998 the Company changed its state of incorporation from
California to Florida.
Selling, General, and Administrative Expenses
These expenses in 1998 consisted primarily of the
administrative expenses connected with searching for investment
opportunities.
The company is currently occupying temporary space in the
State of Florida. Presently the Company's mailing address is 301
Clematis Street, Suite 205, West Palm Beach, FL 33401.
Interest Revenue
Interest revenue for the second quarter 1998 was revenue
associated with the interest earned in the Company's money market
account. This amount at July 4, 1998 was $2,336,442 and was
included in the balance sheet caption "Cash and cash equivalents".
Liquidity and Capital Resources
At July 4, 1998 the Company's basic asset is "Cash and cash
equivalents". The Company has no need for additional liquid
resources at this time.
Management is seeking investment opportunities to either
acquire an operating business or to start a new business. The
Company has no plans to pay a dividend at this time.
Management expects to incur a loss in the Third quarter.
UTOPIA MARKETING, INC.
PART II. OTHER INFORMATION
Item 1.
There are no legal proceedings pending against the Company or
its properties, or to which the Company is a party.
Item 6.
Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit #27 Financial Data Schedule.
(b) Reports on Form 8-K
None.
EXHIBIT INDEX
Exhibit 27 Financial Data Schedule
SIGNATURES
Pursuant to the requirement of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed by the undersigned thereto duly authorized.
UTOPIA MARKETING, INC.
(Registrant)
Dated: August 18, 1998 /s/Samuel L. Edelman
Samuel L. Edelman
Chairman of the Board
Chief Executive Officer
Dated: August 18, 1998 /s/Vance F. Kistler
Vance F. Kistler
Chief Financial Officer