-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WWd9Lfe+xpRchzf1NEM68vqW9+rVZkgZVi/1QbQwErFN9Tn6JirZSPTnL/a5/5P6 d2pV0qDa82JAGVP9OIn3Ow== 0001000096-01-500457.txt : 20020410 0001000096-01-500457.hdr.sgml : 20020410 ACCESSION NUMBER: 0001000096-01-500457 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RETROSPETTIVA INC CENTRAL INDEX KEY: 0001015383 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 954298051 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-13101 FILM NUMBER: 1789101 BUSINESS ADDRESS: STREET 1: 8825 WEST OLYMPIC BLVD CITY: BEVERLY HILLS STATE: CA ZIP: 90211 10QSB 1 retro10qsb.txt FORM 10-QSB (9-30-2001) U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (MARK ONE) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM __________ TO ___________ FOR THE QUARTERLY PERIOD ENDED ________________________ COMMISSION FILE NUMBER: 333-29295 RETROSPETTIVA, INC. --------------------------------------------------------------- (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) CALIFORNIA 95-4298051 ---------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 8825 WEST OLYMPIC BOULEVARD BEVERLY HILLS, CA 90211 -------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (310) 657-1745 ------------------------- (ISSUER'S TELEPHONE NUMBER) CHECK WHETHER THE REGISTRANT (1) HAS 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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, No Par Value, 3,479,916 shares as of November 1, 2001. Transitional Small Business Disclosure Format: Yes [ ] No [ X ] RETROSPETTIVA, INC. AND SUBSIDIARY FORM 10-QSB INDEX Part I Financial Information Page Item 1. Financial Statements: Balance Sheets as of September 30, 2001 and December 31, 2000 1 Statements of Operations for the Three Months and Nine Months Ended September 30, 2001 and 2000 2 Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2000 3 Notes to Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Part II Other Information 8 Signatures 9
RETROSPETTIVA, INC. AND SUBSIDIARY BALANCE SHEETS ASSETS ------ DECEMBER 31, SEPTEMBER 30, 2000 2001 ------------ ------------ (UNAUDITED) CURRENT ASSETS Cash $ 26,069 $ 4,297 Accounts receivable, net, pledged 247,084 366,940 Due from factor 164,471 -- Note receivable, stockholder, pledged 156,997 1,030 Inventories, pledged 8,368,237 -- Income taxes receivable 955,714 259,076 Other current assets 112,537 112,537 Deposits - 86,986 ------------ ------------ Total Current Assets 10,031,109 830,866 PROPERTY AND EQUIPMENT, at cost, net 1,030,565 2,250 Restricted investment, pledged 300,000 -- OTHER ASSETS 18,845 18,845 ------------ ------------ $ 11,380,519 $ 851,961 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Accounts payable, trade $ 2,530,447 $ 1,247,946 Notes payable 2,274,376 968,163 Accrued expenses 101,859 -- Payroll taxes payable -- -- ------------ ------------ Total Current Liabilities 4,906,682 2,216,109 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock - authorized 1,000,000 shares - none issued or outstanding Common stock - authorized 15,000,000 shares, no par value; 3,479,916 issued and outstanding 6,892,820 6,892,820 Subscription receivable (164,790) -- Additional paid-in capital 230,000 230,000 Retained earnings (484,193) (8,486,968) ------------ ------------ Total Stockholders' Equity(Deficit) 6,473,837 (1,364,148) ------------ ------------ $ 11,380,519 $ 851,961 ============ ============ SEE NOTES TO FINANCIAL STATEMENTS 1 RETROSPETTIVA, INC. AND SUBSIDIARY STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 2001 2000 ------------ ----------- ----------- ------------ DISCONTINUED OPERATIONS Income (Loss) from operations $ (7,326) $ (198,011) $(7,821,109) $ (789,532) ----------- ----------- ----------- ----------- NET (LOSS) $ (7,326) $ (198,011) $(7,821,109) $ (789,532) ----------- ----------- ----------- ----------- NET (LOSS) PER SHARE, BASIC $ * $ (0.06) $ (2.25) $ (0.24) =========== =========== =========== =========== WEIGHTED AVERAGE NUMBERS OF SHARES OUTSTANDING, BASIC AND DILUTED 3,479,916 3,271,492 3,479,916 3,223,949 =========== =========== =========== =========== *Less than $(.01) per share SEE NOTES TO FINANCIAL STATEMENTS 2 RETROSPETTIVA, INC. AND SUBSIDIARY STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED SEPTEMBER 30, 2000 2001 ------------ ------------ CASH FLOWS FROM (TO) OPERATING ACTIVITIES Net (loss) $ (789,532) $(7,821,109) Adjustments to reconcile net (loss) to net cash provided (used) by operating activities: Bad debt expense -- 164,790 Depreciation and amortization 102,989 72,738 Common stock issued for services 67,315 -- Loss on product development costs 179,721 -- Loss on factory equipment -- 963,777 Loss on disposal of fixed assets 2,890 -- Subscription receivable deemed uncollectible -- (164,790) Changes in: Accounts receivable 394,629 (119,856) Prepaid income taxes (722,231) 696,638 Due from factor 405,083 164,471 Advances to vendor 124,362 -- Due to vendor 74,588 -- Inventories 1,947,671 8,368,237 Deposits -- (86,986) Other (550) -- Accounts payable and accrued expenses (1,965,459) (1,384,358) Accrued payroll taxes 7,558 -- ----------- ----------- Cash flows provided (used) by operating activities (170,966) 853,552 ----------- ----------- CASH FLOWS FROM (TO) INVESTING ACTIVITIES: Purchase of fixed assets (74,982) (8,200) Stockholder loan repayments 188,714 155,967 Restricted investment (300,000) 300,000 Payments on notes receivable 27,000 -- ----------- ----------- Cash flows provided (used) by investing activities (159,268) 447,767 ----------- ----------- CASH FLOWS FROM (TO) FINANCING ACTIVITIES: (Payments) proceeds from line of credit 264,815 (1,306,213) Other -- (16,878) ----------- ----------- Cash flows provided (used) by financing activities 264,815 (1,323,091) ----------- ----------- NET (DECREASE) IN CASH (65,419) (21,772) CASH IN BANK, beginning of period 85,857 26,069 ----------- ----------- CASH IN BANK, end of period $ 20,438 $ 4,297 =========== =========== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 306,131 $ 92,156 =========== =========== SEE NOTES TO FINANCIAL STATEMENTS 3
RETROSPETTIVA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for 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, the consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented. The results for the three and nine months ended September 30, 2001 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company's Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31, 2000. NOTE 2 - INVENTORIES The Company did not have any inventory at September 30, 2001 The factories that housed a majority of the inventory and equipment owned by the Company were recently destroyed. Attempts to locate usable inventory or equipment was unsuccessful; therefore, these assets were reduced to a net realizable value of zero. NOTE 3 - RECENT DEVELOPMENTS On July 2, 2001, the Company announced that recent events, primarily the war in Macedonia, has forced the company to cease operations and attempt to liquidate its assets. The current civil war in Macedonia has prevented the Company from producing goods there. The Company's day-to-day business has been interrupted by a lack of electric power, shortages of water and fighting between Albanian rebels and Macedonian forces that have reached the cities. This is preventing employees from coming to work and making it practically impossible to produce goods. As a result, the Company had lost most of its orders for goods, was unable to ship completed goods and is unable to access its inventory in Macedonia. As a result of these events, the Company has suspended further operations and is attempting to liquidate its assets in order to pay creditors. It is unlikely that the Company will generate sufficient cash resources to continue in business following the end of hostilities in Macedonia. 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company contracted for the manufacturing of a variety of garments, primarily basic women's sportswear which includes suits, skirts, blouses, blazers, pants, shorts, vests and dresses, using assorted fabrics including rayons, linens, cotton and wool. The Company arranged for the manufacturing of garments for customers under private labels selected by its customers. It marketed its products exclusively in the United States directly to large wholesalers directly and indirectly to national retailers and buying organizations, and directly to women's chain clothing stores and catalogues. Since early 2001, when hostilities commenced in Macedonia, the Company has experienced a significant reduction in new purchase orders for its products. This reduction in new purchase orders, together with a substantial loss incurred by the Company for the three and nine months ended September 30, 2001 and for the year ended December 31, 2000, has required the Company to reduce its operations and overhead expenses. Such overhead reductions have included the layoff of nine employees and the reduction of general and administrative expenses in the amount of approximately $500,000 on an annualized basis. The Company is in default on its credit facility with the Imperial Bank. The amount outstanding was converted to notes payable totaling $968,163. The Company anticipates paying the majority of the amount due from its existing cash flow during the fourth quarter of 2001. Due to continuing hostilities in Macedonia continue, new purchase orders have decreased significantly or were canceled and the Company has decided to cease it's manufacturing operations. The Company intends to negotiate settlement of its liablities. Except for historical information contained herein, the matters set forth may include forward-looking statements that are subject to risks and uncertainty that may cause actual results to differ materially. Such forward-looking statements that may be contained in this document could include in particular statements concerning business back-logs, operating efficiencies and capacities, capital spending, and other expenses. Among other factors that could cause actual results to differ materially are the following; dependence upon unaffiliated manufacturers and fabric suppliers, dependence on certain customers, foreign operations, competition, risks associated with significant growth, uncertainties in apparel industry, general economic conditions, seasonality, political instability, concentration of accounts receivable and possible fluctuations in operating results. 5 RESULTS OF OPERATIONS The Company's main center for production is in Macedonia, which has been the unfortunate victim to armed conflict for most of 2001. The President of the Company visited Macedonia recently to evaluate possibilities of moving the inventory and equipment to another location in another country. At the time of his visit, most of the factories were closed and suspicions of looting were considered. Many parts of the country were unreachable without exposing personnel to serious harm and it was feared the roads were mined by terrorists. On June 30, 2001 the Company decided to cease it's manufacturing operations. The Company is unable to determine if a gain or loss is expected from the final liquidation. The financial statements reflect the discontinued operations for all periods presented. LIQUIDITY The Company has 575,000 warrants outstanding with an exercise price of $7.50 per warrant expiring September 23, 2002. The Company has 50,000 underwriter warrants outstanding with an exercise price of $14.40 per unit. Each unit consists of two shares of the Company's common stock and one warrant as described above. The Company does not expect the warrants to be exercised in 2001. The Company is dilligently working to collect on its receivables to further reduce the notes payable. The Company is utilizing its line of credit and its credit facility arrangement with a New York factoring company. As of May 11, 2001 the Company was not in compliance with the covenants of the loan and is negotiating repayment terms. CAPITAL RESOURCES Since its formation, the Company has financed its operations and met its capital requirements primarily through its public offering, cash flows from operations, customer advances, exercise of Stock Options and credit facilities. As a result of the Macedonian hostilities, the Company's revenue stream has been discontinued causing it to significantly cut all operations in order to reduce overhead. INFLATION The Company does not anticipate a significant increase in inflation in the United States over the short-term. All of the Company's transactions worldwide are conducted on a dollar-denominated basis which is intended to mitigate the possible impact of volatile currencies that may arise as a result of global corporations crowding emerging markets in search of growth. SEASONALITY The Company's revenues and operating results have exhibited some degree of seasonality in past periods. Typically, the Company experiences its highest sales in the first and fourth quarters and its lowest sales in the second and third quarters. In 2000 the Company experienced its highest sales in the first and third quarters. 6 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141") and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. Under SFAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives (but with no maximum life). The amortization provisions of SFAS 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the Company is required to adopt SFAS 142 effective January 1, 2002. The Company is currently evaluating the effect that adoption of the provisions of SFAS 142 will have on its results of operations and financial position. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB 101") which provides guidance related to revenue recognition based on interpretations and practices followed by the SEC. SAB 101A was released on March 24, 2000 and deferred the effective date to no later than the second fiscal quarter beginning after December 15, 1999. In June 2000, the SEC issued SAB 101B which delays the implementation date of SAB 101 until no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. SAB 101 requires companies to report any changes in revenue recognition as a cumulative change in accounting principle at the time of implementation in accordance with Accounting Principles Board Opinion No. 20, "Accounting Changes". Management has accessed the implementation and determined that there is no significant impact on the consolidated financial statements of the Company. 7 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS CHANGES IN SECURITIES Not applicable USE OF PROCEEDS Not applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable ITEM 5. OTHER INFORMATION Not applicable ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Not applicable 8 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 thereto duly authorized. Date: 11-14-2001 RETROSPETTIVA, INC. ------------------- (Registrant) /s/ Borivoje Vukadinovic ---------------------------------------- Borivoje Vukadinovic President 9 -----END PRIVACY-ENHANCED MESSAGE-----