-----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, WE5u+Vvm0nOKgmE5Q6pfmwDEIjunLZfn9UrvIfIIQSpukdLVth1eDosEHoypDKFe Y/eo8j8ag7uVIE9JRdSGmQ== 0000943440-02-000457.txt : 20021101 0000943440-02-000457.hdr.sgml : 20021101 20021101121831 ACCESSION NUMBER: 0000943440-02-000457 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LITEGLOW INDUSTRIES INC CENTRAL INDEX KEY: 0001022494 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MOTOR VEHICLES & MOTOR VEHICLE PARTS & SUPPLIES [5010] IRS NUMBER: 650516403 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-27087 FILM NUMBER: 02806200 BUSINESS ADDRESS: STREET 1: 2301 N W 33RD COURT STREET 2: #104 CITY: POMPANO BEACH STATE: FL ZIP: 33069 BUSINESS PHONE: 9549714569 MAIL ADDRESS: STREET 1: 2301 NW 33RD CT STREET 2: #104 CITY: POMPANO BEACH STATE: FL ZIP: 33069 10QSB 1 sept02-10q.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED: SEPTEMBER 30, 2002 COMMISSION FILE NUMBER:000-27087 LITEGLOW INDUSTRIES, INC. - ------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) UTAH 65-05164035 - ------------------------------------------------------------------------ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 2301 N.W. 33rd Court, Unit 112, Pompano Beach, Florida 33069 - ------------------------------------------------------------------------ (Address, including zip code, of principal executive offices) (954) 971-4569 - ------------------------------------------------------------------------ (Registrant's telephone number, including area code) - ------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Sections 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 filings for the past 90 days. YES [X] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: As of September 30, 2002, the number of the Company's shares of par value $.001 common stock outstanding was 3,780,082. LITEGLOW INDUSTRIES, INC. FORM 10-QSB SEPTEMBER 30, 2002 INDEX Part I - FINANCIAL INFORMATION Item 1 - Financial Statements Balance Sheets .................................................. 3 Statements of Operation.......................................... 4 Statements of Cash Flow.......................................... 5 Notes to Financial Statements.................................... 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations........... 7-9 PART II - OTHER INFORMATION...................................... 10 SIGNATURES....................................................... 11 CERTIFICATIONS................................................... 12-14 2 LITEGLOW INDUSTRIES, INC. BALANCE SHEET SEPTEMBER 30, 2002 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 299,785 Accounts receivable, net 2,075,983 Loan to shareholder 32,419 Inventory, net 1,781,608 Prepaid expenses 110,913 Other current assets 19,193 ------------- Total current assets 4,319,901 Property and equipment less accumulated depreciation 345,835 Goodwill, net 175,660 Deferred loan costs 6,667 Deposits 51,354 ------------- $ 4,899,417 ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 26,756 Current maturities of capital leases 25,351 Line of credit 1,784,383 Loans payable shareholder 68,262 Accounts payable and accrued expenses 1,364,673 ------------- Total current liabilities 3,269,425 ------------- Long term debt less current maturities 8,444 Long term capital lease obligations less current maturities 43,298 ------------- 51,742 ------------- Stockholders' equity (deficit): Preferred stock par value $.001 issued and authorized 1,000,000 1,000 Common stock, $.001 par value; authorized 10,000,000 shares 3,780,082 shares issued and outstanding 3,780 Additional paid-in capital 3,356,542 Retained deficit (1,783,072) ------------- Total stockholders' equity 1,578,250 ------------- $ 4,899,417 ============= The accompanying notes are an integral part of these financial statements 3 LITEGLOW INDUSTRIES, INC. STATEMENT OF OPERATIONS (unaudited)
Nine Months Nine Months Three Months Three Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- Sales $ 9,540,447 $ 4,042,047 $ 2,980,577 $ 1,888,325 Cost of sales 5,238,486 1,883,738 1,659,666 960,106 ------------- ------------- ------------- ------------- Gross profit 4,301,961 2,158,309 1,320,911 928,219 Selling, general and administrative expenses 2,878,130 1,875,346 873,240 677,694 ------------- ------------- ------------- ------------- Income from operations 1,423,831 282,963 447,671 250,525 ------------- ------------- ------------- ------------- Other income (expenses): Interest expense (131,656) (102,258) (43,102) (31,947) Lawsuit settlement 2,000 132,606 2,000 Gain (loss) on disposal of assets (40,000) 5,167 - 7,087 ------------- ------------- ------------- ------------- Total other income (expenses) (169,656) 35,515 (41,102) (24,860) ------------- ------------- ------------- ------------- Income before income taxes 1,254,175 318,478 406,569 225,665 Income tax expense (benefit) - - - - ------------- ------------- ------------- ------------- Net income $ 1,254,175 $ 318,478 $ 406,569 $ 225,665 ============= ============= ============= ============= Net loss per common share: Basic: Net income per common share .32 .07 .11 .05 Diluted: Net income per common share .14 .03 .05 .02 Weighted average shares outstanding basic 3,889,423 4,273,287 3,780,082 4,273,287 ============= ============= ============= ============= Weighted average shares outstanding diluted 8,889,423 9,273,287 8,780,082 9,273,287 ============= ============= ============= =============
The accompanying notes are an integral part of these financial statements 4 LITEGLOW INDUSTRIES, INC. STATEMENT OF CASH FLOWS (unaudited)
Nine Months Nine Months Ended Ended September 30, September 30, 2002 2001 ------------- ------------- Cash flows from operating activities: Net income $ 1,254,175 $ 318,478 Adjustments to reconcile net income to net: Cash provided by (used for) operating activities Depreciation and amortization 58,409 62,598 Non cash compensation - 100 Loss (gain) on disposal of equipment 40,000 (5,167) Settlement of debt - (85,000) Changes in assets and liabilities: Accounts receivable (823,450) (339,484) Inventory (708,078) 61,212 Prepaid expenses (32,672) (17,331) Other current assets (19,193) - Deposits and other assets (5,973) - Deferred loan costs 5,333 (21,500) Accounts payable and accrued expenses 523,657 (584,194) ------------- ------------- Net cash provided from (used for) operations 292,208 (610,288) ------------- ------------- Net cash used in investing activities: Proceeds from sale of equipment - 50,260 Purchase of equipment (132,594) (19,018) ------------- ------------- Net cash used for investing activities (132,594) 31,242 ------------- ------------- Cash flows from (used in) financing activities: Repayments of stockholder loans (87,507) (63,139) Purchase and retirement of treasury stock (24,250) - Proceeds from line of credit 333,221 727,349 Payments of long term debt and leases (83,305) (61,402) ------------- ------------- Net cash provided by financing activities 138,159 602,808 ------------- ------------- Net increase in cash and cash equivalents 297,773 23,762 Cash and cash equivalents, beginning of period 2,012 17,393 ------------- ------------- Cash and cash equivalents, end of period $ 299,785 $ 41,155 ============= ============= Supplemental disclosure: Interest paid $ 131,656 $ 102,258 ============= ============= Assets acquired with debt $ 40,000 $ 47,857 ============= =============
The accompanying notes are an integral part of these financial statements 5 LITEGLOW INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2002 NOTE 1: FINANCIAL STATEMENTS The Company The accompanying financial statements represent those of Liteglow Industries, Inc. (the "Company"). The Company was incorporated April 25, 1984, in the State of Utah. The Company primarily engages in the business of designing, manufacturing and marketing a diverse line of automotive aftermarket accessory and specialty products. The Company initially focused its efforts on developing a line of 12-volt automotive accessories designed to enhance vehicle appearance, including neon license plate frames and neon under-car lighting kits. Significant Accounting Policies The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements included in its Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001. The balance sheet as of September 30, 2002, the statements of operation and cash flows for the three and nine months ended September 30, 2002, and 2001 have been prepared by the Company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2002, and for all periods presented, have been made. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto as of December 31, 2001. NOTE 2: NET INCOME PER SHARE Net income per share is computed by dividing net income by the average number of common shares outstanding, increased by common stock equivalents determined using the treasury stock method. 6 LITEGLOW INDUSTRIES, INC. FORM 10-QSB SEPTEMBER 30, 2002 PART I - FINANCIAL INFORMATION Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - --------------------------------------------------------------- The following discussion and analysis should be read in conjunction with the Financial Statements appearing elsewhere in this Report. It includes an analysis of the three and nine months ended September 30, 2002, and 2001, respectively. Forward-Looking Statements - -------------------------- Except for the historical statements and discussions contained herein, statements contained in this report constitute "forward- looking statements" as defined in the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. These forward- looking statements rely on a number of assumptions concerning future events, and are subject to a number of risks and uncertainties and other factors, many of which are outside the control of the Company, that could cause actual results to differ materially from such statements. Readers are cautioned not to put undue reliance on such forward- looking statements, each of which speaks only as of the date hereof. Factors and uncertainties that could affect the outcome of such forward-looking statements include, among others, market and industry conditions, increased competition, changes in governmental regulations, general economic conditions, pricing pressures, and the Company's ability to continue its growth and expand successfully into new markets and services. The Company disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 7 LITEGLOW INDUSTRIES, INC. FORM 10-QSB SEPTEMBER 30, 2002 Results of Operations Three and Nine Months Ended September 30, 2002 and 2001 Net sales for the quarter ended September 30, 2002 were $2,980,577 compared to net sales of $1,888,325 for the quarter ended September 30, 2001. The increase in sales of $1,092,252 was primarily the result of the sales to three major retailers noted below. For these same periods, cost of sales was $1,659,666 compared to $960,106 for 2002 and 2001, respectively. The gross profit for the quarter ended September 30, 2002 and 2001 was $1,320,911 and $928,219, respectively. The Company's selling, general and administrative expenses increased to $873,240 from $677,694, respectively. The increase in selling, general and administrative expenses is primarily a result of expansion of facilities, hiring of additional personnel and increased trade show promotions. The Company had income from operations of $447,671 compared to $250,525 for the quarter ended September 30, 2002 and 2001 respectively. Net sales for the nine months ended September 30, 2002 were $9,540,447 compared to net sales of $4,042,047 for the nine months ended September 30, 2001. The increase in sales of $5,498,400 was primarily the result of increased sales totaling approximately $3.3 million to three major retailers. The remaining increase is a result of increased sales to new and existing customers. For these same periods, costs of sales were $5,238,486 compared to $1,883,738 for 2002 and 2001, respectively. The gross profit for the nine months ended September 30, 2002 and 2001 was $4,301,961 and $2,158,309, respectively. The Company's selling, general and administrative expenses increased to $2,878,130 from $1,875,346 for the nine months ended September 30, 2002 and 2001, respectively. The increase in selling, general and administrative expenses is primarily a result of expansion of facilities, hiring of additional personnel and increase in trade show promotions. The Company had income from operations of $1,423,831 for the nine months ended September 30, 2002 compared to $282,963 for the nine months ended September 30, 2001. The Company increased its inventory during the first nine months of 2002 by $708,078 compared to a decrease of $61,211 for the same period of 2001. The Company is making efforts to better anticipate inventory needs. No income tax expense or benefit is recorded in the nine months, and three months ended September 30, 2002 and 2001 as the Company will utilize its net operating loss carryforward to offset the current tax expense. Liquidity and Capital Resources Total current assets increased to $4,319,901 at September 30, 2002 compared to $1,592,781 at September 30, 2001 primarily as a result of increasing its accounts receivable and inventory levels. The Company's total assets increased to $4,899,417 at September 30, 2002 compared to $2,034,833 at September 30, 2001 primarily as a result of increasing its current assets described above and due to the purchase of fixed assets. 8 LITEGLOW INDUSTRIES, INC. FORM 10-QSB SEPTEMBER 30, 2002 Liquidity and Capital Resources (continued) The Company's accounts payable and accrued expenses increased to $1,364,673 at September 30, 2002 compared to $381,508 at September 30, 2001, however loans payable to shareholders decreased to $68,262 at September 30, 2002 compared to $137,775 at September 30, 2001 primarily due to the Company's increased purchasing due to higher sales volume and improved cash flow enabling the Company to rely less on shareholder loans. The Company's total current liabilities increased to $3,269,425 at September 30, 2002 from $1,683,487 at September 30, 2001 primarily due to the increased sales volume, which increased the amounts carried in trade payables and other short-term borrowings. The Company's net cash provided by operations was $292,208 for the nine months ended September 30, 2002 compared to net cash used by operations of ($610,288) for the nine months ended September 30, 2001. The Company believes that its current available cash position, coupled with its line of credit will be sufficient to meet its cash needs. 9 LITEGLOW INDUSTRIES, INC. FORM 10-Q SEPTEMBER 30, 2002 PART II - OTHER INFORMATION Item 1 - Legal Proceedings ----------------- The Company is a party to the following legal proceeding. In July 2002, the Company filed suit in the Circuit Court in and for Seminole County, Florida against Keith Kowatch, Judith Kowatch and JDT Services Group, Inc. d/b/a/ Streetgear and/or Boulevard Neon (the "Defendants") alleging that the Kowatches breached the non-competition provisions of their respective employment agreements with the Company. The litigation stemmed from the Company's purchase of the assets of KJK Marketing, Inc. in October, 1997. In September 2002, the Defendants stipulated to the entry of a final judgment (inclusive of attorneys fees and costs), injunction extending the non-compete term, and settlement of remaining issues in favor of the Company. Item 2 - Changes in Securities --------------------- None Item 3 - Defaults upon Senior securities ------------------------------- None Item 4 - Submission of Matters to Vote of Security Holders ------------------------------------------------- None Item 5 - Other information ----------------- None Item 6 - Exhibits and reports on Form 8-K -------------------------------- (a) 99.1 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Spencer Krumholz) 99.2 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Michael Krumholz) b) There were no reports filed on Form 8-K during the quarter ended September 30, 2002. 10 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. LITEGLOW INDUSTRIES, INC. Registrant Date: October 31, 2002 /s/ Spencer Krumholz ------------------------------------- Spencer Krumholz, Chief Executive Officer 11 CERTIFICATIONS I, Spencer Krumholz, certify that: 1. I have received this quarterly report on Form 10-QSB of Liteglow Industries, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operation and cash flows of Liteglow Industries, Inc. as of, and for, the periods presented in this quarterly report. Date: October 31, 2002 /s/ Spencer Krumholz - ----------------------------------------- Spencer Krumholz, Chief Executive Officer I, Michael Krumholz, certify that: 1. I have received this quarterly report on Form 10-QSB of Liteglow Industries, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operation and cash flows of Liteglow Industries, Inc. as of, and for, the periods presented in this quarterly report. Date: October 31, 2002 /s/ Michael Krumholz, - ---------------------------------------- Michael Krumholz, President 12 EX-99.1 3 sept0210q-ex991.txt Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying quarterly report of Liteglow Industries, Inc, (the "Company") on Form 10-QSB for the quarter ending September 30, 2002, as filed with the Securities and Exchange commission on the date hereof (the"Report"), I, Spencer Krumholz, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: (1) The Report fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fully presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Spencer Krumholz -------------------------------- Name: Spencer Krumholz Date: October 31, 2002 EX-99.2 4 sept0210q-ex992.txt Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying quarterly report of Liteglow Industries, Inc, (the "Company") on Form 10-QSB for the quarter ending September 30, 2002, as filed with the Securities and Exchange commission on the date hereof (the"Report"), I, Michael Krumholz, President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: (1) The Report fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fully presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Michael Krumholz ----------------------------- Name: Michael Krumholz Date: October 31, 2002 -----END PRIVACY-ENHANCED MESSAGE-----