-----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, DAX7VQvpHfrcoHT8RT2U4TqPGZrmMIRK+QCu7wWhA+RICZO4EfZsasGJDXqnQwsI cgw8re7OGw2DxZZ7Bw6tkA== 0000861058-98-000008.txt : 19980518 0000861058-98-000008.hdr.sgml : 19980518 ACCESSION NUMBER: 0000861058-98-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREATIVE RECYCLING TECHNOLOGIES INC CENTRAL INDEX KEY: 0000861058 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 841122431 STATE OF INCORPORATION: GA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28704 FILM NUMBER: 98624759 BUSINESS ADDRESS: STREET 1: 3500 PARKWAY LANE STREET 2: SUITE 435 CITY: NORCROSS STATE: GA ZIP: 30071 BUSINESS PHONE: 7707299010 MAIL ADDRESS: STREET 1: 3500 PARKWAY LANE STREET 2: SUITE 435 CITY: NORCROSS STATE: GA ZIP: 30092 FORMER COMPANY: FORMER CONFORMED NAME: CLASSIC RESTAURANTS INTERNATIONAL INC /CO/ DATE OF NAME CHANGE: 19960619 FORMER COMPANY: FORMER CONFORMED NAME: CLASSIC RESTAURANTS INC/CO DATE OF NAME CHANGE: 19960604 FORMER COMPANY: FORMER CONFORMED NAME: CASINOS INTERNATIONAL INC/CO DATE OF NAME CHANGE: 19960604 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 1997 [ ] TRANSITION REPORT PURSUANT SECTION 13 OF 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _______________ Commission file number 0-28704 CREATIVE RECYCLING TECHNOLOGIES, INC. (Exact name of small business issuer as specified in its charter) GEORGIA 84-1122431 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 3500 PARKWAY LANE, SUITE 435, NORCROSS, GEORGIA 30092 (Address of principal executive offices) (770)729-9010 (Issuer's telephone number) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) 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 ____ No _X___ State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date: 733,280 SHARES OF CLASS A COMMON STOCK, NO PAR VALUE 10,000 SHARES OF CLASS B COMMON STOCK, NO PAR VALUE AS OF MAY 12, 1998 Transitional Small Business Disclosure Format (check one): Yes __ No _X_ CREATIVE RECYCLING TECHNOLOGIES, INC. TABLE OF CONTENTS PAGE PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheet dated September 30, 1997 3 Consolidated Statement of Operations 4 Consolidated Statements of Cash Flows for the Three Months Ended September 30, 1996 and 1997 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial 7 Condition and Results of Operations PART II. OTHER INFORMATION 8 2 PART I. - FINANCIAL INFORMATION CREATIVE RECYCLING TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEET DECEMBER 31, 1997 (UNAUDITED)
December 31, June 30, 1997 1997 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 10,858 $ 36,656 Inventory 17,222 14,039 Due from related party 572 - Due from officers and stockholders 220,812 91,444 Other receivables 6,161 6,655 ---------- ---------- Total current assets 255,625 148,794 Property and equipment-net of accumulated Depreciation 280,329 348,801 Other assets: Intangibles net of accumulated amortization Of $7,167 and $10,707 20,281 21,501 Deposits 39,119 39,119 Deferred discounts 8,773 - ----------- ---------- $ 604,127 $ 558,215 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable $ 179,809 $ 184,394 Accrued expenses 179,996 119,169 Notes payable 306,453 333,614 Advance banquet deposits 22,080 26,973 Deferred revenue 47,392 13,833 Deferred rent 23,640 26,640 ----------- ---------- Total current liabilities 759,370 701,623 ----------- ---------- Commitments and contingencies Stockholders' equity (deficiency): Common stock, Class A no par value, 1,800,000,000 shares authorized 3,018,592 and 4,384,116 shares issued and outstanding 4,163,684 3,814,880 Common stock, Class B no par value, 200,000,000 Shares authorized, 200,000 shares issued And outstanding 200 200 Preferred stock, Series A, convertible, stated value $25,000, 20 shares authorized, 14 shares issued and outstanding 350,000 350,000 Preferred stock, Series B convertible, stated value $15, 12,000 shares authorized, 2,918 issued and outstanding 43,770 43,770 Preferred stock, Series C, convertible, stated value $50,000, 12 shares authorized, no shares issued or outstanding - - Accumulated deficit (4,712,897) 4,352,258) ----------- ---------- Total stockholders' equity (deficiency) (155,243) (143,408) ----------- ---------- $ 604,127 $ 558,215 =========== ==========
See accompanying notes to financial statements. 3 CREATIVE RECYCLING TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
For the three months For the six months ended December 31, ended December 31, 1997 1996 1997 1996 ------ ------ ------ ------ Net sales $ 644,516 $ 703,959 $ 962,234 $ 1,115,833 --------- ----------- ---------- ----------- Operating expenses: Operating and maintenance 482,494 547,638 859,159 921,604 General and administrative 183,460 444,310 366,231 694,941 Depreciation and amortization 36,082 35,899 72,002 71,789 ----------- ----------- ---------- ----------- Total operating expenses 702,036 1,027,847 1,297,392 1,688,334 ----------- ----------- ---------- ----------- Loss from operations (57,520) (323,888) (335,158) (572,501) ----------- ----------- Other income (expense): Other income 12 201 460 7,410 Interest expense (13,479) (22,676) (25,214) (28,902) ----------- ----------- ---------- ----------- (13,467) (22,475) (359,912) (21,492) ----------- ----------- ---------- ----------- Net (loss) $ (70,987) $(346,363) (359,912) (593,993) =========== =========== ========== =========== Per share information: Weighted average shares Outstanding 7,605,199 3,249,512 6,536,324 3,135,719 =========== =========== =========== =========== Basic and diluted loss per share $ (0.01) $ (0.11) $ (0.06) $ (0.19) =========== =========== =========== ===========
See accompanying notes to financial statements. 4 CREATIVE RECYCLING TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the three months For the six months ended December 31, ended December 31, 1997 1996 1997 1996 ----------- ------------ ----------- ----------- Cash flows from operating activities: Net loss $ (70,987) $ (346,363) $ (359,912) $ (593,993) Adjustments to reconcile net loss To net cash provided by (used in) Operating activities: Depreciation and amortization 36,082 35,899 72,002 71,789 Changes in assets and liabilities: (Increase) decrease in accounts receivable - (13,948) - (11,459) (Increase) decrease in inventory (2,471) (3,610) (3,183) (5,157) (Increase) decrease in prepaid expenses (624) (282,984) - (283,297) (Increase) decrease due from related party (572) - (572) - (Increase) decrease in other receivables 1,956 - 493 - (Increase) decrease in deferred discounts (8,773) - (8,773) - (Increase) decrease in accounts payable and accrued expenses (43,809) (43,909) 55,515 (89,999) (Decrease) increase in taxes payable - (5,010) - 44,624 Increase (decrease) in advance banquet deposits (17,246) - (4,893) - Increase (decrease) in deferred revenue 35,527 14,848 33,559 54,483 ----------- ----------- ---------- ---------- Total adjustments 70 (289,714) 144,148 (219,016) ----------- ----------- ---------- ---------- Net cash (used in) operating activities (70,917) (645,077) (215,764) (813,009) ----------- ----------- ---------- ---------- Cash flows from investing activities: Purchase of fixed assets - (5,962) (2,309) (10,821) ----------- ----------- ---------- ---------- Net cash (used in) investing activities - (5,962) (2,309) (10,821) Cash flows from financing activities: Net proceeds from issuance of common stock 118,560 1,339,388 348,804 1,359,388 Payments of deposits - (180) - (1,701) Proceeds from due to officers and and stockholders - (472,642) - (320,641) Payment on long-term debt (27,161) (42,999) (27,161) (42,999) Advances to due from officers and stockholders (37,187) (113,325) (129,368) (117,625) ---------- ---------- ---------- ---------- Net cash provided by financing Activities 54,212 710,242 192,275 878,422 ---------- ---------- ---------- ---------- Net increase in cash and cash equivalents (16,705) 59,203 (25,798) 52,592 Beginning-cash and cash equivalents 27,563 16,148 36,656 22,759 Ending-cash and cash equivalents $ 10,858 $ 75,351 $ 10,858 $ 75,351 ========== ========== ========== ==========
See accompanying notes to financial statements. 5 CREATIVE RECYCLING TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared inaccordance with generally accepted accounting principles for interim financial information and Item 310(b) of Regulation SB. 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 (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements of the Company as of June 30, 1997, and the notes thereto, included in the Company's Form 10-KSB. 2. REINCORPORATION At a special meeting of the shareholders of the Company held on April 13, 1998, the shareholders voted to a approve a merger of the Company with and into Creative Recycling Technologies, Inc. ("CRT"), a wholly owned subsidiary of the Company incorporated under the laws of the State of Georgia, for the purpose of changing the Company's state of incorporation from Colorado to Georgia. The merger became effective on April 14, 1998. As of the effective date of the merger, the Company ceased to exist as a separate legal entity, and CRT assumed, and became the owner of, all of the liabilities and assets of the Company by operation of law. Under the Agreement and Plan of Merger, common and preferred shareholders of the Company received, for each share of common or preferred stock which they owned in the Company, one share of common or preferred stock in the CRT which has the same rights, preferences and limitations as the shares which they owned in the Company immediately before the effective date of the merger. Effective upon the close of trading on April 14, 1998, the Company effected a 1-for-20 reverse stock split of its Class A and Class B Common Stock. All per share amounts herein have not been adjusted to reflect the effects of the reverse stock split, except for disclosure of the number of outstanding shares of each class on the cover page. 3. COMMON STOCK For the period October 1, 1997 to December 31, 1997, the Company issued 2,073,250 shares of Class A Common Stock in private placements, and realized net proceeds of $91,140 therefrom. In addition, 100,000 shares of Class A Common Stock were issued upon the conversion of $14,960 of convertible debt. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION LIQUIDITY AND CAPITAL RESOURCES At December 31, 1997 the Company had a working capital deficit of ($503,745), compared to a working capital deficit of ($552,829) on June 30, 1997. On December 31, 1997, and June 30, 1997, the Company had cash and cash equivalents of $10,858, and $36,656, respectively. During the quarter ended December 31, 1997, the Company's working capital was impacted by a continued loss from operations, offset by $91,140 in new capital raised from the private placement of shares of common stock. As of the quarter ended December 31, 1997, the Company had substantial trade liabilities, all of which it was unable to pay in the ordinary course of business. In addition, the Company was in default in the payment of principle and interest on $306,453 of note indebtedness. Currently, the Company is dependent upon advances from shareholders and the sale of stock to meet its financing needs. There is no guaranty that the Company will be able to obtain additional financing from these sources. RESULTS OF OPERATIONS For the three months ended December 31, 1997 and 1996, net sales were $644,516 and $703,959, respectively, for a decrease of 8%. This decrease is partly due to the poor tourist market experienced by the area in which the Company's restaurants are located. The drop in net sales was offset by a substantial drop in general and administrative expenses from $440,310 in the quarter ended December 31, 1996 to $183,460 in the quarter ended December 31, 1997, representing a 58% decline from the prior year. Management expects this trend to continue for the remainder of fiscal 1998. For the three months ended December 31, 1997, 7 operating expenses also decreased substantially from the prior year, decreasing 12% to $482,494 from $547,638 in the three months ended December 31, 1996. The Company attributes the reduction in operating and general and administrative costs to better cost containment. The Company experienced a loss from operations of $57,520 and a net loss of $70,987, for the three months ended December 31, 1997. In contrast, for the three months ended December 31, 1996, the Company had a loss from operations of $323,888 and a net loss of $346,363. 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 Matters to a Vote of Security Holders. None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K 8 (a) Exhibits: REGULATION S-B NUMBER EXHIBIT 27 Financial Data Schedule (b) The Company did not file any reports on Form 8-K during the quarter ended December 31, 1997. SIGNATURES In accordance with the requirements of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CREATIVE RECYCLING TECHNOLOGIES, INC. May 14, 1998 \s\ June M. Cuba Date June M. Cuba Chief Financial Officer 9 EX-27 2 FDS
5 1 U.S. DOLLARS 3-MOS JUN-30-1997 OCT-01-1997 DEC-31-1997 1 10,858 0 220,812 0 17,222 255,625 812,472 532,143 604,127 759,370 0 0 393,770 4,163,684 (4,712,897) 604,127 644,516 644,516 0 702,036 0 0 13,479 (70,987) 0 (70,987) 0 0 0 (70,987) (.01) (.01)
-----END PRIVACY-ENHANCED MESSAGE-----