-----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, RAMReKYGGg8qsq5XghhtNUnwjjRfpkCNTa49EG++CMeefZZ/3rn8U9ovevhVJZbA rBex2kFWBhQPxJgxKskGUg== /in/edgar/work/20000815/0000950117-00-002011/0000950117-00-002011.txt : 20000922 0000950117-00-002011.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950117-00-002011 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREATIVE BAKERIES INC CENTRAL INDEX KEY: 0000949721 STANDARD INDUSTRIAL CLASSIFICATION: [2050 ] IRS NUMBER: 133832215 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-13984 FILM NUMBER: 701452 BUSINESS ADDRESS: STREET 1: 20 PASSAIC AVE CITY: FAIRFIELD STATE: NJ ZIP: 07004 BUSINESS PHONE: 9738088248 MAIL ADDRESS: STREET 1: 20 PASSAIC AVE CITY: FAIRFIELD STATE: NJ ZIP: 07004 FORMER COMPANY: FORMER CONFORMED NAME: WILLIAM GREENBERG JR DESSERTS & CAFES INC DATE OF NAME CHANGE: 19950918 10QSB 1 0001.txt CREATIVE BAKERIES, INC. 10-QSB 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 June 30, 2000 ------------- or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1939 For the transition period from __________ to __________ Commission File Number: 1-13984 ------- CREATIVE BAKERIES, INC. (Exact name of small business issuer as specified in its charter) New York 22-3576940 - -------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number)
20 Passaic Avenue, Fairfield, NJ 07004 ---------------------------------------- (Address of principal executive offices) Issuer's telephone number, including area code: (973) 808-9292 ------------------- Former name: William Greenberg Jr. Desserts and Cafes, Inc. 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 X NO --- --- Indicate the number of Shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date.
Class Outstanding at June 30, 2000 -------------------------- ---------------------------- Common Stock, par value $0.001 per share 5,245,250
INDEX Part I. Financial information Item 1. Condensed consolidated financial statements: Balance sheet as of June 30, 2000 F-2 Statement of operations for the six and three months ended June 30, 2000 and 1999 F-3 Statement of stockholders' equity for the period January 1, 1999 to June 30, 2000 F-4 Statement of cash flows for the six months ended June 30, 2000 and 1999 F-5 Notes to condensed consolidated financial statements F-6 - F-12 Item 2. Management's discussion and analysis of financial condition Item 3. Legal proceedings
Part II. Other information Signatures CREATIVE BAKERIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET - JUNE 30, 2000 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 172,674 Accounts receivable, less allowance for doubtful accounts of $9,000 405,060 Inventories 269,555 Prepaid expenses and other current assets 23,452 ------------ Total current assets 870,741 ------------ Property and equipment, net 559,950 ------------ Other assets: Goodwill, net of amortization 849,485 Security deposits 5,464 ------------ 854,949 ------------ $ 2,285,640 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable, bank $ 128,284 Loans payable, other 7,500 Accounts payable 545,262 Payroll taxes payable 45,370 Accrued expenses 241,189 ------------ Total current liabilities 967,605 ------------ Other liabilities: Deferred rent 126,864 Net liabilities of discontinued operations less assets to be disposed of 404,771 ------------ 531,635 ------------ Stockholders' equity: Preferred stock, $.001 par value, authorized 2,000,000 shares; none issued Common stock, $.001 par value, authorized 10,000,000 shares, issued 5,245,250 shares 5,245 Additional paid in capital 11,364,074 Deficit (10,482,603) ------------ 886,716 Common stock held in treasury, 178,500 shares (100,316) ------------ 786,400 ------------ $ 2,285,640 ============
See notes to condensed consolidated financial statements. F-2 CREATIVE BAKERIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS SIX AND THREE MONTHS ENDED JUNE 30, 2000 AND 1999 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, 2000 1999 2000 1999 ---- ---- ---- ---- Net sales $ 2,108,727 $ 2,036,252 $ 1,284,124 $ 1,128,817 Cost of sales 1,680,344 1,611,200 998,887 892,486 ----------- ----------- ----------- ----------- Gross profit 428,383 425,052 285,237 236,331 Selling, general and administrative expenses 523,295 529,842 287,933 232,736 ----------- ----------- ----------- ----------- Income (loss) from continuing operations and other income (expenses) (94,912) (104,790) (2,696) 3,595 ----------- ----------- ----------- ----------- Other income (expenses): Sale of marketable securities 3,216 Miscellaneous income 4,500 42,345 3,243 6,213 Interest income 2,881 4,248 1,466 2,171 Interest expense (6,986) (5,629) (3,743) (3,422) ----------- ----------- ----------- ----------- 395 44,180 966 4,962 ----------- ----------- ----------- ----------- Income (loss) from continuing operations (94,517) (60,610) (1,730) 8,557 Discontinued operations: Income (loss) from operations of New York facility to be disposed of (24,465) 23,815 (2,488) 53,537 ----------- ----------- ----------- ----------- Net income (loss) ($ 118,982) ($ 36,795) ($ 4,218) $ 62,094 =========== =========== =========== =========== Earnings per common share: Primary and fully diluted: Income (loss) on continuing operations ($ 0.02) ($ 0.01) $ 0.00 $ 0.00 Income (loss) from discontinued operations 0.00 0.00 0.00 0.01 ----------- ----------- ----------- ----------- Net income (loss) per common share ($ 0.02) ($ 0.01) $ 0.00 $ 0.01 =========== =========== =========== =========== Weighted average number of common shares outstanding 5,245,250 5,241,360 5,245,250 5,304,508 =========== =========== =========== ===========
See notes to condensed consolidated financial statements. F-3 CREATIVE BAKERIES, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY JANUARY 1, 1999 TO JUNE 30, 2000
Common stock ---------------------- Number Additional Total of Paid in Accumulated Treasury Stockholders' Shares Amount Capital Deficit Stock Equity ------ ------ ------- ------- ----- ------ Balance at December 31, 1998 5,101,750 $ 5,102 $11,206,588 ($10,482,200) ($247,369) $482,121 Exercise of warrants on January 26, 1999 150,000 150 187,350 187,500 Common stock issued in settlement of accrued obligations 53,500 53 111,760 111,813 Cancellation of shares regarding the purchase of Chatterley Elegant Desserts, Inc. (60,000) (60) 60 Fair market value of warrant to acquire 8,610 shares of common stock issued to a lender in order to obtain financing for the purchase of the operating assets of Greenberg Desserts Associates Limited Partnership, valued at $.500 per share 4,305 4,305 Purchase of treasury stock (95,625) (95,625) Treasury stock issued in settlement of accrued obligations 8,750 8,750 Net income for the year ended December 31, 1999 118,579 118,579 --------- -------- ----------- ----------- -------- -------- Balance at December 31, 1999 5,245,250 5,245 11,510,063 (10,363,621) (334,244) 817,443 Purchase of treasury stock (94,061) (94,061) Treasury stock issued upon exercise of warrant (145,989) 327,989 182,000 Net loss for the six months ended June 30, 2000 (118,982) (118,982) --------- -------- ----------- ----------- -------- -------- (5,245,250) $ 5,245 $11,364,074 ($10,482,603) ($100,316) $786,400 ========= ========= =========== =========== ======== ========
See notes to consolidated financial statements. F-4 CREATIVE BAKERIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (Unaudited)
2000 1999 ---- ---- Operating activities: Loss from continuing operations ($ 94,517) ($ 60,610) Adjustments to reconcile loss from continuing operations to cash used in continuing operations: Depreciation and amortization 107,230 98,501 Gain on sale of marketable securities 3,216 Changes in other operating assets and liabilities from continuing operations: Accounts receivable (90,921) (133,272) Inventory 13,729 55,315 Prepaid expenses and other current assets 64,278 6,810 Accounts payable 29,670 8,760 Accrued expenses and other current liabilities (38,629) 77,229 Deferred rent (10,722) (6,847) --------- --------- Net cash provided by (used in) operating activities (19,882) 49,102 Net cash provided by (used in) discontinued operations 9,150 (125,686) --------- --------- Net cash used in operating activities (10,732) (76,584) --------- --------- Investing activities: Proceeds from sale of marketable securities 4,533 Purchase of property and equipment (16,229) --------- Net cash used in investing activities (11,696) --------- Financing activities: Proceeds from issuance of common stock and warrants 182,000 187,500 Purchase of treasury stock (94,061) Payment of debt (19,504) (19,494) --------- --------- Net cash provided by financing activities 68,435 168,006 --------- --------- Net increase in cash and cash equivalents 57,703 79,726 Cash and cash equivalents, beginning of period 114,971 129,626 --------- --------- Cash and cash equivalents, end of period $ 172,674 $ 209,352 ========= ========= Supplemental disclosures: Cash paid during the period: Interest paid during the period Continuing operations $ 4,379 $ 5,629 ========= ========= Discontinued operations $ 0 $ 0 ========= =========
See notes to condensed consolidated financial statements. F-5 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 1. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to 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, all adjustments considered necessary for a fair presentation have been included. The results of operations for the three months ended is not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report for the year ended December 31, 1999 included in its Annual Report filed on Form 10-KSB. 2. Principles of consolidation: The accompanying consolidated financial statements include the account of the Company and all of its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. 3. Nature of operations, risks and uncertainties: The Company is a manufacturer of baking and confectionery products which are sold to supermarkets, food distributors, educational institutions, restaurants, mail order and to the public. Although the Company sells its products throughout the United States, its main customer base is on the East Coast of the United States. The process of preparing financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. The Company maintains all of its cash balances in New Jersey financial institutions. The balances are insured by the Federal Deposit Insurance Company (FDIC) up to $100,000. At June 30, 2000, the Company had uninsured cash balances of $72,674. F-6 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 4. Accounts receivable: Following is a summary of receivables at June 30, 2000: Trade accounts $414,060 Less allowance for doubtful accounts ( 9,000) -------- $405,060 ========
At June 30, 2000, accounts receivable in the amount of $414,060 was pledged as collateral in connection with the Company's line of credit. 5. Inventories: Inventories at June 30 consist of : Finished goods $ 94,344 Raw materials 72,780 Supplies 102,431 -------- $269,555 ========
6. Property and equipment: Baking equipment $1,442,972 Furniture and fixtures 78,864 Leasehold improvements 180,422 ---------- 1,702,258 Less: Accumulated depreciation and amortization 1,142,308 ---------- $ 559,950 ==========
F-7 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 6. Property and equipment (continued): Depreciation expense charged to operations was $54,274 and $58,045 in 2000 and 1999, respectively. Machinery and equipment with a cost of $197,000 is pledged as collateral for the Company's line of credit. The useful lives of property and equipment for purposes of computing depreciation are:
Years ----- Machinery and equipment 10 Furniture and computers 5 Leasehold improvements 10-15
7. Intangible assets: The acquisition agreement of Greenberg's - L.P. contained a provision for a covenant not to compete of $125,000 which management is amortizing over its five year term. Amortization of the covenant charged to operations was $12,500 in 2000 and 1999. The excess cost over the fair value of the net assets acquired from J.M. Specialties, Inc. aggregated $1,213,565. This goodwill has been amortized over its estimated useful life of fifteen years. Amortization charged to operations amounted to $40,456 in 2000 and 1999. 8. Note payable, bank: As of June 30, 2000, the Company had an available revolving line of credit with Hudson United Bank in the amount of $150,000, of which $128,284 had been utilized at June 30, 2000. The interest rate at June 30, 2000 was 9.50%. F-8 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 9. Commitments and contingencies: The Company is obligated under a triple net lease for use of 29,362 square feet of office and plant space in New Jersey with the lease commencing January 31, 1994 and expiring December 31, 2004. The minimum future rentals on the baking facility is as follows:
Facility -------- June 30, 2001 $200,000 June 30, 2002 200,000 June 30, 2003 200,000 June 30, 2004 200,000 Thereafter 130,000 -------- $930,000 ========
Rent expense for all operating leases amounted to $104,498 in 2000 and $105,895 in 1999. 10. Income taxes: The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards ("SFAS No. 109") "Accounting for Income Taxes", which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. There was no cumulative effect of adoption or current effect in continuing operations mainly because the Company has accumulated a net operating loss carryforward of $8,942,204. The Company has made no provision for a deferred tax asset due to the net operating loss carryforward because a valuation allowance has been provided which is equal to the deferred tax asset. It cannot be determined at this time that a deferred tax asset is more likely that not to be realized. The Company has a loss carryforward of $8,942,204 that may be offset against future taxable income. The carryforward losses expire at the end of the years 2010 through 2013. F-9 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 12. Earnings per share: Primary earnings per share is computed based in the weighted average number of shares actually outstanding plus the shares that would have been outstanding assuming conversion of the common stock purchase warrants which are considered to be common stock equivalents. However, according to FASB 128, effective for financial statements issued and annual periods issued after December 15, 1997, entities with a loss from continuing operations, the exercise of any potential shares increases the number of shares outstanding and results in a lower loss per share. Thus, potential issuances are excluded from the calculation of earnings per share. These common stock purchase warrants amounted to 1,339,575 in 2000 and 2,485,000 in 1999. Reconciliation of shares used in computation of earnings per share:
2000 1999 ---- ---- Weighted average of shares actually outstanding 5,245,250 5,271,360 Common stock purchase warrants --------- --------- Primary and fully diluted weighted average common shares outstanding 5,245,250 5,271,360 ========= =========
13. Supplemental schedule of non-cash investing and financing activities:
2000 1999 ---- ---- Issuance of common shares in consideration of legal, consulting fees and other obligations $ 0 $111,812 ------- -------- $ 0 $111,812 ======= ========
F-10 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 14. Discontinued operations: In 1998, the Company adopted a formal plan to close WGJ Desserts and Cafes, Inc., its New York manufacturing facility, which was done in July of 1998 and to dispose of its one remaining retail store, which was accomplished in November 1998. The New Jersey facility was unaffected and still continues to sell and manufacture. The sale of the final retail location resulted in a selling price of $405,000 which includes a note receivable of $295,000. The sale resulted in a gain of $321,350 which is included in other income. On November 3, 1998, the Company sold its one remaining retail facility for $405,000 which represented disposition of equipment and a license to sell under the "William Greenberg, Jr. Desserts and Cafes" name. The agreement called for a cash down payment of $110,000 with the remainder being paid on a note receivable due in semi-annual installments of $36,875 plus interest at prime. The maturities of the notes are as follows: June 30, 2001 $ 73,750 June 30, 2002 110,625 -------- $184,375 ========
In the event that the licensee opens and operates any additional retail store(s) utilizing the license (other than the original retail store) and the annual gross retail sales of any such store(s) exceeds $400,000, then the licensee shall pay the licensor (the Company) a five percent royalty on all sales in excess of the $400,000 of sales in each store. The licensee shall pay the licensor a royalty on a semi-annual basis of 3% of all mail order sales in excess of $100,000. Net liabilities, less assets to be disposed of, of WGJ Desserts, Inc. consisted of the following as of June 30, 2000: Liabilities: Accounts payable $185,120 Accrued expenses 405,648 -------- 590,768 -------- Assets: Notes receivable 184,375 Interest receivable 1,622 -------- 185,997 -------- $404,771 ========
F-11 CREATIVE BAKERIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 14. Discontinued operations (continued): Information relating to discontinued operations for WGJ Desserts and Cafes, Inc. for the six months ended June 30, 2000 and 1999 is as follows:
2000 1999 ---- ---- Operating expenses $33,615 $66,181 ------- ------- Net loss from operations ( 33,615) ( 66,181) Settlement income 79,065 Interest income 9,150 10,931 ------- ------- Net income (loss) from discontinued operations ($24,465) $23,815 ======= ======= F-12 Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operation: The Company is continuing to seek new and profitable avenues of growth. As a result of the new strategy and concentration on growing Batter Bake-Chatterley, there has been an increase in new business. During 1999 the Company secured approximately $1,000,000 in new annualized business from a national supermarket chain for which it started producing in June 1999. Another $800,000 in annualized business began for a fund raising company in September 1999. This is a seasonal business, which was delivered between September and December. Reception to our new mini cakes has been overwhelming. Future plans call for producing these products sugar free for people on special diets. The Company is still on a stock repurchase program. It will continue repurchasing stock at opportune moments. This stock will be used to cover options/acquisitions. The Company will continue to seek out potential candidates for merger or acquisition that meet its specific needs. At June 30, 2000 to the extent the Company may have taxable income in future periods, there is available a net operating loss for federal income tax purposes of approximately $8,942,204 which can be used to reduce the tax on income up to that amount through the year 2011. b. Results of Operations (continuing ) for three months ending June 30, 2000 vs. three months ended June 30, 1999: The Company's consolidated revenues aggregated $1,284,124 vs. $1,128,817. The cost of goods sold was $998,887 vs. $892,486. Operating expenses were $291,676 vs. $232,736. As a result, the loss from operations for the second quarter 2000 was $6,439 vs. a gain of 3,595 for second quarter 1999. The net interest expense for the quarter was $0. Net loss from discontinued operations was $2,488 for 2nd quarter 2000 or ($.005) per share vs. gain of $53,537 for 2nd quarter 1999 or $.01 per share. The resulting net loss aggregated $4,218 for 2nd quarter 2000 or ($.005) per share vs. a net gain of $62,094 for 2nd quarter 1999 or $.02 per share. The gains in 1999 were a result one time net other income. Batter Bake-Chatterley Inc., (the BBC subsidiary) offers a line of batter and frozen finished cakes, muffins, tart shells and other desserts. BBC's financial records and affairs are kept separate from the parent but included in the consolidated financial statements at June 30, 2000 and 1999. c. Plan of Operation: Exit from Retail Operations: After analyzing the Company's retail operations, management concluded that the unprofitable retail division was diverting management's attention away from pursuing profitable opportunities in the Company's other division. Therefore, by December 31, 1997, the company closed down four of its six stores. A fifth store, in Macy's cellar was taken over by Ferrara Bakery from April 1, 1998. The commissary was closed down on June 30, 1998 and the last remaining store on Madison Avenue was sold in early November, 1998. The Company retains a 50% stake in the Wholesale and Mail Order Business which it will develop jointly with the new owners. In connection with the restructuring plan, management has written down property & equipment at the WGJ subsidiary as of June 30, 2000 to $0. We took a step back at the retail end in order to move forward. We are now at a point where we have minimized the losses and are pursuing ways of growing the business profitably. Wholesale Operations: The next phase in the company's plan of action is to build up the wholesale end of its business with fewer but profitable products. This process includes the following: Calling on supermarket headquarters and chain restaurant accounts. Brokers have been appointed and sales calls and visits are being made. Continue to expand the fat free product line targeting existing as well as new customers and Enter into co-packing arrangements whereby the company would introduce private label products of other bakery operations. Liquidity and Capital Resources: Since its inception the Company's only source of working capital has been the $8,642,500 received from the issuance of its securities. In June 1995, The Company issued 180,000 shares of common stock to unrelated parties for $600,000 and in August 1995, the Company issued 60,000 shares of its common stock to unrelated parties for $200,000. In connection with the acquisition of Greenberg's- L.P., the Company received $2,000,000 from the sale of two notes to InterEquity Capital Partners, L.P. ("InterEquity"). During October 1995, the Company received net proceeds of $4,900,000 from the sale of 1,150,000 shares of its common stock in an initial public offering. During January 1997 the Company received net proceeds of $1,747,500 from the private placement of 1,875,500 common stock purchase warrants at $1.10 per warrant. During October 1997 the Company received net proceeds of $883,000 from the exercise of a portion of these common stock warrants. During January 1999, the Company received a further $187,500 from the exercise of another 150,000 of these warrants. Of the $5,700,000 proceeds from the aforementioned stock sales: (i) $2,125,000 was issued to repay the Inter-Equity debt including interest; (ii) $2,615,000 was used in operations; (iii) $765,00 was used to purchase property, equipment and leaseholds; and (iv) $195,000 was used for general corporate purposes. The $1,650,000 proceeds from the private placement warrants was used to acquire JMS. Of the $1,071,000 proceeds from the exercise of warrants $325,000 was used for consolidation and merger of JMS and Chatterley and the balance is being used for corporate purposes and to fund new business. As of June 30, 2000, the Company (continuing operations) has a negative working capital of approximately $96,863 as compared to a negative working capital of $199,750 at June 30, 1999. During 1997, 1998 and 1999 Management took actions aimed at restructuring the Company in order to reduce operating costs and enhance the Company's focus and efficiency. Pursuant to the restructuring a new management team was put into place, executive contracts and leases were renegotiated and certain positions were eliminated and an exit strategy out of retailing was completed. The Company is continuing to seek new and profitable avenues of growth during 2000. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 14, 2000. CREATIVE BAKERIES, INC. By: /s/ Philip Grabow ----------------------- Philip Grabow President and Chief Executive Officer In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on May 15, 2000. Signatures Title - ---------- ----- /s/Philip Grabow President, Chief Executive Officer/Director - ----------------------- Philip Grabow - ----------------------- Director - ----------------------- Richard Fechtor /s/Raymond J. McKinstry Director - ----------------------- Raymond J. McKinstry /s/Kenneth Sitomer Director - ----------------------- Kenneth Sitomer /s/Karen Brenner Director - ----------------------- Karen Brenner /s/ Yona Gonen Director - ----------------------- Yona Gonen
EX-27 2 0002.txt EXHIBIT 27
5 3-MOS DEC-31-2000 JUN-30-2000 172,674 0 405,060 0 269,555 870,741 559,950 0 2,285,639 967,604 0 5,245 0 0 0 2,285,639 1,284,124 0 998,887 1,290,563 (2,221) 0 0 (4,218) 0 (1,730) (2,488) 0 0 (4,218) (0.005) 0
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