-----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, AecIQ/B/dmXz7nEb8/OnxNCNjkjpd6H+DHbm4ptsZG5IY15HF+RGCg0PkN+a/4vG HQcYs0+STY4CTxG8pIOgfw== /in/edgar/work/20000720/0001014897-00-000179/0001014897-00-000179.txt : 20000920 0001014897-00-000179.hdr.sgml : 20000920 ACCESSION NUMBER: 0001014897-00-000179 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREATIVE BEAUTY SUPPLY INC CENTRAL INDEX KEY: 0001011662 STANDARD INDUSTRIAL CLASSIFICATION: [2844 ] IRS NUMBER: 223392051 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-26361 FILM NUMBER: 675856 BUSINESS ADDRESS: STREET 1: 380 TOTOWA RD CITY: TOWOWA STATE: NJ ZIP: 07512 BUSINESS PHONE: 2012920125 MAIL ADDRESS: STREET 1: 380 TOTOWA ROAD CITY: TOTOWA STATE: NJ ZIP: 07512 10QSB 1 0001.txt U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 1999 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from: to: Commission file number: 000-26361 Creative Beauty Supply, Inc. (Exact name of Small Business Issuer in its charter) NEW JERSEY 22-3392051 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 380 Totowa Road, Totawa, NJ 07512 (Address of principal executive offices) (Zip Code) Registrant's Telephone number, including area code: (973-904-0004 Check mark whether the Issuer (1) has filed all reports required by Section 13 or 15(d) of the Exchange Act 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 the filing requirements for at least the past 90 days. YES: X NO: APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PREVIOUS FIVE YEARS 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 the court. YES: X NO: APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date: 1,864,650 Transitional Small Business Disclosure Format. YES: NO: X PART I FINANCIAL INFORMATION CREATIVE BEAUTY SUPPLY, INC. BALANCE SHEETS ASSETS
December 31, March 31, 1999 1999 ------------- ----------- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $308,937 $324,683 Accounts receivable 2,665 3,263 Inventory 61,439 72,904 Prepaid expenses 97 2,331 -------- --------- TOTAL CURRENT ASSETS 373,138 403,181 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $8,116 (December 1999) and $7,034 (March 1999) 2,578 4,316 OTHER ASSETS: Organization cost, net of accumulated amortization of $422 (December 1999) and $366 (March 1999) - 197 -------- ------- TOTAL ASSETS $375,716 $407,694 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable - trade $ 9,479 $ 9,863 Payroll taxes withheld and accrued 1,260 698 Accrued salaries - officer's salaries 120,481 98,365 Accrued expenses 19,857 19,770 --------- ---------- TOTAL CURRENT LIABILITIES 151,077 128,696 --------- --------- STOCKHOLDERS' EQUITY: Preferred stock, par value $.001, authorized 10,000,000 shares; issued and outstanding -0- shares - - Common stock, par value $.001, authorized 100,000,000 shares; issued and outstanding 1,864,650 shares 1,865 1,865 Additional paid-in capital 467,541 472,541 Accumulated deficit (244,767) (195,408) --------- ---------- TOTAL STOCKHOLDERS' EQUITY 224,639 278,998 --------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $375,716 $407,694
The accompanying note is an integral part of these financial statements. 4 CREATIVE BEAUTY SUPPLY, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Ended Three months Ended December 31, December 31, ------------------ -------------------- 1999 1998 1999 1998 ------ ------ ------ ------ NET SALES $188,809 $201,127 $62,153 $54,404 COST OF GOODS SOLD 151,080 162,850 50,728 44,041 -------- -------- --------- --------- GROSS PROFIT 37,729 38,277 11,425 10,363 -------- -------- -------- -------- OPERATING EXPENSES: Salaries - officers 46,092 46,277 15,900 16,181 Payroll taxes 1,928 1,967 687 672 Auto and delivery 10,055 6,865 3,187 2,438 Employee welfare 3,076 1,802 1,103 718 Insurance 2,466 2,323 825 775 Office 1,375 1,757 607 1,170 Professional fees 16,914 10,296 2,450 2,200 Rent 10,800 10,800 3,600 3,600 Store supplies 250 293 - - Taxes 250 293 - - Telephone 1,440 1,313 490 400 Utilities 1,478 1,632 595 586 Miscellaneous 468 3,213 75 131 Depreciation and amortization 1,835 1,707 697 569 ------- ------- ------ ------ TOTAL OPERATING EXPENSES 99,837 91,492 31,129 30,179 ------- ------- ------ ------- LOSS FROM OPERATIONS BEFORE OTHER INCOME (62,108) (53,215) (19,704) (19,816) OTHER INCOME: Interest income 12,749 12,956 4,218 4,427 NET LOSS $ (49,359) $(40,259) $(15,486) $(15,389) ========= ========= ========= ======== LOSS PER COMMON SHARE, BASIC $(.03) $(.02) $(.01) $(.01) ===== ===== ===== ===== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 1,864,650 1,862,952 1,864,650 1,864,650 ========== ========= ========= =========
The accompanying note is an integral part of these financial statements. 5 CREATIVE BEAUTY SUPPLY, INC. STATEMENTS OF CASH FLOWS NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (UNAUDITED)
1999 1998 -------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(49,359) $(40,259) Adjustments to reconcile net loss to net cash from operating activities: Depreciation and amortization 1,835 1,707 (Increase) decrease in operating assets: Accounts receivable 598 (1,474) Inventory 11,465 (2,274) Prepaid expenses 2,334 2,251 Increase (decrease) in operating liabilities: Accounts payable - trade (384) 1,054 Payroll taxes withheld and accrued 562 425 Accrued expenses - officers salaries 22,116 22,500 Accrued expenses 87 150 ------ ------ NET CASH USED BY OPERATING ACTIVITIES (10,746) (15,920) ------ ----- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock for cash - 47,750 Registration cost (5,000) - ------ ------ NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES (5,000) 47,750 ------ ------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (15,746) 31,830 CASH AND CASH EQUIVALENTS - beginning of period 324,683 291,674 -------- -------- CASH AND CASH EQUIVALENTS - end of period $308,937 $323,504 ======== ========
The accompanying note is an integral part of these financial statements. CREATIVE BEAUTY SUPPLY, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 NOTE 1 - BASIS OF PRESENTATION 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 10QSB and Article 10 of Regulation S-X. 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended December, 1999 are not necessarily indicative of the results that may be expected for the year ending March 31, 2000. The unaudited financial statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's Form 10SB for the year ended March 31, 1999. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Trends and Uncertainties. Demand for the Company's products will be dependent on, among other things, market acceptance of the Company's concept and general economic conditions, which are cyclical in nature. Inasmuch as a major portion of the Company's activities is the receipt of revenues from the sales of its products, the Company's business operations may be adversely affected by the Company's competitors and prolonged recessionary periods. Hair styles in the industry change drastically from season to season. The recent trend away from straight hair will have a favorable impact on the sales of the Company's hair products such as perms, etc. although the extent of this impact is indeterminable. Capital and Source of Liquidity. In April, 1999, the Company renewed its lease for a term of three (3) years commencing May 1, 1999 at a monthly rental of $1,200 per month for the first twelve (12) months and $1,300 a month for each of the remaining twenty four (24) months. Additionally, management intends to lease additional warehouse space. The increased lease amounts will have a negative effect on the cash flow of the Company. For the nine months ended December 31, 1999, the Company had a registration cost of $5,000 resulting in net cash used by financing activities of $5,000. For the nine months ended December 31, 1998, the Company received $47,750 from the issuance of common stock resulting in net cash provided by financing activities of $47,750. For the year ended March 31, 1999, the Company issued common stock for $47,750. As a result, the Company had net cash flow provided by financing activities of $47,750. For the year ended March 31, 1998, the Company issued common stock for $67,556. As a result, the Company had net cash flow provided by financing activities of $67,556. For the nine months ended December 31, 1999 and 1998, the Company pursued no investing activities. For the years ended March 31, 1999 and 1998, the Company pursued no investing activities. Results of Operations. December 31, 1999 compared to December 31, 1998. For the nine months ended December 31, 1999, the Company had a net loss of ($49,359). The Company had net sales of $188,809 with a cost of goods sold of $151,080 resulting in gross profit of $37,729. For the nine months ended December 31, 1998, the Company has a net loss of ($40,259). The Company had net sales of $201,127 with a cost of goods sold of $162,850 resulting in gross profit of $38,277. The Company sells approximately over 1,000 different products at varying mark ups ranging from 10 to 30 percent. The Company has two types of customers, beauty salons and the general public. The gross profit margin on sales of merchandises to the general public ranges from 20 to 30 percent depending on the product sold. The gross margin on sales of merchandise to beauty salons is somewhat less ranging from 10 to 20 percent depending on the product sold and the discount given. The Company had operating expenses of $99,837 for the nine months ended December 31, 1999 compared to $91,492 for the nine months ended December 31, 1998. For the nine months ended December 31, 1999, these expenses consisted of officers salaries of $49,092, auto and delivery of $10,055, professional fees of $16,914, rent of $10,800, insurance of $2,466, miscellaneous expenses of $468 and other miscellaneous expenses of $10,042. For the nine months ended December 31, 1998, these expenses consisted of officers salaries of $46,277, auto and delivery of $6,865, professional fees of $10,296, rent of $10,800, miscellaneous of $3,213, insurance of $2,323, office expenses of $1,757, telephone of $1,313 and other expenses of $8,648. The increase in auto and delivery from $6,865 for the nine months ended December 31, 1998 to $10,055 for the nine months ended December 31, 1999 was due to numerous repairs to the Company's delivery van. The decrease in miscellaneous expenses from $3,213 for the nine months ended December 31, 1998 to $468 for the nine months ended December 31, 1999 was due to tradeshow expenses incurred in 1998 which the Company did not incur in 1999. The major cause of the Company's losses from operations have been the low sales volume. Management is looking for new suppliers at more favorable prices and to increase their customer base and sales volume. Additionally, management has implemented inventory controls which has resulted in additional profits. Management believes that the implementation of its inventory controls and obtaining supplies from new sources will have a favorable impact on the Company's results of operations within the next 12 months. Plan of Operation. During the next twelve months, the Company intends to obtain new product lines by negotiating with various manufacturers, hire new sales representatives and hire technician to conduct product knowledge classes If the Company does not achieve the milestones within the above time schedule, their operating costs will be higher and the Company will lose even more money. The Company's liquidity will be decreased due to little or no increase in revenue and higher operating costs. The Company is not delinquent on any of its obligations even though the Company has had limited operating revenues. The Company intends to market its products utilizing cash made available from the sale of its products. The Company is of the opinion that revenues from the sales of its products and the proceeds from the sale of its securities will be sufficient to pay its expenses. The Company does not have nor does it intend to have pension and/or other post-retirement benefits in the future. The Company does not have any or intends to have any derivative instruments or hedging activities. Year 2000 Compliance. The Company has conducted a comprehensive review of its computer systems to identify any business functions that could be affected by the "Year 2000" issue. As the millennium ("Year 2000") approaches, businesses may experience problems as the result of computer programs being written using two digits rather than four to define the applicable year. The Company has conducted a comprehensive review of its computer systems to identify those areas that could be affected by the "Year 2000" issue. Any of the Company's programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. If not corrected, this could result in extensive miscalculations or a major system failure. The Company relies on industry standard software. Certain manufacturers have already provided the Company with upgraded software to address the "Year 2000" issue. The Company believes that by modifying existing software, the "Year 2000" issue will not pose significant operational problems and is not anticipated to require additional expenditures that would materially impact its financial position or results of operations in any given year. The Company believes that this modification will be completed in the latter part of 1999 at a minimal cost. 9 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Not applicable. ITEM 2. CHANGES IN SECURITIES. 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. (a) Not applicable. (b) Not applicable. 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. Creative Beauty Supply, Inc. (Registrant) Dated: February 15, 2000 By: /s/ Carmine Catizone ---------------------------- Carmine Catizone, President EX-27 2 0002.txt
5 9-MOS MAR-30-2000 DEC-31-1999 $308,937 $0 $2,665 $0 $61,439 $373,138 $2,578 $8,116 $375,716 $151,077 $0 $1,865 $0 $0 $222,774 $375,716 $188,809 $188,809 $151,080 $151,080 $(99,837) $0 $0 $(49,259) $0 $(49,359) $0 $0 $0 $(49,359) $(.03) $(.03)
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