From company's Form 10-SB filed on July 7, 1999:
GENERAL
The following discussion is based on the financial statements contained
elsewhere in this report. The financial statements have been prepared in
conformity with generally accepted accounting principals.
RESULTS OF OPERATIONS
NET SALES. Net sales for the nine months ended March 31, 1999 increased
by $2,621,942 compared to the comparable nine-month period in the prior
fiscal year. Net sales increased as a result of the nationwide rollout of the
Company's "Endless Youth" infomercial in January of 1999. The Company
currently has an agreement with Vendor Services Inc., in which it is to pay
Vendor Services Inc., 91 percent of net sales for all costs associated with
the production, distribution and marketing of the "Endless Youth" vitamin
products through infomercial sales.
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Net sales for the three months ended March 31, 1999 increased by
$2,548,507 compared to the comparable three-month period in the prior fiscal
year. Net sales increased as a result of the nationwide rollout the Company's
"Endless Youth" vitamin products.
COST OF SALES. Cost of sales for the nine months ended March 31, 1999
increased $2,363,026. The increase in cost of sales can be attributed to the
increase in net sales discussed above and an increase in media spending and
air time of the infomercials. Cost of sales as a percentage of net sales
during the nine months ended March 31, 1999 was 88 percent compared to 50
percent during the nine-month period ended March 31, 1998. The percentage
increase is attributed to the Company's agreement with Vendor Services Inc.
Cost of sales for the three-months ended March 31, 1999 increased
$2,403,625. The increase in cost of sales can be attributed to the increase
in sales discussed above and an increase in media spending and air time of
the infomercials. Cost of sales as a percentage of net sales during the three
months ended March 31, 1999 was 94 percent compared to 52 percent during the
three-month period ended March 31, 1998. The percentage increase is
attributed to the Company's agreement with Vendor Services Inc.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $126,188 in the nine-month period ended
March 31, 1999 compared to the comparable nine-month period in the prior
fiscal year. This decrease was primarily due to an overall decrease in
startup related expenses. The Company's management continues to pursue cost
reduction measures consistent with the level of business wherever
opportunities can be identified.
Selling and administrative expenses decreased $115,468 in the
three-month period ended March 31, 1999 compared to the comparable
three-month period in the prior fiscal year. The decrease was primarily due
to an overall decrease in startup related expenses.
LIQUIDITY AND CAPITAL RESOURCES. Although the Company has a negative
working capital and equity, it believes it has sufficient resources to fund
the Company's operations and capital requirements for the 1999 fiscal year
due to its recent sales volume and its contract with Vendor Services, which
pays for the production, distribution and marketing of its product.
Prepaid advertising was $121,758 and $0 at June 30, 1998 and March 31,
1999, respectively. The decrease in 1999 resulted from the amortization of
the remaining infomercial costs.
Accounts receivable was $0 and $22,828 at June 30, 1998 and March 31,
1999, respectively. The increase in 1999 resulted from the increased sales of
the Company's "Endless Youth" product and the agreement with Vendor Services
Inc.
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ENDLESS YOUTH PRODUCTS, INC.
BALANCE SHEETS
March 31, 1999 June 30, 1998
-------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 39,162 $ 471
Prepaid advertising (Notes 1 & 2) 0 121,758
Accounts receivable 22,828 0
----------- -----------
TOTAL CURRENT ASSETS 61,990 122,229
Property and Equipment
net of accumulated depreciation (Notes 1 & 3) 10,448 13,448
OTHER ASSETS 46,150 0
----------- -----------
TOTAL ASSETS $ 118,588 $ 135,677
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS'
(DEFICIT) EQUITY
CURRENT LIABILITIES
Accounts payable $ 182,480 $ 204,305
Advances from shareholders (Note 5) 48,000 97,113
----------- -----------
TOTAL LIABILITIES 230,480 301,418
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock, $.001 par value.
Authorized 4,000,000 shares;
issued and outstanding 2,916,011,
2,016,178, and 1,891,587 at March 31, 1999,
June 30, 1998, and June 30, 1997
respectively (Note 6 & 7) 2,916 2,017
Additional paid-in capital 1,053,852 952,881
Retained deficit (1,168,660) (1,120,639)
----------- -----------
Total shareholders' (Deficit) equity (111,892) (165,741)
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDER'S (DEFICIT) EQUITY $ 118,588 $ 135,677
----------- -----------
----------- -----------
See accompanying notes to financial statements
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ENDLESS YOUTH PRODUCTS, INC.
STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended For The Year Ended
March 31, March 31, June 30,
---------------------------- ----------------------------- ------------------
1999 1998 1999 1998 1998
----------- ----------- ----------- ----------- -----------
Gross Receipts $ 3,517,307 $ 40,586 $ 3,672,377 $ 122,221 $ 225,896
Less: Returns and allowances 928,214 0 928,214 0 14,077
----------- ----------- ----------- ----------- -----------
Net Sales 2,589,093 40,586 2,744,163 122,221 211,819
Cost of Sales 2,424,695 21,070 2,424,695 61,669 70,059
----------- ----------- ----------- ----------- -----------
Gross Profit 164,398 19,516 319,468 60,552 141,760
Selling, General and Administrative
Expenses 62,483 177,951 367,489 493,677 681,366
----------- ----------- ----------- ----------- -----------
Income (Loss) from Operations 101,915 (158,435) (48,021) (433,125) (539,606)
Other Income and (Expenses)
Interest Income 0 0 0 340 340
Interest Expense 0 (420) 0 (420) (8,392)
----------- ----------- ----------- ----------- -----------
Income (Loss) before income taxes 101,915 (158,855) (48,021) (433,205) (547,658)
Provision for income taxes - (Note 4) 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Net income (Loss) $ 101,915 $ (158,855) $ (48,021) $ (433,205) $ (547,658)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Loss per share amounts:
Basic:
Net income (loss) $ 0.03 $ (0.08) $ (0.02) $ (0.22) $ (0.28)
Diluted:
Net income (loss) $ 0.03 $ (0.08) $ (0.02) $ (0.22) $ (0.28)
Weighted average common and
common equivalent shares:
Basic 2,907,759 1,984,962 2,466,095 1,953,833 1,953,833
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Diluted 3,013,833 1,984,962 2,572,169 1,953,833 1,980,108
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
See accompanying notes to financial statements
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ENDLESS YOUTH PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
For the nine months ended,
March 31, June 30,
------------------------- -------------------------
1999 1998 1998 1997
---------- --------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ (48,021) $(433,205) $(547,658) $(572,981)
Adjustments to reconcile net income to
net cash provided by operating activites:
Amortization - $ - $ 147,339 $ 18,678
Depreciation 3,000 0 3,267 1,343
Increase in accounts receivable (22,828) 0 0 0
Increase in accounts payable 0 0 76,647 127,658
(Increase)/Decrease in inventory 0 35,903 35,903 (35,903)
(Increase)/Decrease in prepaid advertising 121,758 85,016 0 (287,775)
Increase in other assets (46,150) 0 0 0
Increase (Decrease) in accounts payable (21,825) 87,590 0 0
---------- --------- --------- ---------
NET CASH USED IN OPERATING ACTIVITIES (14,066) (224,696) (284,502) (748,980)
---------- --------- --------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant, and equipement 0 (3,865) (10,090) (7,968)
---------- --------- --------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES 0 (3,865) (10,090) (7,968)
---------- --------- --------- ---------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 101,870 79,642 169,612 785,286
Advances from (Repayments to) shareholders (49,113) 112,587 83,600 13,513
---------- --------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 52,757 192,229 253,212 798,799
---------- --------- --------- ---------
NET CHANGE IN CASH 38,691 (36,332) (41,380) 41,851
CASH AT BEGINNING OF YEAR 471 41,851 41,851 -
---------- --------- --------- ---------
CASH AT END OF YEAR $ 39,162 $ 5,519 $ 471 $ 41,851
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