content: Securities and Exchange Commission
                               Washington, D.C. 20549
                     FORM 10-QSB-Quarterly or Transition Report
  
                                     (Mark One)
  
  [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934
                    For the quarterly period ended June 30, 1997.
  
  [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT
            For the transition period from              to
  
                           Commission file number 0-23026
  
                             Paramark Enterprises, Inc.
          (Exact name of small business issuer as specified in its charter)
  
           Delaware                          22-3261564
   (State or other jurisdiction          (I.R.S. Employer Identification
   of incorporation or organization)      No.)
  
  
                    135 Seaview Drive, Secaucus, New Jersey 07094
                      (Address of principal executive offices)
  
                                    201-422-0910
                   (Issuer's telephone number including area-code)
  
  
                                   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
  
                        APPLICABLE ONLY TO CORPORATE ISSUERS
  
  State the number of shares outstanding of each of the issuer's classes of common
  stock as of the latest practicable date:
  
        Common Stock, $.01 par value - 3,070,083 shares as of August 8, 1997.
  
                                        -1-
  
  <PAGE>
  
                              Paramark Enterprises Inc.
  
  
  Part I FINANCIAL INFORMATION
  
  Item I FINANCIAL STATEMENTS
  
         INDEX TO FINANCIAL STATEMENTS                                      PAGE
  
         Balance Sheets at December 31, 1996 and                              3
         June 30, 1997.
  
         Statement of  Operations  for the three and six 4 months ended
         June 30, 1996 and June 30, 1997.                                     4
  
         Statement  of Cash  Flows for the six  months 5 ended June 30,
         1996 and June 30, 1997.                                              5
  
         Notes to Financial Statements                                        6
  
  
  Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        8
  
  
  SIGNATURES                                                                 12
  
                                         -2-
  
  <PAGE>
  
                             PARAMARK ENTERPRISES, INC.
                             CONSOLIDATED BALANCE SHEET
  <TABLE>
  <CAPTION>
  
                                                                   December 31,       June 30,
                                                                       1996             1997
                                                                    (Audited)       (Unaudited)
                                       ASSETS
  <S>                                                                 <C>              <C>    
  Current Assets:
    Cash                                                              $49,667          $10,582
    Accounts receivable, less allowance for doubtful accounts         335,322          216,025
    Notes receivable - current maturities                           1,383,836          765,208
    Inventory                                                          82,201          171,893
    Prepaid expenses and other current assets, net                     40,380           43,430
                                                                  -----------      -----------
          Total current assets                                      1,891,406        1,207,138
  
  Property and equipment                                              188,547          238,307
  Excess of cost over fair value of net assets acquired               531,666          504,167
  Notes Receivable, net of current maturities                          39,675                0
                                                                  -----------      -----------
      Total Assets                                                 $2,651,294       $1,949,612
                                                                  ===========      ===========
  
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  Current Liabilities:
      Accounts payable and accrued expenses                          $833,319         $633,932
      Current maturities of long-term debt                            168,809          257,073
      Other current liabilities                                        53,383           15,000
                                                                  -----------      -----------
          Total current liabilities                                 1,055,511          906,005
  
  Long-Term Debt, net of current maturities                            39,675                0
                                                                  -----------      -----------
      Total liabilities                                             1,095,186          906,005
                                                                  -----------      -----------
  
  
                                STOCKHOLDERS' EQUITY
  
  Preferred Stock                                                           0                0
  Common Stock                                                         30,689           30,689
  Additional paid-in capital                                        6,757,491        6,757,491
  Accumulated deficit                                              (5,232,072)      (5,744,573)
                                                                  -----------      -----------
      Total stockholders' equity                                    1,556,108        1,043,607
                                                                  -----------      -----------
      Total Liabilities and Stockholders' Equity                   $2,651,294       $1,949,612
                                                                  ===========      ===========
  </TABLE>
  
                          SEE NOTES TO FINANCIAL STATEMENTS
  
                                          3
  <PAGE>
  
                             PARAMARK ENTERPRISES, INC.
                        CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
                                                    For the Three Months              For the Six Months
                                                       Ended June 30,                   Ended June 30,
                                                   1996             1997            1996               1997
  <S>                                            <C>              <C>              <C>              <C>     
  Revenue:
      Wholesale sales                            $163,436         $560,175         $333,272         $982,714
      Sales from Company-owned stores              55,509           43,175          115,676           94,558
      Royalties and licensing fees                149,352           61,759          310,098           83,555
                                              -----------      -----------      -----------      -----------
          Total revenue                           368,297          665,109          759,046        1,160,827
  
  Operating expenses:
      Cost of goods sold                          199,293          441,912          391,931          797,123
      Selling, general and administrative         387,843          586,081          681,282          971,760
                                              -----------      -----------      -----------      -----------
          Total operating expenses                587,136        1,027,993        1,073,213        1,768,883
                                              -----------      -----------      -----------      -----------
  
  
  Loss from operations                           (218,839)        (362,884)        (314,167)        (608,056)
                                              -----------      -----------      -----------      -----------
  
  Other income (expense):
      Interest income (expense), net              (16,631)           8,857          (33,756)          31,618
      Other income                                      0            8,820                0           63,936
                                              -----------      -----------      -----------      -----------
          Total other income (expense)            (16,631)          17,078          (33,756)          95,555
                                              -----------      -----------      -----------      -----------
  
  
  Net income (loss)                             ($235,649)       $(345,806)       ($347,923)       ($512,501)
                                              ===========      ===========      ===========      ===========
  
  
  Net income (loss) per common share               ($0.08)          ($0.11)          ($0.12)          ($0.17)
                                              ===========      ===========      ===========      ===========
  
  
  Weighted average number of
      common shares outstanding                 2,910,833        3,068,833        2,910,833        3,068,833
                                              ===========      ===========      ===========      ===========
  </TABLE>
  
                          SEE NOTES TO FINANCIAL STATEMENTS
  
                                        -4-
  
  <PAGE>
  
                             PARAMARK ENTERPRISES, INC.
                        CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
  
                                                                                   For the Six Months
                                                                                     Ended June 30,
                                                                                  1996           1997
  <S>                                                                          <C>            <C>       
  Cash flow from operating activities:
      Net income (loss)                                                        ($347,923)     ($512,501)
  Adjustments to reconcile net income (loss) to net cash from
      operating activities:
          Depreciation and amortization                                          106,441         48,941
          Licensing revenue                                                      (12,500)             0
          Provision for doubtful accounts                                         86,706              0
          Noncash interest expense                                                29,059              0
          Changes in operating assets and liabilities:
          (Increase) decrease in accounts receivable                            (127,956)       119,297
          (Increase) decrease in inventories                                           0        (89,692)
          (Increase) decrease in prepaid expenses and other current assets        11,814         (3,049)
          (Increase) decrease in deferred transaction costs                      (64,389)             0
          Increase (decrease) in accounts payable and accrued expenses           142,372       (237,770)
          Increase (decrease) in other current liabilities                        38,358              0
  
                                                                                (138,018)      (674,774)
  
  
  Cash flows from investing activities:
      Purchases of equipment                                                           0        (71,203)
                                                                               ---------      ---------
  
                                                                                       0        (71,203)
                                                                               ---------      ---------
  
  Cash flows from financing activities:
      Proceeds from notes payable                                                109,464        163,855
      Proceeds from notes receivable                                                   0        658,303
      Payment of notes payable                                                         0       (115,266)
                                                                               ---------      ---------
                                                                                 109,464        706,892
  
  Net increase (decrease) in cash                                                (28,554)       (39,085)
  
  Cash at beginning of period                                                     51,677         49,667
  
  Cash at end of period                                                          $23,123        $10,582
                                                                               =========      =========
  </TABLE>
  
                          SEE NOTES TO FINANCIAL STATEMENTS
  
                                        -5-
  
  <PAGE>
  
                             Paramark Enterprises, Inc.
                            Notes to Financial Statements
                                     (Unaudited)
  
  Note 1 - Basis of Presentation
  
  The  accompanying  financial  statements  have been prepared by the Company,  in
  accordance  with  generally  accepted  accounting  principles and except for the
  Balance Sheet at December 31, 1996, all statements are unaudited. In the opinion
  of  management,  all  adjustments  (consisting  of  normal  recurring  accruals)
  considered necessary for a fair presentation have been included.
  
  Additionally,  certain information and footnote disclosures normally included in
  financial  statements  prepared in accordance with generally accepted accounting
  principals have been omitted. It is suggested that these financial statements be
  read in connection with the financial  statements and notes thereto  included in
  the Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December
  31, 1996.  There have been no significant  changes of accounting  policies since
  December  31,  1996.   For   comparability,   certain  1996  amounts  have  been
  reclassified, where appropriate, to conform with the 1997 presentation.
  
  Note 2 - Net Income (Loss) Per Common Share
  
  Net loss per common  share is  calculated  by dividing  net loss by the weighted
  average number of shares of common stock  outstanding for each period presented.
  For purposes of these  computations,  shares  issuable  upon the exercise of all
  common stock purchase  options and warrants  outstanding have been excluded from
  the  computation of weighted  average shares  outstanding  since their effect is
  antidilutive.
  
  Note 3 - Income Taxes
  
  No  provision  (credit)  for income taxes has been made for the six months ended
  June 30,  1997 and 1996 as the  Company  has net  operating  losses.  These  net
  operating  losses have resulted in a deferred tax asset at June 30, 1997. Due to
  the  uncertainty  regarding  the  ultimate  amount of income tax  benefits to be
  derived from the  Company's  net  operating  losses,  the Company has recorded a
  valuation  allowance for the entire amount of the deferred tax asset at June 30,
  1997.
  
  Note 4 - Sale of Assets
  
  In August 1996, the Company closed a purchase agreement (the "Transaction") with
  Triarc Restaurant Group d/b/a/ Arby's,  Inc. ("Triarc") through which (a) Triarc
  purchased the  trademarks,  service  marks,  recipes and secret  formulas of the
  Company,  (b) Triarc licensed back to the Company the rights to operate existing
  franchised  bakery locations and to distribute T.J.  Cinnamons  products through
  retail grocery outlets,  and (c) the Company entered into a management agreement
  with Triarc to manage the franchise system.
  
                                        -6-
  <PAGE>
  
  Note 4 - Sale of Assets (Continued)
  
  The Company received payments of $1,790,000 at the closing, a promissory note in
  the  amount of  $1,650,000  which is being paid in  fifteen  (15) equal  monthly
  installments  beginning  October 1,  1996,  a  promissory  note in the amount of
  $100,000  which is being  paid in twenty  four (24) equal  monthly  installments
  beginning October 1, 1996. In addition,  the purchase agreement provides for the
  contingent  payments of up to a maximum of an  additional  $5,500,000  over time
  dependent upon the amount of T.J.  Cinnamons product sales by Triarc exceeding a
  minimum  base system wide sales of $26.3  million.  Pursuant to the terms of the
  Transaction, T.J. Cinnamons, Inc. changed its name to Paramark Enterprises, Inc.
  
  Simultaneous  with the closing of the  Transaction  in August 1996,  the Company
  entered into an  agreement  with Heinz  Bakery  Products to  terminate  the 1992
  manufacturing  and  license  agreement.  Under the terms of the  agreement,  the
  Company paid Heinz Bakery  Products  $600,000 at closing,  and assigned to Heinz
  the Triarc  promissory  note in the amount of $100,000  payable with interest in
  equal installments over a two year period.
  
  Note 5 - Short Term Financing
  
  In December,  1996 the Company consummated a short term loan with Gelt Financial
  Corporation  ("Gelt") in the amount of $100,000,  and in March, 1997 the Company
  increased the loan with Gelt by an additional $175,000.  The terms of these Gelt
  loans  provided for interest at a rate of prime plus three and one half percent,
  and a  placement  fee of 5.5%.  These  loans  have been  secured  by a  security
  interest in the 15 month note receivable  from Triarc in the original  principal
  amount of $1,650,000,  and will be fully  amortized and paid in full by December
  1, 1997. The proceeds of these loans were used to pay outstanding  indebtedness,
  fund startup costs of the California bakery facility, and fund working capital.
  
                                        -7-
  
  <PAGE>
  
  Part  I   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 and notes thereto appearing elsewhere in this report.
  
     RESULTS OF  OPERATIONS  (for the three and six month  periods  ended June 30,
     1997 compared to the three and six month periods ended June 30, 1996).
  
     The following tables set forth the components of the Company's revenue:
  
                                        Three Months Ended June 30,
                                           1996            1997
  
      Wholesale sales                    $163,436       $560,175
      Company-owned bakery sales           55,509         43,175
      Royalties and licensing fees        149,352         61,759
                                       ----------     ----------
      Total Revenue                      $368,297       $665,109
  
                                        Six Months Ended June 30,
                                           1996            1997
  
      Wholesale sales                    $333,272       $982,714
      Company-owned bakery sales          115,676         94,558
      Royalties and licensing fees        310,098         83,555
                                       ----------     ----------
      Total Revenue                      $759,046     $1,160,827
  
  
       Wholesale  sales  increased  by 243% to $560,175 for the three months ended
  June 30,  1997 from  $163,436  for the three  months  ended June 30,  1996,  and
  increased  by 195% to  $982,714  for the six  months  ended  June 30,  1997 from
  $333,272 for the six months ended June 30, 1996.. In the fourth quarter of 1996,
  the Company began production in its own bakery  manufacturing  facility in Santa
  Ana,  California.  The  current  products  sold  by the  Company  include:  T.J.
  Cinnamons  gourmet cinnamon rolls,  T.J.  Cinnamons pecan sticky cinnamon rolls,
  T.J. Cinnamons  CinnaChips,  gourmet rugalach in four flavor varieties,  gourmet
  bundt cakes in five flavor varieties,  layer cakes,  gourmet brownies,  and mini
  carrot and banana cakes. All of these products are sold in various packaging and
  sizes, and are shipped through both fresh and frozen distribution.
  
       To develop its wholesale sales, the Company has focused its selling efforts
  in targeted  geographic  areas  through  alliances  with the  following key food
  brokerage groups: (a) Le Grand Marketing,  representing retail grocery stores in
  California;  and (b) American Sales and Marketing,  representing  the membership
  club stores  nationwide and retail grocery stores in the mid-west and southeast.
  The Company
  
  
  
  <PAGE>
  
  is currently selling products to the following accounts:  Ralph's  Supermarkets,
  Food-4-Less Supermarkets,  Lucky's Supermarkets,  Price/Costco,  Sam's Wholesale
  Clubs, H.E. Butt Supermarkets,  Hughs  Supermarkets,  Shoprite  Supermarkets and
  Kings Supermarkets. These chains represent over 1,350 locations.
  
       In July,  1997,  the Company hired  Fredrick S. Popp to serve as east coast
  regional  sales  manager.  Mr. Popp has  approximately  20 years of bakery sales
  experience  working for Viola Bakeries,  Sara Lee,  Country Home Bakers,  Rich's
  Products and Van DeKamps Frozen Foods. Mr. Popp will initially focus his efforts
  on the  northeast,  developing  a  brokerage  network  to  market  and  sell the
  Company's product line with a marketing launch in the fall season.
  
       Company-owned bakery sales decreased by 22% to $43,175 for the three months
  ended June 30, 1997 from $55,509 for the three  months ended June 30, 1996,  and
  decreased by 18% to $94,558 for the six months ended June 30, 1997 from $115,676
  for the six months  ended June 30, 1996.  This sales  decrease  resulted  from a
  decline  in mall  traffic  due to a  number  of  vacancies  in the  Poughkeepsie
  Galleria  mall. In April 1997, the Company  entered into a management  agreement
  whereby the  Poughkeepsie  Galleria  mall bakery will be operated  with all cash
  deficits  funded by the  manager  and all  positive  cash flow  retained  by the
  manager as a management fee.
  
       Royalty  and  licensing  fee  revenues  decreased  to $61,759 for the three
  months  ended June 30, 1997 from  $149,352  for the three  months ended June 30,
  1996,  and  decreased  to $83,555  for the six months  ended June 30,  1997 from
  $310,098 for the six months ended June 30, 1996.  This decrease in royalties and
  licensing  fees  resulted  primarily  from the terms of the  Triarc  Transaction
  requiring the Company to provide  franchisees  an offer to forgive all franchise
  royalties for the period August,  1996 through February,  1997 in exchange for a
  general release against the Company.  Franchisees representing approximately 80%
  of the franchised  bakery units entered into these general  release  agreements.
  The  decreases  in license  fees are  primarily  from a decrease in the sales of
  "proof and bake" cinnamon rolls utilized in various  locations  under  licensing
  agreements. In August, 1996, the Company terminated its trademark and technology
  license  agreement  with Heinz  Bakery  Products  which was a condition  for the
  closing of the Triarc Transaction.
  
       Cost of goods sold  increased  to $441,912  for the three months ended June
  30, 1997 from  $199,293 for the three months ended June 30, 1996,  and increased
  to $797,123  for the six months  ended June 30, 1997 from  $391,931  for the six
  months ended June 30, 1996. These increases are primarily the result of the cost
  of the wholesale sales to supermarkets chains and membership club chains.
  
       Selling,  general and administrative expenses increased to $586,081 for the
  three months ended June 30, 1997 from  $387,843 for the three months ended March
  31, 1996,  and increased to $971,760 for the six months ended June 30, 1997 from
  $681,282 for the six months ended June 30, 1996.  These  increases are primarily
  the result of increases in selling,  general and administrative costs associated
  with the Company's  manufacturing plant in Santa Ana, California and the selling
  and marketing expenses  associated with the launch of the Company's product line
  to wholesale channels of distribution.
  
                                        -9-
  
  <PAGE>
  
       Net interest  income for the three months ended June 30, 1997 was $8,842 as
  compared to net  interest  expense for the three  months  ended June 30, 1996 of
  ($16,631),  and net  interest  income for the six months ended June 30, 1997 was
  $31,618 as compared to net  interest  expense for the six months  ended June 30,
  1996 of ($33,756).  This change in net interest expense resulted  primarily from
  the interest earned on the notes receivable from Triarc Restaurant Group.
  
       Other income of $3,553 for the three months ended June 30, 1997 and $63,936
  for the six months ended June 30, 1997 are from  reductions in accounts  payable
  and accrued liabilities resulting from discounted  settlements and write-offs of
  accounts  payable based on their being no recent contact with the Company by the
  creditors being owed such amounts.
  
  
      LIQUIDITY AND CAPITAL RESOURCES
  
      At June 30, 1997, the Company had a working capital surplus of approximately
  $301,100.  During the three and six  months  ended June 30,  1997,  the  Company
  experienced cash flow deficits from its operating  activities  primarily because
  its operating expenses exceeded its operating revenues. These operating deficits
  have been funded by the Triarc notes receivable payments.
  
      The Company used net cash in operating  activities in the amount of $674,774
  for the six months  ended June 30,  1997,  as compared  to $138,018  for the six
  months ended June 30, 1996. The Company used net cash from investing  activities
  in the amount of $71,203 for the six months ended June 30, 1997  resulting  from
  the purchases of equipment.  The Company received net cash provided by financing
  activities  in the amount of  $706,892  for the six months  ended June 30,  1997
  resulting from proceeds  received from notes  receivable  and notes payable,  as
  compared to net cash provided by financing  activities in the amount of $109,464
  for the six months ended June 30, 1996.
  
      In  August  1996,  the  Company  closed a  purchase  agreement  with  Triarc
  Restaurant  Group d/b/a/ Arby's,  Inc.  ("Triarc")  pursuant to which (a) Triarc
  purchased the  trademarks,  service  marks,  recipes and secret  formulas of the
  Company,  (b) Triarc licensed back to the Company the rights to operate existing
  franchised  bakery locations and to distribute T.J.  Cinnamons  products through
  retail grocery outlets,  and (c) the Company entered into a management agreement
  with Triarc to manage the franchise system.
  
      The Company  received  payments of $1,790,000  at the closing,  a promissory
  note in the  amount of  $1,650,000  which is being  paid in  fifteen  (15) equal
  monthly  installments  which began on October 1, 1996, and a promissory  note in
  the amount of  $100,000  which is being paid in twenty  four (24) equal  monthly
  installments  which began on October 1, 1996 with a $50,000  balloon  payment on
  September 1, 1998. In addition,  the purchase  agreement provides for contingent
  payments of up to a maximum of an additional $5,500,000 over time dependent upon
  the amount of T.J.  Cinnamons  product sales by Triarc  exceeding a minimum base
  system wide sales of $26.3  million.  Management  believes that funds  generated
  from the Triarc  transaction  will provide  sufficient  working  capital for its
  planned product manufacturing and distribution  expansion plans at least through
  December, 1997.
  
                                        -10-
  
  <PAGE>
  
      Simultaneous with the closing of the Triarc  transaction in August 1996, the
  Company  entered into an agreement  with Heinz Bakery  Products to terminate the
  1992 manufacturing and license agreement.  Under the terms of the agreement, the
  Company paid Heinz Bakery  Products  $600,000 at closing,  and assigned to Heinz
  the Triarc  promissory  note in the amount of $100,000  payable with interest in
  equal  installments  over a twenty four (24) month period with a $50,000 balloon
  payment.
  
       In  December,  1996 the  Company  consummated  a short  term loan with Gelt
  Financial Corporation in the amount of $100,000,  and in March, 1997 the Company
  increased the loan with Gelt by an additional $175,000.  The terms of these Gelt
  loans  provided for interest at a rate of prime plus three and one half percent,
  and a  placement  fee of 5.5%.  These  loans  have been  secured  by a  security
  interest in the 15 month note receivable  from Triarc in the original  principal
  amount of $1,650,000,  and will be fully  amortized and paid in full by December
  1, 1997. The proceeds of these loans were used to pay outstanding  indebtedness,
  fund  startup  costs of the  California  bakery  production  facility,  and fund
  working capital.
  
       In June, 1997, the Company received a purchase  commitment from Wal-Mart to
  supply its CinnaChip products to 445 Sams Wholesale Club stores  nationally.  In
  order to finance the working capital for these sales aggregating  $945,000 , the
  Company  entered into a loan  agreement with Gelt  Financial  Corporation  for a
  credit  line  in  the  amount  of  $200,000  secured  by the  Wal-Mart  accounts
  receivable.  The terms of this loan agreement  provide for a service fee of 1.5%
  of each advance  together  with interest at a rate of 675 basis points above the
  prime  rate.  In  addition,  the  Company  granted  Gelt  1,500  shares  of  the
  Company's common stock as a loan origination fee.
  
      In June 1997,  the Company  terminated  its  investment  advisory  letter of
  intent with Commonwealth Associates.  The Company is currently exploring various
  financing options to raise funds to be utilized toward automating the Santa Ana,
  California  production facility,  establishing a North East production facility,
  and establishing a working capital reserve.
  
  
                                        -11-
  
  
  
  
  
  <PAGE>
  
  
                                     SIGNATURES
  
  
  
  Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereto duly authorized.
  
  
  
  
                                 Paramark Enterprises, Inc.
  
  
  
  
  Dated:                          By: /s/ Charles N. Loccisano
                                      Charles N. Loccisano,
                                      Chairman and Chief Executive Officer
  
  
  
  
                                  By:/s/ Alan S. Gottlich
                                      Alan S. Gottlich, President
                                      and Chief Financial Officer
                                      (Principal Accounting Officer)
  
                                        -12-
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 31028}]
metadata_filer: {"company-data": {"conformed-name": "PARAMARK ENTERPRISES INC", "cik": "0000915661", "assigned-sic": "6794", "irs-number": "223261564", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-23026", "film-number": "97654314"}, "business-address": {"street1": "135 SEAVIEW DR", "city": "SECAUCUS", "state": "NJ", "zip": "07094", "phone": "2014220910"}, "mail-address": {"street1": "135 SEAVIEW DR", "city": "SECAUCUS", "state": "NJ", "zip": "07094"}, "former-company": {"former-conformed-name": "T J CINNAMONS INC", "date-changed": "19931216"}}
text: Securities and Exchange Commission
                               Washington, D.C. 20549
                     FORM 10-QSB-Quarterly or Transition Report
  
                                     (Mark One)
  
  [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934
                    For the quarterly period ended June 30, 1997.
  
  [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT
            For the transition period from              to
  
                           Commission file number 0-23026
  
                             Paramark Enterprises, Inc.
          (Exact name of small business issuer as specified in its charter)
  
           Delaware                          22-3261564
   (State or other jurisdiction          (I.R.S. Employer Identification
   of incorporation or organization)      No.)
  
                    135 Seaview Drive, Secaucus, New Jersey 07094
                      (Address of principal executive offices)
  
                                    201-422-0910
                   (Issuer's telephone number including area-code)
  
                                   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
  
                        APPLICABLE ONLY TO CORPORATE ISSUERS
  
  State the number of shares outstanding of each of the issuer's classes of common
  stock as of the latest practicable date:
  
        Common Stock, $.01 par value - 3,070,083 shares as of August 8, 1997.
  
                                        -1-
  Paramark Enterprises Inc.
  
  Part I FINANCIAL INFORMATION
  
  Item I FINANCIAL STATEMENTS
  
         INDEX TO FINANCIAL STATEMENTS                                      PAGE
  
         Balance Sheets at December 31, 1996 and                              3
         June 30, 1997.
  
         Statement of  Operations  for the three and six 4 months ended
         June 30, 1996 and June 30, 1997.                                     4
  
         Statement  of Cash  Flows for the six  months 5 ended June 30,
         1996 and June 30, 1997.                                              5
  
         Notes to Financial Statements                                        6
  
  Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        8
  
  SIGNATURES                                                                 12
  
                                         -2-
  PARAMARK ENTERPRISES, INC.
                             CONSOLIDATED BALANCE SHEET
  December 31,       June 30,
                                                                       1996             1997
                                                                    (Audited)       (Unaudited)
                                       ASSETS
  Current Assets:
    Cash                                                              $49,667          $10,582
    Accounts receivable, less allowance for doubtful accounts         335,322          216,025
    Notes receivable - current maturities                           1,383,836          765,208
    Inventory                                                          82,201          171,893
    Prepaid expenses and other current assets, net                     40,380           43,430
                                                                  -----------      -----------
          Total current assets                                      1,891,406        1,207,138
  
  Property and equipment                                              188,547          238,307
  Excess of cost over fair value of net assets acquired               531,666          504,167
  Notes Receivable, net of current maturities                          39,675                0
                                                                  -----------      -----------
      Total Assets                                                 $2,651,294       $1,949,612
                                                                  ===========      ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  Current Liabilities:
      Accounts payable and accrued expenses                          $833,319         $633,932
      Current maturities of long-term debt                            168,809          257,073
      Other current liabilities                                        53,383           15,000
                                                                  -----------      -----------
          Total current liabilities                                 1,055,511          906,005
  
  Long-Term Debt, net of current maturities                            39,675                0
                                                                  -----------      -----------
      Total liabilities                                             1,095,186          906,005
                                                                  -----------      -----------
  
                                STOCKHOLDERS' EQUITY
  
  Preferred Stock                                                           0                0
  Common Stock                                                         30,689           30,689
  Additional paid-in capital                                        6,757,491        6,757,491
  Accumulated deficit                                              (5,232,072)      (5,744,573)
                                                                  -----------      -----------
      Total stockholders' equity                                    1,556,108        1,043,607
                                                                  -----------      -----------
      Total Liabilities and Stockholders' Equity                   $2,651,294       $1,949,612
                                                                  ===========      ===========
  SEE NOTES TO FINANCIAL STATEMENTS
  
                                          3
  PARAMARK ENTERPRISES, INC.
                        CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  For the Three Months              For the Six Months
                                                       Ended June 30,                   Ended June 30,
                                                   1996             1997            1996               1997
  Revenue:
      Wholesale sales                            $163,436         $560,175         $333,272         $982,714
      Sales from Company-owned stores              55,509           43,175          115,676           94,558
      Royalties and licensing fees                149,352           61,759          310,098           83,555
                                              -----------      -----------      -----------      -----------
          Total revenue                           368,297          665,109          759,046        1,160,827
  
  Operating expenses:
      Cost of goods sold                          199,293          441,912          391,931          797,123
      Selling, general and administrative         387,843          586,081          681,282          971,760
                                              -----------      -----------      -----------      -----------
          Total operating expenses                587,136        1,027,993        1,073,213        1,768,883
                                              -----------      -----------      -----------      -----------
  
  Loss from operations                           (218,839)        (362,884)        (314,167)        (608,056)
                                              -----------      -----------      -----------      -----------
  
  Other income (expense):
      Interest income (expense), net              (16,631)           8,857          (33,756)          31,618
      Other income                                      0            8,820                0           63,936
                                              -----------      -----------      -----------      -----------
          Total other income (expense)            (16,631)          17,078          (33,756)          95,555
                                              -----------      -----------      -----------      -----------
  
  Net income (loss)                             ($235,649)       $(345,806)       ($347,923)       ($512,501)
                                              ===========      ===========      ===========      ===========
  
  Net income (loss) per common share               ($0.08)          ($0.11)          ($0.12)          ($0.17)
                                              ===========      ===========      ===========      ===========
  
  Weighted average number of
      common shares outstanding                 2,910,833        3,068,833        2,910,833        3,068,833
                                              ===========      ===========      ===========      ===========
  SEE NOTES TO FINANCIAL STATEMENTS
  
                                        -4-
  PARAMARK ENTERPRISES, INC.
                        CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (UNAUDITED)
  For the Six Months
                                                                                     Ended June 30,
                                                                                  1996           1997
  Cash flow from operating activities:
      Net income (loss)                                                        ($347,923)     ($512,501)
  Adjustments to reconcile net income (loss) to net cash from
      operating activities:
          Depreciation and amortization                                          106,441         48,941
          Licensing revenue                                                      (12,500)             0
          Provision for doubtful accounts                                         86,706              0
          Noncash interest expense                                                29,059              0
          Changes in operating assets and liabilities:
          (Increase) decrease in accounts receivable                            (127,956)       119,297
          (Increase) decrease in inventories                                           0        (89,692)
          (Increase) decrease in prepaid expenses and other current assets        11,814         (3,049)
          (Increase) decrease in deferred transaction costs                      (64,389)             0
          Increase (decrease) in accounts payable and accrued expenses           142,372       (237,770)
          Increase (decrease) in other current liabilities                        38,358              0
  
                                                                                (138,018)      (674,774)
  
  Cash flows from investing activities:
      Purchases of equipment                                                           0        (71,203)
                                                                               ---------      ---------
  
                                                                                       0        (71,203)
                                                                               ---------      ---------
  
  Cash flows from financing activities:
      Proceeds from notes payable                                                109,464        163,855
      Proceeds from notes receivable                                                   0        658,303
      Payment of notes payable                                                         0       (115,266)
                                                                               ---------      ---------
                                                                                 109,464        706,892
  
  Net increase (decrease) in cash                                                (28,554)       (39,085)
  
  Cash at beginning of period                                                     51,677         49,667
  
  Cash at end of period                                                          $23,123        $10,582
                                                                               =========      =========
  SEE NOTES TO FINANCIAL STATEMENTS
  
                                        -5-
  Paramark Enterprises, Inc.
                            Notes to Financial Statements
                                     (Unaudited)
  
  Note 1 - Basis of Presentation
  
  The  accompanying  financial  statements  have been prepared by the Company,  in
  accordance  with  generally  accepted  accounting  principles and except for the
  Balance Sheet at December 31, 1996, all statements are unaudited. In the opinion
  of  management,  all  adjustments  (consisting  of  normal  recurring  accruals)
  considered necessary for a fair presentation have been included.
  
  Additionally,  certain information and footnote disclosures normally included in
  financial  statements  prepared in accordance with generally accepted accounting
  principals have been omitted. It is suggested that these financial statements be
  read in connection with the financial  statements and notes thereto  included in
  the Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December
  31, 1996.  There have been no significant  changes of accounting  policies since
  December  31,  1996.   For   comparability,   certain  1996  amounts  have  been
  reclassified, where appropriate, to conform with the 1997 presentation.
  
  Note 2 - Net Income (Loss) Per Common Share
  
  Net loss per common  share is  calculated  by dividing  net loss by the weighted
  average number of shares of common stock  outstanding for each period presented.
  For purposes of these  computations,  shares  issuable  upon the exercise of all
  common stock purchase  options and warrants  outstanding have been excluded from
  the  computation of weighted  average shares  outstanding  since their effect is
  antidilutive.
  
  Note 3 - Income Taxes
  
  No  provision  (credit)  for income taxes has been made for the six months ended
  June 30,  1997 and 1996 as the  Company  has net  operating  losses.  These  net
  operating  losses have resulted in a deferred tax asset at June 30, 1997. Due to
  the  uncertainty  regarding  the  ultimate  amount of income tax  benefits to be
  derived from the  Company's  net  operating  losses,  the Company has recorded a
  valuation  allowance for the entire amount of the deferred tax asset at June 30,
  1997.
  
  Note 4 - Sale of Assets
  
  In August 1996, the Company closed a purchase agreement (the "Transaction") with
  Triarc Restaurant Group d/b/a/ Arby's,  Inc. ("Triarc") through which (a) Triarc
  purchased the  trademarks,  service  marks,  recipes and secret  formulas of the
  Company,  (b) Triarc licensed back to the Company the rights to operate existing
  franchised  bakery locations and to distribute T.J.  Cinnamons  products through
  retail grocery outlets,  and (c) the Company entered into a management agreement
  with Triarc to manage the franchise system.
  
                                        -6-
  Note 4 - Sale of Assets (Continued)
  
  The Company received payments of $1,790,000 at the closing, a promissory note in
  the  amount of  $1,650,000  which is being paid in  fifteen  (15) equal  monthly
  installments  beginning  October 1,  1996,  a  promissory  note in the amount of
  $100,000  which is being  paid in twenty  four (24) equal  monthly  installments
  beginning October 1, 1996. In addition,  the purchase agreement provides for the
  contingent  payments of up to a maximum of an  additional  $5,500,000  over time
  dependent upon the amount of T.J.  Cinnamons product sales by Triarc exceeding a
  minimum  base system wide sales of $26.3  million.  Pursuant to the terms of the
  Transaction, T.J. Cinnamons, Inc. changed its name to Paramark Enterprises, Inc.
  
  Simultaneous  with the closing of the  Transaction  in August 1996,  the Company
  entered into an  agreement  with Heinz  Bakery  Products to  terminate  the 1992
  manufacturing  and  license  agreement.  Under the terms of the  agreement,  the
  Company paid Heinz Bakery  Products  $600,000 at closing,  and assigned to Heinz
  the Triarc  promissory  note in the amount of $100,000  payable with interest in
  equal installments over a two year period.
  
  Note 5 - Short Term Financing
  
  In December,  1996 the Company consummated a short term loan with Gelt Financial
  Corporation  ("Gelt") in the amount of $100,000,  and in March, 1997 the Company
  increased the loan with Gelt by an additional $175,000.  The terms of these Gelt
  loans  provided for interest at a rate of prime plus three and one half percent,
  and a  placement  fee of 5.5%.  These  loans  have been  secured  by a  security
  interest in the 15 month note receivable  from Triarc in the original  principal
  amount of $1,650,000,  and will be fully  amortized and paid in full by December
  1, 1997. The proceeds of these loans were used to pay outstanding  indebtedness,
  fund startup costs of the California bakery facility, and fund working capital.
  
                                        -7-
  Part  I   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 and notes thereto appearing elsewhere in this report.
  
     RESULTS OF  OPERATIONS  (for the three and six month  periods  ended June 30,
     1997 compared to the three and six month periods ended June 30, 1996).
  
     The following tables set forth the components of the Company's revenue:
  
                                        Three Months Ended June 30,
                                           1996            1997
  
      Wholesale sales                    $163,436       $560,175
      Company-owned bakery sales           55,509         43,175
      Royalties and licensing fees        149,352         61,759
                                       ----------     ----------
      Total Revenue                      $368,297       $665,109
  
                                        Six Months Ended June 30,
                                           1996            1997
  
      Wholesale sales                    $333,272       $982,714
      Company-owned bakery sales          115,676         94,558
      Royalties and licensing fees        310,098         83,555
                                       ----------     ----------
      Total Revenue                      $759,046     $1,160,827
  
       Wholesale  sales  increased  by 243% to $560,175 for the three months ended
  June 30,  1997 from  $163,436  for the three  months  ended June 30,  1996,  and
  increased  by 195% to  $982,714  for the six  months  ended  June 30,  1997 from
  $333,272 for the six months ended June 30, 1996.. In the fourth quarter of 1996,
  the Company began production in its own bakery  manufacturing  facility in Santa
  Ana,  California.  The  current  products  sold  by the  Company  include:  T.J.
  Cinnamons  gourmet cinnamon rolls,  T.J.  Cinnamons pecan sticky cinnamon rolls,
  T.J. Cinnamons  CinnaChips,  gourmet rugalach in four flavor varieties,  gourmet
  bundt cakes in five flavor varieties,  layer cakes,  gourmet brownies,  and mini
  carrot and banana cakes. All of these products are sold in various packaging and
  sizes, and are shipped through both fresh and frozen distribution.
  
       To develop its wholesale sales, the Company has focused its selling efforts
  in targeted  geographic  areas  through  alliances  with the  following key food
  brokerage groups: (a) Le Grand Marketing,  representing retail grocery stores in
  California;  and (b) American Sales and Marketing,  representing  the membership
  club stores  nationwide and retail grocery stores in the mid-west and southeast.
  The Company
  is currently selling products to the following accounts:  Ralph's  Supermarkets,
  Food-4-Less Supermarkets,  Lucky's Supermarkets,  Price/Costco,  Sam's Wholesale
  Clubs, H.E. Butt Supermarkets,  Hughs  Supermarkets,  Shoprite  Supermarkets and
  Kings Supermarkets. These chains represent over 1,350 locations.
  
       In July,  1997,  the Company hired  Fredrick S. Popp to serve as east coast
  regional  sales  manager.  Mr. Popp has  approximately  20 years of bakery sales
  experience  working for Viola Bakeries,  Sara Lee,  Country Home Bakers,  Rich's
  Products and Van DeKamps Frozen Foods. Mr. Popp will initially focus his efforts
  on the  northeast,  developing  a  brokerage  network  to  market  and  sell the
  Company's product line with a marketing launch in the fall season.
  
       Company-owned bakery sales decreased by 22% to $43,175 for the three months
  ended June 30, 1997 from $55,509 for the three  months ended June 30, 1996,  and
  decreased by 18% to $94,558 for the six months ended June 30, 1997 from $115,676
  for the six months  ended June 30, 1996.  This sales  decrease  resulted  from a
  decline  in mall  traffic  due to a  number  of  vacancies  in the  Poughkeepsie
  Galleria  mall. In April 1997, the Company  entered into a management  agreement
  whereby the  Poughkeepsie  Galleria  mall bakery will be operated  with all cash
  deficits  funded by the  manager  and all  positive  cash flow  retained  by the
  manager as a management fee.
  
       Royalty  and  licensing  fee  revenues  decreased  to $61,759 for the three
  months  ended June 30, 1997 from  $149,352  for the three  months ended June 30,
  1996,  and  decreased  to $83,555  for the six months  ended June 30,  1997 from
  $310,098 for the six months ended June 30, 1996.  This decrease in royalties and
  licensing  fees  resulted  primarily  from the terms of the  Triarc  Transaction
  requiring the Company to provide  franchisees  an offer to forgive all franchise
  royalties for the period August,  1996 through February,  1997 in exchange for a
  general release against the Company.  Franchisees representing approximately 80%
  of the franchised  bakery units entered into these general  release  agreements.
  The  decreases  in license  fees are  primarily  from a decrease in the sales of
  "proof and bake" cinnamon rolls utilized in various  locations  under  licensing
  agreements. In August, 1996, the Company terminated its trademark and technology
  license  agreement  with Heinz  Bakery  Products  which was a condition  for the
  closing of the Triarc Transaction.
  
       Cost of goods sold  increased  to $441,912  for the three months ended June
  30, 1997 from  $199,293 for the three months ended June 30, 1996,  and increased
  to $797,123  for the six months  ended June 30, 1997 from  $391,931  for the six
  months ended June 30, 1996. These increases are primarily the result of the cost
  of the wholesale sales to supermarkets chains and membership club chains.
  
       Selling,  general and administrative expenses increased to $586,081 for the
  three months ended June 30, 1997 from  $387,843 for the three months ended March
  31, 1996,  and increased to $971,760 for the six months ended June 30, 1997 from
  $681,282 for the six months ended June 30, 1996.  These  increases are primarily
  the result of increases in selling,  general and administrative costs associated
  with the Company's  manufacturing plant in Santa Ana, California and the selling
  and marketing expenses  associated with the launch of the Company's product line
  to wholesale channels of distribution.
  
                                        -9-
  Net interest  income for the three months ended June 30, 1997 was $8,842 as
  compared to net  interest  expense for the three  months  ended June 30, 1996 of
  ($16,631),  and net  interest  income for the six months ended June 30, 1997 was
  $31,618 as compared to net  interest  expense for the six months  ended June 30,
  1996 of ($33,756).  This change in net interest expense resulted  primarily from
  the interest earned on the notes receivable from Triarc Restaurant Group.
  
       Other income of $3,553 for the three months ended June 30, 1997 and $63,936
  for the six months ended June 30, 1997 are from  reductions in accounts  payable
  and accrued liabilities resulting from discounted  settlements and write-offs of
  accounts  payable based on their being no recent contact with the Company by the
  creditors being owed such amounts.
  
      LIQUIDITY AND CAPITAL RESOURCES
  
      At June 30, 1997, the Company had a working capital surplus of approximately
  $301,100.  During the three and six  months  ended June 30,  1997,  the  Company
  experienced cash flow deficits from its operating  activities  primarily because
  its operating expenses exceeded its operating revenues. These operating deficits
  have been funded by the Triarc notes receivable payments.
  
      The Company used net cash in operating  activities in the amount of $674,774
  for the six months  ended June 30,  1997,  as compared  to $138,018  for the six
  months ended June 30, 1996. The Company used net cash from investing  activities
  in the amount of $71,203 for the six months ended June 30, 1997  resulting  from
  the purchases of equipment.  The Company received net cash provided by financing
  activities  in the amount of  $706,892  for the six months  ended June 30,  1997
  resulting from proceeds  received from notes  receivable  and notes payable,  as
  compared to net cash provided by financing  activities in the amount of $109,464
  for the six months ended June 30, 1996.
  
      In  August  1996,  the  Company  closed a  purchase  agreement  with  Triarc
  Restaurant  Group d/b/a/ Arby's,  Inc.  ("Triarc")  pursuant to which (a) Triarc
  purchased the  trademarks,  service  marks,  recipes and secret  formulas of the
  Company,  (b) Triarc licensed back to the Company the rights to operate existing
  franchised  bakery locations and to distribute T.J.  Cinnamons  products through
  retail grocery outlets,  and (c) the Company entered into a management agreement
  with Triarc to manage the franchise system.
  
      The Company  received  payments of $1,790,000  at the closing,  a promissory
  note in the  amount of  $1,650,000  which is being  paid in  fifteen  (15) equal
  monthly  installments  which began on October 1, 1996, and a promissory  note in
  the amount of  $100,000  which is being paid in twenty  four (24) equal  monthly
  installments  which began on October 1, 1996 with a $50,000  balloon  payment on
  September 1, 1998. In addition,  the purchase  agreement provides for contingent
  payments of up to a maximum of an additional $5,500,000 over time dependent upon
  the amount of T.J.  Cinnamons  product sales by Triarc  exceeding a minimum base
  system wide sales of $26.3  million.  Management  believes that funds  generated
  from the Triarc  transaction  will provide  sufficient  working  capital for its
  planned product manufacturing and distribution  expansion plans at least through
  December, 1997.
  
                                        -10-
  Simultaneous with the closing of the Triarc  transaction in August 1996, the
  Company  entered into an agreement  with Heinz Bakery  Products to terminate the
  1992 manufacturing and license agreement.  Under the terms of the agreement, the
  Company paid Heinz Bakery  Products  $600,000 at closing,  and assigned to Heinz
  the Triarc  promissory  note in the amount of $100,000  payable with interest in
  equal  installments  over a twenty four (24) month period with a $50,000 balloon
  payment.
  
       In  December,  1996 the  Company  consummated  a short  term loan with Gelt
  Financial Corporation in the amount of $100,000,  and in March, 1997 the Company
  increased the loan with Gelt by an additional $175,000.  The terms of these Gelt
  loans  provided for interest at a rate of prime plus three and one half percent,
  and a  placement  fee of 5.5%.  These  loans  have been  secured  by a  security
  interest in the 15 month note receivable  from Triarc in the original  principal
  amount of $1,650,000,  and will be fully  amortized and paid in full by December
  1, 1997. The proceeds of these loans were used to pay outstanding  indebtedness,
  fund  startup  costs of the  California  bakery  production  facility,  and fund
  working capital.
  
       In June, 1997, the Company received a purchase  commitment from Wal-Mart to
  supply its CinnaChip products to 445 Sams Wholesale Club stores  nationally.  In
  order to finance the working capital for these sales aggregating  $945,000 , the
  Company  entered into a loan  agreement with Gelt  Financial  Corporation  for a
  credit  line  in  the  amount  of  $200,000  secured  by the  Wal-Mart  accounts
  receivable.  The terms of this loan agreement  provide for a service fee of 1.5%
  of each advance  together  with interest at a rate of 675 basis points above the
  prime  rate.  In  addition,  the  Company  granted  Gelt  1,500  shares  of  the
  Company's common stock as a loan origination fee.
  
      In June 1997,  the Company  terminated  its  investment  advisory  letter of
  intent with Commonwealth Associates.  The Company is currently exploring various
  financing options to raise funds to be utilized toward automating the Santa Ana,
  California  production facility,  establishing a North East production facility,
  and establishing a working capital reserve.
  
                                        -11-
  SIGNATURES
  
  Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereto duly authorized.
  
                                 Paramark Enterprises, Inc.
  
  Dated:                          By: /s/ Charles N. Loccisano
                                      Charles N. Loccisano,
                                      Chairman and Chief Executive Officer
  
                                  By:/s/ Alan S. Gottlich
                                      Alan S. Gottlich, President
                                      and Chief Financial Officer
                                      (Principal Accounting Officer)
  
                                        -12-