S.E.C. File# 333-6388
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the first quarter ended June 30, 1999
GREEN MACHINE DEVELOPMENT, CORP
(Name of small business issuer in its charter)
FLORIDA 65-0594832
(State of incorporation (I.R.S. Employer Identification Number)
200 MacFarlane Dr., Ste 405, Delray Beach, FL 33483
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (561) 276-8226
VIVA GOLF MANUFACTURING, INC.
(Former name of issuer)
Check whether 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 requirement for the past 90 days. Yes (X) No ( )
Number of shares of Common Stock outstanding as of June 30, 1999: 11,700,000
Transitional Small Business Disclosure Format (Check one): Yes X No __
GREEN MACHINE DEVELOPMENT, CORP. AND SUBSIDARY
F/K/A VIVA GOLF MANUFACTURING, INC.
QUARTER ENDING JUNE 30, 1999
Page 2
HISTORY OF COMPANY
In August, 1996, the company became known as Viva Golf Manufacturing, Inc.
(VGMI), upon the acquisition of Viva International Products, Corp. After
substantial research, development and testing, a "High Tech" titanium alloy
oversized golf club head was produced. This head was then matched to a
suitable lightweight, flexible graphite shaft; the combination of which
produced the "Viva Gold Driver" that outperformed the three leading
nationally advertised brands in tests by a leading independent laboratory.
The initial production run of heads by the supplier were inferior to the
prototype/design and there was a high percentage of returns. The defect
would occasionally appear under certain conditions of repeated use. After
months of "finger pointing", the supplier finally corrected the problem
and installed a suitable quality control system.
The loss of time and credibility proved to be devastating to VGMI since
the company was unable to timely supply a quality golf products to national
and international markets; the marketing and distribution company expended
much of it's resources on the development of a 30 minute TV infomercial,
only to loose TV and cable contracts that were later unavailable. The
delay also caused the company to experience some credit and financing
problems with other suppliers and creditability shrunk again.
In October 1998, Viva acquired the assets of the marketing and distribution
operations and again attempted to attract new capital, unsuccessfully. In
January of 1999, the shareholders elected a new member to the Board of
Directors and the Board decided to negotiate the cancellation of the
October 1998 acquisition and the corresponding note issued for the M & D
Purchase. The cancellation was completed by March 31, 1999 and the company
has basically settled all of it's affairs, wound down the golf business
and actively sought a potential reverse acquisition.
CORPORATE NAME CHANGE
On June 17th, 1999, VGMI acquired Green Machine Management, Corp. (GMMC)
through a contribution of capital by a common shareholder. The company filed
an Amendment to the Articles of Incorporation for a name change to "Green
Machine Development, Corp" which became effective on July 1, 1999 and will
operate GMMC as a wholly owned subsidiary of GMDC.
The contributed assets include cash, unencumbered title to (2) real estate
development projects, contracts for additional land purchases, requisite
environmental engineering, preliminary planning and architectural designs.
GMMC has completed its third annual financial statement for year ending
May 31, 1999, and GMDC has completed combined statements for the quarter
ending June 30, 1999, which is attached hereto.
GREEN MACHINE DEVELOPMENT, CORP. AND SUBSIDARY
F/K/A VIVA GOLF MANUFACTURING, INC.
QUARTER ENDING JUNE 30, 1999
Page 3
DESCIPTION OF BUSINESS
The company is planning the development and construction of two active real
estate projects; (1) two luxury single family residences on the Intracoastal
Waterway (ICW) in Ocean Ridge, Florida; (2) two triplex lots which the
company plans to develop as a 7 or 8 unit townhouse condominium in Delray
Beach, Florida. GMDC has contracts to purchase additional property along
the ICW and continues to negotiate the contracts for five additional parcels
to complete the plan for construction of 9 homes on 10 lots. The one
environmentally sensitive lot may be used for green area if mangrove
mitigation is not arranged.
GMDC expects to be qualified as a Florida licensed General Contractor through
the license of James T. Martin, a Director of the Company. The Company plans
to subcontract most of the building operations. Marketing may also be handled
internally through the expertise of the President, June-Ann Fox, a licensed
Realtor, well experienced in the sale of high-end real estate.
Clearing and filling has begun on the ICW project and the first two luxury
homes have been designated as Phase I South. This parcel of almost 30,000 sq.
ft. with 176" along the ICW is owned free from any encumbrance. Plans and
permits are being processed for the construction of these luxury homes which
are expected to sell for over $1.2 million each. Phase II involves the
acquisition of 3 parcels, including an existing home and two additional lots
on the South side, contiguous to Phase I.
Phase III will include the other existing ICW home with two lots, under
contract, and the acquisition of two unrelated lots. Preliminary lot layouts
and environmental feasibility for the subdivision and replatting is now being
conducted.
The development will utilize existing dockage along the ICW and build a new
fishing dock and rip rap wall as permitted by the Army Corp. Recreational,
Common and Marina areas will be maintained by a Homeowners Association and
accessibility may be offered to a second tier membership of neighbors, in
order to gain community support for the approvals and road abandonment
required.
GMDC is reviewing future projects including the acquisition of a Vero Beach
residential and resort community and a family golf center in Altamonte Springs.
GREEN MACHINE DEVELOPMENT, CORP. AND SUBSIDARY
F/K/A VIVA GOLF MANUFACTURING, INC.
QUARTER ENDING JUNE 30, 1999
Page 4
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION
On January 11, 1999, the shareholders of Viva elected a new Director,
June-Ann Fox and the company's Board announced that it was still seeking
a merger or acquisition with a golf orientated firm. However, the entire
golf industry seemed to be experiencing a multitude of problems; any
suitable merger would be entertained since the continued viability of
the company was questionable. The Board agreed to a workout with the
creditor, from whom the company acquired that marketing assets of Viva
Golf USA, Corp., in October, 1998. Since there was little chance to
continue the production or marketing of it's products; the company
and the creditor agreed to cancel the asset acquisition and the
corresponding note, on March 31, 1999.
Viva had no significant operations, assets or revenues and began negotiating
with several firms for a reverse acquisition. The company entered into a
Letter of Intent with Connect One Telecom Corp. of Delray Beach, FL on
May 7, 1999. However, after a 30 day "Due Diligence" that company was
unable to produce auditable assets or the necessary investment capital to
acquire the three requisite companies involved in the transaction.
On June 17, 1999, Viva accepted, as a contribution to capital, all the
issued outstanding stock of Green Machine Management, Corp. (GMMC). The
contribution to VGMI capital was made by the sole shareholder who is also
the major shareholder of VGMI. The company has filed a name change to Green
Machine Development Corp. (GMDC) which became effective July 1, 1999. GMMC
will operate as a wholly owned subsidiary and has 3 years of audited financial
statements as of the May 31, 1999 statement.
GMDC plans to acquire additional land to develop two real estate projects:
(1) 9 luxury single family residences on the Intracoastal Waterway
(ICW) including a planned marina basin/canal in Ocean Ridge, Florida. Price
will range from $700,000 to $1,500,000.
(2) 7-8 townhomes in Delray Beach, Florida, priced at $200,000.
GREEN MACHINE DEVELOPMENT CORP. AND SUBSIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC,
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30, 1999
TABLE OF CONTENTS
Page
Independent Auditor's Report 1
Consolidated Balance Sheet 2
Consolidated Statement of Income and Accumulated deficit 3
Consolidated Statement of Cash Flows 4
Statement of Changes in Stockholders Equity 5
Notes to Financial Statements 6-9
BAUM & COMPANY, P.A.
Certified Public Accountants
1515 University Drive - Suite 209
Coral Springs, Florida 33071
954-752-1712
INDEPENDENT AUDITORS REPORT
The Board of Directors: Green Machine Development, Corp and Subsidiary
F/K/A Viva Golf Manufacturing, Inc.
Delray Beach, Florida
We have compiled the accompanying balance sheet of Green Machine Development
Corp. and Wholly-Owned Subsidiaries (Formerly Viva Golf Manufacturing, Inc.)
as of June 30, 1999 and the related statement of income for the three month
period that ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited
or reviewed the accompanying financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
July 31, 1999
Coral Springs, Florida
GREEN MACHINE DEVELOPMENT CORP. AND SUBSIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC.
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
ASSETS
Current Assets $ 60,713
Cash in Bank 3,909
Marketable Securities (Note 1) 64,622
Other Assets
Investments in Real Estate (Note 1) 364,066
Organization costs (net of amortization
Of $5,836) (Note 1) 4,164
Total Assets $ 368,230
Property, plant and equipment (net) (Note 1 and 2) 732
Total assets $ 433,584
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Mortgage payable (Note 4) $ 12,000
Note Payable (Note 5) 407,050
Loan payable -(Note 6) 114,886
Accrued expenses 12,000
Total Current Liabilities 545,936
Stock holders Equity
Common Stock, par value $.001
50,000,000 shares authorized;
1,000,00 shares, issued 1,000
Accumulated deficit (152,461)
(151,461)
Total Liabilities & Stockholders Equity $ 394,475
See Accountants compilation report and notes to the financial statements
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GREEN MACHINE DEVELOPMENT, CORP AND SUBIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC. AND SUBIDIARY
STATEMENT OF INCOME AND RETAINED EARNINGS
QUARTERLY ENDED JUNE 30, 1999
Revenues
Fee Income $ - 0 -
Other Income 187
(187)
Operating Expenses 5,110
Net Income (Loss) (4,923)
Accumulated deficit - beginning (56,362)
Accumulated deficit - ending $(63.285)
See Accountants Report and Notes to the Financial Statements.
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GREEN MACHINE DEVELOPMENT, CORP AND SUBSIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC.
STATEMENT OF CASH FLOWS
QUARTER ENDED JUNE 30, 1999
Cash flows from operations:
Net income (loss) $ (38,459)
Changes in operating assets and liabilities
Decrease in investments 16,601
(Increase) in accrued expenses 12,000
Net cash used for operations (9,858)
Cash flows from investing activities:
Investment in real estate (364,066)
Cash flows from financing activities:
Proceeds from note payable 404,077
Proceeds from loan payable 25,000
Net increase in cash 55,153
Cash - beginning 5,560
Cash - ending $ 60,713
See Accounts Report and Notes to the Financial Statements.
- -4-
GREEN MACHINE MANAGEMENT, CORP AND SUBSIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
QUARTER ENDED JUNE 30, 1999
Additional
Common Stock Paid-In- Accumulated
Shares_ Amount___ Capital__ _ Deficit__
Balance, August 12, 1996 1,700,000 $ 1,700 $ - 0 - $ - 0 -
Issuance of Common
Stock in Acquisition 15,000,000 15,000 - 0 - - 0 -
Retirement of Common
Stock (5,000,000) (5,000) - 0 - - 0 -
Net Loss - 0 - - 0 - - 0 - (48,711)
Balance, March 31, 1997 11,700,000 11,700 - 0 - (48,711)
Net Loss _________ _______ _____ (37,744)
Balance - March 31, 1998 11,700,000 11,700 - 0 - (86,455)
Net Loss - 0 - - 0 - - 0 - (9,644)
Balance - March 31, 1999 11,700,000 $ 11,700 $ - 0 - $(96,099)
See Accountant's Report and Notes to the Financial Statements.
- -5-
GREEN MACHINE DEVELOPMENT, CORP. AND SUBSIDARY
F/K/A VIVA GOLF MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
QUARTER ENDING JUNE 30, 1999
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
The Company was organized under the laws of the State of Florida on May 3,
1989. On August 12, 1996, the Company acquired Viva International Products,
Inc. by issuing stock to the sole shareholder of the Company. As a result
of this acquisition, the Company (formerly Federal Tax Lien, Inc.) changed
its name to Viva Golf Manufacturing, Inc. and merged the operations of Viva
International Products, Inc. into its Company.
The Company on August 12, 1996, had virtually no assets at the time of
acquisition. The company had incurred various intangible coasts involved in
the development of its proprietary line of golf clubs.
On June 17,1999, VGMI acquired Green Machine Management, Corp. (GMMC) through
a contribution of capital by a common shareholder. The company filed an
Amendment to the Articles of Incorporation for a name change to "Green
Machine Development, Corp." which became effective on July 1, 1999 and will
operate GMMC as a wholly owned subsidiary of GMDC.
Basis of Accounting
The Company has elected March 31 as its year end and it is the
company's policy to prepare its financial statements using the
accrual basis of accounting in accordance with generally accepted
accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
Marketable Securities
The Company utilizes the lower of cost or market in valuing its
investments.
Investment in Real Estate
The Company's investment in real estate is stated at cost and related
costs have been capitalized.
- -6-
GREEN MACHINE DEVELOPMENT, CORP. AND SUBSIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 1 (Continued)- BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes
In February 1992, the Financial Accounting Standards Board issued
Statement on Financial Accounting Standards No. 109. "Accounting for
Income Taxes." Under SFAC No. 109. Deferred assets and liabilities
are recognized for the estimated future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective basis.
Organization Costs
The Company has incurred various expenditures in the formation of its
corporate and organizational structure. Upon commencement of its
operations the deferred costs will be amortized over a period of no
greater than sixty (60) months. Amortization commenced in August 1996.
Earnings Per Share
Earnings per share are computed by dividing net income (loss) for the
period by the weighted average of common shares that are outstanding.
Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and revenues and expenses. The actual outcome of the
estimates could differ from the estimates made in the preparation
of the financial statements.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
Computer Equipment $ 1,825
Less: accumulated depreciation 1,093
$ 732
NOTE 3 - CAPITAL TRANSACTIONS
On April 17, 1990, the Company received a letter of effectiveness
from the Securities and Exchange Commission for its registration
pursuant to a SB-1 filing. The underwriting of its public common
stock was unsuccessful, but 170,000,000 shares of its common stock
were issued to the organizing group.
On April 16, 1996, the Company recapitalized by reducing its
authorized stock from 500,000,000 shares; .00001 par value to
50,000,000 shares; .001 par value. Pursuant to corporate resolution
dated April 16, 1996, the Company approved a reverse split of its
common stock 100 to 1. Effectively the 170,000,000 shares outstanding
was reduced to 1,700,000 shares.
- -7-
GREEN MACHINE MANAGEMENT, CORP. AND SUBSIDIARY
F/K/A VIVA GOLF MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 3(Continued)- CAPITAL TRANSACTIONS
On August 12, 1996, the Company issued 15,000,000 shares to acquire
100% of all the issued and outstanding common shares of Viva
International Products, Inc. via a stock for stock exchange. On Sept.
5, 1996, the Company changed its name to Viva Golf Manufacturing, Inc.
On December 10, 1996, the Board of Directors approved a resolution
whereby five million shares held by a principal shareholder was retired
in order to induce investment financing. The shareholder's loan
account was credited with this transaction for par value of stock
retired.
NOTE 4 - MORTGATE PAYABLE
On January 15, 1999, the Company acquired a parcel of land whereby
the seller save back a $40,000 fixed rate balloon mortgage. The
mortgage is interest free until July 15, 1999, and will accrue interest
at 6.5% per annum. The entire principal balance together with accrued
interest shall be due and payable in full on October 15, 1999.
NOTE 5 - NOTE PAYABLE
The Company has received funding primarily for its real estate
investing from a related party. The note plus accrued interest at 6%
per annum is due on or before June 16, 2000, and can be satisfied by
the option of holder to receive common stock of the company at $1.00
per share. The note is unsecured.
NOTE 6 - LOAN PAYABLE
On May 20, 1999, an investor remitted $25,000 as a stock subscription
under the Company's private placement. All parties have agreed to
postpone issuance of stock and treat the advance as a temporary
non-interest loan, which may be refunded or exchanged for 25,000
shares of restricted common stock.
NOTE 7 - COMMITMENTS
The Company has executed an agreement with its current President and
Director whereby will receive $1,000 per month for the period
August 1, 1999 through October 31, 1999. Additionally, a stock option
agreement has been approved as explained in Note 8.
NOTE 8 - STOCK OPTION PLAN
On June 17, 1999, the company approved a stock option plan for its
tow Corporate Directors. The plan calls for the exercise of up to
100,000 shares in the year 1999, and 400,000 shares in the year 2000
for each of its two Directors. The stock option exercise is fixed at
$1.00 per common share with a minimum of 25,000 shares per transaction.
- -8-
GREEN MACHINE DEVELOPMENT, CORP. AND SUBSIDARY
F/K/A VIVA GOLF MANUFACTURING, INC.
NOTES TO FINANCIAL STATEMENT
QUARTER ENDING JUNE 30, 1999
NOTE 9 - SUBSEQUENT EVENTS
On June 17, 1999, the sole shareholder of Green Machine Management,
Corp., contributed 1,000,000 shares of common stock to Viva Golf
Manufacturing, Inc. That Company will be accounted for as a
wholly-owned subsidiary of Viva Golf Manufacturing, Inc. of which this
shareholder is a related party. Viva Golf Manufacturing, Inc. then
changed its name to Green Machine Development in June 1999.
- - 9 -
