U.S. SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
S.E.C. File #333-6388
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 15 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the First Quarter ended June 30, 2000
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
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securties Exchange Act during the past 12 months
(or for such shorter periods that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. (1) Yes X_ No__ (2) Yes X_ No__
There were 11,700,000 shares of common stock outstanding at 07/01/2000, no
preferred shares issued.
Transitional Small Busines Disclosure Format (Check one): Yes__ No X_
INDEX
PART I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 2000 and June 30, 1999
Consolidated Statements of Income and Retained Earnings for the three
month periods ending June 30, 2000 and June 30, 1999
Consolidated Statements of Cash Flows for the three month periods
ending June 30, 2000 and June 30, 1999
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports
Signature
PART I - Financial Information
Item 1. Financial Statements
GREEN MACHINE DEVELOPMENT CORP.
AND WHOLLY-OWNED SUBSIDIARY
(FORMERLY VIVA GOLF MANUFACTUREING, INC.)
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
TABLE OF CONTENTS
Page
Consolidated Balance Sheet 1
Consolidated Statements of Income and Retained Earnings 2
Consolidated Statement of Cash Flows 3
Statement of Changes in Stockholders' Equity 4
Notes to Financial Statements 5-9
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED BALANCE SHEET
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
ASSETS
2000 1999
Current Assets
Cash in Bank and Cash Equivalents $ 68,572 $ 53,693
Marketable Securities (Note 1) -0- 3,909
Prepaid Expenses -0- 2,496
________ ________
68,572 60.098
Other Assets
Investments in Real Estate (Note 1) 243,455 391,066
Deposits on real estate 15,000 15,000
Organization costs (net of amortization of ($5,836)
(Note 1) 1,764 4,664
________ ________
Total other assets 260.209 410,230
________ ________
Property, plant and equipment ( net ) (Note 1 and 2) 640 723
________ ________
Total assets $329,421 $471,060
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Mortgage payable (Note 3) $ 25,000 $ 40,000
Note Payable (Note 4) 71,208 492,132
Loan Payable (Note ) -0- 25,000
Accured expenses 2,000 14,134
_________ _________
Total current liabilities 98,208 571,266
_________ _________
Stockholders Equity
Common Stock, par value $.001
50,000,000 shares authorized;
11,700,000 shares issued and outstanding 11,700 1,000
Additional paid in capital 403,997 -0-
Accumulated deficity during development stage (173,784) (101,206)
__________ _________
241,913 (100,206)
__________ _________
Total Liabilities and Stockholders Equity $340,121 $471,060
========= ========
See notes to the financial statements
Page 1
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
2000 1999
Revenues
Fee Income $ -0- $ -0-
Other Income -0- 176
________ ________
-0- 176
________ ________
Operating Expenses (11,778) 5,294
________ ________
Net Income (Loss) (11,778) (5,107)
Accumulated deficit - beginning (162,006) (96,099)
_________ ________
Accumulated deficit - ending $(173,784) $(101,206)
========== ==========
See notes to the financial statements.
Page 2
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
2000 1999
Cash flows fromoperation:
Net loss $(65,907) $ (5,107)
Adjustments to reconcile net loss to cash
provided by Operating activities:
Depreciation and amortization 2,591 559
Changes in operating assets and liabilities
Decrease in Investments -0- 391,066
(Increase) in accrued expenses 44,900 14,134
________ ________
Net cash used for operations (18,416) (9,858)
Cash flows from investing activities:
Investment in real estate (400,583) (391,066)
Deposits on real estate (15,000) -0-
_________ _________
(415,583) -0-
_________ _________
Cash flows from financing activities:
Proceeds from note payable 422,356 404,077
Proceeds from loan payble 25,000 25,000
_______ _______
447,356 429,077
_______ _______
Net increase in cash 13,357 55,153
Cash - beginning -0- 5,560
_______ ______
Cash - ending $13,357 $60,713
======= =======
See notes to the financial statements
Page 3
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
JUNE 30, 2000
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 (5,000,000) (5,000) -0- -0-
Net Loss -0- -0- (70,240)
___________ ________ _________ ________
Balance, March 31, 1997 11,700,000 11,700 -0- (70,240)
Net Loss (16,215)
__________ ______ _________ ________
Balance, March 31, 1998 11,700,000 11,700 -0- (86,455)
Net Loss (9,666)
__________ ______ _________ _________
Balance - March 31, 1999 11,700,000 11,700 -0- (96,099)
Net Loss (65,907)
__________ ______ _________ _________
Balance - March 31, 2000 11,700,000 11,700 -0- (162,006)
Capitalization of loan payable -0- -0- 403,997 -0-
Net Loss -0- -0- -0- (11,778)
__________ ______ _________ _________
Balance - June 30, 2000 11,700,000 $11,700 $403,997 $(173,784)
========== ======= ========= =========
See notes to the financial statements
Page 4
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations
The Company was organized under the laws of the State of Florida on May 3, 1989.
The company acts as a managemtn and business consultant and develops real estate
projects. The Company is in its development state and is actively seeking to
raise capital to fund its activities. On June 17, 1999, the company filed an
Amendment to the Articles of Incorporation to changes its name to Green Machine
Development Corp.
Basis of Accounting
The Company's policy is 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 liabillities, the disclosure of
contingent 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 period. Actual results could differ
from those estimates.
Consolidation of Subsidiaries
The Company eliminates all intercompany transactions in it consolidation of its
wholly-owned subsidiaries Green Machine Management Crop. and Mercard Credit
Services Corp.
Investment in Real Estate
The Company's investment in real estate is stated at cost and related costs have
been capitalized.
Fixed Assets
Fixed assets are stated at cost and are depreciated over their estimated useful
lives (5 to 10 years), using the straight-line method of depreciation.
Expenditures for major renewals and betterments that extend the useful lives
of fixed assets are capitalized. Expenditures for amintenance and repairs are
charged to expense as incurred.
Page 5
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
(A DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES - continued
Income Taxes
In February 1992, the Financial Accounting Standards Board issued Statement on
Financial Accounting Standards No. 109. "Accounting for Income Tax." Under
SFAS 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.
In accordance with FASB 109 due to the uncertainty of future operating profets
the Company has taken a 100% valuation allowance against the tax benefits
resulting from the approximate $140,000 of net operating losses.
NOTE 2 PROPERTY, PLANT AND EQUIPMENT
Fixed assets are comprised of:
2000 1999
Computer equipment $ 1,825 $ 1825
Less: accumulated equipment 1,185 (1,093)
_______ ______
Net fixed assets $ 640 $ 732
======= ======
NOTE 3 MORTGAGE PAYABLE
On January 15, 1999, the Company acquired a parcel of land whereby the seller
gave back a $40,000 fixed reate balloon mortgage. The mortgage is interest free
until July 15, 1999, and will accrue interest at 6.5% per annum. The entire
principle balance together with accrued interest would have been due and payable
in full on October 15, 1999. The note's maturity date was subsequently extended
to October 15, 2000. The note has been reduced by $15,000 as of March 31, 2000.
Page 6
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 LOAN PAYABLE - RELATED PARTY
The Company has received funding primarily for its real estate investing from a
related party. The loan plus accrued interest at 8% per annum is due on or
before June 16, 2000. The note is unsecured. The related party subcribed
to 1,000,000 shares of the Company's common stock for the amount of loans plus
accred interest, a total of $567,142, in June 2000. Those 1 million shares were
then exchanged back with the Company for all of the issued and outstanding
shares of the former subsidiary Mercard Credit Services, Inc.
A related party has received various reimbursements of personal expenditures in
exchange for providing office facilities and administrative services.
NOTE 5 CAPITAL TRANSACTIONS
On April 17, 1990, the Company received a letter of effectiveness from the
Securities and Exchange Commission for its registration prusuant to a SB-1
filling. The underwriting of its public common stock was unseccessful, but
170,000,000 shares of its common stock were issued to the organizing group.
On April 16, 1996, the Company recepitalized 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 April16, 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.
On august 12, 1996, the Company issued 15,000,000 shares to acquire 100% of the
outstanding common shares of Viva International Products, Inc. via a stock for
stock exchanges.
On September 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 principle shareholder was retired in order to induce
investment financing.
On October 29, 1998, the Company received $155,000 pursuant to private placement
under Regulation D Securties Act of 1933. On Many 31, 1999, the Board of
Directors rescided the transaction and the $155,000 received was combined with
other funds received from a related party and reclassified as an additional
shareholder loan.
Page 7
<PAGE>
GREEN MACHINE DEVELOPMENT CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
NOTE 5 CAPITAL TRANSACTIONS - continued
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 12,500 shares of free trading common stock. The
obligation has been satisfied by a related party.
On June 17, 1999, Viva Golf Manufactureing, Inc. accepted as a capital
contribution all the issued and outstanding stock of Green Machine Management
a wholly-owned subsidiary. On the same date the Company filed an Amendment to
the Articles of Incorporation for a name change to Green Machine Development
Corp.
NOTE 6 STOCK OPTION PLAN
On June 17, 1999, the Company approved a stock option plan for its two Corporate
Directors. The plan calls for the exercise of up to 100,000 shares in the 1999,
and 100,000 shares in the year 2000 for each of its two Directors for a total of
400,000 shares. The stock iption exercise is fixed at $1.00 per common share
with a minimum of 25,000 shares per transaction. No additional options have
been granted or excercised as of March 31, 2000.
On April 5, 2000, Green Machine Management Corp. (A wholly-owned subsidiary)
conveyed by quitclaim deed two parcels of land, one to the Parent Company and
the other to Mercard Credit Services Corp. The Company agreed to a stock
subscription of 1 million shares of common stock on May 18, 2000
to satisfy the related party loans on these parcels and then exchanged all the
issued and outstanding stock of Mercard Credit Services Corp., which occured on
June 13, 2000, to the related party. Additionally, the subsidiary Green Machine
Management Crop. will be spun off as a stock dividend to the shareholders,
receiving one common share for each ten shares held in the Company as of June
30, 2000.
Page 8
<PAGE>
PART 1 FINANCIAL INFORMATION
Item 2: Management's Discussion and Analysis
The Company had no income or revenue in the first quarter FYE 2000, and did have
$176 of income in the first quarter of 1999. The operating expenses for the
200 period were $11,778 and less than half of that amount for the same period in
the previous year, due to planning, engineering and marketing activities.
The Company had cash of $68,592 on deposit at the end of the first quarter of
2000, more than $15,000 over the $53,693 on deposit in the corresponding period
1999. The Company significantly reduced its liabilities; including notes
(shareholder loans) mortgages and loan payable by more than $465,000 through a
million share stock subscription for $567,142 which was later exchanged for all
the outstanding shares of the subsidary Mercard Credit Services, Inc. This
transaction also reduced the investment in real estate by almost $150,000; due
to booked costs associated with the purchase of a large parcel. The parcel was
subdivided into two building lots. One of which was deeded to MCSI and the
other was deeded to the Company, subsequently the related party gave a new loan
to the Company in the amount of $71,208 pending expected financing.
Plan of Operation
The Company owns two parcels of real estate and has a contract to purchase
another property across the street from Parcel "A".
a. A building lot #25 south side of Hudson Ave., on the Intracoastal Waterway
(ICW) in Ocean Ridge, Palm Beach County, Florida.
b. Two triplex lots which will be developed as a (7) seven unit townhouse
condominiu;m in Delray Beach, Florida.
c. Parcel on the north side of Hudson Avenue on the ICW, Ocean Ridge, Florida,
across the street from Parcel "A" under contract for $605,000. Presently in
dispute due to untimely disclosures and lack of maintenance by seller.
Parcel "A"
The Company owned a large lot which was divided into two building lots. In order
to maintain the lot division a deed was filed conveying (1) one lot to this
Company and a deed was also recorded conveying the second lot to Mercard Credit
Services, Inc. (MCSI), formerly a wholly-owned subsidiary of this Company. In
June of 2000, MCSI became independent through the exchange of all of it's out-
standing stock for 1,000,000 shares of the Company's stock which was suscribed
to for $567,142, booked as shareholder's loans and accrued interest.
The Company has become more creditworthy since it now owns a lot on the ICW
without encumbrance or substantial shareholder debt. Management expects to
obtain bank financing for construction of a new luxury residence and the
development of the additional lots under contract.
The site work, fill and clearing, has been completed and a "Rip Rap" seawall has
been constructed along the ICW. The Department of Enviromental Protection made
a final inspection and approved an agreed administrative order for several minor
violations of the permit. This agreement resulted in the payment by the Company
of a settlement of $1250. Preliminary plans for the new dwelling was reviewed
and approved by the Town of Ocean Ridge and construction drawings are being
completed. The marketing of the luxury home has begun and magazine
advertisement will continue. The home is listed as new construction in the Palm
Beach Multiple Listing Service for $1.4 million. Construction of the
luxury home will begin upon the execution of a pending sales contract for
$1.3 million. the "Rip Rap" wall permit also included the approval of
approximately 200 feet of "Fishing Docks"' 30 feet into the ICW from the new
water line. This area may be developed into a protected dock area for the
luxury homes.
Parcel "B"
The Company owns (2) triplex lots which will be developed as 2 story townhouses.
Preliminary review for the seven (7) unit condominium has been approved by the
building inspector. The Company holds title to the property, subject to a
$25,000 mortgage. The Company plans to sell or point venture this project.
<PAGE>
Parcel "C"
The Company has a contract to Purchase #26 Hudson Avenue, Ocean Ridge, Florida
which we expected to close in July. The Company may complete a tax free third
party exchange, through the sale of the new home, to finance the acquisition of
the property and defer income taxes. However, a dispute arose in May when the
seller made Disclosures that were a year late and materially affect the
property's value. Additionally, the seller failed to maintain the premises.
The Company is seeking to resolve the issues amicably in order to avoid costly
and time consuming litigation.
The Company will provide a plan for a preliminary review to vacate the Hudson
Avenue section (60' R.O.W.) between parcels "A" and "C" for consideration by the
municipality. If the R.O.W. abanconment is ultimately completed the Company
plans to build a marine basin to provide dockage for the development.
PART II - OTHER INFORMATION
Item 4: Submission of Matters to Vote of Secruity Holders
Pursuant to the Company's December 21, 1999, resolution to restructure the
Company and eliminate debt, the Board of Directors conducted several special
meetings which were also attended by a shareholder majority:
On May 10, 2000, the Board passed a resolution authorizing the issuance of up to
1 million shares of preferred stock at a parvalue of $1.00 per share and with
10% annual dividend. These shares whould not have voting rights but could be
converted into common stock, in one year, at the rate of (2) preferred for (1)
common.
On May 18, 2000, the board authoried the issuance of 1 million common shares
pursuant to a subscription by the holder of the shreholder's loans in the
amount of $567,142, the total of the outstanding loans and accured interest.
On June 13, 2000, the board authorized the exchange of the 1 million shares of
this Company's common stock which was subscribed for the #567,142 of debt in
subsidiary Mercard Credit Services, Inc.
On June 24, 2000, the Board approved the spinoff of the remaining subsidiary,
Green Machine Management, Corp., which holds title to the two triplex lots,
subject to a $25,000 mortgage. The shareholders of record on June 30, 2000 will
receive a dividend of (1) share in the subsidiary for each (10) shares held.
Item 5: Other Information
In early June 2000, Sierra Brokerage Services, Inc., a NASD Member-Dealer,
filed a request for authority to quote and trade the Company's common stock on
the OTC Bulletin Board. On June 29, 2000, NASD Regulation replied with a
request for additional information on four items in order to complete the
review. The Company provided the additional information to Sierra which in
turn reviewed same and filed on July 14, 2000. The Company is currently
awaiting the NASD Regulation's reply or approval for trading authority.
<PAGE>
The Company will seek investment through the placement of convertable preferred
stock which was recently authorized. The Company may earmark a class of
preferred stock to back or collaterize a particular real estate acquisition.
The Company plans to file an SEC Registration of a public offering or privately
place common stock to finance current and future projects.
The Company has become creditworthy through the subscription of stock for share-
holder debt and the later exchange of that stock for the subsidiary Mercard
Credit Services, Inc.
The Company retains title to (1) luxury lot without $567,142 debt and has a
purchase contract for (3) additonal lots, two on the ICW. This contract for
additional property is currently in dispute, however, management expects to
resolve the issues before September 30, 2000, the end of the 2nd quarter.
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Green Machine Development, Corp.
(Registrant)
July 26, 2000 /S/June-Ann Fox
Chief Executive Officer
July 26, 2000 /S/James T. Martin
Chief Financial Officer
