FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
COMMISSION FILE NUMBER 1-8322
VISA INDUSTRIES OF ARIZONA, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ARIZONA 86-0510653
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9201 N. 7th Avenue Phoenix, AZ 85021
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(602) 870-0004
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the
past 90 days.
YES NO X
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
OUTSTANDING AT
CLASS OF COMMON STOCK MARCH 31, 1998
--------------------- -----------------
$.0001 PAR VALUE 2,219,742 SHARES
<PAGE>
PART I. - FINANCIAL INFORMATION
VISA INDUSTRIES OF ARIZONA, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
The accompanying notes are an integral part of
these consolidated financial statements.
Visa Industries of AZ, Inc.
Balance Sheet Comparison
As of March 31, 1998
<TABLE>
<CAPTION>
Mar 31, '98 Mar 31, 1997
<S> <C> <C>
Current Assets
Checking/Savings
1010 GENERAL CHECKING ... 1,662.20 (2,797.53)
1060 CLEARING ACCT 0.00 2,572.51
Total Checking/Savings 1,662.20 (225.02)
Accounts Receivable
1200 Accounts Receivable 1,778.53 13,721.12
Total Accounts Receivable 1,778.53 13,721.12
Other Current Assets
1260 BOND INVESTMENT
1265 ALLOWANCE FOR D...(12,114.00) (12,114.00)
1260 BOND INVESTMENT... 17,932.00 17,932.00
Total 1260 BOND INVEST... 5,818.00 5,818.00
1498 MONTESSORI DAY SC... 28,518.71 4,047.45
Total Other Current Assets 34,336.71 9,865.45
Total Current Assets 37,777.44 23,361.55
Fixed Assets
1400 Fixed Assets
1500 Oil & Gas Propert...
1590 Cost of Proven ...337,769.55 337,769.55
1600 Accumulated Dep..(301,940.62) (289,633.11)
Total 1500 Oil & Gas P... 35,828.93 48,136.44
1510 Furniture & Fixtures
1610 Accumulated Dep...(16,003.06) (15,623.64)
1510 Furniture & Fix... 16,288.48 16,288.48
Total 1510 Furniture &... 285.42 664.84
Total 1400 Fixed Assets 36,114.35 48,801.28
Total Fixed Assets 36,114.35 48,801.28
Other Assets
1305 BOOKSTORE-INVESTMENT
1310 Bookstore Investment 37,879.06 37,879.06
1315 REPAYMENT OF INVE...(10,443.86) (9,812.75)
Total 1305 BOOKSTORE-INV...27,435.20 28,066.31
Total Other Assets 27,435.20 28,066.31
TOTAL ASSETS 101,326.99 100,229.14
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
2000 Accounts Payable 14,658.56 13,103.92
Total Accounts Payable 14,658.56 13,103.92
Other Current Liabilities
2001 Other - Accts P... 7,020.00 8,320.00
2020 Margin Payable (28.00) (28.00)
2100 Payroll Liabili...
2110 Federal Withho... 149.00 180.00
2120 FICA
2122 Company 116.87 226.02
2124 Employee 116.87 226.02
Total 2120 FICA 233.74 452.04
2130 FUTA 15.09 29.17
2140 Medicare
2142 Company 27.34 52.86
2144 Employee 27.34 52.86
Total 2140 Medicare 54.68 105.72
2160 State Withholding 14.90 18.00
2170 SUI (5.27) 24.42
Total 2100 Payroll L... 462.14 809.35
Total Other Current Liab... 7,454.14 9,101.35
Total Current Liabilities 22,112.70 22,205.27
Total Liabilities 22,112.70 22,205.27
Equity
2800 Common Stock 2,219.92 2,219.92
2805 Treasury Stock (8,499.50) (8,499.50)
2810 Additional Paid In ..596,994.08 596,994.08
2820 Net Unrealized Losson(26,780.59) (26,780.59)
3900 Retained Earnings (484,339.31) (485,996.82)
Net Income (380.31) 86.78
Total Equity 79,214.29 78,023.87
TOTAL LIABILITIES & EQUITY 101,326.99 100,229.14
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
The accompanying notes are an integral part of
these consolidated financial statements.
Visa Industries of AZ, Inc.
Profit and Loss YTD
January through March 1998
<TABLE>
<S> <C> <C>
Jan - Mar
Ordinary Income/Expense
Income
4020 Sales
4100 Oil Sales 5,485.69
4110 GAS SALES 2,159.17
Total 4020 Sales 7,644.86
Total Income 7,644.86
Cost of Goods Sold
5000 Cost of Goods Sold
5020 Severance Tax 229.18
5100 Lease Operatin.. . 1,162.84
5000 Cost of Goods ... 258.08
Total 5000 Cost of Go... 1,650.10
Total COGS 1,650.10
Gross Profit 5,994.76
Expense
6060 Bank Service Charges 14.77
6190 Depletion Expense 2,461.50
6200 Depreciation Expense 94.85
6220 Dues and Subscript... 145.59
6380 Insurance 132.64
6530 Miscellaneous 240.00
6550 Office Supplies 159.90
6560 Payroll Expenses
6565 Benefits 480.00
6575 Gross Wages 1,213.00
Total 6560 Payroll Expe... 1,693.00
6580 Payroll Taxes
6585 FICA 116.87
6590 FUTA 15.08
6595 Medicare 27.34
6605 SUI 12.64
Total 6580 Payroll Taxes 171.93
6880 Telephone 248.39
6900 Travel & Ent
6910 Entertainment 1,012.50
Total 6900 Travel & Ent 1,012.50
Total Expense 6,375.07
Net Income (380.31)
</TABLE>
Notes to Financial Statements
March 31, 1998
1. Organization
The Company was incorporated in Arizona on November 29, 1984, for
the purpose of acquiring, through the issuance of stock, the
remaining assets of Visa Energy Corporation. Visa Energy
Corporation filed for protection from its creditors under Chapter
11 of the Bankruptcy Code on December 6, 1983. The merger of
Visa Energy Corporation into Visa Industries of Arizona, Inc. Was
effective April 10, 1985. Under the terms of the bankruptcy, the
stockholders of Visa Energy Corporation received one share of
Visa Industries of Arizona, Inc. common stock for each ten shares
of Visa Energy Corporation common stock.
The assets acquired in the merger consisted of interests in 23
oil and gas wells. The acquired oil and gas wells are located in
the states of Texas, Oklahoma, and New Mexico. Visa Industries
of Arizona, Inc. had no operations prior to the merger.
The merger is accounted for using the pooling of interests
method. Visa Energy Corporation's retained earnings was adjusted
to zero and oil and gas properties adjusted to their fair value
as a result of the reorganization in bankruptcy. This adjustment
was made because substantially all assets of the Company were
sold and because of the decline in the value of the properties.
Visa is primarily an oil and gas operating company, revenues from
its Stock Transfer Business amount to less than 10% of revenues.
2. Summary of significant accounting policies
A. Method of accounting
The Company's policy is to prepare its financial statements
on the accrual basis of accounting in accordance with generally
accepted accounting principles; consequently, revenues and gains
are recognized when earned and losses are recognized when
incurred.
B. Recording of oil and gas revenue
Revenue from oil and gas sales are recognized based upon
production date.
C. Oil and gas properties
Oil and gas properties are recorded at estimated net
realizable value. The estimated net realizable value is based
upon a reserve study done as of January 1, 1986 for ten of 23
wells in which the Company has an interest.
The reserve study done on proved developed/producing
properties represent approximately 90 percent of the value of the
properties of the Company. It was management's decision not to
have reserve studies done on the remaining properties because it
was not economically beneficial.
The Company has not undertaken any exploration or
development efforts in connection with its oil and gas
properties. At such time as these activities commence, they will
elect either full cost or successful efforts methods of
accounting.
D. Depletion expense
Depletion expense on oil and gas properties is recorded
using the units of production method over the estimated
productive life of all the reserves to recorded basis of the
properties.
E. Furniture and equipment
Furniture and equipment are recorded at cost and are being
depreciated using the straight-line method over an estimated
useful life of five years.
F. Net loss per share of common stock
Net loss per share has been computed based on the weighted
average number of common shares outstanding during the year.
5. Income taxes
The Company's tax basis in oil and gas properties is zero.
This is because Visa Energy Corporation offset its entire tax
basis in the properties with debt forgiveness income which it
elected not to recognize.
The Company files its income tax returns on a cash basis in
which revenues earned are not recognized until received and
expenses incurred are not recognized until paid. The Company has
a net operating loss carryforward available to offset future
taxable income of $17,000. The tax net operating loss expires in
the year 2000.<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Visa Industries of Arizona is organized for the purpose of
oil and gas production and exploration; and operates a stock
transfer agency. Due to the Company's limited resources and the
recent low prices of energy, the company is not currently active
in exploration or development activities.
The Company's current business strategy is to find a merger
partner.
LIQUIDITY AND CAPITAL RESOURCES
The Company is basically self financing, through cash flow.
The Company occasionally borrows funds to alleviate short term
cash flow problems, but has no loans outstanding at this time.
The Company currently has sufficient cash flow to continue in
business.
RESULTS OF OPERATIONS
The Company basically operated at break even for the first
quarter. The current price depression is not affecting the
Company severely.
PART II: OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
EX 27. Financial Data Schedule
b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Visa Industries of Arizona, Inc.
(Registrant)
Date: May 15, 1998 By: /s/ Mary Anne Ramirez
-------------------
Mary Anne Ramirez
Chairman of the Board and
Chief Executive Officer
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> MAR-31-1998 MAR-31-1997
<CASH> 1662 225
<SECURITIES> 5818 5818
<RECEIVABLES> 1778 13721
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 37777 37777
<PP&E> 354058 354058
<DEPRECIATION> 317943 317943
<TOTAL-ASSETS> 101326 100229
<CURRENT-LIABILITIES> 22112 22205
<BONDS> 0 0
0 0
0 0
<COMMON> 2219 2219
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 101326 100229
<SALES> 0 0
<TOTAL-REVENUES> 7644 7644
<CGS> 1650 1650
<TOTAL-COSTS> 1650 1650
<OTHER-EXPENSES> 6375 6375
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (380) (380)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (380) (380)
<EPS-PRIMARY> (0.00) (0.00)
<EPS-DILUTED> (0.00) (0.00)
</TABLE>
