<PAGE>
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB/A
Amendment No. 1
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1996
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ____________
Commission File No.0-18222
COSTA RICA INTERNATIONAL, INC.
------------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 87-0432572
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
SUITE 301, 2525 S.W. 3RD AVE.
MIAMI, FLORIDA 33129
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(Address of principal executive offices) (Zip Code)
(305) 250-9938
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(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) had 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 (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 X No
--- ---
The number of shares outstanding of Registrant's common stock, par value $ .001
per share, as of September 30, 1996 was 19,626,063 shares.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I. Financial Statements
See attached financial statements
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Revenues of the Company for the quarter ended September 30, increased from
$13,971,392 in fiscal year 1995 to $15,603,322 in fiscal year 1996, an increase
of approximately 11.7% over the previous year. The Company experienced
increased revenues in the latest fiscal quarter over the comparable quarter for
previous year as a result of the successful sale of more products. It should be
particularly noted that sales resulting form exports also increased in the in
latest fiscal quarter over the comparable quarter for previous year.
Management expects continued growth of revenues from its core business
activities. Management is continuing to expand its market operations and to cut
costs to maximize future profit potential.
The Company generated an operating profit of $1,106,909 for the quarter in
fiscal year 1996, when compared to a profit of $856,485 for the comparable
quarter in fiscal year 1995. The Company recorded a net profit of $734,071 for
quarter in fiscal year 1996, when compared to a net profit in the comparable
fiscal year 1995 of $371,462. The Company's selling, general and administrative
expenses decreased slightly as a percentage of the Company revenue when compared
to the previous year's fiscal quarter as a result of more efficient management
of resources. Operating expenses decreased to $2,786,356 for the quarter in
fiscal year 1996, as compared to $2,812,818 for the comparable quarter in
fiscal year 1995.
Liquidity and Capital Resources
At September 30, 1996, cash and cash equivalents was $5,542,782, as
compared to $2,042,399 at September 30, 1995.
At September 30, 1996, the working capital ratio was 1.27 as compared to
.91 at September 30, 1995.
Historically, the Company has generally relied upon internally generated
funds to satisfy working capital requirements. Management believes that it can
continue to fund its obligations and implement the development of its business
segments with available cash and internally generated cash flow. However, the
Company may partially rely upon external financing or equity contributions for
capital investment purposes, although there are no specific plans to do so at
the present time. The Company does not foresee a major requirement for capital
in the next fiscal
<PAGE>
year. The Company does not intend to pay dividends on its common shares in
the foreseeable future.
The Company finalized and closed on its Agreement and Plan of
Reorganization for the acquisition of Corporacion Pipasa, S.A., effective
September 30, 1996. This Agreement also specified that the Company shall divest
itself of all prior operations, which was also accomplished as of September 30,
1996.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
No legal proceedings of a material nature to which the Company is a party
were pending during the reporting period, and the Company knows of no legal
proceedings of a material nature pending or threatened or judgments entered
against any director or officer of the Company in his capacity as such.
ITEM 2. Changes in Securities. None.
ITEM 3. Defaults upon Senior Securities. None.
ITEM 4. Submission of Matters to a Vote of Security Holders. None
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-K.
No exhibits as set forth in Regulation S-K are considered necessary in this
lO-QSB filing.
<PAGE>
COSTA RICA INTERNATIONAL, INC.
Balance Sheet
September 30, 1996 and 1995
1996 1995
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ASSETS UNAUDITED
Current Assets:
Cash and Equivalents $ 3,128,026 $ 2,042,399
Marketable Securities 2,414,756 -
Notes Receivables 218,352 112,879
Accounts Receivables, net 6,045,878 4,222,544
Inventories, net 7,288,279 5,984,909
Due from Related Party - 210,996
Prepaid Expenses 158,200 152,289
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Total Current Assets 19,253,491 12,726,016
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Long Term Notes Receivables 52,855 -
Investments - Held to maturity 1,099,615 1,524,023
Property, Plant and Equipment, net 28,790,967 28,754,560
Forestry Rights 748,303 657,961
Copyrights, trademarks and Goodwill 115,385 151,410
Guarantee Deposits 117,522 145,872
Other Assets - 89,979
Due from Related Party - 1,850,433
Total Assets $ 50,178,138 $ 45,900,254
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Liabilities and Stockholder's Equity
Current Liabilities
Bank Overdrafts $ 545,118 -
Notes Payables 10,225,254 9,159,313
Account Payables 2,759,609 3,682,199
Allowances for Christmas Bonus 467,407 371,800
Allowances for Severance Pay 95,638 63,858
Accumulated Expenses 1,040,241 653,022
Estimated Income Tax 57,694 87,005
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Total Current Liabilities 15,190,961 14,017,197
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Long term Notes Payable 3,695,688 2,383,500
Long term Account Payable - 14,480
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Total Liabilities 18,886,648 16,415,177
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Stockholder's Equity:
Common Stock 25,174,801 17,769,881
Titulos de Capital - 505,511
Preferred nominal Shares 2,005,439 2,005,439
Additional Paid-In Capital 2,428
Legal Reserve 667,998 518,884
Foreign Currency Trans. Adjustmnet (143,100) 437,498
Retained Earnings 3,583,924 8,247,864
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Total Stockholder's Equity 31,291,490 29,485,077
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Total Liabilities and Stockholder's Equity $ 50,178,138 $ 45,900,254
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<PAGE>
COSTA RICA INTERNATIONAL, INC.
STATEMENT OF EARNINGS
For the quarters ended September 30, 1995 and 1996
1996 1995
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UNAUDITED
Net Sales $ 15,603,322 $ 13,971,392
Cost of Sales 11,710,057 10,302,090
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Gross Profit 3,893,265 3,669,303
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Operating Expenses
Selling 1,636,494 1,644,646
Export 53,764 36,548
General and Administrative 1,096,097 1,131,623
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Total Operating Expense 2,786,356 2,812,818
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Operating Profit 1,106,909 856,485
Other Income 391,978 398,682
Other Expenses 764,817 883,705
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Net Earnings before Income Tax $ 734,071 $ 371,462
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<PAGE>
COSTA RICA INTERNATIONAL, INC.
Statement of Stockholder's Equity
For the Quarter ended September 30, 1996
<TABLE>
CAPITAL STOCK PREFERRED SHARES TITULOS DE CAPITAL
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NUMBER NUMBER NUMBER ADDITIONAL
OF SHARES AMOUNT OF SHARES AMOUNT OF SHARES AMOUNT PAID-IN CAPITAL
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<S> <C> <C> <C> <C> <C> <C>
Balance: June 30, 1996 4,550,000 $ 25,174,801 317,831 $ 2,005,439 - - $ 2,428
Transfer from Retained
Earnings
Foreign Currency
Translation
Add, net earnings
Less, Income Tax for the year
ended September 30, 1996
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Balance : September 30, 1996 4,550,000 $ 25,174,801 317,831 $ 2,005,439 - - $ 2,428
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<CAPTION>
FOREIGN TOTAL
LEGAL CURRENCY RETAINED STOCKHOLDER'S
RESERVE TRANSLATION EARNINGS EQUITY
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<S> <C> <C> <C> <C>
Balance: June 30, 1996 $ 518,884 $ 214,719 $ 3,183,069 $ 31,099,340
Transfer from Retained
Earnings 149,114 (149,114) -
Foreign Currency
Translation (357,819) (357,819)
Add, net earnings 734,071 734,071
Less, Income Tax for the year
ended September 30, 1996 (184,102) (184,102)
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Balance : September 30, 1996 $ 667,998 $ (143,100) $ 3,583,924 $ 31,291,490
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</TABLE>
<PAGE>
COSTA RICA INTERNATIONAL, INC.
Statement of Stockholder's Equity
For the Quarter ended September 30, 1996
<TABLE>
CAPITAL STOCK PREFERRED SHARES TITULOS DE CAPITAL
----------------------------------------------------------------------
NUMBER NUMBER NUMBER ADDITIONAL
OF SHARES AMOUNT OF SHARES AMOUNT OF SHARES AMOUNT PAID-IN CAPITAL
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<S> <C> <C> <C> <C> <C> <C> <C>
Balance: June 30, 1995 2,500,000 $ 17,769,881 245,136 $ 1,628,717 - - $ 376,722
Transfer from Retained
Earnings 1,500,000 505,511
Transfer from Additional
Paid-in Capital 72,695 376,722 (376,722)
Transfer from Retained
Earnings
Add, Prior year adjustment
Decreases during the year
Less, Dividends Paid
Foreign Currency
Translation
Add, net earnings
----------------------------------------------------------------------------------------
Less, Income Tax for the year
ended September 30, 1995 2,500,000 $ 17,769,881 317,831 $ 2,005,439 1,500,000 $505,511 -
----------------------------------------------------------------------------------------
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<CAPTION>
FOREIGN TOTAL
LEGAL CURRENCY RETAINED STOCKHOLDER'S
RESERVE TRANSLATION EARNINGS EQUITY
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<S> <C> <C> <C> <C>
Balance: June 30, 1995 $ 371,306 $ 50,962 $ 9,734,117 $ 29,931,705
Transfer from Retained
Earnings (505,511) -
Transfer from Additional
Paid-in Capital -
Transfer from Retained
Earnings 147,578 (147,578)
Add, Prior year adjustment 7,216 7,216
Decreases during the year (3,571) (3,571)
Less, Dividends Paid (977,654) (977,654)
Foreign Currency
Translation 386,536 386,536
Add, net earnings 371,463 371,463
Less, Income Tax for the year
ended September 30, 1995 (230,618) (230,618)
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$ 518,884 $ 437,498 $ 8,247,864 $ 29,485,077
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</TABLE>
<PAGE>
COSTA RICA INTERNATIONAL, INC.
STATEMENT OF CASH FLOWS
FOR TWELVE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings for the period $ 2,982,272 $ 3,610,350
Adjustments to reconcile net earnings to cash
provided by operating activities:
Depreciation and amortization 1,266,788 1,275,566
(Increase) decrease in:
Accounts receivable (1,612,338) (609,403)
Inventories (1,303,370) 871,993
Other assets (5,911) 370,843
Prepaid expenses 37,156 92,913
Increase (decrease) in:
Accounts payable (920,752) 307,081
Other Liabilities 485,295 (273,425)
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Net cash provided by operating activities 929,140 5,645,918
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in property and equipment (444,107) (3,316,041)
Net change in long term investments (487,682) 168,531
Net change in notes and loans receivable 1,692,104 (703,235)
Net change in forestry rights,
copyrights and deposits (54,317) (128,995)
Translation adjustment (1,805,286) 233,636
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Net cash (used) by financing activities (1,099,288) (3,746,104)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net changes in long-term debt and
notes payable 2,363,649 2,024,345
Dividends paid (590,142) (1,414,596)
Bank overdrafts 545,118 (227,615)
Translation adjustment (1,062,850) (1,607,660)
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Net cash (used) by investing activities 1,255,775 (1,225,526)
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Net increase (decrease) in cash 1,085,627 674,288
Cash balance, at the beginning of the year 2,042,399 1,368,111
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Cash balance, at the end of the year $ 3,128,026 $ 2,042,399
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</TABLE>
<PAGE>
COSTA RICA INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
NOTE 1 - ORGANIZATION
On January 7, 1991 Akron, S.A. merged with the following Corporations:
Industrias Derivados de Pollo, S.A. (Idepos S.A.), Retisa, S.A., Servicios
Multiple PIPASA (Semupi, S.A.), Avicola Chacara, S.A., Concentrados Belen, S.A.,
Empolladora Belen, S.A., Granja Avicola Monica, S.A., Planta Procesadora de
Aves, S.A., Grupo PIPASA, S.A., Productores de Huevo Fertil, S.A. (Prohufe,
S.A.) and El Polluelo, S.A. prevailing the name of the Company as Akron, S.A.
Sometime afterwards the articles of incorporation were amended and the Company's
name was switched to Corporacion PIPASA, S.A. The Corporation is domiciled in
La Ribera district, Belen county Heredia province, Republic of Costa Rica.
Although Corporacion PIPASA, S.A. was formed on January 7, 1991, the necessary
legal documents were signed on February 15, 1991. Settlement of the accounts
for the merger was taken on January 31, 1991.
The main line of business of the Company is the production and marketing of
poultry products. The principal activities of the Company are conducted within
Costa Rica.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements as of
September 30, 1995, include the accounts of Corporacion PIPASA, S.A. and its
wholly-owned subsidiary, Rincon de los Toros, S.A. Rincon de los Toros, S.A. is
an inactive Company. All significant intercompany transactions and balances
have been eliminated. Rincon de los Toros, S.A. was merged into Corporation
PIPASA, S.A. during the period ended September 30, 1996, using the pooling of
interests method of accounting.
CASH AND CASH EQUIVALENTS - The Company considers all liquid investments with
original maturities of three months or less to be cash equivalents.
DEPRECIATION, MAINTENANCE AND REPAIRS - Depreciation is provided by the
straight-line method. Estimated useful lives for depreciation purposes are as
follows:
Buildings 10 - 50 years
Machinery and equipment 5 - 10 years
Production equipment 5 - 10 years
Furniture and fixtures 3 - 10 years
Maintenance and repairs which do not prolong the useful life of an asset
<PAGE>
are expensed as incurred.
AMORTIZATION - Amortization of intangible assets which include copyrights,
royalties and goodwill is provided by the straight-line method. Estimated
useful lives for amortization purposes are as follows:
Goodwill 5 - 10 years
Royalties 5 - 10 years
Copyrights 5 - 10 years
CAPITALIZED ADVERTISING COSTS - Advertising and re-launching of Company
products are capitalized and amortized to expense over one year. Advertising
signs are loaned to customers and remain the property of the Company. The signs
are capitalized and amortized on the straight-line method over their estimated
useful lives. All other forms of advertising are charged to expense as
incurred.
ESTIMATES - Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenue
and expenses. Actual results could vary from the estimates that were assumed in
preparing the financial statements.
MARKETABLE SECURITIES - Held-to-maturity securities are recorded as non-current
assets and reclassified to current assets when maturity is within the next year.
Available-for-sale securities are either (1)recorded as current assets because
they represent an excess of available funds and, even though management has no
current plans to dispose of them, it can sell them at any time at its option or
(2) classified as current and non-current based on management's plans to dispose
of them. Trading securities are classified as current assets.
INVENTORY - Inventory is recorded at the lower of cost or market. Cost is
determined using the weighted average method for all inventories.
INCOME TAXES - During the fourth quarter of fiscal 1992, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes", which requires an assets and liability approach for financial
accounting and reporting for income taxes. Under SFAS No. 109, deferred income
taxes are provided for the temporary differences between the financial reporting
basis and the tax basis of the Company's assets and liabilities. Deferred
income taxes represent the future tax return consequences of the temporary
differences, which will be taxable or deductible when assets and liabilities are
recovered or settled.
NOTE 3 - AGREEMENT AND PLAN OF REORGANIZATION
On April 30, 1996, Corporation Pipasa, S.A. (Pipasa) entered into an Agreement
and Plan of Reorganization with Quantum Learning Systems, Inc. to be known as
Costa Rica Inernational, Inc. for the acquisition of Corporation Pipasa, S.A. by
Quantum Learning Systems, Inc. to be known
<PAGE>
as Costa Rica International, Inc (CRI).
The agreement specifies that Corporacion Pipasa, S.A. and its stockholders will
exchange all of the issued and outstanding shares of Class A and Class B common
stock of Pipasa for approximately 25,600,000 shares, in the aggregate, of
restricted common stock of the CRI, which in any case shall be at least 82.4%,
in the aggregate, of the issued and outstanding common shares of the CRI on a
fully diluted basis at the time of the delivery of such shares to the
Stockholders of Pipasa, which includes currently outstanding warrants and
options to issue approximately 750,000 shares. If, and to the extent that the
acquiror receives less than 100% of the common stock of the acquiree, the amount
of shares to be issued hereunder to the Stockholders of the acquiree shall be
reduced pro-rata.
CRI has three subsidiary corporations which include Cambridge Academy, Sentient,
Inc. and Current Concept Seminars, Inc., along with a division which engages in
real estate development. As a condition of the Agreement and the underlying
acquisition, the acquiror will divest itself of all operations, including the
subsidiary corporations and the real estate division, by the delivery date of
the common shares.
The transaction was approved by the shareholders of the CRI on August 5, 1996.
The transaction was consummated Septmeber 30, 1996.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) 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.
COSTA RICA INTERNATIONAL, INC.
By: /s/ CALIXTO CHAVES ZAMORA
------------------------------------
Calixto Chaves Zamora
Chairman
Dated: December 5, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
CHIEF FINANCIAL AND ACCOUNTING OFFICER
Dated: December 5, 1996 By: /s/ JORGE M. QUESADA CHAVES
------------------------------------
Jorge M. Quesada Chaves
Treasurer
SECRETARY
Dated: December 5, 1996 By: /s/ MONICA CHAVES ZAMORA
------------------------------------
Monica Chaves Zamora
Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 3,128,026
<SECURITIES> 2,414,756
<RECEIVABLES> 6,411,953
<ALLOWANCES> (147,723)
<INVENTORY> 7,288,279
<CURRENT-ASSETS> 19,253,491
<PP&E> 36,351,782
<DEPRECIATION> 7,560,815
<TOTAL-ASSETS> 50,178,138
<CURRENT-LIABILITIES> 15,190,961
<BONDS> 3,695,688
0
2,005,439
<COMMON> 25,174,801
<OTHER-SE> 4,111,250
<TOTAL-LIABILITY-AND-EQUITY> 50,178,138
<SALES> 15,603,322
<TOTAL-REVENUES> 16,111,749
<CGS> 11,710,057
<TOTAL-COSTS> 2,786,356
<OTHER-EXPENSES> 268,315
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 496,501
<INCOME-PRETAX> 734,071
<INCOME-TAX> 0
<INCOME-CONTINUING> 734,071
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 734,071
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
