<PAGE>
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
FORM 10-QSB/A
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended December 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
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Suite 301, 2525 S.W. 3rd Ave. Miami, Florida 33129
(Address of principal executive offices) (Zip Code)
(305) 365-5820
(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) had filed all reports required
to be filled by Section 13 or 15(d) of the Securities Exchange Act of of 1934
during the preceding 12 onths (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 December 31, 1996 was 19,809,396 shares.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. 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 December 30, increased
from $16.224.068 in fiscal year 1995 to $16.950.221 in fiscal year 1996, an
increase of approximately 5% over the previous year. The Company experienced
increased revenues in the last fiscal year over the previous year as a result
of sale.
The profit after the cost of sales is slightly low in comparison to the
previous year. The reason of this is because in the year of 1996 the Company
has the highest prices in row materials (corn and soy bean) and the management
expects this prices to become lower.
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 recorded a net profit of $ 921.725 for quarter in fiscal
year 1996, when compared to a net profit in the comparison to the 1995 year of
$ 1.181.234. The Company's selling, and export expenses decreased slightly as a
result of more efficient management of resources. General and administrative
expenses had an extraordinary increase. The slight decrease in the net profit
is due to the increase in the price of grain such as corn and soy bean and the
general and administrative expenses.
Liquidity and Capital Resources
At December 30, 1996, cash and cash equivalent was $ 738.591, as
compared to $ 686.931 at December 30, 1995.
As of December 30, 1996, the working capital ratio was 1.22 as compared
to 1.14 at December 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. The Company
does not foresee a major requirement for capital in the next fiscal year. It
has been the company s policy to distribute common stock dividends , up to a
maximum amount of 50% of the period s income, if the cash flow allows.
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 office of the Company i his capacity as such.
<PAGE>
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
10-QSB filing.
<PAGE>
Costa Rica International
Consolidated Balance Sheet
December 31, 1996 and 1995
Corporacion
Unaudited Pipasa S.A.
--------- ----------
1996 1995
---- ----
Assets
Current Assets
Cash and Banks $ 738,591 686,931
Marketable Securities 2,166,314 1,371,181
Notes Receivables 1,518,882 2,170,279
Accounts Receivables- Net 6,777,583 6,066,222
Inventories - Net 7,776,608 5,680,920
Prepaid Expenses 70,541 220,170
----------- -----------
Total Current Assets 19,048,519 16,195,703
----------- -----------
Long Term Notes Receivables 44,897 -
Long Term Investment 2,402,171 1,697,728
Property, Plant and Eq. - Net 39,926,057 28,338,490
Forestry Rights 766,919 679,815
Copyrights, trademarks and Goodwill 1,050,411 154,691
Preoperative Expenses 105,669 -
Guarantee Deposits 121,697 133,545
----------- -----------
Total Assets $63,466,340 $47,199,972
----------- -----------
----------- -----------
Liabilities and Stockholder's Equity
Current Liabilities
Bank Overdrafts 654,582 865,476
Notes Payables 10,623,407 9,418,378
Account Payables 2,861,504 2,508,538
Allowances 296,719 230,797
Accumulated Expenses 1,123,146 1,209,119
Deferred Revenue 1,537 -
----------- -----------
Total Current Liabilities 15,560,895 14,232,308
----------- -----------
Long Term Notes Palyables 3,595,972 2,415,593
Long Term Accounts Payables - 59,986
----------- -----------
Total Liabilities 19,156,867 16,707,887
----------- -----------
Stockholder's Equity
Common Stock 19,560 17,769,881
T tulos de Capital - 505,511
Preferred Nominal Shares - 2,005,439
Additional Paid-in Capital 33,928,787 -
Legal Reserve - 518,884
Foreign Currency Trans. Adj. (26,536) 454,224
Retained Earnings (2,698,528) 9,238,146
----------- -----------
31,223,283 30,492,085
----------- -----------
Minority Interest 13,086,190 -
----------- -----------
Total Stockholder's Equity 44,309,473 30,492,085
----------- -----------
Total Liabilities and
Stockholder s Equity $63,466,340 $47,199,972
----------- -----------
----------- -----------
<PAGE>
Costa Rica International
Statement of Earnings
For the three months ended December 31, 1996 and 1995
Corporacion
Unaudited Pipasa S.A.
--------- -----------
1996 1995
Net Sales $16,950,221 16,224,068
Cost of Sales 12,783,470 11,606,190
----------- ----------
4,166,751 4,617,878
----------- ----------
Operating Expenses
Selling 1,599,658 1,625,045
Export 27,485 33,216
General and Administrataive 1,326,505 1,085,801
----------- ----------
Total Operating Expenses 2,953,648 2,744,062
----------- ----------
Operating Profit 1,213,103 1,873,815
Other Income 428,417 329,014
Other Expenses 719,795 1,021,595
----------- ----------
Net Earnings before Income Tax $ 921,725 $1,181,234
----------- ----------
----------- ----------
<PAGE>
Costa Rica International
Consolidated Statements in Shareholder's Equity
For the three months ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Common Stock
-----------------------
Number of Minority Additional Foreign Curr. Accumulated Total
Shares Amount Interest Paid - in Translat. Adj. Deficit Stock. Equity
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance September 30,1996 19,559,396 19,560 12,665,111 33,928,787.00 - (3,181,134.00) 43,432,324.00
Net Income 921,725.00 921,725.00
Translation Adjustment (44,576.00) (44,576.00)
Minority Interest Income 439,119.00 (439,119.00) -
Minority Interest -
Translation Adjustment (18,040) 18,040.00
Consolidating Adjustement
------------- ------ ------------- ------------- ----------- -------------- -------------
Balance December 31,1996 19,559,396.00 19,560 13,086,190.00 33,928,787.00 (26,536.00) 2,698,528 44,309,475
------------- ------ ------------- ------------- ----------- -------------- -------------
Common Stock Preferred Shares Titulos de Capital
------------------------------------------------------------------------------------------------------
Foreign
Curr. Total
Number of Number of Number of Legal Translat. Retained Stock.
Shares Amount Shares Amount Shares Amount Reserve Adj. Earnings Equity
--------- ------ --------- ------ --------- ------ ------- ------- -------- ------
Balance September 30,1995
Corporacion Pipasa SA 2,500,000 17,769,881 317,831 2,005,439 1,500,000 505,511 518,884 437,498 8,247,865 29,485,078
Net Income 1,181,234 1,181,234
Foreign Currency Translation 16,726 16,726
Dividends Distributed (190,953) (190,953)
Balance December 31,1995
------------------------------------------------------------------------------------------------------
Corporacion Pipasa SA 2,500,000 17,769,881 317,831 2,005,439 1,500,000 505,511 518,884 454,224 9,238,146 30,492,085
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Costa Rica International
Consolidated Financial Statments
For the three months ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Corporation
Unaudited Pipasa S.A.
--------- ------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income for the Period $ 921,726 1,181,234
Adjustments to reconcile Net
Income to Cash:
Depreciation and amortization 409,370 335,645
(Increase) Decrease in:
Accounts Receivable (917,403) (1,843,678)
Inventories (488,329) 303,989
Other Assets 375,186 89,979
Prepaid Expense 87,659 (67,881)
Preoperative Expense (105,669) -
(Decrease) Increase in:
Accounts Payable (712,951) (1,128,155)
Accrued Expense 332,353 469,092
Allowances (266,326) (204,861)
Deferred Revenue 1,537 -
----------- -----------
Net Cash Provided by Operating Activities (362,848) (864,636)
----------- -----------
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Sale of Property and Equipment 80,425
Purchase of Property and Equipment (370,762) -
Loans to Related Party (1,193,171) (473,444)
Collection Loans Related Party 322 2,640
Advances on Notes Receivables (188,748) (28,532)
Collection on Notes Receivables 140,700 11,501
Investments (3,420,654) (1,544,886)
Forestry Rights (18,615) (21,854)
Copyrights and Goodwill 7,796 (3,281)
Deposits (6,312) 12,327
Translation Adjustment 53,095 508,590
----------- -----------
Net Cash Provided by Investing Activities (4,996,349) (1,456,514)
----------- -----------
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Notes Payables 9,729,436 (7,850,738)
Principle Payment Notes Payables (8,856,162) 7,623,400
Bank Overdrafts 584,469 865,476
Translation Adjustment (619,412) (190,953)
518,497
----------- -----------
Net Cash Provided by Financing Activities 838,331 965,682
----------- -----------
----------- -----------
Net Increase (Decrease) in Cash (4,520,866) (1,355,468)
Cash Balance at beginning of period 5,259,457 2,042,399
----------- ----------
Cash Balance at end of period $ 738,591 686,931
----------- -----------
----------- -----------
</TABLE>
<PAGE>
COSTA RICA INTERNATIONAL INC.
Notes to Financial Statements
December 31, 1996 and 1995
NOTE 1 - AGREEMENT AND PLAN OF REORGANIZATION
On April 30, 1996, Corporation Pipasa, S.A. (Pipasa) entered into an
Agreement and plan of Reorgainization with Quantum Learning Systems, Inc. to
be known as Costa Rica International, Inc. for the acquisition of Corporacion
Pipasa, S.A. by Quantum Learning Systems, Inc. to be known 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 26,147,508 shares, in the aggregate, of restricted
common stock of the company, which in any case should be at least 82.4% of
the issued and outstanding common shares of 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.
The transaction was approved by the sharesholders of the CRI on August 5,
1996 and was consummated on September 30, 1996.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements as of
December 31, 1996, include the accounts of Costa Rica International, and
59.56% owned subsidiary Corporacion Pipasa S.A. The purchase method was used
for consolidating the companies. The consolidated financial statements as of
December 31, 1995, include the accounts of Corporacion PIPASA, S.A. and its
wholly-owed 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 for both quarters. Rincon de los Toros, S.A.
was merged into Corporation PIPASA, S.A. during the period ended June 30,
1996, using the pooling of interests method of accounting.
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 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 - New t.v. commercial 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.
<PAGE>
COSTA RICA INTERNATIONAL INC.
Notes to Financial Statements
December 30, 1996 and 1995
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.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) of the Securities Exchange Act of
1934, the Registrant that duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
COSTA RICA INTERNATIONAL, INC.
By:
----------------------------
Calixto Chaves Zamora
Chairman
Dated: February 24, 1997
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: February 24, 1997 By : /s/
-------------------------------
Lic. Jorge Ml. Quesada Chaves
Treasurer
SECRETARY
Dated: February 24, 1997 By: /s/
-----------------------------
Monica Chaves Zamora
Secretary
