UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
( x ) Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 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 number 0-16523
MADERA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 68-0318289
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9455 Collins Ave., Suite 308, Surfside, FL 33154
- ------------------------------------------ -----------
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (305) 774-9411
(Former name, former address and former fiscal year, if changed since last
report)
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 (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
--- ---
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
--- ---
As of June 30, 1996, there were 49,519,132 shares of common stock ($.01 par
value) issued and outstanding.
Total sequentially numbered pages in this document: 11
----
1
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Madera International, Inc.
Balance Sheet
<CAPTION>
ASSETS June 30, 1995 June 30, 1996
------------- -------------
(Unaudited) (Unaudited)
Current Assets
<S> <C> <C>
Cash $39,493 $329,710
Receivables (Note 3) 34,271 190,600
Inventory (Note 4) 1,148,201 629,000
---------- ----------
Total Current Assets 1,221,965 1,149,310
---------- ----------
Other Assets
Investment in Timber Producing Property (Note 5) 40,470,435 30,100,000
Investment in Sawmill and Related Equipment 2,600,000 1,500,000
Investment in Joint Venture (See 10K 3/31/95) 13,885 1,535
---------- ----------
Total Other Assets 43,084,320 31,601,535
---------- ----------
Total Assets 44,306,285 32,750,845
---------- ----------
Liabilities and Shareholder Equity
Current Liabilities
Accounts payable 215,614 374,318
Accrued taxes payable 13,000 10,086
Income taxes payable 800 1,600
Other accrued expenses 0 48,268
Current portion of long term debt (Note 6) 0 445,796
---------- ----------
Total Current Liabilities 229,414 880,068
Reserve for possible loss on rescissions 0 0
Long-Term Debt (Note 6) 328,086 0
Common stock to be issued 0 423,750
---------- ---------
Total Liabilities 557,500 1,303,818
---------- ---------
Stockholders' Equity
Redeemable Preferred Stock - $.01 Par,
100,000,000 shares authorized, 10,000,000
shares issued and outstanding 105,000 5,000
Common Stock - $.01 Par, 250,000,000 shares
authorized, 8,953,142 shares issued
and outstanding 237,607 495,190
Paid in capital 44,062,828 34,578,754
Retained Deficit Prior (445,185) (3,379,473)
Retained Deficit Current (211,465) (252,444)
----------- -----------
Total Shareholder Equity 43,748,785 31,447,027
----------- -----------
Total Liabilities and Equity 44,306,285 32,750,845
=========== ===========
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
2
<PAGE>
<TABLE>
Madera International, Inc.
Unaudited Statement of Operations
For the Quarter Ended June 30
<CAPTION>
Three Months Three Months
1995 1996
------------ ------------
<S> <C> <C>
Income:
Timber sales $0 $0
Other income (expense) ($7,000) 0
------------ ------------
Total Income (7,000) 0
------------ ------------
Cost of Sales:
Beginning Inventory 350,630 490,000
Purchases 87,000 139,000
Inventory adjustment 0 0
Field costs ($2,500) 0
Field travel 0 0
Sales costs and travel 0 0
Commissions 0 0
Joint venture share 0 0
Joint venture costs 0 0
------------ ------------
Total accumulated costs 435,130 629,000
Less: Ending inventory (Note 4) (629,000) (629,000)
------------ ------------
Cost of sales (193,870) 0
------------ ------------
Gross margin (Loss) (186,870) 0
------------ ------------
Operating Expenses:
General and Administrative $58,816 252,444
------------ ------------
Total General and Administrative Expenses 58,816 252,444
------------ ------------
Pre-Tax Profit (Loss) ($245,686) ($252,444)
============ ============
Earnings (Loss) per Share of Common Stock
and Common Stock Equivalents ($0.005) ($0.005)
============ ============
Weighted average number of shares
of common stock outstanding 49,519,132 49,519,132
============ ============
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
PRIOR YEARS DATA IS NOT INCLUDED DUE TO THE STATUS OF COMPANY AT THAT TIME
3
<PAGE>
<TABLE>
UNAUDITED STATEMENT OF CASH FLOWS
For the Three Month Period Ended June 30
<CAPTION>
CASH FLOWS IN OPERATING ACTIVITIES 1996
----------
<S> <C>
Net (Loss) ($252,444)
Adjustments to Reconcile Net Income to
Net Cash Used in Operating Activities:
(Increase) Decrease in:
Receivables (1,600)
Inventory (139,000)
Increase (Decrease) in:
Accounts payable (46,416)
Accrued expenses 0
Common stock to be issue - Peru 0
NET CASH PROVIDED BY (USED IN) ----------
OPERATING ACTIVITIES (439,460)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in:
Timber property purchase 0
Investments 0
Sawmill and related equipment purchase 0
Increase (Decrease) in:
Reserve for possible losses on rescission 0
Long term debt 0
Preferred stock 0
Common stock 75,550
Paid in capital 611,013
----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 686,563
----------
NET INCREASE (DECREASE) IN CASH 247,103
CASH, at Beginning of Period 82,607
----------
CASH, at End of Period $329,710
==========
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
PRIOR YEARS DATA IS NOT INCLUDED DUE TO THE STATUS OF THE COMPANY AT THAT TIME
4
<PAGE>
<TABLE>
Madera International, Inc.
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Month Period Ended June 30
<CAPTION>
Common Stock Preferred Stock Additional
--------------------- ---------------- Paid In Retained
Shares Amount Shares Amount Capital Earnings Total
---------- -------- ------- ------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, March 31, 1996 41,964,132 $419,640 500,000 $5,000 $33,967,741 ($3,379,473) $31,012,908
Issued for fund raising 4,250,000 42,500 $42,500
Issued for administrative
assistants 80,000 800 $800
Issued for consultants 3,200,000 32,000 $32,000
Issued for legal costs 25,000 250 611,013 $611,263
Loss for period (252,444) ($252,444)
---------- -------- ------- ------ ----------- ------------ -----------
BALANCE, Current Period 49,519,132 $495,190 500,000 $5,000 $34,578,754 ($3,631,917) $31,447,027
========== ======== ======= ====== =========== ============ ===========
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
PRIOR YEARS DATA IS NOT INCLUDED DUE TO THE STATUS OF THE COMPANY AT THAT TIME
5
<PAGE>
Madera International, Inc.
Notes to Financial Statements
June 30, 1996
Note A - COMPANY
-------
Madera International, Inc., formerly Weaver Arms Corporation,
emerged from Chapter 11 Bankruptcy proceedings on January 21, 1994.
The Company engages in the business of harvesting and exporting
timber.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE AND COST RECOGNITION
----------------------------
Revenues are recognized in the period in which they are considered
earned. General and administrative costs are charged to expense
when incurred.
INVENTORY
---------
Inventory is recorded at the lower of cost or market. Cost is
determined by the first-in, first-out method.
Property and Equipment
----------------------
Property and equipment are stated at cost. Depreciation is
computed over the useful lives of the depreciable assets using the
straight-line method. Major renewals and improvements are
capitalized, while maintenance and repairs are expensed when
incurred.
Non-monetary Transactions
-------------------------
The Company records non-monetary transactions in accordance with
APB-29 "Accounting for Non-monetary Transactions." The transfer or
distribution of a non-monetary asset or liability is based on the
fair value of the asset or liability that is received or
surrendered, whichever is more clearly evident.
Proforma Statements
-------------------
Material transactions that occur after the close of a quarter have
an affect on the financial presentation. So as to more accurately
disclose this information a Proforma Balance Sheet and supporting
schedules may be included as required.
Cash Equivalents
----------------
For purposes of statement of cash flows, the Company considers all
highly liquid investments purchased with a maturity of three months
or less to be cash equivalents.
6
<PAGE>
Note B - RECEIVABLES
-----------
Receivables represent advances made on future sales of timber.
Management has determined that the entire amount is fully
collectible.
Note C - INVENTORY
---------
Pursuant to operating policy and government requirements the
Company must pay for timber as it arrives from the field to the
sawmill. The timber is then cut in accordance with customers
specifications and then stored at the sawmill until shipped to the
docks and then to the customer. The amounts shown as inventory
represents payments for the accumulation of logs as well as the
cutting of the logs, however, after adjustment to realizable value.
Adjustments will be made periodically to reflect shipment delays.
Note D - INVESTMENT IN TIMBER PRODUCING PROPERTY
---------------------------------------
The Company has concentrated all ownership and activity to
properties in Brazil and Peru. These properties are both owned
and on long term concessions with right of purchase. All other
properties have been eliminated from the financial presentation.
The properties consist of 500,000 acres owned in Brazil and 70,000
hectares on long term concession in Peru. Operations are ongoing
in both areas with production in Brazil and development towards
1997 production in Peru.
The amount of wood reserves are substantial and are represented by
independent appraisals.
Note E - LONG TERM DEBT
--------------
Long-Term debt consists of:
Prime + 1% Notes with Principal and Interest due July 1, 1996,
unless this date is extended by the Note holder. All Note holders
have informed Management that the notes are extended until
December 31, 1996.
Note F - RELATED PARTY TRANSACTIONS
--------------------------
At June 30, 1996 all of the Company's Long-Term debt was payable
to related individuals and companies. The related companies are CD
Management, Inc., CD Financial, Inc., Gateway Industries Ltd., and
International Investeam, Inc. Daniel Lezak, is also general manager
of these companies.
Note G - OTHER INVESTMENTS
-----------------
The Company acquired 86.5% interest in the 30,000 hectares in Peru
by purchasing 100% of the stock in a Peruvian Corporation. This
transaction was consummated, however there is an amount of stock
remaining to be issued in the amount of $423,750. This stock will
be issued in 1996.
7
<PAGE>
Note H - CAPITAL STOCK
-------------
On February 11, 1994 the Company changed the authorized Common
Stock to 250,000,000 shares with a par value of $.01 (one cent)
per share.
On February 11, 1994 the Company also authorized Preferred Stock in
the amount of 100,000,000 shares with a par value of $.01 (one cent)
per share with the caveats for these shares in varying series to be
established by the Board of Directors.
Since these dates, the company has issued a series of Preferred
Stock issuances. These issuances have been for acquisitions and
are highlighted in the financial statements and other notes
contained herein.
Note I - COMMON STOCK CLASS A WARRANTS
-----------------------------
The Company has Class A Warrants with an exercise price established
by the Board of Directors of $3.00 per share. This exercise price
is in effect from May 25, 1994 until August 30, 1994. Subsequently
from August 30, 1994 until February 1, 1995 the exercise price will
be $3.50 per share. The company has extended these warrants for one
year.
At June 30, 1995 there were 19,056,900 Class A Warrants
outstanding.
Note J - INCOME TAXES
------------
The provision for income taxes as of June 30, 1996 represents the
minimum corporate tax for the State of California which is $1,600.
No tax was accrued for the quarter ended June 30, 1996.
Note K - PER SHARE DATA
--------------
Net earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares of common stock
and common stock equivalents outstanding during the period. The
weighted number of shares used to compute earnings (loss) per
share for each quarter was the actual shares issued and outstanding
at that time.
Note L - LEASES
------
At June 30, 1996 the company was removed from its lease obligations
in California and was searching for office space in Florida.
Note M - REVERSE STOCK SPLIT
-------------------
On August 11, 1994, upon due notice, the Annual Meeting of
Stockholders was held and approved a reverse stock split of 1 for 3
to be effective on that date. A stock option program of 2 Million
shares was approved and an S-8 registration statement was also
approved.
8
<PAGE>
Note N - OPERATIONS OF THE BRAZIL SAWMILL
--------------------------------
All information related to operations in the Brazil Sawmill have
been supplied by operating management. Books and records are being
obtained by field personnel and will be available for fiscal year
end. These numbers have all been approved by operations personnel.
9
<PAGE>
ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the Three Months ended June 30, 1996
Financial Condition:
- -------------------
The Company's working capital resources during the nine months ended
June 30, 1996 were provided by loans from related parties (See Notes to
Financial Statements), and stock placements. Additional working capital was
obtained by the private placement of common stock totaling $480,000 during the
three months ended June 30, 1996. This provided the Company with cash
reserves of $329,710 at June 30, 1996.
Management believes that the Company's working capital resources and
anticipated cash flow from timber sales will be sufficient to support
operations during the year ending March 31, 1997.
Results of Operations:
- ----------------------
During the three months ended June 30, 1996, the Company's sales efforts
resulted in orders for Mahogany and Spanish Cedar. The Company announced a
replacement for the previously stated expense line of credit, which should be
in place during the second quarter of this fiscal year. The Company continues
to direct funds toward the accumulation of inventory and the procurement of
sales, at the same time holding General and Administrative expenses to a
minimum.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company's Legal involvements have not changed from those reported in
the 10K annual report for fiscal year ended March 31, 1996.
ITEMS 2. through 4. are not applicable.
ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Not applicable this period
10
<PAGE>
(b) Reports on Form 8-K:
Not applicable this period
SIGNATURES
----------
Pursuant to the requirements of 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.
MADERA INTERNATIONAL, INC.
-------------------------------
(Registrant)
Date: August 15, 1996 /s/ Ramiro Fernandez-Moris
- ---------------------- -------------------------------
Ramiro Fernandez-Moris, Chairman,
Chief Executive Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 329,710
<SECURITIES> 0
<RECEIVABLES> 190,600
<ALLOWANCES> 0
<INVENTORY> 629,000
<CURRENT-ASSETS> 1,149,310
<PP&E> 31,600,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,750,845
<CURRENT-LIABILITIES> 1,303,818
<BONDS> 0
0
5,000
<COMMON> 495,190
<OTHER-SE> 30,946,837
<TOTAL-LIABILITY-AND-EQUITY> 32,750,845
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 252,444
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (252,444)
<INCOME-TAX> 0
<INCOME-CONTINUING> (252,444)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (252,444)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
