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 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 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
2600 Douglas Road - Suite 1004, Coral Gables, FL 33134
- -----------------------------------------------------------------------------
Address of principal executive offices) (Zip Code)
Phone: (305) 774-9411 Fax: (305) 774-9345
-----------------------------------------
(Registrant's telephone number, including area code)
(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 September 30, 1996, there were 57,401,786 shares of common stock ($.01 par
value) issued and outstanding.
Total sequentially numbered pages in this document: 11
----
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
Madera International, Inc.
Balance Sheet
<CAPTION>
ASSETS Sep 30, 1995 Sep 30, 1996
------------ ------------
<S> <C> <C>
(Unaudited) (Unaudited)
Current Assets
Cash $ 4,696 $ 331,754
Receivables (Note B) 4,160 434,000
Inventory (Note A) 672,000 611,539
------------ ------------
Total Current Assets 680,856 1,377,293
------------ ------------
Other Assets
Investment in Timber Producing Property (Note D) 40,600,000 30,100,000
Investment in Sawmill and Related Equipment 2,600,000 1,500,000
Other receivables, deposits, etc 0 9,560
Furniture & equipment 0 16,754
------------ ------------
Total Other Assets 43,200,000 31,626,314
------------ ------------
Total Assets 43,880,856 33,003,607
------------ ------------
LIABILITIES AND SHAREHOLDER EQUITY
Current Liabilities
Accounts payable 264,056 374,789
Accrued taxes payable 10,086 10,086
Income taxes payable 800 1,600
Other accrued expenses 0 48,268
Current portion of long term debt (Note E) 365,906 465,796
------------ ------------
Total Current Liabilities 640,848 900,539
------------ ------------
Long-Term Debt (Note E) 0 0
Common stock to be issued 423,750 423,750
------------ ------------
Total Liabilities 1,064,598 1,324,289
------------ ------------
Stockholders' Equity
Redeemable Preferred Stock - $.01 Par, 100,000,000 shares
authorized, 10,000,000 shares issued and outstanding 225,000 3,333
Common Stock - $.01 Par, 250,000,000 shares authorized,
8,953,142 shares issued and outstanding 151,955 574,017
Paid in capital 44,381,759 34,974,920
Retained Deficit Prior (1,674,578) (3,379,473)
Retained Deficit Current (267,878) (493,479)
------------ ------------
Total Shareholder Equity 42,816,258 31,679,318
------------ ------------
Total Liabilities and Equity 43,880,856 33,003,607
============ ============
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
2
<PAGE>
Madera International, Inc.
Unaudited Statement of Operations
For The Period Ended September 30
<TABLE>
<CAPTION>
6 Months 3 Months 3 Months 6 Months
1995 1995 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income:
Timber sales $ 0 $ 0 $ 245,000 $ 245,000
Other income (expense) 7,000 0 2,255 2,255
------------ ------------ ------------ ------------
Total Income 7,000 0 247,255 247,255
------------ ------------ ------------ ------------
Cost of Sales:
Beginning Inventory 630,000 630,000 629,000 490,000
Purchases 52,000 39,500 82,000 221,000
Inventory adjustment 0 0 0 0
Field costs 2,500 2,500 38,146 38,146
Field travel 0 0 0 0
Sales costs and travel 0 0 1,393 1,393
Commissions 0 0 0 0
Joint venture share 0 0 0 0
Joint venture costs 0 0 0 0
------------ ------------ ------------ ------------
Total accumulated costs 684,500 672,000 750,539 750,539
Less:Ending inventory (Note C) (630,000) (672,000) (611,539) (611,539)
------------ ------------ ------------ ------------
Cost of sales 54,500 0 139,000 139,000
------------ ------------ ------------ ------------
Gross margin (Loss) (47,500) 0 108,255 108,255
------------ ------------ ------------ ------------
Operating Expenses:
General and Administrative 193,628 140,439 143,040 395,484
------------ ------------ ------------ ------------
Total General and Administrative Expenses 193,628 140,439 143,040 395,484
------------ ------------ ------------ ------------
Pre-Tax Operating Profit (Loss) ($ 241,128) ($ 140,439) ($ 34,785) ($ 287,229)
Extra-ordinary loss due to fund raising 0 0 (206,250) (206,250)
------------ ------------ ------------ ------------
Pre-Tax Profit (Loss) ($ 241,128) ($ 140,439) ($ 241,035) ($ 493,479)
============ ============ ============ ============
Earnings (Loss) per Share of Common Stock
and Common Stock Equivalents ($ 0.016) ($ 0.009) ($ 0.001) ($ 0.005)
============ ============ ============ ============
of common stock outstanding 15,195,632 15,195,632 57,401,786 57,401,786
============ ============ ============ ============
</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>
UNAUDITED STATEMENT OF CASH FLOWS
For the Six Month Period Ended September 30
<TABLE>
<CAPTION>
1995 1996
----------- -----------
CASH FLOWS IN OPERATING ACTIVITIES
<S> <C> <C>
Net (Loss) ($ 267,878) ($ 493,479)
Adjustments to Reconcile Net Income to
Net Cash Used in Operating Activities:
(Increase) Decrease in:
Receivables (160) (245,000)
Inventory (42,000) (121,539)
Purchase of Furniture and Equipment 0 (16,754)
Loans to employees 0 (8,025)
Increase (Decrease) in:
Accounts payable 38,843 4,055
Accrued expenses 0 0
Payment of Legal Judgment 0 (50,000)
Common stock to be issue - Peru 423,750 0
NET CASH PROVIDED BY (USED IN) ----------- -----------
OPERATING ACTIVITIES 152,555 (930,742)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
(Increase) Decrease in:
Timber property purchase (500,000) 0
Investments 0 0
Sawmill and related equipment purchase 0 0
Increase (Decrease) in:
Long term debt 136,245 20,000
Preferred stock 0 (1,667)
Common stock 31,200 154,377
Paid in capital 165,363 1,007,179
NET CASH PROVIDED BY (USED IN) ----------- -----------
FINANCING ACTIVITIES (167,192) 1,179,889
----------- -----------
NET INCREASE (DECREASE) IN CASH (14,637) 249,147
CASH, at Beginning of Period 19,333 82,607
----------- -----------
CASH, at End of Period $ 4,696 $ 331,754
=========== ===========
</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>
Madera International, Inc.
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Six Month Period Ended September 30, 1996
<TABLE>
<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
Entries For Quarter Ending June 30, 1996
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 3/31 thru 6/30/96 (252,444) (252,444)
-------------------------------------------------------------------------------------
BALANCE, June 30, 1996 49,519,132 495,190 500,000 5,000 34,578,754 (3,631,917) 31,447,027
-------------------------------------------------------------------------------------
Entries For Quarter Ending September 30, 1996
Issued for fund raising 7,300,000 73,000 73,000
Issued for administrative assistants 24,200 242 242
Issued for consultants 236,500 2,365 397,594 399,959
Issued for legal costs 12,500 125 125
Finder's Conversion of Preferred Stock 166,667 1,667 (166,667) (1,667) --
Adjustment of Preferred Stock (see Note O) 142,787 1,429 (1,429) --
Extraordinary Loss caused by stock
issuance for operating funds (206,250) (206,250)
Operating Profit (Loss) for period
7/1 thru 9/30/96 (34,785) (34,785)
-------------------------------------------------------------------------------------
BALANCE, June 30, 1996 57,401,786 $574,018 333,333 $3,333 $34,974,919 ($3,872,952) $31,679,318
-------------------------------------------------------------------------------------
</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
September 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 Not 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 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 balance of the total 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 September 30, 1996 the company had entered into a lease
for office facilities in Coral Gables, Florida. The lease is for
approximately 2,500 sq. ft. of office space.
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.
Note O - ADJUSTMENT OF COMMON AND PREFERRED STOCK
----------------------------------------
In reviewing data submitted by the Transfer Agent, an adjustment was
made to Common and Preferred Stock for a conversion of Preferred
Stock by Roman Fernandez that had not been reflected in the Prior
Year, when all these stocks were converted. The adjustment was a
total of 202,500 shares and it caused an overstatement at March 31,
1996 of 59,713 shares, and an understatement of 142,787 shares at
June 30, 1996 for a total of 202,500 shares.
9
<PAGE>
ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the Six Months Ended September 30, 1996:
Financial Condition:
- --------------------
The Company's working capital resources during the six months ended
September 30, 1996 were provided by loans from related parties (See Notes to
Financial Statements), and stock placements. The formal business activity of
lumber shipment and sales began this quarter with the first formal shipment in
the regular course of business. Sales of $245,000 were recorded. Additional
working capital of $250,000 was obtained by the private placement of common
stock.
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 six months ended September 30, 1996, the Company's sales
efforts resulted in orders for Mahogany and Spanish Cedar. The Company exported
its first shipment of Spanish Cedar from the Company-owned mill in Brazil to the
United States. This shipment went to Miami, Florida for ultimate delivery to the
customer. 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 has settled all litigation in a manner acceptable to the
Board of Directors. Payment is being made and these problems cease to be a drain
on management and resources.
ITEMS 2. through 4. are not applicable.
ITEM 5. OTHER INFORMATION. N/A
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
10
<PAGE>
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: October 23, 1996 /s/ Ramiro Fernandez-Moris
--------------------------
Ramiro Fernandez-Moris (Chairman, President,
CEO)
/s/ Regina Fernandez
--------------------
Regina Fernandez (CFO)
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 331,754
<SECURITIES> 0
<RECEIVABLES> 434,000
<ALLOWANCES> 0
<INVENTORY> 611,539
<CURRENT-ASSETS> 1,377,293
<PP&E> 31,616,754
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,003,607
<CURRENT-LIABILITIES> 1,324,289
<BONDS> 0
0
3,333
<COMMON> 574,017
<OTHER-SE> 31,101,968
<TOTAL-LIABILITY-AND-EQUITY> 33,003,607
<SALES> 245,000
<TOTAL-REVENUES> 247,255
<CGS> 139,000
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 395,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (287,229)
<INCOME-TAX> 0
<INCOME-CONTINUING> (287,229)
<DISCONTINUED> 0
<EXTRAORDINARY> (206,250)
<CHANGES> 0
<NET-INCOME> (493,479)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
