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 December 31, 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 December 31, 1996, there were 60,978,569 shares of common stock ($.01 par
value) issued and outstanding.
Total sequentially numbered pages in this document: 13
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Madera International, Inc.
Balance Sheet
ASSETS Dec 31, 1995 Dec 31, 1996
------------ ------------
(Unaudited) (Unaudited)
Current Assets
Cash $ 1,492 $ 54,871
Receivables (Note B) 235,160 682,505
Inventory (Note A) 637,000 2,910,539
----------- -----------
Total Current Assets 873,652 3,647,915
----------- -----------
Other Assets
Investment in Timber Producing Property (Note D) 28,012,000 30,115,000
Investment in Sawmill and Related Equipment 2,600,000 1,500,000
Other receivables, deposits, etc 0 57,216
Furniture & equipment 0 18,085
----------- -----------
Total Other Assets 30,612,000 31,690,301
----------- -----------
Total Assets 31,485,652 35,338,216
----------- -----------
<PAGE>
Madera International, Inc.
Balance Sheet
(Continued)
Dec 31, 1995 Dec 31, 1996
------------ ------------
(Unaudited) (Unaudited)
Liabilities and Shareholder Equity
Current Liabilities
Accounts payable 386,757 325,255
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) 378,877 286,796
----------- -----------
Total Current Liabilities 776,520 672,005
----------- -----------
Reserve for possible loss on rescission 150,000 0
Long-Term Debt (Note E) 0 0
Common stock to be issued 423,750 423,750
----------- -----------
Total Liabilities 1,350,270 1,095,755
----------- -----------
Stockholders' Equity
Redeemable Preferred Stock - $.01 Par,
100,000,000 shares authorized, 1,500,000
shares issued and outstanding 5,000 15,000
Common Stock - $.01 Par, 250,000,000
shares authorized, 60,978,569 shares
issued and outstanding 333,115 629,785
Paid in capital 31,943,741 37,392,950
Retained Deficit Prior (1,674,578) (3,379,473)
Retained Deficit Current (471,896) (415,801)
----------- -----------
Total Shareholder Equity 30,135,382 34,242,461
----------- -----------
Total Liabilities and Equity $31,485,652 $35,338,216
=========== ===========
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
<PAGE>
Madera International, Inc.
Unaudited Statement of Operations
For The Period Ended December 31
<TABLE>
<CAPTION>
9 Months 3 Months 3 Months 9 Months
1995 1995 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income:
Timber sales $189,000 $189,000 $544,854 $789,854
Other income (expense) (146,446) (153,446) 0 2,255
------------ ------------ ------------ ------------
Total Income 42,554 35,554 544,854 792,109
------------ ------------ ------------ ------------
Cost of Sales:
Beginning Inventory 630,000 350,630 611,539 490,000
Purchases 163,000 111,000 158,240 379,240
Inventory adjustment 0 0 2,400,000 2,400,000
Field costs 2,500 0 0 38,146
Field travel 0 0 0 0
Sales costs and travel 210 210 11,926 13,319
Commissions 0 0 0 0
Joint venture share 0 0 0 0
Joint venture costs 0 0 0 0
------------ ------------ ------------ ------------
Total accumulated costs 795,710 461,840 3,181,705 3,320,705
Less:Ending inventory (Note C) (637,000) (637,000) (2,910,539) (2,910,539)
------------ ------------ ------------ ------------
Cost of sales 158,710 (175,160) 271,166 410,166
------------ ------------ ------------ ------------
Gross margin (Loss) (116,156) (210,714) 273,688 381,943
------------ ------------ ------------ ------------
Operating Expenses:
General and Administrative 355,740 162,212 196,010 591,494
------------ ------------ ------------ ------------
Total General and Administrative Expenses 355,740 162,112 196,010 591,494
------------ ------------ ------------ ------------
Pre-Tax Operating Profit (Loss) ($471,896) ($372,826) $77,678 ($209,551)
Extra-ordinary loss due to fund raising 0 0 0 (206,250)
------------ ------------ ------------ ------------
Pre-Tax Profit (Loss) ($471,896) ($372,826) $77,678 ($415,801)
============ ============ ============ ============
Earnings (Loss) per Share of Common Stock
and Common Stock Equivalents ($0.014) ($0.011) $0.001 ($0.003)
============ ============ ============ ============
of common stock outstanding 33,311,632 33,311,632 60,978,569 60,978,569
============ ============ ============ ============
</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
<PAGE>
UNAUDITED STATEMENT OF CASH FLOWS
For the Nine Month Period Ended December 31
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES 1995 1996
------------ ------------
<S> <C> <C>
Net (Loss) ($471,896) ($415,801)
Adjustments to Reconcile Net Income to
Net Cash Used in Operating Activities:
(Increase) Decrease in:
Receivables (231,160) (493,505)
Inventory (7,000) (2,420,539)
Purchase of Furniture and Equipment 0 (18,085)
Loans to employees 0 (8,025)
Increase (Decrease) in:
Accounts payable 161,544 (15,479)
Accrued expenses 0 0
Payment of Legal Judgment 0 (80,000)
Common stock to be issue - Peru 423,750
NET CASH PROVIDED BY (USED IN) ------------ ------------
OPERATING ACTIVITIES (124,762) (3,451,434)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
(Increase) Decrease in:
Timber property purchase 12,088,000 (15,000)
Investments 0 (47,656)
Sawmill and related equipment purchase 0 0
Increase (Decrease) in:
0
Long term debt 149,216 (159,000)
Preferred stock (220,000) 10,000
Common stock 212,360 210,145
Paid in capital (12,272,655) 3,425,209
Reserve for possible losses on rescission 150,000 0
------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 106,921 3,423,698
------------ ------------
NET INCREASE (DECREASE) IN CASH (17,841) (27,736)
CASH, at Beginning of Period 19,333 82,607
------------ ------------
CASH, at End of Period $1,492 $54,871
============ ============
</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
<PAGE>
Madera International, Inc.
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<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) 0
Adjustment of Preferred Stock (See Note
O) for conversion of Roman Fernandez 142,787 1,429 (1,429) 0
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, September 30, 1996 57,401,786 574,018 333,333 3,333 34,974,919 (3,872,952) 31,679,318
---------------------------------------------------------------------------------
Entries For Quarter Ending December 31, 1996
Issued for consulting fees 1,173,450 11,735 11,735
Issued for debt conversion 2,000,000 20,000 20,000
Finder's conversion of Preferred stock 393,333 3,933 (333,333) (3,333) 600
Issued for legal fees 10,000 100 2,438,031 2,438,131
Issued to purchase inventory and to
reduce related party debt 1,500,000 15,000 15,000
Operating Profit (Loss) for period 10/1 thru
12/31/96 77,678 77,678
---------------------------------------------------------------------------------
BALANCE, December 31, 1996 60,978,569 $609,786 1,500,000 $15,000 $37,412,950 ($3,795,274) $34,242,462
---------------------------------------------------------------------------------
</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
<PAGE>
Madera International, Inc.
Notes to Financial Statements
December 31, 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.
Note B - RECEIVABLES
Receivables represent advances made on future sales of timber.
Management has determined that the entire amount is fully collectible.
<PAGE>
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.
Increases this quarter amounting to $2.4 Million occurred as a result
of additional purchases of finished lumber from the controlling
shareholder to complete the transition of all assets now at the
operating mill in Brazil.
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 750,000 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.
<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.
<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.
<PAGE>
ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the Nine Months Ended December 31, 1996:
Financial Condition:
The Company's working capital resources during the nine months ended
December 31, 1996 were provided by operations, loans from related parties (See
Notes to Financial Statements), and stock placements. The formal business
activity of lumber shipment and sales continued this quarter with the shipments
in the regular course of business improving to approximately $545,000. This
quarter, the third quarter of the fiscal year, saw a profit for the first time
of $77,000.
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 nine months ended December 31, 1996, the Company's sales
efforts resulted in orders for Mahogany and Spanish Cedar. The Company continued
exporting shipments 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
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
<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: February 11, 1996 /s/ Ramiro Fernandez-Moris
------------------------
Ramiro Fernandez-Moris
(Chairman, President, CEO)
/s/ Regina Fernandez
------------------------
Regina Fernandez, (CFO)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 54,871
<SECURITIES> 0
<RECEIVABLES> 682,505
<ALLOWANCES> 0
<INVENTORY> 2,910,539
<CURRENT-ASSETS> 3,647,915
<PP&E> 31,690,301
<DEPRECIATION> 0
<TOTAL-ASSETS> 35,338,216
<CURRENT-LIABILITIES> 672,005
<BONDS> 423,750
0
15,000
<COMMON> 629,785
<OTHER-SE> 33,597,676
<TOTAL-LIABILITY-AND-EQUITY> 35,338,216
<SALES> 789,854
<TOTAL-REVENUES> 792,109
<CGS> 410,166
<TOTAL-COSTS> 410,166
<OTHER-EXPENSES> 591,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (209,551)
<INCOME-TAX> 0
<INCOME-CONTINUING> (209,551)
<DISCONTINUED> 0
<EXTRAORDINARY> (206,250)
<CHANGES> 0
<NET-INCOME> (415,801)
<EPS-PRIMARY> (0.003)
<EPS-DILUTED> (0.003)
</TABLE>
