FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ 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 0-17345
W-J International, Ltd.
(Exact name of small business issuer as specified in its charter)
Delaware 41-1578316
(State of other jurisdiction of (I.R.S. Employer
organization) Identification No.)
23 Washburne Avenue
Paynesville, Minnesota 56362
(Address of principal executive offices)
612-243-3311
(Registrant's telephone number, including area code)
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
At August 14, 1996 12,214,632 shares of registrant's common stock (par value,
$.01) were outstanding.
Transitional Small Business Disclosure Format (check one) Yes No X
<PAGE>
W-J International, Ltd.
QUARTERLY REPORT ON FORM 10-QSB
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of June 30, 1996 (Unaudited)
and September 30, 1995 3
Condensed Income Statements (Unaudited)
Three and Nine-Months ended June 30, 1996 and June 30, 1995 4
Condensed Statements of Cash Flows (Unaudited)
Three and Nine-Months ended June 30, 1996 and June 30, 1995 5
Notes to Condensed Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 4. Submission of matters to a Vote of Security Holders 7
Item 6. Exhibits and Reports on Form 8-K. 7
SIGNATURES 8
<PAGE>
W-J International, Ltd.
Balance Sheet
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
(Unaudited) (Audited)
---------- ----------------
A S S E T S
<S> <C> <C>
Current Assets:
Cash $290,350 $338,358
---------- -----------
Total current assets 290,350 338,358
---------- -----------
Property and equipment:
Land 30,648 30,648
Buildings 374,266 374,266
---------- -----------
404,914 404,914
Less: accumulated depreciation (97,531) (86,137)
---------- -----------
Net property and equipment 307,383 318,777
---------- -----------
Total Assets $597,733 $657,135
========== ===========
L I A B I L I T I E S A N D E Q U I T Y
Current liabilities:
Current portion of long-term debt $130,000 $172,862
Operations borrowing 2,624 2,624
Accounts payable - Trade 0 0
Accrued expenses 90 85,248
Due to related parties 27,324 53,941
Notes payable - related parties 12,301 20,264
---------- -----------
Total current liabilities 172,339 334,939
---------- -----------
Long-term debt, net of current portion 73,483 96,045
---------- -----------
Stockholders equity:
Common stock, $.01 par value; 20,000,000
shares authorized, 12,214,632
shares issued and outstanding 122,146 122,146
Additional paid-in capital 2,274,840 2,274,840
Accumulated deficit 2,045,075) (2,170,835)
---------- -----------
Total stockholders equity 351,911 226,151
---------- -----------
Total liabilities and stockholders equity $597,733 $657,135
========== ===========
</TABLE>
See notes to financial statements
3
<PAGE>
W-J International, Ltd.
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Rental Income: $28,200 $26,489 $69,178 $55,637
Gain on extinguishment of debt $97,473 $0 $97,473 $0
------------ ----------- ------------ ------------
Total Income $125,673 $26,489 $166,651 $55,637
Expenses:
General & Administrative 10,483 9,643 14,607 70,716
Interest (274) 9,062 4,624 16,412
------------ ----------- ------------ ------------
10,209 18,705 19,231 87,128
------------ ----------- ------------ ------------
Income (loss) from continuing operations
before discountinued operations and
extraordinary items 115,464 7,784 147,420 (31,491)
Discontinued Operations:
Discontinued Operations 4,109 0 21,660 0
Extraordinary item 0 0 0 100,000
Gain on extinguishment of debt 0 18,540 0 74,696
------------ ----------- ------------ ------------
Income (Loss) from discontinued operations
and extraordinary item (4,109) 18,540 (21,660) 174,696
Net Income (loss) 111,355 26,324 125,760 143,205
============ =========== ============ ============
Weighted average common shares outstanding 12,214,632 12,214,632 12,214,632 12,214,632
============ =========== ============ ============
during period
Net (loss) per share $0.01 $0.00 $0.01 $0.01
============ =========== ============ ============
</TABLE>
See notes to financial statements
4
<PAGE>
W-J International, Ltd.
Statement of Cash Flows
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
CASH FLOWS FROM OPERATING ACTIVITIES 1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------- ----------------------
<S> <C> <C> <C> <C>
Net (Loss) $111,355 $26,324 $125,760 $143,205
Adjustments to reconcile net (loss) to net cash
flows from operating activities:
Depreciation 3,798 3,798 11,394 11,394
Changes in:
Accounts receivables - Trade 0 0 0 0
Accounts receivables - Related parties 0 0 0 0
Prepaid expenses 0 0 0 0
Accounts payables - Trade 0 (18,540) 0 (18,540)
Accounts payables - Related parties (2,655) (33,650) (34,581) (33,650)
Accrued expenses (142,472) 30,293 (134,155) 7,616
---------- ---------- --------- ---------
Net cash flows from operating activities (29,974) 8,225 (31,582) 110,025
---------- ---------- --------- ---------
Cash flows from investing activities:
Purchase of property and equipment 0 0 0 0
Net cash flows from investing activities 0 0 0 0
---------- ---------- --------- ---------
Cash flows from financing activities:
Gain on extinguishment of debt 0 0 0
Principal payments on long-term debt (6,000) (3,770) (16,426) (146,720)
---------- ---------- --------- ---------
Net cash flows from financing activities (6,000) (3,770) (16,426) (146,720)
---------- ---------- --------- ---------
Net increase (decrease) in cash (35,974) 4,455 (48,008) (36,695)
Cash, beginning of period 326,324 317,159 338,358 358,309
---------- ---------- --------- ---------
Cash, end of period $290,350 $321,614 $290,350 $321,614
========== ========== ========= =========
</TABLE>
See notes to financial statements
5
<PAGE>
W-J International, Ltd.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The condensed balance sheet as of June 30, 1996 (Unaudited) and
September 30, 1995 (Audited) and the related statement of operations
and cash for for the three and nine-month periods ended June 30, 1996
(Unaudited) are enclosed. In the opinion of management, all
adjustments necessary for a fair presentation of such financial
statements have been included.
The Financial statements and notes are presented as permitted by Form
10-QSB and contain certain information included in the Company's
annual financial statements and notes of W-J International, Ltd., a
Delaware Corporation ("WJ" or the "Company").
Note 2. INVENTORIES
Inventories consist of the following:
June 30, September 30,
1996 1995
-------- ---------
Parts and Components $ 0 $ 0
Finished Units 0 0
-------- ---------
======== =========
Total $ 0 $ 0
======== =========
Note 3. STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
(Audited) Equity Changes (Unaudited)
September 30, Due to Operation June 30,
1995 1996
<S> <C> <C> <C>
Number of Shares 12,214,632 0 12,214,632
Common Stock 122,146 0 122,146
Additional Paid-In Capital 2,274,840 0 2,274,840
Retained Earnings
(Accumulated Deficit) (2,170,835) 125,760 (2,045,075)
Total 226,151 125,760 351,911
</TABLE>
6
<PAGE>
Item 2 - Management's discussion and Analysis of Results of Operations and
Financial Condition.
RESULTS OF OPERATIONS
Rental Income for the nine-month period ended June 30, 1996 increased
24% to $69,178 from $55,637 for the nine-month period June 30, 1995. Rental
Income for the three-month period ended June 30, 1996 increased 6% to $28,200
from $26,489 for the three-month period ended June 30, 1995. The increase in
rent for the three-month and nine-month periods ending June 30, 1996 as compared
to the three-month and nine-month periods ending June 30, 1995 was primarily due
to the tenant renting additional square footage.
Expenses for the nine-month period ended June 30, 1996 decreased 79% to
$14,607 from $70,716 for the nine-month period June 30, 1995. Expenses for the
three-month period ended June 30, 1996 increased 9% to $10,483 from $9,643 for
the three-month period ended June 30, 1995. The increase in expenses for the
three-month period ending June 30, 1996 as compared to the three-month ending
June 30, 1995 was primarily related to increased costs related to building
maintenance. The decrease in expenses for the nine-month period ended June 30,
1996 as compared to the nine-month period ending June 30, 1995 was primarily
related to limited operations.
Discountinued Operation expenses for the nine-month period ended June
30, 1996 was $21,660 while expenses for the three month period ended June 30,
1996 was $4,109.
Net Income for the nine-month period ended June 30, 1996 decreased 12%
to $125,760 from $143,205 for the nine-month period June 30, 1995. Net Income
for the three-month period ended June 30, 1996 increased 323% to $111,355 from
$26,324 for the three-month period ended June 30, 1995. The increase in Net
Income for the three-month period ending June 30, 1996 as compared to the
three-month period ending June 30, 1995 is primarily related to the gain of the
extinguishment of debt of the WetWorks Note Payable and accompanying interest.
The Company satisfied a $247,473 debt to WetWorks (including principal and
accrued interest) by making a payment of $150,000, thereby resulting in a gain
of $97,473 in the quarter ended June 30, 1996. The decrease in Net Income for
the nine-month period ending June 30, 1996 as compared to the nine-month period
ending June 30, 1995 is primarily related to extraordinary items.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased to $118,011 for the nine-months
ended June 30, 1996 from $3,419 for the year ended September 30, 1995. This
increase is primarily related to the gain recorded upon settlement of the debt
to WetWorks.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the
quarter ended March 31, 1996.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following exhibit is included with this report:
Exhibit 27 - Financial Data Schedule (filed only with electronic
version)
(b) Reports on Form 8-K.
No report on Form 8-K was filed during the three-month period ended
June 30, 1996.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Issuer
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
W-J International, Ltd.
("Small Business Issuer")
By \s\ Edward H. Webb
Edward H. Webb, President
(principal executive officer and
principal financial and accounting
officer)
Date: August 14, 1996
8
<PAGE>
W-J International, Ltd.
Form 10-QSB Quarterly Report
For the Quarter Ended June 30, 1996
EXHIBIT INDEX
Exhibit
Number Item
27 Financial Data Schedule (included in electronic version only)
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 290,350
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 290,350
<PP&E> 404,914
<DEPRECIATION> 97,531
<TOTAL-ASSETS> 597,733
<CURRENT-LIABILITIES> 172,339
<BONDS> 0
0
0
<COMMON> 122,146
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 597,733
<SALES> 0
<TOTAL-REVENUES> 28,200
<CGS> 0
<TOTAL-COSTS> 10,483
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 274
<INCOME-PRETAX> 115,464
<INCOME-TAX> 0
<INCOME-CONTINUING> 115,464
<DISCONTINUED> 4,109
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,355
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
