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 30-Jun-98
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.
(Formerly Wetjet 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 July 17, 1998 12,214,632 shares of registrant's common stock (par value,
$.01) were outstanding.
Transitional Small Business Disclosure Format: Yes No X
<PAGE>
W-J International, Ltd.
QUARTERLY REPORT ON FORM 10-QSB
INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of June 30, 1998 (Unaudited)
and September 30, 1997
Condensed Income Statements (Unaudited)
Three and Nine-Months ended June 30, 1998 and June 30, 1997
Condensed Statements of Cash Flows (Unaudited)
Three and Nine-Months ended June 30, 1998 and June 30, 1997
Notes to Condensed Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis
or Plan of Operation
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
W-J International, Ltd.
Balance Sheet
<TABLE>
<CAPTION>
June 30, September 30,
1998 1997
----------- -----------
(Unaudited) (Audited)
A S S E T S
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 156,917 $ 188,593
Liabilities with debit balance 10,350 0
----------- -----------
Total current assets 167,267 188,593
----------- -----------
Property and equipment:
Land 30,648 30,648
Buildings 374,266 374,266
----------- -----------
404,914 404,914
Less: accumulated depreciation (122,049) (110,655)
----------- -----------
Net property and equipment 282,865 294,259
----------- -----------
Total Assets $ 450,132 $ 482,852
=========== ===========
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 $ 23,782 $ 23,782
Accrued expenses 0 396
Due to related parties 0 0
Notes payable - related parties 0 0
----------- -----------
Total current liabilities 23,782 24,178
----------- -----------
Long-term debt, net of current portion 44,339 56,200
----------- -----------
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 (2,014,974) (1,994,512)
----------- -----------
Total stockholders equity 382,012 402,474
----------- -----------
Total liabilities and stockholders equity $ 450,132 $ 482,852
=========== ===========
</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,
1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Rental Income: $ 3,000 $ 3,000 $ 9,000 $ 59,400
Gain on extinguishment of debt $ 0 $ 0 $ 0 $ 0
------------ ------------ ------------ ------------
Total Income $ 3,000 $ 3,000 $ 9,000 $ 59,400
Expenses:
General & Administrative 4,773 9,692 26,055 23,362
Interest 2,073 3,018 (2,081) 6,469
------------ ------------ ------------ ------------
6,846 12,710 23,974 29,831
------------ ------------ ------------ ------------
Income (loss) from continuing operations
before discountinued operations and
extraordinary items (3,846) (9,710) (14,974) 29,569
Discontinued Operations:
Discontinued Operations (60) (2,616) (5,488) (11,972)
Income (Loss) from discontinued operations and
extraordinary item (60) (2,616) (5,488) (11,972)
Net Income (loss) (3,906) (12,325) (20,462) 17,597
============ ============ ============ ============
Weighted average common shares outstanding
during period 12,214,632 12,214,632 12,214,632 12,214,632
============ ============ ============ ============
Net (loss) per share ($ 0.00) ($ 0.00) ($ 0.00) $ 0.00
============ ============ ============ ============
</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 1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------------------- -----------------------
<S> <C> <C> <C> <C>
Net (Loss) ($ 3,906) ($ 12,325) ($ 20,462) $ 17,597
Adjustments to reconcile net (loss) to net cash
flows from operating activities:
Depreciation 3,798 3,798 11,394 11,394
Changes in:
Accounts receivable - Trade (2,025) (2,407) (3,400) (2,407)
Notes payable - Trade 0 0 0 25,316
Notes payable - Related parties 0 0 0 (39,593)
Accrued expenses (4,472) 0 (398) (27,323)
--------- --------- --------- ---------
Net cash flows from operating activities (6,605) (10,934) (12,866) (15,016)
--------- --------- --------- ---------
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 0
Principal payments on long-term debt (2,699) (4,050) (11,860) (12,151)
--------- --------- --------- ---------
Net cash flows from financing activities (2,699) (4,050) (11,860) (12,151)
--------- --------- --------- ---------
Net decrease in cash (9,304) (14,984) (24,726) (27,167)
Cash, beginning of period 166,221 197,658 181,643 209,841
--------- --------- --------- ---------
Cash, end of period $ 156,917 $ 182,674 $ 156,917 $ 182,674
========= ========= ========= =========
</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, 1998 (Unaudited) and
September 30, 1997 (Audited) and the related statement of operations
and cash for for the three and nine-month periods ended June 30, 1998
(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,
1998 1997
---------- -----------
Parts and $ 0 $ 0
Components
Finished Units 0 0
---------- -----------
========== ===========
Total $ 0 $ 0
========== ===========
Note 3. STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
(Audited) Equity Changes (Unaudited)
September 30, Due to Operation June 30,
1997 1998
<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 (1,994,512) (20,462) (2,014,974)
Deficit)
Total 402,474 (20,462) 382,012
</TABLE>
6
<PAGE>
Item 2 - Management's Discussion and Analysis or Plan of Operation
RESULTS OF OPERATIONS
Rental Income for the nine-month period ended June 30, 1998
decreased 85% to $9,000 from $59,400 for the nine-month period June 30,
1997. Rental Income for the three-month period ended June 30, 1998 of
$3,000 was equal to the rental income for the three-month period ended
June 30, 1997. The decrease in rent for the nine-month period ending
June 30, 1998 as compared to the nine-month period ending June 30, 1997
was primarily due to the fact that the one-year lease agreement that
the Company had with one of its lessees was not extended beyond its
March 31, 1997 termination date. The Company has not yet replaced this
renter, and rental income is the Company's only source of income.
Expenses for the nine-month period ended June 30, 1998
decreased 20% to $23,974 from $29,831 for the nine-month period June
30, 1997. Expenses for the three-month period ended June 30, 1998
decreased 46% to $6,846 from $12,710 for the three-month period ended
June 30, 1997.
Discountinued Operation expenses for the nine-month period
ended June 30, 1998 were $5,488 while expenses for the nine-month
period ended June 30, 1997 totalled $11,972. Discountinued Operation
expenses for the three-month period ended June 30, 1998 was $60 while
expenses for the three-month period ended June 30, 1997 was $2,616.
Net Income for the nine-month period ended June 30, 1998
decreased 216% to a $(20,462) from $17,597 for the nine-month period
June 30, 1997. Net Income for the three-month period ended June 30,
1998 increased 68% to $(3,906) from $(12,325) for the three-month
period ended June 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES AND PLAN OF OPERATION
The Company's working capital decreased to $143,485 on June
30, 1998 from $164,415 on September 30, 1997. The Company intends to
continue to seek and evaluate alternatives in order to begin operations
again and to improve the Company's financial condition, including
merger and acquisition opportunities. In the interim, the Company will
seek a renter or purchaser for its building. Because the Company will
not restart operations of any type until a business opportunity arises
for such, it does not anticipate raising additional funds and believes
is has sufficient means to meet its capital requirements for the
remainder of fiscal year 1998.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form
8-K.
(a) Exhibits
No exhibits are required to be filed for the three-month
period ended June 30, 1998. Exhibit 27 (Financial Data
Schedule) has been included in the electronic version only.
(b) Reports on Form 8-K.
No report on Form 8-K was filed during the three-month
period ended June 30, 1998.
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
Date: July 28, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 156,917
<SECURITIES> 0
<RECEIVABLES> 10,350
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 167,267
<PP&E> 404,914
<DEPRECIATION> (122,049)
<TOTAL-ASSETS> 450,132
<CURRENT-LIABILITIES> 23,782
<BONDS> 0
0
0
<COMMON> 122,146
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 450,132
<SALES> 0
<TOTAL-REVENUES> 3,000
<CGS> 0
<TOTAL-COSTS> 6,846
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,073
<INCOME-PRETAX> (3,846)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,846)
<DISCONTINUED> (60)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,906)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
