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, 1999
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)
320-243-3311
(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 29, 1999 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, 1999 (Unaudited)
and September 30, 1998 (Audited)
Condensed Income Statements (Unaudited) for the Three and Nine Months
ended June 30, 1999 and June 30, 1998
Condensed Statements of Cash Flows (Unaudited) for the Three and Nine
Months ended June 30, 1999 and June 30, 1998
Notes to Condensed Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
W-J International, Ltd.
Balance Sheet
<TABLE>
<CAPTION>
June 30, September 30,
1999 1998
(Unaudited) (Audited)
----------------------- -----------------------
<S> <C> <C>
A S S E T S
Current Assets:
Cash / Cash Equivalents $147,425 $146,110
Accounts Receivable 18,450 12,375
----------------------- -----------------------
Total current assets 165,875 158,485
----------------------- -----------------------
Property and equipment:
Land 20,648 20,648
Buildings 284,266 284,266
----------------------- -----------------------
304,914 304,914
Less: accumulated depreciation (134,122) (122,728)
----------------------- -----------------------
Net property and equipment 170,792 182,186
======================= =======================
Total Assets $336,667 $340,671
======================= =======================
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 $64,770 $24,311
Accrued liabilities 0 0
----------------------- -----------------------
Total current liabilities 64,770 24,311
----------------------- -----------------------
Long-term debt, net of current portion 16,625 33,905
----------------------- -----------------------
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 (2,141,714) (2,114,531)
----------------------- -----------------------
Total stockholders equity 255,272 282,455
----------------------- -----------------------
Total liabilities and stockholders equity $336,667 $340,671
======================= =======================
</TABLE>
See notes to financial statements
<PAGE>
W-J International, Ltd.
Statement of Operations
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Rental Income: $3,000 $3,000 $9,000 $9,000
Expenses:
General & Administrative 4,773 4,773 19,305 26,055
Interest 1,199 2,073 45 (2,081)
----------------- ----------------- ------------------- -----------------
(5,972) (6,846) 19,350 23,974
----------------- ----------------- ------------------- -----------------
Income (loss) from continuing
operations before discontinued
operations (2,972) (3,846) (10,350) (14,974)
Discontinued Operations: Loss
from discontinued operations 5,656 60 (16,834) (5,488)
Net Income (loss) (8,628) (3,906) (27,184) (20,462)
================= ================= =================== =================
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) ($0.00)
================= ================= =================== =================
</TABLE>
See notes to financial statements
<PAGE>
W-J International, Ltd.
Statement of Cash Flows
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------------- --------------- ------------------ ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net (Loss) ($ 8,627) ($ 3,906) ($ 27,183) ($ 20,462)
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 (3,400)
Accounts receivables - Related parties (2,025) (2,025) (6,075) 0
Prepaid expenses 0 0 0 0
Notes payables - Trade 0 0 0 0
Notes payables - Related parties 0 0 5,035 0
Accrued expenses 0 (4,472) 0 (398)
---------------- --------------- ------------------ ----------------
Net cash flows from operating activities (6,854) (6,605) (16,829) (12,866)
---------------- --------------- ------------------ ----------------
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:
Acquisition of long-term debt 12,887 -- 39,084 --
Gain on extinguishment of debt 0 0 0 0
Principal payments on long-term debt (4,080) (2,699) (20,941) (11,860)
---------------- --------------- ------------------ ----------------
Net cash flows from financing activities 8,807 (2,699) (18,143) (11,860)
---------------- --------------- ------------------ ----------------
Net increase (decrease) in cash 1,953 (9,304) 1,314 (24,726)
Cash, beginning of period 145,472 166,221 146,110 181,643
---------------- --------------- ------------------ ----------------
Cash, end of period $ 147,425 $ 156,917 $ 147,425 $ 156,917
================ =============== ================== ================
</TABLE>
See notes to financial statements
<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, 1999 (Unaudited) and September 30,
1998 (Audited) and the related statement of operations and cash flows for the
three and nine month periods ended June 30, 1999 (Unaudited) are enclosed. In
the opinion of management, all adjustments necessary for a fair presentation of
such financial statements have been included. Such adjustments consisted only of
normal recurring items.
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 ("W-J"
or the "Company").
Note 2. INVENTORIES
Inventories consist of the following:
June 30, September 30,
1999 1998
Parts and Components $ 0 $ 0
Finished Units 0 0
---------- ----------
========== ==========
Total $ 0 $ 0
========== ==========
Note 3. STOCKHOLDERS' EQUITY
(Audited) Equity Changes (Unaudited)
September 30, Due to Operation June 30,
1998 1999
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 (2,114,531) (27,183) (2,141,714)
(Accumulated Deficit)
Total 282,455 (27,183) 255,272
<PAGE>
Item 2 - Management's Discussion and Analysis or Plan of Operation
PLAN OF OPERATION
The Company's current operations consist primarily of renting land and a
building to a related party under a month-to-month lease. The Company has no
current plans to begin operations again, and has no research and development
initiatives underway. It does, however, continue to evaluate alternatives in
order to improve the Company's financial condition, including merger and
acquisition opportunities.
RESULTS OF OPERATIONS
Rental Income for the third three-month period of fiscal year 1999, which ended
on June 30, 1999, remained the same as compared to the three-month period ended
June 30, 1998.
Expenses for the three-month period ended June 30, 1999 decreased to $5,972 from
$6,846 for the three-month period ended June 30, 1998. The decrease was due to
lesser professional fees in 1999.
Discontinued Operations expenses for the three-month period ended June 30, 1999
were $5,656 compared to $60 for the three-month period ended June 30, 1998.
This increase was due to property taxes of $4,326 and legal fees of $1,267.
Net loss for the three-month period ended June 30, 1999 increased 121% to a
deficit of $8,628 from a deficit of $3,906 for the three-month period ended June
30, 1998. This substantial increase in the Company's net loss resulted from real
estate taxes paid in the second calendar quarter of this year as compared to the
first calendar quarter last year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital decreased to $101,105 at June 30, 1999 from
$134,174 at September 30, 1998. Since the Company has no operations or plans for
such, and because its administrative expenses are minimal, it believes it has
sufficient capital to fund its needs as it evaluates any options for future
business opportunities.
To meet existing operating expenses, the Company, as needed, secures short term
loans using specific CDs as collateral. By doing so the Company maximizes its
ability to generate income as it has no other means of revenue.
The Company also provided collateral in the form of CDs in order to secure a
loan obtained by Ed Webb, a principle shareholder. The Company does not believe
this will have a material effect on the Company's liquidity.
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
June 30, 1999.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 Financial Data Schedule (filed in electronic format only)
(b) Reports on Form 8-K.
No report on Form 8-K was filed during the three-month period ended
June 30, 1998.
<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: August 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 147,425
<SECURITIES> 0
<RECEIVABLES> 18,450
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 165,875
<PP&E> 304,914
<DEPRECIATION> 134,122
<TOTAL-ASSETS> 336,367
<CURRENT-LIABILITIES> 64,770
<BONDS> 0
0
0
<COMMON> 122,146
<OTHER-SE> 133,126
<TOTAL-LIABILITY-AND-EQUITY> 336,667
<SALES> 0
<TOTAL-REVENUES> 3,000
<CGS> 0
<TOTAL-COSTS> 19,305
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45
<INCOME-PRETAX> (10,350)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,350)
<DISCONTINUED> (16,834)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,184)
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
