UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1 TO FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended JUNE 30, 1996 Commission File Number 000-18389
WORLD WIDE STONE CORPORATION
(Exact Name of Registrant as specified in its Charter)
NEVADA 33-0297934
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5236 S. 40th Street , Phoenix, AZ 85040
(Address of Principal Executive Offices) (Zip Code)
602-438-1001
(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 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 [ ]
As of June 30, 1996, there were 34,415,868 shares of common stock
outstanding.
<PAGE>
EXPLANATORY NOTE REGARDING RESTATEMENT OF FINANCIAL STATEMENTS
In connection with the audit of its financial statements for the year
ended December 31, 1997 World Wide Stone Corporation (the "Company") determined
that the acquisition of certain quarry rights in December of 1995 had not been
properly recorded in its financial statements for the year ended December 31,
1995. In that transaction, the Company issued two million shares of Common Stock
valued at $1,200,000 to a director and officer of one of the Company's Mexican
subsidiaries. The Company originally recorded the value of its shares issued in
connection with this transaction as an asset in its financial statements for the
year ended December 31, 1995. Under Statement of Financial Accounting Standards
("SFAS") No. 13, ACCOUNTING FOR LEASES, only payments related to a lease
acquisition with independent third parties are eligible for capitalization.
Accordingly, the amounts should have been expensed in the fourth quarter of 1995
when the transaction occurred. As a result, the Company has restated its
financial statements for the year ended December 31, 1995 to reflect the proper
application of SFAS No. 13. In addition, the Company has adjusted the financial
statements for the year ended December 31, 1995 to reclassify an understatement
to common stock and "paid in capital" of $15,000. Accordingly, adjustments have
been made to retained earnings, common stock, paid in capital and other assets
at January 1, 1996 to correct these items.
The Company hereby amends and restates certain Items of its Form 10-Q
for the quarter ended June 30, 1996, to reflect the restatement of its financial
statements for the year ended December 31, 1995 as described above. The
information contained in this Form 10-Q/A reflects, where appropriate, changes
required to conform to the restatement of the financial statements.
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<PAGE>
WORLD WIDE STONE CORPORATION AND SUBSIDIARIES
Index to Form 10-Q/A
For the Quarter Ended June 30, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet
June 30, 1996 and December 31, 1995.................................4
Consolidated Statement of Operations (Income)
Three months ended June 30, 1996 and 1995 ..........................6
Consolidated Statement of Operations (Income)
Six months ended June 30, 1996 and 1995 ............................7
Consolidated Statement of Cash Flows
Six months ended June 30, 1996 and 1995 ............................8
Notes to Financial Statements.......................................9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports ..............................................9
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<PAGE>
WORLD WIDE STONE CORPORATION
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
ASSETS
(Unaudited) (Restated)
JUNE 30, 1996 DEC. 31, 1995
------------- -------------
Current assets
Cash $ 135,320 $ 23,569
Accounts receivable 115,789 109,116
Loans receivable - Intercompany 89,201 0
Inventory 398,118 296,495
Loans to employees 205 0
---------- ----------
Total current assets 738,633 429,180
Property, plant, and equipment - Mexico 3,044,560 3,044,560
Mex Marmoles Muguiro - Trade Name\Company Files 273,589 273,589
Machinery & equipment 376,131 266,984
Accumulated depreciation (614,304) (518,304)
---------- ----------
Net property and equipment 3,079,976 3,066,829
Other assets
Prepaid rent 1,995 1,995
Prepaid IVA - Mexico 105,152 52,435
---------- ----------
Total other assets 107,147 54,430
---------- ----------
Total assets $3,925,756 $3,550,439
========== ==========
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<PAGE>
WORLD WIDE STONE CORPORATION
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
LIABILITIES AND EQUITY
(Unaudited) (Restated)
JUNE 30, 1996 DEC. 31, 1995
------------- -------------
Liabilities
Accounts payable $ 163,904 $ 33,094
Accrued pension 4,969 4,969
Payroll taxes 12,707 422
Accrued payroll taxes 24,860 22,627
Accrued interest 16,494 16,230
Other accrued taxes 4,407 0
Shareholder loan 1,828 0
Due to Felipe 2,567 2,567
Loan payable - G&C Partners 30,500 35,000
Due to M. Cunningham 14,949 14,949
Loan payable - truck 6,744 7,610
Loan payable - vehicle 12,336 13,003
Loan payable - forklift 15,162 16,456
Long term debt - Mexico 924,387 817,224
----------- -----------
Total liabilities 1,235,814 984,151
----------- -----------
Equity
Common stock 44,386 34,386
Additional paid in capital 7,853,049 7,853,049
Retained earnings (5,321,147) (4,087,912)
Current period earnings (loss) 113,654 (1,233,235)
----------- -----------
Total equity 2,689,942 2,566,288
----------- -----------
Total liabilities and equity $ 3,925,756 $ 3,550,439
=========== ===========
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<PAGE>
WORLD WIDE STONE CORPORATION
STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
Income
Sales $ 448,859 $ 228,851
Cost of sales 195,180 113,985
--------- ---------
Gross profit 253,679 114,866
Expenses
Salaries and wages 16,247 24,123
Salaries - officers 36,000 0
Casual labor 25 0
Salaries - salesmen 10,600 0
Advertising 1,464 5,085
Promotion 1,367 0
Auto expense 2,795 1,245
Bank charges 702 353
Commissions 850 0
Consulting fees 5,567 0
Data processing (3) 0
Depreciation 48,000 46,632
Dues and subscriptions 2,350 652
Insurance 3,381 1,380
Legal and accounting 2,996 3,862
Licenses and permits 0 362
Office expense 26,967 4,040
Postage 1,236 777
Rent 8,900 3,311
Supplies 3,301 0
Taxes - payroll 6,608 6,515
Telephone 1,853 3,083
Travel 9,134 4,527
Utilities 397 521
Other (income) (222) (3,242)
--------- ---------
Total expenses 190,521 103,226
--------- ---------
Net income $ 63,158 $ 11,640
========= =========
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<PAGE>
WORLD WIDE STONE CORPORATION
STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
Income
Sales $ 899,367 $ 470,710
Cost of sales 420,796 242,728
--------- ---------
Gross profit 478,571 227,982
Expenses
Salaries and wages 32,198 52,105
Salaries - officers 63,000 0
Casual labor 3,647 0
Salaries - salesmen 17,750 0
Advertising 4,070 7,047
Promotion 2,017 0
Auto expense 3,693 3,735
Bank charges 1,346 445
Commissions 2,066 0
Consulting fees 7,173 0
Data processing 590 0
Depreciation 96,000 93,264
Dues and subscriptions 4,443 1,157
Insurance 5,513 4,373
Legal and accounting 20,770 7,845
Licenses and permits 420 472
Office expense 40,031 19,238
Postage 1,950 1,631
Rent 18,827 8,314
Supplies 8,516 828
Taxes - payroll 12,129 13,760
Telephone 5,332 5,242
Travel 12,471 10,234
Utilities 1,100 1,090
Other expense (income) (135) (3,390)
--------- ---------
Total expenses 364,917 227,390
--------- ---------
Net income $ 113,654 $ 592
========= =========
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<PAGE>
WORLD WIDE STONE CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 113,654 $ 592
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 96,000 93,264
(Increase) decrease in:
Loans to employees (205) 0
Accounts receivable (6,673) (33,000)
Inventories (101,623) 52,130
Prepaid expenses - IVA (52,717) (2,497)
Intercompany receivable - Mexico (89,201) 0
Deposits 0 (1,563)
Investments - Mexico 0 11,985
Increase (decrease) in:
Accounts payable 130,810 87,100
Accrued liabilities 19,189 (71,247)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 109,234 136,764
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (109,147) 0
--------- ---------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (109,147) 0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
New borrowing:
Long-term (net) 107,163 27,351
Short-term (net) (7,327) 15,074
Stockholder loans 1,828 (38,003)
Purchase of common stock 10,000 0
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 111,664 4,422
--------- ---------
NET INCREASE IN CASH 111,751 141,186
CASH AT BEGINNING OF YEAR 23,569 29,183
CASH AT JUNE 30 $ 135,320 $ 170,369
========= =========
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<PAGE>
WORLD WIDE STONE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1) GENERAL
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The financial statements reflect all
adjustments (consisting of normal recurring accruals) which are, in the opinion
of management, necessary to fairly present such information. Although the
Company believes that the disclosures are adequate to make the information
presented not misleading, certain information and footnote disclosures,
including significant accounting policies, normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS
(a) Exhibit 27.1: Amended and Restated Financial Data Schedule
(b) Reports on Form 8-K: Not Applicable
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto authorized.
Date: November 2, 1998 World Wide Stone Corporation
(Registrant)
BY:/s/ Franklin Cunningham
-------------------------------
Franklin Cunningham, President
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
[LEGEND]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF WORLD WIDE STONE CORPORATION (THE
"COMPANY") FOR THE SIX MONTHS ENDED JUNE 30, 1996, AS RESTATED. THIS SCHEDULE IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH RESTATED FINANCIAL STATEMENTS. IN
ADDITION, CERTAIN ENTRIES ON THIS SCHEDULE HAVE BEEN AMENDED FROM THE PREVIOUS
FINANCIAL DATA SCHEDULE FILED FOR THIS PERIOD. THIS EXHIBIT SHALL NOT BE DEEMED
FILED FOR THE PURPOSE OF SECTION 11 OF THE SECURITIES ACT OF 1933 AND SECTION 18
OF THE SECURITIES EXCHANGE ACT OF 1934, OR OTHERWISE SUBJECT TO THE LIABILITY OF
SUCH SECTIONS, NOR SHALL IT BE DEEMED A PART OF ANY OTHER FILING WHICH
INCORPORATES THIS REPORT BY REFERENCE, UNLESS SUCH OTHER FILING EXPRESSLY
INCORPORATES THIS EXHIBIT BY REFERENCE.
[/LEGEND]
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 135,320
<SECURITIES> 0
<RECEIVABLES> 115,789
<ALLOWANCES> 0
<INVENTORY> 398,118
<CURRENT-ASSETS> 738,633
<PP&E> 3,694,280
<DEPRECIATION> (614,304)
<TOTAL-ASSETS> 3,925,756
<CURRENT-LIABILITIES> 311,427
<BONDS> 924,387
0
0
<COMMON> 44,386
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<CGS> 420,796
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