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 SEPTEMBER 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 September 30, 1996, there were 34,818,868 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 September 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 September 30, 1996
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet
September 30, 1996 and December 31, 1995..............................4
Consolidated Statement of Operations (Income)
Three months ended September 30, 1996 and 1995........................6
Consolidated Statement of Operations (Income)
Nine months ended September 30, 1996 and 1995.........................7
Consolidated Statement of Cash Flows
Nine months ended September 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
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
ASSETS
(Unaudited) (Restated)
SEPT. 30, 1996 DEC. 31, 1995
-------------- -------------
Current assets
Cash $ 166,958 23,569
Accounts receivable 192,859 109,116
Loans receivable - Intercompany 99,597 0
Inventory 415,566 296,495
Loans to employees 710 0
---------- ----------
Total current assets 875,690 429,180
Property, plant, and equipment - Mexico 3,044,560 3,044,560
Mex Marmoles Muguiro - Trade Name\Company Files 273,589 273,589
Machinery & equipment 515,810 266,984
Accumulated depreciation (672,304) (518,304)
---------- ----------
Net property and equipment 3,161,655 3,066,829
Other assets
Prepaid rent 11,054 1,995
Prepaid IVA - Mexico 151,287 52,435
---------- ----------
Total other assets 162,341 54,430
---------- ----------
Total assets $4,199,686 $3,550,439
========== ==========
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<PAGE>
WORLD WIDE STONE CORPORATION
BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
LIABILITIES AND EQUITY
(Unaudited) (Restated)
SEPT. 30, 1996 DEC. 31, 1995
-------------- -------------
Liabilities
Accounts payable $ 216,762 $ 33,094
Accrued pension 4,969 4,969
Payroll taxes 6,008 422
Accrued payroll taxes 15,299 22,627
Accrued interest 16,569 16,230
Other accrued taxes 9,258 0
Due to Felipe 2,567 2,567
Loan payable - G&C Partners 30,000 35,000
Due to M. Cunningham 9,949 14,949
Loan payable - truck 5,011 7,610
Loan payable - vehicle 10,333 13,003
Loan payable - forklifts 36,664 16,456
Long term debt - Mexico 988,387 817,224
----------- -----------
Total liabilities 1,351,776 984,151
----------- -----------
Equity
Common stock 76,191 34,386
Additional paid in capital 7,863,049 7,853,049
Retained earnings (5,321,147) (4,087,912)
Current period earnings (loss) 229,817 (1,233,235)
----------- -----------
Total equity 2,847,910 2,566,288
----------- -----------
Total liabilities and equity $ 4,199,686 $ 3,550,439
=========== ===========
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<PAGE>
WORLD WIDE STONE CORPORATION
STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
SEPT. 30, 1996 SEPT. 30, 1995
-------------- --------------
Income
Sales $600,993 $ 231,015
Cost of sales 267,841 130,737
-------- ---------
Gross profit 333,152 100,278
Expenses
Salaries and wages 20,618 30,703
Salaries - officers 18,000 0
Casual labor 221 0
Salaries - salesmen 13,310 0
Advertising 7,638 8,022
Promotion 19 0
Auto expense 361 2,310
Bank charge 2,032 189
Commission 9,255 0
Consulting fees 9,514 0
Data processin 0 0
Depreciation 58,000 46,632
Dues and subscriptions 645 103
Insurance 6,389 1,725
Legal and accounting 4,705 4,124
Licenses and permits 1,089 205
Office expense 21,264 11,094
Postage 1,255 1,462
Rent 8,610 4,679
Supplie 10,739 10,139
Taxes - payroll 5,266 3,109
Telephone 4,589 2,808
Travel 12,769 7,249
Utilities 693 590
Other expense 8 0
-------- ---------
Total expenses 216,989 135,143
-------- ---------
Net income (loss) $116,163 $ (34,865)
======== =========
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<PAGE>
WORLD WIDE STONE CORPORATION
STATEMENTS OF INCOME
Nine months ended September 30, 1996 and 1995
(Unaudited)
SEPT. 30, 1996 SEPT. 30, 1995
-------------- --------------
Income
Sales $1,500,360 $687,784
Cost of sales 688,637 373,465
---------- --------
Gross Profit 811,723 314,319
---------- --------
Expenses
Salaries and wages 52,816 82,808
Salaries - officers 81,000 0
Casual labor 3,868 0
Salaries - salesmen 31,060 0
Advertisin 11,708 15,069
Promotion 2,036 0
Auto Expens 4,054 6,045
Bank Charge 3,378 634
Commissions 11,321 0
Consulting Fees 16,687 0
Data Processing 590 0
Depreciation 154,000 139,896
Dues and subscriptions 5,088 1,260
Insurance 11,902 6,098
Legal and accounting 25,475 11,969
Licenses and permits 1,509 677
Office expense 61,295 26,024
Postage 3,205 3,093
Rent 27,437 12,993
Supplies 19,255 11,102
Taxes - payroll 17,395 17,652
Telephone 9,921 8,050
Travel 25,240 17,483
Utilities 1,793 1,680
Other expense (income) (127) (13,941)
---------- --------
Total expenses 581,906 348,592
---------- --------
Net income (loss) $ 229,817 $(34,273)
========== ========
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<PAGE>
WORLD WIDE STONE CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
SEPT. 30, 1996 SEPT. 30, 1995
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 229,817 $ (34,273)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 154,000 139,896
(Increase) decrease in:
Loans to employees (710) (26,343)
Accounts receivable (83,743) (38,643)
Inventories (119,071) 7,493
Prepaid expenses - IVA (98,852) (184,579)
Intercompany receivable - Mexico (99,597) 0
Deposits (9,059) (1,563)
Increase (decrease) in:
Accounts payable 183,668 (36,567)
Accrued liabilities 7,855 39,021
--------- ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 164,308 135,558
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (248,826) 0
--------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (248,826) 0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
New borrowing:
Long-term (net) 171,163 273,805
Short-term (net) 4,939 11,810
Stockholder loans 0 (25,782)
Purchase (sale) of common stock 41,805 (2,500)
Additional paid in capital 10,000 0
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 227,907 257,333
--------- ---------
NET INCREASE IN CASH 143,389 121,775
CASH AT BEGINNING OF YEAR 23,569 29,183
CASH AT SEPT. 30 $ 166,958 $ 150,958
========= =========
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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. It is suggested that
these financial statements be read in conjunction with the consolidated
financial statements, included in the Company's annual report on Form 10-K/A
filed for the year ended December 31, 1995.
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 NINE MONTHS ENDED SEPTEMBER 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]
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
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<RECEIVABLES> 192,859
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<DEPRECIATION> 672,304
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0
0
<COMMON> 76,191
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