SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File No. 017833
GREENLAND CORPORATION
Nevada 87-0439051
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7084 Miramar Road
San Diego, CA 92121
(Address and zip code of principal executive offices
(619) 566-9604
(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.
[X] YES [ ] NO
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class A Common Stock 23,667,091 Shares Outstanding
$0.001 par value as of April 22, 1997
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
REPORT ON FORM 10-QSB
QUARTER ENDED MARCH 31, 1997
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1997 AND
DECEMBER 31, 1996
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS
ENDED MARCH 31, 1997 AND 1996
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY AS OF MARCH 31, 1997
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AS OF MARCH 31,
1997 AND 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PART II. OTHER INFORMATION SIGNATURES
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
QUARTER ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Mar. 31, 1997 Dec. 31, 1996
---------------- ----------------
ASSETS (unaudited) (audited)
Current assets:
<S> <C> <C>
Cash in bank $ 23,778 $ 6,909
Escrow accounts 9,188 7,518
Accounts receivable, officers 148,448 130,398
---------------- ----------------
Total current assets 181,414 144,825
Rental properties, net of depreciation 5,006,656 5,054,875
Other assets
Land option 2,515,000 2,515,000
Investments 152,893 152,893
Capitalized software 186,723 186,723
---------------- ----------------
Total assets $ 8,042,686 $ 8,054,316
================ ================
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 90,679 $ 74,550
Tenant deposits 20,814 20,814
Payroll taxes payable 11,445 43,141
Property taxes payable 83,782 83,782
Accrued salaries 49,800 49,800
Accrued interest payable 24,140 24,139
Note payable 5,000 5,000
Current portion of long-term debt 364,683 364,100
---------------- ----------------
Total current liabilities 650,343 665,326
Contingent liabilities - -
Payable to stockholders 120,790 140,790
Long-term debt 3,471,974 3,481,202
---------------- ----------------
Total liabilities 4,243,107 4,287,318
STOCKHOLDERS' EQUITY
Common stock
$0.001 par value: 50,000,000 authorized; 18,195,108 shares
issued and outstanding (15,214,460 at 12/31/96) 18,195 15,214
Additional paid-in capital 6,163,105 5,595,049
Retained deficit (2,381,721) (1,843,265)
---------------- ----------------
Total stockholders' equity 3,799,579 3,766,998
---------------- ----------------
$ 8,042,686 $ 8,054,316
================ ================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Three Months Ended Mar. 31,
1997 1996
(unaudited) (unaudited)
------------ -------------
Revenues:
<S> <C> <C>
Rental income $ 117,548 $ 105,161
AMR income 15,000 -
Other income 2,579 60,188
------------ -------------
Net revenue 135,127 165,349
Expenses:
General and administrative expense 71,837 158,052
Consulting fees 211,405 -
Salaries 103,555 -
Marketing and sales 53,502 -
Supplies - AMR 50,715 -
Rent 51,370 -
Depreciation 48,219 40,727
Property and other taxes 11,498 3,358
Interest 71,482 73,873
------------ -------------
673,583 276,010
------------ -------------
Income (loss) from operations (538,456) (110,661)
Other income (expense) - -
Provision for income taxes - -
------------ -------------
Net income (loss) $ (538,456) $ (110,661)
============ =============
Net income (loss) per share* $ (0.03) $ (0.01)
============ =============
*Weighted average number of common
shares used to compute income (loss)
per share 16,847,291 13,282,285
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
QUARTER ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Common Stock Additional
Par Value $0.001 Paid-In Retained
Shares Amount Capital Deficit
-------------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Balances at 12/31/96 15,214,460 $ 15,214 $ 5,595,049 $ (1,843,265)
Issuance of common (restricted)
at $.1352 per share for cash 882,268 882 118,400
at $.156 per share for cash 768,037 768 119,046
at $.221 per share for cash 280,543 281 61,720
at $.25 per share for cash 313,000 313 77,937
at $.26 per share for services 731,500 732 189,458
at $.283 per share for services 5,300 5 1,495
Net loss for period - - - (538,456)
-------------- ----------- -------------- -------------
Balances at 3/31/97 18,195,108 $ 18,195 $ 6,163,105 $ (2,381,721)
============== =========== ============== =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
QUARTER ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
3 Months Ended
March 31,
1997 1996
(unaudited) (unaudited)
------------ ------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $ (538,456) $ (110,661)
Adjustments to reconcile net loss to cash used
by operating activities:
Stock issued for services 191,690 -
Depreciation 48,219 40,727
Changes in operating assets and liabilities:
Accounts receivable (18,050) -
Escrow accounts (1,670) (2,694)
Other assets - (24,450)
Accounts payable 16,129 39,977
Payroll taxes payable (31,696) -
Deposits - (495)
Notes payable - (45,000)
------------ ------------
Net cash required by operating activities (333,834) (102,596)
INVESTING ACTIVITIES
Purchase of equipment - (549)
------------ ------------
Net cash provided by investing activities - (549)
FINANCING ACTIVITIES
Proceeds from sale of stock 379,347 75,100
Collection of stock subscription - 40,000
Amounts repaid to stockholder (20,000) -
Repayment of loans (8,644) (15,587)
------------ ------------
Net cash provided by financing activities 350,703 99,513
------------ ------------
Increase (decrease) in cash and cash equivalents 16,869 (3,632)
Cash and cash equivalents at beginning of period 6,909 8,523
------------ ------------
Cash and cash equivalents at end of period $ 23,778 $ 4,891
============ ============
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 71,482 $ 78,873
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED STATEMENTS
QUARTER ENDED MARCH 31, 1997
NOTE 1: BASIS OF PRESENTATION
General
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q. Therefore, they do not include
all information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flows, and stockholders' equity in
conformity with generally accepted accounting principles. Except as disclosed
herein, there has been no material change in the information disclosed in the
notes to the financial statements included in the Company's annual report on
Form 10-KSB for the year ended December 31, 1996. In the opinion of Management,
all adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature. Operating results for the quarter ended March
31, 1997 are not necessarily indicative of the results that can be expected for
the year ended December 31, 1997.
NOTE 2: PRIVATE PLACEMENT OF COMMON STOCK
During the first quarter ended March 31, 1997, the Company sold an
aggregate amount of 1,930,848 shares of its common stock, at prices ranging from
$.1352 to $.221 per share, for $301,097. Additionally, the Company, sold an
aggregate of 313,000 shares of its common stock, at $.25 per share, for $78,250
through its Private Placement Memorandum pursuant to Regulation D, Rule 505
during the first quarter.
NOTE 3: RELOCATION
During the period ended March 31, 1997, the Company moved its offices to
7084 Miramar Road, San Diego, California. In January, 1997, the Company entered
into a three-year operating lease of office space. Required lease payments are
$51,546 in 1997, $73,313 in 1988, and $79,560 in 1999.
NOTE 4: DISPOSITION OF IVDS LICENSES
In 1995, the Company acquired the rights to three Interactive Video and
Data Systems Licenses ("IVDS") which were issued by the Federal Communications
Commission. The licenses are located within the geographical areas of Olympia,
Washington; Lubbock, Texas; and Knoxville, Tennessee. In 1996, management
determined that the licenses were in fact, not transferable and sued for return
of the stock issued in exchange therefore. The lawsuit settled March 20, 1997,
and the transaction has been rescinded. The licenses were valued on the
Company's balance sheets at $959,432; a long-term liability of $500,000 was
recognized in relation to these assets.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Introduction
The following discussion pertains to the Company's results of operations
and financial condition as of March 31, 1997 and 1996, respectively.
The operations of the Company's meter reading operations are consolidated
in the Company's financial statements. These operations have been devoted
primarily to research and development and the deployment of pilot systems in a
number of U.S. municipalities. The Company has filed for three patents with the
U.S. Patent Office.
The Company owns a 49% interest in Signature Leasing, LLC, a Nevada
Corporation ("Signature"). The Company has not consolidated the operations of
Signature as it was a minority shareholder at March 31, 1997.
The Company's operations have been largely devoted to those of its
wholly-owned GAM Properties, Inc. subsidiary.
Results of Operations
Income
Rental income for the first quarter of fiscal 1997 totaled $117,548 for the
period ended March 31, 1997 compared to $105,161 in the first quarter of the
previous fiscal year; an increase of $12,387, or 11.8%. The San Diego rental
market remains essentially flat; but the Company has been able to stabilize high
occupancy rates.
Income from the Company's automated meter reading technology
("AirLink(TM)") was $15,000 during the first quarter. There were no revenues
from these operations in the year-earlier period.
Other income (including interest income) was $2,579 for the first quarter
compared to $60,188 in the first quarter of last year. The Company's operations
have been streamlined to concentrate on AirLink and its GAM Properties
subsidiary.
Expenses
General and administrative expenses for the period ended March 31, 1997
totaled $440,299, which included consulting fees of $211,405, salaries of
$103,555, and marketing and sales expenses of $53,502. In the previous year's
first quarter, general and administrative expenses were $158,052. The increase
in general and administrative expenses of $282,247 (178.6%) were due primarily
to increases in consulting fees and salaries due to expanded operations of the
Company.
Depreciation expense was $ 48,219 for the first quarter of fiscal 1997 as
compared to $40,727 in the previous year period, an increase of $7,492 or 18.4%,
which is attributable to changes in the Company's portfolio of properties.
Interest expense decreased by $2,391 to $71,482 (3.2%) in the first quarter
period of 1997 over the first quarter period of fiscal 1996.
Property taxes for the period ended March 31, 1997 were $11,498 compared to
$3,358 in the previous fiscal year period. The increase of $8,140 (242.4%) is
directly attributable to the Company's changing portfolio of real estate
properties upon which value the taxes are assessed and the associated payment
schedule for such taxes.
<PAGE>
AMR Operations
The Company has continue to fund the development efforts related to its
automated meter reading operations. Sales of the Company's AirLink automated
meter reading system have been limited to pilot installations for utilities in
Connecticut, Utah, and Oregon. Marketing and sales efforts on behalf of AirLink
have been accelerated and the Company has responded to several requests for
proposal from utilities in the U.S. and internationally.
Real Estate Operations
The Company continued to experience negative cash flow from its rental
properties during the first quarter. Increased expenses from insurance and
property taxes in the first quarter contributed to this condition. The Company
continues to reduce its debt on its properties, and is looking to sell some of
its unprofitable holdings.
Management is currently considering its various options related to the
disposition of its Tucson property: sale, trade, refinance, joint-venture for
development.
Liquidity and Capital Resources
The Company's total assets were $8,042,686 at March 31, 1997, a decrease of
$737,763, or 8.4%, compared to the period ended March 31, 1996. This decrease in
assets is based primarily on the rescission of the Company's 1995 acquisition of
certain IVDS telecommunications licenses. (Also see Note 4 to Financial
Statements.) The Company's total liabilities at March 31, 1997 were $4,243,107
compared to $4,472,297 in the year-earlier period; a decrease of $229,190 or
5.1%. This decrease is due primarily to the rescission of the Company's 1995
acquisition of certain IVDS telecommunications licenses. Stockholders' equity
was $3,779,579 at March 31, 1997, a decrease of $525,570 or 12.2%. This decrease
was due primarily to the effect of the rescission of the acquisition of the
Company's IVDS licenses.
The Company had negative working capital of $468,929 at March 31, 1997. On
April 9, 1997, the Company sold $600,000 in aggregate principal amount of 10%
Convertible Debentures due April 30, 1999 under Regulation S. This financing
serves to reduce the pressures associated with this condition.
Additionally, the Company has extended a private placement offering to sell
up to 4,000,000 shares of restricted common stock to raise $1,000,000. The
Company continues to investigate several alternatives to acquire additional
capital; particularly related to anticipated needs related to project financing
of its automated meter reading operations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company is not involved in any litigation that would have a material
adverse effect on the Company; and the officers and directors are aware of no
threatened or pending litigation which would have a material, adverse effect on
the Company.
ITEM 2 - CHANGES IN SECURITIES
The Company's shareholders approved, at the Company's annual meeting on
April 18, 1997, a measure to amend the Company's Articles of Incorporation to
authorized an increase in the Company's authorized common stock from 25,000,000
shares to 50,000,000 shares.
Additionally, shareholders have authorized the issuance of two classes of
Preferred Stock, 10,000 shares for each class, at an as-yet to be determined par
value.
ITEM 3 - DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none.
Reports on Form 8-K
Form 8-K filed April 18, 1997 related to the sale of 10%
Convertible Debentures due April 30, 1999 under Regulation S.
<PAGE>
SIGNATURES
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 duly authorized.
GREENLAND CORPORATION
Signed
April 25, 1997
--------------------------------------------------
Eric W. Gaer
President and Chief Executive Officer
Signed
April 25, 1997
--------------------------------------------------
Kevin G. Smith
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from Greenland Corporation March 31, 1997
financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000852127
<NAME> Greenland Corporation
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 23,778
<SECURITIES> 152,893
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 157,636
<PP&E> 5,361,417
<DEPRECIATION> 354,761
<TOTAL-ASSETS> 8,042,686
<CURRENT-LIABILITIES> 650,343
<BONDS> 3,686,657
0
0
<COMMON> 18,195
<OTHER-SE> 3,781,384
<TOTAL-LIABILITY-AND-EQUITY> 8,042,686
<SALES> 15,000
<TOTAL-REVENUES> 135,127
<CGS> 0
<TOTAL-COSTS> 602,101
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,482
<INCOME-PRETAX> (538,456)
<INCOME-TAX> 0
<INCOME-CONTINUING> (538,456)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (538,456)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
