SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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 33-53250-A
Workforce Systems Corp.
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(Exact name of small business issuer as specified in its charter)
Florida
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(State or other jurisdiction of incorporation or organization)
65-0353816
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(IRS Employer Identification No.)
8870 Cedar Springs Lane, Suite 5, Knoxville, TN 37923
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(Address of principal executive offices)
423-769-2380
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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( ).
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. As of November 13, 1996 the
registrant had issued and outstanding 2,493,934 shares of common stock.
Transitional Small Business Disclosure Format (check one);
Yes ( ) No (x)
<PAGE>
The Registrant hereby amends the items and financial statements of its
Quarterly Report on Form 10-QSB for the quarter ended September 30, 1996 as set
forth below:
LIST OF ITEMS AMENDED
PART I - FINANCIAL INFORMATION
Item Page Number
- ---- -----------
1. Consolidated Balance Sheets at September 30, 1996
(Unaudited) and June 30, 1996 (Audited) 2
Consolidated Statements of Stockholders' Equity for the
three month period ended September 30, 1996 (Unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended September 30, 1996 (Unaudited)
and 1995 (Unaudited) 5
Notes to the Unaudited Consolidated Financial Statements 6
TEXT OF ITEMS AMENDED
Each of the above listed Items is hereby amended by deleting each Item in
its entirety and replacing it with the Items attached hereto and filed herewith.
On August 30, 1996, the Company filed a registration statement on Form
SB-2 under the Securities Act of 1933, as amended, with the Securities and
Exchange Commission (the "SEC"). The SEC issued comments on the filing by letter
dated November 4, 1996. On January 14, 1997 the Company responded to the SEC and
amended the SB-2 filing. The SEC issued additional comments by letter dated
February 14, 1997. As a result of these comments, the Company made certain
expense charges to its financial statements for the year ended June 30, 1996
which are reflected in the Consolidated Balance Sheets at June 30, 1996
presented herein. On June 12, 1997 the SEC issued additional comments. The
purpose of this amendment as a result of these comments, and prior year
adjustments, is for the Company to amend its Consolidated Balance Sheets at June
30, 1996 and amend its Consolidated Balance Sheets, Consolidated Statements of
Changes in Stockholder's Equity, Consolidated Statements of Cash Flows and
associated Notes to Unaudited Consolidated Financial Statements for the three
months ended September 30, 1996. Contemporaneously with the filing of this
10Q-SB/A, the Company has also filed a 10Q-SB/A for the quarter ended March 31,
1997 which reflects a change in the Company's policy of capitalization of costs
associated with the identification, start-up and development or expansion of new
products or companies and general business services related to the foregoing.
Readers are referred to the 10Q-SB/A for the quarterly period ended March 31,
1997.
1
<PAGE>
PART I - FINANCIAL INFORMATION
WORKFORCE SYSTEMS CORP.
CONSOLIDATED BALANCE SHEETS
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<TABLE>
<CAPTION>
September 30 June 30,
1996 1996
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 201,069 $ 938,487
Receivables:
Trade accounts receivables, no allowance
necessary 649,829 633,188
Inventory 1,758,823 1,412,896
Prepaid expenses 674,226 711,510
----------- -----------
Total Current Assets 3,283,947 3,696,081
PROPERTY, PLANT AND EQUIPMENT
Land 156,503 156,503
Building and improvements 1,381,460 1,380,422
Machinery and equipment 1,297,035 1,125,921
Autos and trucks 181,003 146,428
Accumulated depreciation (160,356) (132,856)
----------- -----------
Total Property, Plant and Equipment 2,855,645 2,676,418
OTHER ASSETS
Intangibles, net of accumulated amortization
of $17,571 and $92,852, respective 1,541,817 1,330,348
$ 7,681,409 $ 7,702,847
=========== ===========
</TABLE>
2
<PAGE>
WORKFORCE SYSTEMS CORP.
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
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(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable $ 338,356 $ 390,895
Accrued expenses 72,371 113,507
Accrued income taxes 190,356 132,359
Deferred income tax liability 65,000 65,000
Current portion of long term debt 275,000 254,159
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Total Current Liabilities 941,083 955,920
NON CURRENT DEFERRED INCOME TAXES 125,541 125,541
LONG TERM DEBT, less current portion 491,668 539,207
RELATED PARTY NOTE PAYABLE -- 132,667
STOCKHOLDER'S EQUITY
Series A preferred stock, $.001 par value, 30 shares
authorized, 30 shares issued and outstanding -- --
Series C preferred stock, $.001 par value, 30,000 shares
authorized, 30,000 shares issued and outstanding 30 30
Series D preferred stock, $.001 par value, 1,000,000
shares authorized, 1,000,000 shares issued
and outstanding 1,000 1,000
Common stock, $.001 par value, 10,000,000 shares
authorized, 2,420,836 and 1,503,724 shares
issued and outstanding 2,421 2,421
Paid in capital 8,569,011 8,569,011
Retained earnings (2,449,345) (2,622,950)
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Total Stockholders' Equity 6,123,117 5,949,512
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$ 7,681,409 $ 7,702,847
=========== ===========
</TABLE>
3
<PAGE>
WORKFORCE SYSTEMS CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the three months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Preferred stock Common stock
$.001 par value $.001 par value
2,000,000 shares 10,000,000 shares
authorized authorized
1,030,030 2,420,836 Additional Total
shares issued shares issued Paid-In Retained Stockholders'
and outstanding and outstanding Capital Earnings Equity
--------------- --------------- ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1996 $ 1,030 $ 2,421 $8,569,011 $(2,622,950) $5,949,512
Net income for the three months
ended September 30, 1996 - - - 173,605 173,605
---------- --------- ---------- ----------- ----------
Balance, December 31, 1996 $ 1,030 $ 2,421 $8,569,011 $(2,449,345) $6,123,117
========== ========= ========== =========== ==========
</TABLE>
4
<PAGE>
WORKFORCE SYSTEMS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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<TABLE>
<CAPTION>
For the three For the three
months ended months ended
September 30, September 30,
1996 1995
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(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 173,605 $ 164,343
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization and depreciation 67,500 67,511
Changes in operating assets and liabilities:
(Increase) in receivables (16,641) (49,031)
(Increase) decrease in prepaid expense 37,284 8,979
(Increase) in inventory (345,927) (146,885)
Increase in income tax accounts 57,997 (13,274)
(Decrease) in accounts payable (52,539) (30,279)
Increase (decrease) in miscellaneous liabilies (41,136) (72,079)
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Net Cash Provided (Used) by Operating Activities (119,857) (70,715)
INVESTING ACTIVITIES:
(Increase) in start-up costs (201,469) --
(Increase) in property, plant and equipment (256,727) (184,934)
--------- ---------
Net Cash Provided (Used) by Investing Activities (458,196) (184,934)
FINANCING ACTIVITIES:
(Decrease) in long term debt (26,698) (19,229)
Dividends paid -- (19,317)
Increase (Decrease) in related party note payable (132,667) 273,676
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Net Cash Provided (Used) by Financing Activities (159,365) 235,130
Net (Decrease) in Cash and Cash Equivalents (737,418) (20,519)
Cash and Cash Equivalents, Beginning of Period 938,487 91,652
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Cash and Cash Equivalents, End of Period $ 201,069 $ 71,133
========= =========
</TABLE>
5
<PAGE>
WORKFORCE SYSTEMS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1996
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instruction of Form 10-QSB and Article 310 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The preparation requires management to make estimates and
assumptions that affect the reported of amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results may differ from these estimates. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three month period ended September 30, 1996 are not necessarily indicative of
the results that may be expected for the year ended June 30, 1997.
On August 30, 1996, the Company filed a registration statement on Form
SB-2 under the Securities Act of 1933, as amended, with the Securities and
Exchange Commission (the "SEC"). The SEC issued comments on the filing by letter
dated November 4, 1996. On January 14, 1997 the Company responded to the SEC and
amended the SB-2 filing. The SEC issued additional comments by letter dated
February 14, 1997. As a result of these comments, the Company made the following
expense charges to its financial statements for the year ended June 30, 1996
which are reflected in the balance sheets presented herein. On June 12, 1997 the
SEC issued additional comments. As a result of these comments and prior year
adjustments, the Company has amended its Consolidated Balance Sheets,
Consolidated Statement of Changes in Stockholder's Equity and Consolidated
Statements of Cash Flows for the three months ended September 30, 1996 to
incorporate such. The expense charges to the financial statements for the year
ended June 30, 1996 resulting in the changes to the Company's financial
statements listed above are, specifically:
Acquisition costs totaling $76,890 have been charged to expense for the
year ended June 30, 1996 and represents the value of 17,000 shares of common
stock and cash paid to unrelated parties pursuant to the acquisition of American
Industrial Management, Inc. The acquisition has been accounted for based on the
purchase method of accounting.
6
<PAGE>
Mineral exploration costs totaling $700,000 have been charged to expense
for the year ended June 30, 1996. The mineral exploration costs was incurred in
connection with the successful prospecting, acquisition of mineral rights and
geophysical analysis of the mineral used in Mr. Food's AlloFresh and was paid
to a related party as defined under FASB 57 with the issuance of 140,000 shares
of common stock.
Startup costs totaling $1,091,308 have been charged to expense for the
year ended June 30, 1996. Startup costs represent pre-operating expenses
incurred in the development of Mr. Food's AlloFresh under the Company's Consumer
Products Division. As a result of the formation of Products That Produce,
Inc., 141,000 shares of stock were issued to unrelated parties. The remaining
$386,308 in startup costs represents operating expenses incurred during the
startup phase.
Web development costs totaling $400,000 have been charged to expense for
the year ended June 30, 1996. The costs were incurred in connection with
certain contracts to acquire equipment and to develop and maintain Internet web
sites ultimately as an Internet provider to market its consumer products and,
through its Manufacturing Division, its inventory of refurbished gear boxes and
other power transmission components internationally. The web development was
paid for with the issuance of 80,000 shares of stock to an unrelated party.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSBA
for the year ended June 30, 1996 as filed with the Securities and Exchange
Commission. Contemporaneously with the filing of this 10Q-SB/A, the Company has
also filed a 10Q-SB/A for the quarter ended March 31, 1997 which reflects a
change in the Company's policy of capitalization of costs associated with the
identification, start-up and development or expansion of new products or
companies and general business services related to the foregoing. Readers are
referred to the 10Q-SB/A for the quarterly period ended March 31, 1997.
7
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Workforce Systems Corp,
a Florida corporation
Date: June 16, 1997 By: /s/ Ella Boutwell Chesnutt
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Ella Boutwell Chesnutt,
Chairman
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