Securities and Exchange Commission
Washington, D.C. 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 June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to ___________.
Commission file number: 33-55254-34.
<PAGE>
MAUI USA, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0485322
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
505 Front Street, Suite 233, Lahaina, Maui, Hawaii 96761
(Address of principal executive offices) (Zip Code)
(808) 667-0647
(Issuer's telephone number)
______________________________________________________
(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
As of July 31, 1997, 8,000,000 shares of Class A Common Stock and
2,000,000 shares of Class B Common Stock of the issuer were outstanding.
<PAGE>
MAUI USA, INC.
INDEX
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 1
Consolidated Balance Sheets - June 30,
1997 and December 31, 1996 . . . . . . . . . . . 1
Consolidated Statements of Operations for the
Three Months Ended June 30, 1997 and 1996 . . . . 2
Consolidated Statements of Operations for the
Six Months Ended June 30, 1997 and 1996 . . . . . 3
Consolidated Statements of Cash Flows for the
Six Months ended June 30, 1997 and 1996 . . . . . 4
Notes to Consolidated Financial Statements . . . 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . 6
PART II - OTHER INFORMATION
Item 6(b). Reports on Form 8-K . . . . . . . . . . . . 8
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CONSOLIDATED BALANCE
SHEETS
June 30,
December 31,
1997
1996
(Unaudited)
ASSETS
<S> <C>
<C>
Cash (including restricted cash of
$23,430 and $1,846,840) $ 70,460
$ 1,916,104
Land under development 28,095,180
22,082,317
Furniture and equipment, net 13,074
12,268
Other 156,602
52,475
Total Assets $ 28,335,316
$ 24,063,164
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $ 547,056
$ 1,542,343
Advances from contractor 3,234,878
-
Bonds payable 360,000
-
Note payable 12,119,459
12,119,459
Accrued interest payable 2,239,956
1,045,479
Payable to affiliates 4,708,784
4,004,828
Total liabilities 23,210,133
18,712,109
Stockholders' equity:
Common Stock
Class A, $.001 par value;
authorized - 25,000,000 shares
outstanding - 8,000,000 shares 8,000
8,000
<PAGE>
Class B, $.001 par value;
authorized - 5,000,000 shares,
outstanding - 2,000,000 shares 2,000
2,000
Additional paid-in capital 5,556,149
5,556,149
Accumulated deficit (440,966)
(215,094)
Total stockholders' equity 5,125,183
5,351,055
Total liabilities and
stockholders' equity $ 28,335,316
$ 24,063,164
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
1997
1996
<S> <C>
<C>
Interest income $ 2,351
$ 10,494
Selling, general and
administrative expenses (111,580)
(49,488)
Depreciation & amortization (4,432)
(1,090)
Interest expense (15,148)
-
Net loss $ (128,809)
$ (40,084)
Loss per common share
Primary $ (0.013)
$ (0.004)
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
1997
1996
<S> <C>
<C>
Interest income $ 17,116
$ 22,067
Selling, general and
administrative expenses (219,189)
(94,074)
Depreciation & amortization (8,651)
(2,180)
Interest expense (15,148)
-
Net loss $ (225,872)
$ (74,187)
Loss per common share
Primary $ (0.023)
$ (0.007)
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
1997 1996
<S> <C>
<C>
Cash flows from operating activities:
Net loss
$(225,872) $(74,187)
Adjustments to reconcile net
loss to net cash provided by
operating activities -
Depreciation and amortization
8,651 2,180
Changes in assets and liabilities:
Increase in receivable from
County of Maui
- (790,719)
Increase in land under development
(6,012,863) (1,620,502)
(Increase) decrease in other assets
(110,385) 5,502
Increase in accrued interest payable
1,194,478 -
Increase (decrease) in accounts
payable
(995,287) 448,785
Net cash used in operating
activities
(6,141,278) (2,028,941)
Cash flows used in investing activities:
Purchases of furniture and equipment
(3,200) -
Net cash used in investing activities
(3,200) -
Cash flows from financing activities:
Increase in advances from contractor
3,234,878 -
Proceeds from borrowings from
affiliates, net
703,956 875,535
Proceeds from bonds payable
360,000 -
Net cash provided by financing
activities
4,298,834 875,535
<PAGE>
Net increase (decrease) in cash
(1,845,644) (1,153,406)
Cash at beginning of period (including
restricted cash of $1,846,840
and $1,142,872)
1,916,104 1,202,656
Cash at end of period (including
restricted cash of $23,428
and $8,763)
$70,460 $49,250
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION:
In the opinion of management, the unaudited financial information included in
this report contains all adjustments, consisting of normal recurring
adjustments only, necessary for a fair presentation of the results of
operations and cash flows for the interim period covered and the financial
condition of the Company at the dates of the balance sheets. The operating
results for the interim period are not necessarily indicative of the results
to be expected for the full fiscal year. The accounting policies followed by
the Company are set forth in Note 2 to the financial statements in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.
Reclassifications
The Company reclassified the cash outflow related to the land under
development from investing activities to operating activities on the Statement
of Cash Flows for the six months ended June 30, 1996 in order to conform to
the presentation in the Statement of Cash Flows for the six months ended June
30, 1997. In addition, the Company reclassified the cash proceeds from
borrowings from affiliates from operating activities to financing activities.
Such reclassifications increased net cash used by operating activities by
$2,496,037, decreased net cash used in investing activities by $1,620,502 and
increased net cash provided by financing activities of $875,535.
NOTE 2 - MATERIAL COMMITMENTS:
The Company has $2.1 million in outstanding commitments related to an $11.5
million fixed price contract for mass grading and infrastructure construction
(primarily utilities, sewage and roadways) for the Project. The Company
estimates that the mass grading and infrastructure construction will be
substantially completed by September 1997. In connection with this contract,
the Company entered into an agreement dated July 25, 1996, whereby the Company
placed $4 million into escrow, of which approximately $23,428 remained as of
June 30, 1997.
The fixed price contract provides that the general contractor will not suspend
work or terminate the contract on account of nonpayment and will look solely
to the $4 million initially deposited into escrow and the sales proceeds from
future contracts of $50,000 per lot for payment of the contract. During the
second quarter, the general contractor funded $3,234,878 toward the land
development project reflected as advances from contractor. Interest shall
accrue on all unpaid amounts at the First Hawaiian Bank prime rate in effect
at the time payment became due.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Material Changes in Financial Condition
Maui USA, Inc. (the "Company") is continuing with its development of three
adjoining parcels of land, totaling approximately sixty acres, located at
Kahana Ridge in West Maui (the "Project"). The expected completion date for
the development of the Project is September 1997. Costs incurred during the
six month period ended June 30, 1997 relate to development of the
infrastructure of the Project and capitalization of approximately $1.4 million
of interest related to notes payable. This resulted in a significant increase
(approximately $6 million) in Land Under Development (as set forth on the
Company's unaudited consolidated balance sheet). The decrease in accounts
payable from December 31, 1996 is primarily due to the paydown of accounts
using the escrow funds and proceeds from advances from affiliates.
Material Changes in Results of Operations
The Company's selling, general and administrative expenses amounted to
$219,189 for the six month period ended June 30, 1997, compared to $94,074 for
the corresponding 1996 period. The Company's selling, general and
administrative expenses amounted to $111,580 for the three month period ended
June 30, 1997, compared to $49,488 for the corresponding 1996 period. These
increases in expense result from increased selling activities related to the
Company's Kahana Ridge project, and for expenses incurred to pursue other
potential business opportunities. Interest expense for the three months ended
June 30, 1997 aggregating $15,148 relates primarily to the convertible bonds
issued.
Financing, Working Capital and Liquidity
Upon completion of lot development expected in August 1997, the Company will
begin lot sales. $100,000 of proceeds from each lot sale will be paid to the
investor; the next $50,000 of proceeds will be paid to the general contractor;
and the remainder will be paid to the investor until the mortgage loan is
repaid in full. Management expects working capital shortfalls for the
Company's general and administrative and debt service payments required on
their loan from a bank will continue to be funded by advances from affiliates.
<PAGE>
Pursuant to a letter agreement, dated January 14, 1997, the Company acquired
for $60,000 cash, subject to certain conditions, the right to purchase
11,000,000 shares in Moomin Valley Corporation ("Moomin Valley") for $1.00 per
share. Moomin Valley was founded to develop and operate a Moomin theme park
at an existing agricultural theme park. No development has yet occurred with
respect to the proposed theme park. However, management is pursuing
discussions with financial institutions and institutional investors for the
private placement of $18 million of five year convertible debt which would be
used for the development of the theme park and general corporate expenditures.
On March 20, 1997, the Company issued $60,000 of convertible bonds at 6%, due
March 31, 2002 to a single investor. On April 22, 1997, another investor
purchased $300,000 of convertible bonds from the Company with a five-year
term, at 6%. In addition, the bonds sold have warrants attached for the
purchase of 60,000 shares of the Company's Class A common stock for $4.00 per
share which expires on April 30, 1999.
<PAGE>
PART II - OTHER INFORMATION
Item 6(b) Reports on Form 8-K..
Report on Form 8-K filed May 13, 1997, reporting Item 4 (Change in
Registrant's Certifying Accountant) and Item 7 (Exhibit 16.1 - Letter re
Change of Accountant).
Report on Form 8-K/A filed June 25, 1997, reporting Item 4 (Change in
Registrant's Certifying Accountant) and Item 7 (Exhibit 16.1 - Letter re
Change of Accountant).
Report of Form 8-K filed June 25, 1997, reporting Item 4 (Change in
Registrant's Certifying Accountant).
<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.
Dated: August 15, 1997 MAUI USA, INC.
By: /s/ Myron O. Kirkeby
Myron O. Kirkeby
President, Chief Executive
Officer and Secretary
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<C>
<PERIOD-TYPE> 6-Mos
Year
<FISCAL-YEAR-END> Dec-31-1996
Dec-31-1996
<PERIOD-END> Jun-30-1997
Dec-31-1996
<CASH> 70,460
1,916,104
<SECURITIES> 0
0
<RECEIVABLES> 0
0
<ALLOWANCES> 0
0
<INVENTORY> 28,095,180
22,082,317
<CURRENT-ASSETS> 0
0
<PP&E> 24,994
21,794
<DEPRECIATION> (11,920)
(9,526)
<TOTAL-ASSETS> 28,335,316
24,063,164
<CURRENT-LIABILITIES> 547,056
1,542,343
<BONDS> 12,119,459
12,119,459
<COMMON> 10,000
10,000
0
0
0
0
<OTHER-SE> 5,556,149
5,556,149
<TOTAL-LIABILITY-AND-EQUITY> 28,335,316
24,063,164
<SALES> 0
0
<PAGE>
<TOTAL-REVENUES> 17,116
11,573
<CGS> 0
0
<TOTAL-COSTS> (242,988)
(45,676)
<OTHER-EXPENSES> 0
0
<LOSS-PROVISION> 0
0
<INTEREST-EXPENSE> 0
0
<INCOME-PRETAX> (225,872)
(34,103)
<INCOME-TAX> 0
0
<INCOME-CONTINUING> (225,872)
(34,103)
<DISCONTINUED> 0
0
<EXTRAORDINARY> 0
0
<CHANGES> 0
0
<NET-INCOME> (225,872)
(34,103)
<EPS-PRIMARY> (.023)
(.003)
<EPS-DILUTED> 0
0
<PAGE>
</TABLE>
