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 March 31, 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.
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 ( )
<PAGE>
As of June 30, 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 - March 31, 1997
and December 31, 1996 . . . . . . . . . . . . . . . . 1
Consolidated Statement of Operations For the
Three Months Ended March 31, 1997 and 1996 . . . . . 2
Consolidated Statements of Cash Flows For the
Three Months Ended March 31, 1997 and 1996 . . . . . 3
Notes to Consolidated Financial Statements . . . . . 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . 5
PART II - OTHER INFORMATION
None.
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
ASSETS
Cash (including restricted cash of
$23,430 and $1,846,840) $ 117,247 $ 1,916,104
Land under development 24,310,226 22,082,317
Furniture and equipment, net 14,378 12,268
Other 113,458 52,475
Total Assets $ 24,555,309 $ 24,063,164
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 787,230 $ 1,542,343
Bonds payable 60,000 -
Note payable 12,119,459 12,119,459
Accrued interest payable 1,637,260 1,045,479
Payable to affiliates 4,697,369 4,004,828
Total liabilities 19,301,318 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
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 (312,158) (215,094)
Total stockholders' equity 5,253,991 5,351,055
Total liabilities and stockholders' equity $ 24,555,309 $ 24,063,164
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Interest income $ 14,764 $ 11,573
Selling, general and administrative expenses (111,828) (45,676)
Net loss $ (97,064) $ (34,103)
Loss per common share
Primary $ (0.010) $ (0.003)
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $(97,064) $(34,103)
Adjustments to reconcile net loss to net cash
provided by operating activities -
Depreciation and amortization 4,219 1,090
Changes in assets and liabilities:
Increase in land under development (2,227,909) (1,430,122)
Increase in accrued interest payable 591,781 -
Increase in other assets (64,112) (4,920)
Increase (decrease) in accounts payable (755,113) 817,444
Net cash used in operating activities (2,548,198) (650,611)
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:
Proceeds from borrowings from affiliates 692,541 648,192
Proceeds from bonds payable 60,000 -
Net cash provided by financing activities 752,541 648,192
Net decrease in cash (1,798,857) (2,419)
Cash at beginning of period (including restricted cash
of $1,846,840 and $1,142,972) 1,916,104 1,202,656
Cash at end of period (including restricted cash of
$23,430 and $1,003,422) $117,247 $1,200,237
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<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 three months ended March 31, 1996 in order to conform to
the presentation in the Statement of Cash Flows for the three months ended
March 31, 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
$2,078,314, decreased net cash used in investing activities by $1,430,122 and
increased net cash provided by financing activities of $648,192.
NOTE 2 - MATERIAL COMMITMENTS:
The Company has $4.1 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 August 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 $23,400 remained as of
March 31, 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. 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 on the
Kahana Ridge in West Maui (the "Project"). The expected completion date for
the development of the Project is August 1997. Costs incurred during the
three month period ended March 31, 1997 relate to development of the
infrastructure of the Project and capitalization of $689,006 of interest
related to notes payable and advances from affiliates. This resulted in a
significant increase (approximately $2,200,000) 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
$111,828 for the quarter ended March 31, 1997, compared to $45,576 for the
corresponding 1996 period. The increase in expenses results from increased
selling activities related to the Company's Kahana Ridge project, and for
expenses incurred to pursue other potential business opportunities.
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.
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.
During the first quarter ended March 31, 1997, the Company issued $60,000 of
convertible bonds at 4%, due March 31, 2002 to a single investor. Subsequent
to March 31, 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
None.
<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: July 22, 1997 MAUI USA, INC.
By: /s/ Myron O. Kirkeby
---------------------
Myron O. Kirkeby
President, Chief
Executive Officer and
Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-31-1997 MAR-31-1997
<CASH> 117,247 1,916,104
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 24,310,226 22,082,317
<CURRENT-ASSETS> 0 0
<PP&E> 24,994 21,794
<DEPRECIATION> 10,616 9,526
<TOTAL-ASSETS> 24,555,309 24,063,164
<CURRENT-LIABILITIES> 787,230 1,542,343
<BONDS> 12,179,459 12,119,459
0 0
0 0
<COMMON> 10,000 10,000
<OTHER-SE> 5,556,149 5,556,149
<TOTAL-LIABILITY-AND-EQUITY> 24,555,309 24,063,164
<SALES> 0 0
<TOTAL-REVENUES> 14,764 11,573
<CGS> 0 0
<TOTAL-COSTS> (111,828) (45,676)
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (97,064) (34,103)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (97,064) (34,103)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (97,064) (34,103)
<EPS-PRIMARY> (.010) (.003)
<EPS-DILUTED> 0 0
</TABLE>
