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Previous: DEVELOPMENT BANCORP LTD, 10QSB, 1997-01-14 |
Next: DEVELOPMENT BANCORP LTD, 10QSB, 1997-01-14 |
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, 1996
[ ] 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 0-22934
DEVELOPMENT BANCORP, LTD.
(Exact Name of Small Business Issuer as
specified in its Charter)
Washington 91-1268870
(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.)
14 Quai du Seujet, Geneva, Switzerland CH-1201
(Address of principal executive offices) (Zip Code)
(011) 4122-9081598
(Issuer's telephone number)
Check whether the Issuer (1) 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.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of Common Equity, as of the latest practicable date.
Common Stock, no par value 1,044,923
Title of Class Number of Shares outstanding
at June 30, 1996
No exhibits included.
<PAGE>
<TABLE>
<CAPTION>
DEVELOPMENT BANCORP, LTD.
CONSOLIDATED BALANCE SHEET
June 30, 1996
ASSETS
Current assets:
<S> <C>
Cash and equivalents $ 825,803
Commissions receivable 74,242
Other receivables 199,356
Marketable securities 1,613,844
Other current assets 346,308
------------
Total current assets 3,059,553
Investments 882,983
Intangible assets, net 250,575
Property and equipment, net 181,695
------------
Total assets $4,374,806
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Note payable - bank $ 50,000
Notes payable - related parties 228,331
Accounts payable 413,915
Accrued payroll and commissions 189,724
Other accrued liabilities 359,157
Current portion of long-term debt 20,511
-------------
Total current liabilities 1,261,638
Long-term debt - related party 35,000
Total liabilities 1,296,638
Commitments and contingencies -
Shareholders' equity:
Class B convertible preferred stock, no par value; 110,000
shares designated, issued and outstanding 165,000
Common stock, no par value; 50,000,000 shares
authorized, 1,044,923 shares issued and outstanding 3,727,496
Accumulated deficit (1,075,978)
Translation adjustment 261,650
------------
Total shareholders' equity 3,078,168
Total liabilities and shareholders' equity $4,374,806
</TABLE>
The accompanying selected information is
an integral part of the financial
statements.
2
<PAGE>
<TABLE>
<CAPTION>
DEVELOPMENT BANCORP, LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Month Period Ended June 30, 1996 and 1995
1996 1995
-------------- ---------
Revenues:
<S> <C> <C>
Commissions and consulting fees $2,523,345 $ 27,529
Consulting fees - related parties 130,000 -
------------ ------------
Total revenues 2,653,345 27,529
General and administrative expenses 3,182,773 95,361
----------- -------------
Loss from operations ( 529,428) ( 67,832)
------------ -------------
Other income (expense):
Gain on sale of marketable securities 136,864 44,093
Unrealized gain (loss) on marketable
securities portfolio ( 49,894) -
Interest income 26,603 15,340
Interest expense ( 6,933) -
Foreign currency transaction gain (loss) 142,581 ( 54,003)
Miscellaneous - 732
----------------- ---------------
Total other income 249,221 6,162
------------ --------------
Net loss $( 280,207) $( 61,670)
=========== ============
Per share information:
Net loss per share $( .27) $( .06)
=============== ===============
Weighted average number
of common shares outstanding 1,043,769 1,114,923
=========== ===========
</TABLE>
The accompanying selected information is
an integral part of the financial
statements.
3
<PAGE>
<TABLE>
<CAPTION>
DEVELOPMENT BANCORP, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Month Period Ended June 30, 1996 and 1995
1996 1995
--------------- ----------
Cash flows from operating activities:
<S> <C> <C>
Net loss $( 280,207) ( 61,670)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 43,630 1,646
Unrealized (gain) loss on marketable securities 66,699 -
Foreign currency transaction loss 5,398 -
(Increase) decrease in assets:
Commissions receivable 170,632 -
Other receivables ( 106,628) ( 19,586)
Marketable securities ( 107,935) ( 75,717)
Other current assets ( 224,020) ( 39,015)
Increase (decrease) in liabilities:
Accounts payable ( 68,552) 23,712
Accrued liabilities 43,861 -
-------------- -------------
Net cash used in used in operating activities ( 457,122) ( 170,630)
------------- -------------
Cash flows from investing activities:
Purchase of investments - ( 275,867)
Purchase of property and equipment ( 57,646) ( 20,406)
-------------- --------------
Net cash used in investing activities ( 57,646) ( 296,273)
-------------- -------------
Cash flows from financing activities:
Repayment of notes payable - related parties ( 76,544) -
Repayment of long-term debt ( 13,140) -
Proceeds from issuance of common stock 54,000 270,000
-------------- -------------
Net cash provided by (used in) financing activities ( 35,684) 270,000
-------------- -------------
Effect of exchange rate changes on cash ( 142,072) 445,898
------------- -------------
Increase (decrease) in cash and equivalents ( 692,524) 248,995
Cash and equivalents - beginning of year 1,518,327 1,725,446
------------ ------------
Cash and equivalents - end of year $ 825,803 $ 1,974,441
============ ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 26,603 $ -
============= ==========
</TABLE>
Supplemental disclosure of non-cash investing and financing activities: During
1995:
The Company incurred $350,169 of debt in exchange for foreign exchange
contracts.
The accompanying selected information is
an integral part of the financial
statements.
4
<PAGE>
DEVELOPMENT BANCORP, LTD.
SELECTED INFORMATION
For the Six Month Period Ended June 30, 1996 and 1995
Note 1: Organization and Significant Accounting Policies
Nature of Organization:
Development Bancorp, Ltd. ("Development" or "the Company")
is a holding company organized in the state of Washington
for the purpose of providing international investment
banking services through its majority-owned subsidiaries:
Development Corp Services Limited (Ireland - 99.93%
owned), SFD Societe Financere De Distribution Geneve SA
(Switzerland - 99.3% owned), and KSM Holding Corporation
("KSM") (United States - 99.93% owned). KSM is the parent
company of wholly-owned Global Financial Group ("Global")
(United States).
Basis of Presentation:
The accompanying unaudited consolidated balance sheets as
of June 30, 1996 and the unaudited consolidated statements
of operations and cash flows for the six month periods
ended June 30, 1996, include the accounts of Development
Bancorp, Ltd. and its wholly-owned subsidiaries,
Development Corp Services Limited, SFD Societe Financiere
De Distribution Geneve SA, and KSM Holding Corporation.
For the six months ended June 30, 1995, the consolidated
financial statements include the accounts of Development
Bancorp, Ltd. and its wholly-owned subsidiaries,
Development Corp Services Limited and SFD Societe
Financiere De Distribution Geneve SA. All references to
"the Company" in these financial statements relate to the
consolidated entity. All significant intercompany accounts
and transactions are eliminated in consolidation.
These financial statements reflect all adjustments which,
in the opinion of management, are necessary for a fair
presentation of the Company's financial position, the
results of operations and its cash flows for the six
months ended June 30, 1996 and 1995. The results for the
period ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ending
December 31, 1996. This report should be read in
conjunction with the Financial Statements and Notes
contained in the Company's Annual Report for the year
ended December 31, 1995.
Net Income (Loss) Per Share:
Income (loss) per share is calculated based on the
weighted average number of common shares outstanding as
the effect of including common stock equivalents would be
anti-dilutive.
Reclassifications:
Certain reclassifications have been made in the 1995
financial statements in order to conform with 1996
financial statement presentation. These reclassifications
have no effect on accumulated deficit or net loss, as
originally reported.
5
<PAGE>
<TABLE>
<CAPTION>
DEVELOPMENT BANCORP, LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Month Period Ended June 30, 1996 and 1995
1996 1995
-------------- ---------
Revenues:
<S> <C> <C>
Commissions and consulting fees $1,494,883 $ 27,529
Consulting fees - related parties - -
----------------- ------------
Total revenues 1,494,883 27,529
General and administrative expenses 1,646,496 75,006
----------- -------------
Loss from operations ( 151,613) ( 47,477)
------------ -------------
Other income (expense):
Gain on sale of marketable securities 88,243 ( 65,479)
Unrealized gain (loss) on marketable
securities portfolio ( 42,255) -
Interest income 14,098 10,240
Interest expense ( 2,398) -
Foreign currency transaction gain (loss) 82,489 ( 54,003)
Miscellaneous - 732
----------------- ---------------
Total other income 140,177 ( 108,510)
------------ ------------
Net loss $( 11,436) $( 155,987)
============ ===========
Per share information:
Net loss per share $ .01 $( .14)
=============== ===============
Weighted average number
of common shares outstanding 1,044,923 1,139,923
=========== ===========
</TABLE>
The accompanying selected information is
an integral part of the financial
statements.
6
<PAGE>
<TABLE>
<CAPTION>
DEVELOPMENT BANCORP, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Month Period Ended June 30, 1996 and 1995
1996 1995
--------------- ----------
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $( 11,436) $( 155,987)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 21,815 895
Common stock issued for services - ( 121,000)
Non-cash (gain) loss on sale of investment - 109,572
Unrealized (gain) loss on marketable securities 42,255 -
Foreign currency transaction loss ( 4,715) -
(Increase) decrease in assets:
Commissions receivable 174,621 -
Other receivables 21,605 ( 19,586)
Marketable securities ( 147,883) ( 75,717)
Other current assets ( 144,122) ( 39,015)
Stock subscription receivable - 250,000
Increase (decrease) in liabilities:
Accounts payable ( 86,621) 30,738
Accrued liabilities 93,055 -
Due to officers - 121,000
------------------ -------------
Net cash provided by (used in) used
in operating activities ( 41,426) 100,900
-------------- -------------
Cash flows from investing activities:
Purchase of investments - ( 275,867)
Purchase of property and equipment ( 43,425) ( 20,406)
-------------- --------------
Net cash used in investing activities ( 43,425) ( 296,273)
-------------- -------------
Cash flows from financing activities:
Repayment of notes payable - related parties ( 71,313) -
Repayment of long-term debt ( 6,629) -
Proceeds from issuance of common stock - 20,000
------------------ --------------
Net cash provided by (used in) financing activities ( 77,942) 20,000
-------------- --------------
Effect of exchange rate changes on cash ( 68,657) 445,898
-------------- -------------
Increase (decrease) in cash and equivalents ( 231,450) 270,525
Cash and equivalents - beginning of year 1,057,253 1,703,916
------------ ------------
Cash and equivalents - end of year $ 825,803 $ 1,974,441
============ ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 22,068 $ -
============= ==========
</TABLE>
Supplemental disclosure of non-cash investing and financing activities: During
1995:
The Company incurred $350,169 of debt in exchange for foreign exchange
contracts.
The accompanying selected information is an integral part of the financial
statements.
7
<PAGE>
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
The following discussion regarding the financial statements of the Company
should be read in conjunction with the financial statements and notes thereto
included elsewhere in this Report.
The Company did not engage in operations until the quarter ended June 30, 1995,
and the results for the six months ended June 30, 1995 are not indicative of the
entire year's results. Substantially all of the Company's operations for the six
months ended June 30, 1996 reflect the operations of the Company's U.S.
subsidiaries, KSM Financial Holdings and Global Financial, Inc.
The Company acquired these subsidiaries in November 1995, but the acquisition
was mutually rescinded in November 1996. Therefore, the results of operations
for the six months ended June 30, 1996 should not be viewed as indicative of the
results of operations to be expected for the full fiscal year ended December 31,
1996.
8
<PAGE>
PART II. OTHER INFORMATION
Item 1.LEGAL PROCEEDINGS
None
Item 2.CHANGES IN SECURITIES
None
Item 3.DEFAULTS UPON SENIOR SECURITIES
None
Item 4.SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
9
<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.
Date: January 10, 1997 By: /s/ Dempsey K. Mork
--------------------
Dempsey K. Mork
(Chief accounting and financial officer
and duly authorized officer)
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND AS
OF JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000915337
<NAME> DEVELOPMENT BANCORP, LTD.
<MULTIPLIER> 1
<CURRENCY> US dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Apr-01-1996
<PERIOD-END> Jun-30-1996
<EXCHANGE-RATE> 1
<CASH> 825,803
<SECURITIES> 1,613,844
<RECEIVABLES> 93,598
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,059,553
<PP&E> 181,695
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,374,806
<CURRENT-LIABILITIES> 1,261,638
<BONDS> 0
0
165,000
<COMMON> 3,727,496
<OTHER-SE> (814,328)
<TOTAL-LIABILITY-AND-EQUITY> 4,374,806
<SALES> 0
<TOTAL-REVENUES> 2,523,345
<CGS> 0
<TOTAL-COSTS> 3,182,773
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,933)
<INCOME-PRETAX> (280,207)
<INCOME-TAX> 0
<INCOME-CONTINUING> (280,207)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (280,207)
<EPS-PRIMARY> (.27)
<EPS-DILUTED> (.27)
</TABLE>
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