<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31,1997
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to ____________
Commission file number _______________________________
INTERUNION FINANCIAL CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 87-0520294
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
249 Royal Palm Way, Suite 301 H, 33480
Palm Beach, Fl (Zip Code)
(Address of principal executive offices)
(561) 820 - 0084
(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 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 / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of share outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: $0.001 Par Value Common Shares -
1,220,250 as of January 31,1998.
Transitional Small Business Disclosure Format (Check One) Yes / / No /X/
Page 1 of 10
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
INTERUNION FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
3 mos ended 3 mos ended 9 mos ended 9 mos ended
Dec.-97 Dec.-96 Dec.-97 Dec.-96
<S> <C> <C> <C> <C> <C>
REVENUES
Commissions, trading & investment income 129,173 856,820 2,127,834 2,966,354
Fee Revenue 236,843 148,642 866,421 465,950
--------- ----------- ---------- ---------
366,016 1,005,462 2,994,255 3,432,304
--------- ----------- ---------- ---------
EXPENSES
Selling, General & Administration 755,660 1,030,081 3,100,834 3,563,792
Foreign Exchange Loss (Gain) 17,004 9,797 (237) 8,770
Interest & Bank Charges Expense (Income) (12,204) (55,018) (2,779) (68,578)
Amortization & Depreciation 57,756 60,504 173,947 180,072
--------- ---------- ---------- ---------
818,216 1,045,364 3,271,765 3,684,056
--------- ---------- ---------- ---------
PROFIT (LOSS) FROM CONTINUING OPERATIONS - BEFORE INCOME
TAXES (452,200) (39,902) (277,510) (251,752)
PROVISION FOR INCOME TAXES (RECOVERABLE) (134,370) (1,422) (70,000) 5,111
--------- ---------- --------- ---------
PROFIT (LOSS) FROM CONTINUING OPERATIONS (317,830) (38,480) (207,510) (256,863)
Gain (Loss) from Discontinued Operation ---- (17,969) 691 (54,114)
Gain on Disposal of Discontinued Assets ---- ---- 803,483 ----
--------- ---------- --------- ---------
NET PROFIT (LOSS) FOR THE PERIOD (317,830) (56,449) 596,664 (310,977)
FOREIGN EXCHANGE TRANSLATION EFFECT (7,467) ---- (7,123) ----
RETAINED EARNINGS (DEFICIT)
- - BEGINNING OF PERIOD (652,640) (1,582,656) (1,587,478) (1,328,128)
--------- ---------- ---------- ----------
RETAINED EARNINGS (DEFICIT)
- - END OF PERIOD (977,937) (1,639,105) (977,937) (1,639,105)
========= ========== ========== ==========
FINANCIAL OVERVIEW
Common Shares Outstanding 1,220,250 969,714 1,220,250 969,714
Weighted Average Shares Outstanding 1,220,250 969,714 1,202,040 807,984
EPS - From Continuing Operations (0.26) (0.04) (0.17) (0.31)
EPS - From Discontinuing Operations 0.00 (0.02) 0.67 (0.07)
EPS (0.26) (0.06) 0.50 (0.38)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 2 of 10
<PAGE> 3
INTERUNION FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
9 mos at 9 mos at 12 mos at 12 mos at
Dec.-97 Dec.-96 Mar-97 Mar-96
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 675,664 447,314 349,738 674,159
Due from brokers and dealers 388,874 374,455 166,062 1,168,190
Client deposits 651,889 932,037 5,967,989 2,093,966
Marketable securities 338,462 627,911 29,457,965 2,625,585
Accounts receivable 449,785 287,652 226,663 148,078
Income tax receivable 9,198 26,294 22,197 1,597
Prepaid expenses and other current assets 118,270 102,516 151,483 65,698
Notes receivable 1,090,932 --- --- ---
--------- --------- ---------- ---------
3,723,074 2,798,179 36,342,097 6,777,273
--------- --------- ---------- ---------
CAPITAL ASSETS 1,453,816 1,667,799 1,609,905 1,827,240
NOTES RECEIVABLE 306,673 --- --- ---
LONG TERM INVESTMENTS 3,064,697 265,384 256,945 140,000
GOODWILL AND NON-CURRENT ASSETS 377,901 399,810 394,332 416,240
DISCONTINUED ASSETS --- 523,603 217,228 203,254
--------- --------- ---------- ---------
5,203,087 2,856,596 2,478,410 2,586,734
--------- --------- ---------- ---------
--------- --------- ---------- ---------
8,926,161 5,654,775 38,820,507 9,364,007
========= ========= ========== =========
CURRENT LIABILITIES
Due to brokers and dealers 216,241 --- 33,012,864 2,499,665
Due to clients 712,342 831,710 1,320,874 3,035,310
Accounts payable and accrued liabilities 577,642 594,540 257,470 314,030
Notes payable 1,278,941 --- --- ---
--------- --------- ---------- ---------
2,785,166 1,426,250 34,591,208 5,849,005
--------- --------- ---------- ---------
DUE TO RELATED PARTIES 20,056 --- --- 119,462
NOTES PAYABLE 192,059 --- --- ---
DISCONTINUED LIABILITIES --- 802,272 504,962 361,692
DEFERRED INCOME TAX LIABILITY --- --- 85,000 ---
--------- --------- ---------- ---------
212,115 802,272 589,962 481,154
--------- --------- ---------- ---------
SHAREHOLDERS EQUITY
Capital Stock and additional paid-in capital 6,906,817 5,065,358 5,206,815 4,361,976
Retained Earnings (Deficit) (977,937) (1,639,105) (1,567,478) (1,328,128)
5,928,880 3,426,253 3,639,337 3,033,848
--------- ---------- ---------- ----------
8,926,161 5,654,775 38,820,507 9,364,007
--------- ---------- ---------- ----------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 3 of 10
<PAGE> 4
INTERUNION FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
9 mos ended 9 mos ended 12 mos ended 12 mos ended
Dec.-97 Dec.-96 Mar-97 Mar-96
<C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) 596,664 (310,977) (230,153) (504,626)
Amortization 173,947 180,072 240,912 244,739
Non cash compensation 120,000 --- 117,500 ---
Gain on disposition of discontinued operations --- --- --- (117,296)
Deferred income tax (85,000) 5,111 85,000 ---
----------- ---------- ----------- -----------
805,611 (125,794) 213,259 (377,183)
Increase (decrease) in due to/from brokers and
dealers, net (33,189,513) (1,705,930) 31,515,327 (28,663,907)
Increase (decrease) in due to/from clients, net 4,707,568 (1,041,671) (5,588,459) 15,720,553
Increase (decrease) in marketable securities 29,022,136 1,992,563 (26,882,380) 13,056,486
Increase (decrease) in accounts receivable &
sundry assets (176,910) (201,089) (184,970) (136,916)
Decrease (increase) in accounts payable and
accrued liabilities 320,172 280,510 (56,560) 30,571
Increase (decrease) in assets and liabilities
related to discontinued operations (287,734) 120,231 129,296 31,629
---------- --------- ---------- ----------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,201,330 (681,180) (854,487) (338,767)
---------- --------- ---------- ----------
FINANCING ACTIVITIES
Capital stock and additional paid-in capital issued 1,580,002 703,382 727,339 555,000
Increase (decrease) in due to related parties 20,056 (119,462) (119,462) 18,589
Notes payable 1,476,751 ---- ---- ----
--------- --------- ---------- ----------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES 3,076,809 583,920 607,877 573,589
--------- --------- ---------- ----------
INVESTING ACTIVITIES
Capital assets (12,688) (4,475) (10,866) (37,872)
Long term investments (2,861,451) (125,110) (66,945) (13,472)
Notes receivable (1,078,074) ---- ---- ----
---------- --------- --------- ---------
CASH PROVIDED (USED) IN INVESTING ACTIVITIES (3,952,213) (129,585) (77,811) (51,344)
---------- --------- --------- ---------
INCREASE (DECREASE) IN CASH 325,926 (226,845) (324,421) 183,478
CASH - BEGINNING OF YEAR 349,738 674,159 674,159 490,681
---------- --------- --------- ---------
CASH - END OF YEAR 675,664 447,314 349,738 674,159
========== ========= ========= =========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
Page 4 of 10
<PAGE> 5
INTERUNION FINANCIAL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
1. Interim information is unaudited; however, in the opinion of management, all
adjustments necessary for a fair statement of interim results have been
included in accordance with Generally Accepted Accounting Principles. All
adjustments are of a normal recurring nature unless specified in a separate
note included in these Notes to Consolidated Financial Statements. The results
for interim periods are not necessarily indicative of results to be expected
for the entire fiscal year. These financial statements and notes should be
read in conjunction with the Company's annual consolidated financial statements
and the notes thereto for the fiscal year ended March 31, 1997, included in its
Form 10-KSB for the year ended March 31, 1997.
2. CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL
a. During the current fiscal year, the Company changed its authorized share
capital as follows:
1,500,000 Non-cumulative, non-participating, ($0.10 par value)
Class A Preference shares entitled to 100 votes for every
one share issued
1,000 Non-cumulative, non-participating, non-voting Class B
preference shares with a par value to be determined at
the date of first issuance ($0.10 par value)
1,000 Non-cumulative, non-participating, non-voting Class C
preference shares convertible into common shares at a
conversion rate to be determined at the date of first
issuance ($0.10 par value)
2,500,000 Common shares ($0.001 par value)
b. During the first quarter, the Company issued 60,000 incentive stock options
with an exercise price of $3.00. These stock options were exercised for a net
funding of $180,000.
c. During the second quarter, 15,000 share purchase warrants were exercised,
for net proceeds of $90,000. In addition the Company canceled 50,000 shares.
3. In the first quarter of fiscal 1998, the Company crystallized its investment
in Receptagen Ltd. described in the Company's audited consolidated statements
dated March 31, 1997 and its annual filing. This investment, is recorded as a
long term investment on the Company's balance sheet. The Company assumed the
financial responsibility of USD $297,970 and C$500,630 (approximately USD
$350,200) in notes payable by Receptagen and its trade creditors, up to
approximately C$9 million for which the Company and the creditors have agreed
will be settled with a payment of C$0.20 per dollar in units of the Company
valued at $4.00 per unit. The Company issued 225,536 units. Each unit
includes one Common Share and one Common Share Purchase Warrant at $5.00 for 2
years. In return, InterUnion received a note receivable for USD $297,970 and
C$500,630 (approximately USD $350,200) and a Rollover Debenture for up to
approximately C$1.8 million. The Rollover Debenture is convertible into units
of Receptagen at a conversion price of C$0.07 per unit. Each Receptagen unit
is exchangeable into one Receptagen Common Share and one Receptagen Share
Purchase Warrant at C$0.14 for two years from the date of conversion.
InterUnion subsequently disposed of 9,008,618 Receptagen units to hold
13,761,703. The Company anticipates that it will be required to issue
additional units to settle claims of Receptagen not settled as of this date
with the Trustee. The Company will be compensated for issuing these units on
identical basis as mentioned above. It is anticipated that these outstanding
claims will be settled prior to the end of its current fiscal year.
As of December 31, 1997, the Receptagen restructuring had not received a
discharge from the courts and therefore, additional InterUnion units with a
value of up to $206,077.35 could still be issued. Should InterUnion issue
these units, it will receive up to 2,943,642 Receptagen units.
4. During the second quarter, the Company sold its investment in Reeve, Mackay
& Associates Ltd., InterUnion's auctionneering & appraisal business. The
deconsolidation of Reeve, Mackay, permitted the Company to record a one
Page 5 of 10
<PAGE> 6
time extraordinary gain on the disposition of $803,483 that represented the
excess of the net liabilities of Reeve, Mackay over the net assets.
The terms of the sale required the Company to finance the transaction
valued at $575,000 at interest rate of 5.5%. The terms also required the
purchaser to pay $90,000 within 90 days of the closing, July 1,1997. In
September, the Company received $268,750. The balance of the note is recorded
on the balance sheet at $306,700.
5. In July 1997, the Company acquired a 33.33% interest in Leon, Frazer Black &
Associates Limited, an investment management firm. This acquisition was
recorded at a cost of $1,062,120 and will be accounted for under the equity
method, as a long term investment. The terms of the acquisition requires the
Company to pay the selling shareholders C$274,550 (USD$192,000) on the first
and second anniversary of the transaction for a total of C$549,100
(USD$384,000). This amount can also be adjusted depending on the assets under
management on the first anniversary. These amounts are accounted for on the
balance sheet in equal amounts as notes payable under current liabilities and
liabilities.
6. In December 1997, the Company issued 177,750 Common Shares as collateral for
a $400,000 loan. The terms of the loan call for the interest, 11% per annum,
to be paid up on reimbursement of the capital no later than August 9, 1998.
The Company used the proceeds of the loan to lend the same amount to Receptagen
at similar terms and an additional 10,000,000 Receptagen warrants with an
exercise price of $0.10 subject to Receptagen's non interested shareholder's
approval. The principal amount of the loans can be increased to $700,000.
Should the amount be increased to $700,000 the Company will have to issue
additional Common Shares as collateral. These Common Shares have not been
treated as outstanding as they are held only for the purpose of collateral.
7. The Company adopted SFAS 128 - Earnings Per Share in the third quarter of
fiscal 1998. Earnings (loss) per share and per share amounts for all periods
have been restated to comply with SFAS 128.
8. The interim consolidated financial statements for the period ending December
31, 1996 has been reclassified to reflect the Company's sale of its auction
house, Reeve, Mackay & Associates Ltd.
Page 6 of 10
<PAGE> 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
(1) OVERVIEW
During first nine months of fiscal 1998, InterUnion Financial Corporation (the
"Company" or "InterUnion") reported consolidated revenues of $3.0 million
versus $3.4 million a year earlier, a decrease of 12.8%.
Selected financial data from InterUnion's financial statements is (figures in
000's except per share data):
<TABLE>
<CAPTION>
3 mo. ended 3 mo. ended 3 mo. ended 3 mo. ended 3 mo. ended
Dec. - 97 Sept. - 97 June - 97 March - 97 Dec. - 96
<S> <C> <C> <C> <C> <C>
Revenues 366 1,155 1,473 2,280 1,005
Net Profit (Loss) (318) 816 98 81 (56)
EPS - Operations (0.26) 0.01 0.09 0.43 (0.04)
EPS - Discontinued Operations 0.00 0.65 0.00 (0.34) (0.02)
EPS (0.26) 0.66 0.09 0.09 (0.06)
Working Capital 938 1,468 2,146 1,751 1,372
Cash Flow (370) 899 277 339 3
Total Assets 8,926 11,335 10,063 38,821 5,655
Shareholders' Equity 5,929 6,254 5,617 3,639 3,426
Common Share, # 1,220,250 1,220,250 1,255,250 969,714 969,714
Book Value Per Share 4.86 5.13 4.48 3.75 3.53
</TABLE>
During the current fiscal year, InterUnion crystallized the recapitalization
plan of Receptagen Ltd. ("Receptagen"). InterUnion assumed the financial
responsibility of USD $297,970 and C$500,630 (approximately USD $350,200) in
notes payable by Receptagen and its trade creditors, up to approximately C$9
million for which the Company and the creditors have agreed will be settled
with a payment of C$0.20 per dollar in units of the Company valued at $4.00 per
unit. The Company issued 225,536 units. Each unit includes one Common Share
and one Common Share Purchase Warrant at $5.00 for 2 years. In return,
InterUnion received a note receivable for USD $297,970 and C$500,630
(approximately USD $350,200) and a Rollover Debenture for up to approximately
C$1.8 million. The Rollover Debenture is convertible into units of Receptagen
at a conversion price of C$0.07 per unit. Each Receptagen unit is exchangeable
into one Receptagen Common Share and one Receptagen Share Purchase Warrant at
C$0.14 for two years from the date of conversion. InterUnion subsequently
disposed of 9,008,618 Receptagen units to hold 13,761,703.
In addition, InterUnion assisted Receptagen in identifying a suitable merger
partner. On December 5, 1997, Receptagen signed a Share Exchange Agreement
with Scitech Genetics PTE Ltd. ("SGL") of Singapore. Receptagen and SGL are to
merge in March 1998 upon the completion of a public financing for which
InterUnion's wholly owned subsidiary Credifinance Securities Limited will act
as a lead agent.
InterUnion successfully divested itself of its interest in Reeve, Mackay in
order to solely focus on financial services and investment banking activities.
In July 1997, InterUnion closed its 33.3% interest in Leon, Frazer Black &
Associates Limited. In January 1998 InterUnion announced it has agreed to
acquire 90% of Cluster Asset Management Limited which owns The Glen
Ardith-Frazer Corporation which has approximately C$150 million in assets under
management. These acquisitions bring the total assets under management to
approximately C$450 million.
(2) NET REVENUES
For the first nine months of fiscal 1998, InterUnion reported consolidated
revenues of $3.0 million versus $3.4 million a year earlier, for a decrease of
12.8%. Revenues for the three months to December 1997 were $0.4 million versus
$1.0 million, for a decrease of 63.6%. The decrease in revenue is attributable
to the reduction in the market value of warrants that the company received as
additional compensation from its investment banking activities. During the
same period Fee Revenue increased to $236,843 from $148,642, or 59.3%, as the
Company continues to focus on its investment banking services.
Page 7 of 10
<PAGE> 8
(3) EXPENSES
Expenses for the first nine months of fiscal 1998 decreased by $412,291 or
11.2% to $3,271,765 from $3,684,056 for the same period a year earlier. For
the quarter, expenses decreased by $227,148 or 21.7% to $818,216 from
$1,045,364. The reduction is attributable to the continued shift in
remuneration from fixed to performance based and a reduction in fixed overhead.
(4) NET INCOME
Net income from operations for the nine months ending December 31, 1997 was
$596,664 or $0.50 per share versus a loss of $310,977 or $0.39 per share a year
earlier. For the three months ending December 31,1997, InterUnion lost
$317,830 or $0.26 per share versus a loss of $56,449 or $0.04 a year earlier.
The increase in the nine months EPS is due to the extra ordinary gain on the
divesture of the Company's auction subsidiary Reeve, Mackay (see note 4 of the
interim consolidated financial statements). The decrease in the third quarter
EPS is due to the reduction in market value of the Company's compensation
warrants mentioned above under Net Revenue.
The average number of common shares outstanding for the nine months ending
December 31, 1997 is 1,202,040 versus 807,984 a year earlier. The average
number of common shares outstanding for the three months ending December 31,
1997 is 1,220,250 versus 969,714 a year earlier. The change in shares
outstanding is due to the fact that additional shares in the form of Regulation
"S" were issued during the period in order to finance its expansion and the
exercise of outstanding warrants and compensation options. During the period,
common shares were issued in the recapitalization of Receptagen Ltd. under Rule
144 and upon the exercise of both compensation options and warrants of a
previous private placement. In addition, the Company canceled 50,000 shares
previously issued and outstanding in September 1997.
(5) LIQUIDITY AND CAPITAL RESOURCES
In order to meet its growth plans, the Company's current policy is to issue
additional capital stock. To date the Company has done this through the
issuance of Confidential Private Placement Offerings under Regulation "D" or
Regulation "S". The following are details of private placements that were
completed within the last two (2) years:
<TABLE>
<CAPTION>
Date # of Shares Amount Type
-------------- ----------- ------- --------------
<S> <C> <C> <C>
March 1996 160,000 320,000 Regulation "D"
September 1996 277,142 759,710 Regulation "S"
June 1997 60,000 180,000 Regulation "S"
September 1997 15,000 90,000 Regulation "S"
</TABLE>
In September 1997, the Company canceled 50,000 common shares that represents
the initial payment on the sale of Reeve, Mackay & Associates Ltd.
In addition, the Company will borrow funds to match its bridge lending
requirements. A bridge loan to Receptagen was completed in December 1997. The
amount of this loan was $400,000, with the option to increase it to $700,000.
InterUnion successfully negotiated favorable terms to borrow these funds.
InterUnion is also indebted to third parties in the amount of USD$297,970 and
C$500,630 (approximately USD$350,200), which the Company is to receive from
Receptagen when the notes come due.
All of InterUnion's notes payable are matched with notes receivable that carry
substanially identical terms of repayment, with the exception of the balance of
sale for the acquisition of Leon, Frazer, Black & Associates Limited. The
Company plans to either pay these amounts from operating cash flow or issue
additional common shares from treasury.
Page 8 of 10
<PAGE> 9
(6) ACQUISITION PROGRAM
In July 1997, InterUnion acquired a 33% interest in Leon Fraser, Black &
Associates Limited. ("LFB"). InterUnion's investment in LFB has been financed
from working capital. LFB has approximately C$200 million under management.
This investment is reflected in InterUnion's financial statements for the
second quarter of fiscal 1998.
In January 1998, InterUnion announced it has agreed to acquire 90% of the
issued and outstanding shares of Cluster Asset Management Limited which owns
100% of the issued and outstanding common shares The Glen Ardith-Frazer
Corporation, the minority owner is LFB. LFB acquired its interest prior to
InterUnion acquiring its 33.3% of LFB. The Glen Ardith-Frazer Corporation is
an investment management firm with approximately C$150 million under
management.
InterUnion's management continues to explore opportunities for the acquisition
of operating companies that will provide additional cash flow and liquidity to
its common share. Such acquisitions would be financed by the issuance of
common stock from treasury or, if required, by means of private placement or
at a last resort from operations. Management continues to investigate a number
of opportunities in the investment management field and the investment banking
activities. However, the Company only plans to consummate such acquisition if
they meet the Company's objectives. The Company is also considering special
situation acquisitions linked to bridge financing activities.
In addition to the above, the Company is also exploring various opportunities
in the management of multiple residential real estate properties. Such
activities are at a very early stage and the Company cannot indicate if any of
these opportunities will materialize into any successful project.
(7) CONCLUDING REMARKS
There are no other known trends, events or uncertainties that may have, or are
reasonably likely to have, a material impact on the Company's short-term or
long-term liquidity that has not been discussed above.
In addition, there are no significant income or losses that have arisen from
the Company's continuing operations that have not been analyzed or discussed
above. In addition, there have not been any material change in any line item
that is presented on the financial statements that has not been discussed
above.
(8) CERTAIN RISK FACTORS WHICH MAY IMPACT FUTURE OPERATIONS
The Company and its subsidiaries operate in a rapidly changing environment that
involves a number of factors, some of which are beyond management's control,
such as financial market trends both domestic and foreign in addition to
investors' appetite for new financings.
Forward-looking statements included in Management's Analysis and Discussion
reflects management's best judgment based on known factors and involve risks
and uncertainties. Actual results could differ materially from those
anticipated in these forward-looking statements. Forward-looking information
is provided by InterUnion pursuant to the safe harbor established by recent
securities legislation and should be evaluated in the context of these factors.
In the opinion of management the financial statements for the periods ending
December 31, 1997 accurately reflect the operations of the Company and its
subsidiaries. The Company has taken every reasonable step to assure itself
that its quarterly financial statements do not represent a distorted picture to
anyone having a business reason to review such statements and who has also
reviewed its previous audited annual financial statements for the year ended
March 31, 1997.
Page 9 of 10
<PAGE> 10
ITEM 1 - LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceeding, nor is its
property the subject of a pending legal proceeding for which the claims,
exclusive of interest and costs, exceed 10% of the current assets of the
Company on a consolidated basis.
ITEM 2 - CHANGES IN SECURITIES
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There have been no defaults in the payment of principal or interest with
respect to any senior indebtedness of InterUnion Financial Corporation.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27 Financial Data Schedule (for S.E.C. use only).
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.
InterUnion Financial Corporation
---------------------------------------------
(Registrant)
Date February 11, 1998 /s/ Georges Benarroch, Director
---------------------------------------------
(Signature)*
Date February 11, 1998 /s/ Jacques Meyer De Stadelhofen, Director
-----------------------------------------------
(Signature)*
* Print the name and title of each signing officer under his signature.
Page 10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM INTERUNION
FINANCIAL CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS
ENDED DECEMBER 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<CASH> 675,664
<SECURITIES> 338,462
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<PP&E> 2,102,883
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,916,963
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<COMMON> 1,220
0
150,000
<OTHER-SE> 5,777,660
<TOTAL-LIABILITY-AND-EQUITY> 8,916,963
<SALES> 0
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<CGS> 0
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<OTHER-EXPENSES> 169,497
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<INTEREST-EXPENSE> (2,779)
<INCOME-PRETAX> (277,510)
<INCOME-TAX> (70,000)
<INCOME-CONTINUING> (207,510)
<DISCONTINUED> 804,174
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 596,664
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.37
</TABLE>
