-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KKbSdJ25MsrpwVHR4uhsz7w+AOuvCJKzmFupHZgSJJiwgPD/FWD2HLcWf/dcffSx nWHyN2NrF3Ur1KWrFbKINw== 0001000096-97-000861.txt : 19971117 0001000096-97-000861.hdr.sgml : 19971117 ACCESSION NUMBER: 0001000096-97-000861 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLD SERVICES INC CENTRAL INDEX KEY: 0000767410 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 460355586 STATE OF INCORPORATION: SD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13499 FILM NUMBER: 97719222 BUSINESS ADDRESS: STREET 1: 404 S LINCOLN CITY: ABERDEEN STATE: SD ZIP: 57401 BUSINESS PHONE: 6052294404 MAIL ADDRESS: STREET 1: 404 S LINCOLN CITY: ABERDEEN STATE: SD ZIP: 57401 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTER REPORT UNDER SECTION 13 0R 15(d) Quarter Ended 9-30-97 Commission File Number --------------------- ---------------- World Services, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) South Dakota 46-0355586 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 404 South Lincoln Aberdeen, South Dakota 57401 - -------------------------------------------------------------------------------- (Address if principal executive offices) (Zip Code) Registrant's telephone number, including area code (605) 225-4131 -------------- Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 Yes X during the preceding 12 months (or for such shorter ------- period that the registrant was required to file such No reports), and (2) has been subject to such filing ------- requirements for the past 90 days. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the close of the period covered by this report. As of September 30, 1997, Registrant had 2,600,400 shares of its $.001 par value common stock outstanding. INDEX PART I. FINANCIAL INFORMATION: Item 1. ACCOUNTANTS' REPORT ................................... 1 Balance Sheets as of September 30, 1997, and December 21, 1996 ............................ 2 Statements of Income for the Quarters Ended September 30, 1997 and 1996 .................. 3 Statements of Income for the Nine Months Ended September 30, 1997 and 1996 .................. 4 Statements of Cash Flows for the Nine Months Ended September 30, 1997 and 1996 ............ 5 Notes to Financial Statements ................ 6 Item 2. Managements's discussion and Analysis of Financial Condition and Results of Operations: Liquidity and Capital Resources .............. 7 Results of Operations ........................ 8 PART II. OTHER INFORMATION: Item 1. Legal Proceedings ..................................... 10 Item 2. Changes in Securities ................................. 10 Item 3. Default Upon Senior Securities ........................ 10 Item 4. Submission of matters to a Vote of Security Holders ...................................... 10 Item 5. Other Inf11mation ..................................... 11 Item 6. Exhibits and Reports on Form 10-Q ..................... 11 MEIDINGER & ASSOCIATES - -------------------------------------------------------------------------------- Certified Public Accountants 311 South 2nd Street Aberdeen, SD 57401 (605) 229-4404 October 20, 1997 The Board of Directors World Services, Inc. Aberdeen, South Dakota 57401 We have compiled the accompanying Balance Sheets of World Services, Inc. as of September 30, 1997, and December 31, 1996, and the related Statements of Income and Cash Flows for the periods ended September 30, 1997, and September 30, 1996, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements, information that is the representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. The corporation previously recorded the First Savings & Loan Association, Inc. (FSL) investment, for interim reporting purposes, only at the audited value at year end. The investment in FSL is now accounted for under the equity method of accounting. Accordingly, the accompanying financial statements have been restated. Meidinger & Associates Certified Public Accountants 1
WORLD SERVICES, INC. BALANCE SHEETS September 30, 1997 and December 31, 1996 September 30, December 31, 1997 1996 ---- ---- ASSETS CURRENT ASSETS Cash $ 15,994.60 $ 27,652.56 Certificate of Deposit 490,000.00 290,000.00 Interest Receivable 15,508.77 16,998.90 ---------------- ---------------- TOTAL CURRENT ASSETS 521,503.37 334,651.46 PROPERTY AND EQUIPMENT Office Equipment 2,882.14 2,882.14 Accum Depr-Office Equipment (2,882.14) (2,882.14) ---------------- ---------------- TOTAL PROPERTY AND EQUIPMENT 0.00 0.00 INVESTMENTS AND OTHER ASSETS Investment-First Savings & Loan 380,100.00 335,000.00 Investment-Super 8 Developers 568,000.00 568,000.00 Other 4,000.00 4,000.00 ---------------- ---------------- TOTAL OTHER ASSETS 952,100.00 907,000.00 ---------------- ---------------- TOTAL ASSETS $ 1,473,603.37 $ 1,241,651.46 ================ ================ LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Stock Redemption $ 202,306.75 $ 0.00 ---------------- ---------------- STOCKHOLDERS EQUITY Common stock, par value $.001 per share; (50,000,000 shares authorized) 3,152,400 shares issued at September 30, 1997, and 5,357,000 shares issued at December 31, 1996 5,359.00 5,359.00 Additional paid in capital 6,544,641.00 6,544,641.00 Treasury Stock at cost, 552,000 shares at September 30, 1997, and 129,093 at December 31, 1996 (205,306.75) (3,000.00) Accumulated Deficit (5,073,396.63) (5,305,348.54) ---------------- --------------- TOTAL STOCKHOLDERS' EQUITY 1,261,296.62 1,241,651.46 ---------------- ---------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,473,603.37 $ 1,241,651.46 ================ ================ 2
WORLD SERVICES, INC. STATEMENTS OF INCOME AND ACCUMULATED DEFICIT For the Quarters Ended September 30, 1997 and 1996 1997 1996 ---- ---- REVENUE Interest Income $ 6,541.84 $ 2,094.25 Stock Transfer Fees 0.00 40.25 ---------------- ------------- TOTAL REVENUE 6,541.84 2,134.50 ---------------- ------------- EXPENSES Accounting Fees 3,120.80 0.00 Contract Wages & Consulting 13,907.20 780.00 Faxes 141.75 0.07 Legal Fees 7,591.77 4,908.94 Director Fees 3,150.00 600.00 Office Supplies 13.80 88.50 Printing 6,786.94 0.00 Postage 2,252.05 17.78 Supplies 133.30 0.00 Telephone 77.77 2.21 Annual Meeting 462.06 0.00 Miscellaneous Expense 0.00 17.10 ---------------- ------------- TOTAL EXPENSES 37,637.44 6,414.53 ---------------- ------------- LOSS BEFORE EQUITY IN EARNINGS OF AFFILIATED COMPANIES (31,095.60) (4,280.03) EQUITY IN EARNINGS OF AFFILIATED COMPANIES 8,100.00 0.00 ---------------- ------------- LOSS BEFORE INCOME TAXES (22,995.60) (4,280.03) INCOME TAXES (NOL CARRYOVER) 0.00 0.00 ---------------- ------------- NET INCOME (LOSS) $ (22,995.60) $ (4,280.03) ================ ============= INCOME (LOSS) PER SHARE * * ================ ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,000,898 5,229,907 ================ ============= * Less than $0.01 per share.
3
WORLD SERVICES, INC. STATEMENTS OF INCOME AND ACCUMULATED DEFICIT For the Nine Months Ended September 30, 1997 and 1996 1997 1996 REVENUE Dividend Income $ 239,085.60 $ 79,700.95 Interest Income 31,399.35 15,247.38 Stock Transfer Fees 39.75 0.00 Miscellaneous Income 0.00 272.24 ---------------- ---------------- TOTAL REVENUE 270,524.70 95,220.57 ---------------- ---------------- EXPENSES Accounting Fees 11,736.60 14,647.80 Contract Wages & Consulting 16,547.20 4,973.68 Faxes 281.25 0.00 Interest 0.00 49.76 Legal Fees 35,054.97 11,473.77 Donations 0.00 100.00 Director Fees 6,300.00 1,950.00 Dues, Fees, Subscriptions 0.00 58.00 Office Supplies 133.15 352.80 Printing 7,769.29 0.00 Postage 2,663.55 354.45 Rent 1,820.00 260.00 Repairs & Maintenance 0.00 580.30 Supplies 335.03 4,171.46 Telephone 121.89 70.92 Travel 447.80 0.00 Annual Meeting 462.06 0.00 Administrative Expenses 0.00 2,298.68 Miscellaneous Expense 0.00 470.01 ---------------- ---------------- TOTAL EXPENSES 83,672.79 41,811.63 ---------------- ---------------- INCOME BEFORE EQUITY IN EARNINGS OF AFFILIATED COMPANIES 186,851.91 53,408.94 EQUITY IN EARNINGS OF AFFILIATED COMPANIES 45,100.00 0.00 ---------------- ---------------- INCOME BEFORE INCOME TAXES 231,951.91 53,408.94 INCOME TAXES (NOL CARRYOVER) 0.00 0.00 ---------------- ---------------- NET INCOME $ 231,951.91 $ 53,408.94 ================ ================ INCOME (LOSS) PER SHARE 0.05 0.01 ================ ================ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,815,735 5,229,907 ================ ================
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WORLD SERVICES, INC STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1997 and 1996 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 231,951.91 $ 53,408.94 Adjustment to reconcile net income to net cash provided by operating activities: Equity in Earning of Affiliates (45,100.00) 0.00 (Increase) Decrease in: Other Assets 1,490.13 0.00 Increase (Decrease) in: Accounts Payable 0.00 (6,813.56) -------------- -------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 188,342.04 46,595.38 -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Fixed Assets 0.00 (2,882.14) Purchase of Certificates of Deposit (200,000.00) (140,000.00) Sale of certificate of deposit 0.00 100,000.00 -------------- -------------- NET CASH (USED)BY INVESTING ACTIVITIES (200,000.00) (42,882.14) -------------- -------------- NET INCREASE IN CASH (11,657.96) 3,713.24 CASH AT BEGINNING OF PERIOD 27,652.56 9,000.00 -------------- -------------- CASH AT END OF PERIOD $ 15,994.60 $ 12,713.24 ============== ============== SUPPLEMENTAL DISCLOSURES Cash payments for: Income taxes $ 0.00 $ 0.00 ============== ============== Interest paid $ 0.00 $ 49.76 ============== =========== 5
WORLD SERVICES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1997 AND 1996 In the opinion of management of World Services, Inc., (the Company), the accompanying unaudited financial statements reflect all adjustments necessary to present fairly the financial position of the company as of September 30, 1997 and 1996, and the results of operations and changes in financial position for the nine months ended September 30, 1997 and 1996. These unaudited financial statements should be read in conjunction with the Company's annual report on Form 10-KSB for the year ended December 31, 1996. NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES - -------------------------------------------------------------------------------- A summary of significant accounting policies is currently on file with the Securities and Exchange Commission on Form 10-KSB. NOTE 2 - INCOME TAXES - -------------------------------------------------------------------------------- As of December 31, 1996, the Company had net operating loss carry forwards for income tax purposes totaling approximately $3,100,000 which expire in the years 1997 to 2011. The net operating loss carry forwards may be limited with respect to their availability due to prior ownership changes and the consolidated return regulations. In addition, there are investment tax credit carry forwards of $28,000. 6 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this report. LIQUIDITY AND CAPITAL RESOURCES - SEPTEMBER 30, 1997, COMPARED TO DECEMBER 31, 1996 - -------------------------------------------------------------------------------- During the nine months ended September 30, 1997, Certificates of Deposit increased $200,000.00, from $290,000.00 at December 31, 1996, to $490,000.00 at September 30, 1997. The increase reflects the purchase of two certificates of $100,000.00 each. In addition, cash decreased by $11,657.96 as noted below. Interest receivable decreased $1,490.13, from $16,998.90 at December 31, 1996, to $15,508.77 at September 30, 1997. As a result of the foregoing, current assets increased by $186,851.91, from $334,651.46 at December 31, 1996, to $521,503.37 at September 30, 1997. Current liabilities increased $202,306.75, from $0.00 at December 31, 1996, to $202,306.75 at September 30, 1997. The increase is the result of a stock redemption induced by a stockholder approved stock split. - Discussed later in "Other Information". As a result of the Company's net income for the nine months of $231,951.91, the accumulated deficit decreased from $5,305,348.54 at December 31, 1996, to $5,073,396.63 at September 30, 1997. In addition, treasury stock increased $202,306.75, from $3,000.00 at December 31, 1996, to $205,306.75 at September 30, 1997. As a result, the total stockholders equity increased from $1,241,651.46 at December 31, 1996, to $1,261,296.62 at September 30, 1996. 7 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 1996 - -------------------------------------------------------------------------------- Total revenue for the three months ended September 30, 1997, were $6,541.84 as compared to $2,134.50 for the comparable period ended September 30, 1996, an increase of $4,407.34. The increase is due to interest payments on several CDs. Operating expenses were $37,637.44 for the three months ended September 30, 1997, compared to $6,414.53 for the comparable period ended September 30, 1996, an increase of $31,222.91. The majority of this increase was in legal fees, wages, directors fees, printing and postage. Equity in earnings of affiliates relates to holdings of common stock in First Savings and Loan, Inc. Based on the foregoing, the net loss available to stockholders for the three months ended September 30, 1997, was $22,995.60, which translates to a net loss per share of less than $0.01 based on 4,000,898 weighted average shares outstanding. This compares to the net loss available to stockholders for the three months ended September 30, 1996, of $4,280.03, which translates to a net loss per share of less than $0.01 based on 5,229,907 weighted average shares outstanding at that time. RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996 - -------------------------------------------------------------------------------- Total revenue for the nine months ended September 30, 1997, were $270,524.70 as compared to $95,220.57 for the comparable period ended September 30, 1996, an increase of $175,304.13. Dividend income from Super 8 Motel Developers, Inc. of over $239,000.00 is the major contributing factor in this increase. Operating expenses were $83,672.79 for the nine months ended September 30, 1997, compared to $41,811.63 for the comparable period ended September 30, 1996, an increase of $41,861.16. The majority of this increase was in legal fees due to the pending OTS inquiry (see other information). There were also substantial increases in directors fees, printing and postage mainly due to the stockholders meeting held in August of 1997. 8 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Equity in earnings of affiliates relates to holdings of common stock in First Savings and Loan, Inc. Based on the foregoing, the net income available to stockholders for the nine months ended September 30, 1997, was $231,951.91, which translates to a net income per share of $0.05 based on 4,815,735 weighted average shares outstanding. This compares to the net income available to stockholders for the nine months ended September 30, 1996, of $53,408.94, which translates to a net income per share of $0.01 based on 5,229,907 weighted average shares outstanding at that time. 9 WORLD SERVICES, INC. PART II. OTHER INFORMATION ITEM 1. - LEGAL PROCEEDINGS - -------------------------------------------------------------------------------- The company is not a party to any legal proceedings and no such proceedings are known to be contemplated except for the Office of Thrift Supervision (OTS) inquiry. OTS Inquiry - In September of 1996, the Company was contacted by the federal OTS concerning certain changes in the alleged control of First Savings and Loan stock, the ownership of First Savings stock by certain affiliates of the Company, and a threatened action against the Company as a result thereof. OTS notified the Company and some of its directors that they may be in violation of OTS Reg. No. 574.4(b), relating to a requirement of submitting either a change of control notice or rebuttals of concerted action or control. The Company has complied with the OTS request by voting to sell all shares of First Savings and Loan stock at the August 18th shareholder meeting (see below). As of September 30, 1997, this offer was pending regulatory review. Subsequent to September 30, 1997, this sale was approved and the sale was consummated at a total price of $426,672.39. ITEM 2. - CHANGES IN SECURITIES - -------------------------------------------------------------------------------- None. ITEM 3. - DEFAULT UPON SENIOR SECURITIES - -------------------------------------------------------------------------------- None. ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - -------------------------------------------------------------------------------- On August 18, 1997, a shareholder meeting was held and several major decisions voted upon and approved. Items of business included the re-election of the five directors and approval of a plan to recapitalize the corporation through a 510-for-one reverse stock split and purchase of all fractional shares for $.25 per pre-split share. The shareholders further voted to approve a one-for- 300 forward stock split for all remaining shares. Also, at the insistence of the Office of Thrift Supervision (OTS), it was decided at the August 18th meeting to accept an offer to sell all shares of First Savings and Loan held by World Services, Inc. for $2.51 per share. 10 WORLD SERVICES, INC. PART II. OTHER INFORMATION (continued) ITEM 5. - OTHER INFORMATION - -------------------------------------------------------------------------------- None. ITEM 6. - EXHIBITS - -------------------------------------------------------------------------------- Exhibit 27 - Financial Data Schedule. 11 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. OCTOBER 20, 1997 WORLD SERVICES, INC. By /s/ RONNE TARRELL ------------------------------------- Ronne Tarrell, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. OCTOBER 20, 1997 Ronne Tarrell, President, Principal Executive Officer, and Director OCTOBER 20, 1997 David Jorgenson, Secretary, Treasurer, Principal Accounting Officer, Principal Financial Officer, and Director OCTOBER 20, 1997 Delores Bower, Director OCTOBER 20, 1997 Delbert Harty, Director OCTOBER 20, 1997 Terry Heinz, Director 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the September 30, 1997 of World Services, Inc. and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1997 SEP-30-1997 505,995 0 15,509 0 0 521,504 2,882 (2,882) 1,473,603 202,307 0 0 0 5,359 1,265,937 1,473,603 0 270,525 0 0 83,673 0 0 231,952 0 0 0 0 0 231,952 .044 .044
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