-----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, Gy0MQD9/kBcgX74oqYgMXJQxM+rsvtDkCURBoXcjOgx/DSHBYIkkG856qa7BXOYB GGcIKTdaLZpTCgc5XGvQMw== 0001000096-99-000417.txt : 19990812 0001000096-99-000417.hdr.sgml : 19990812 ACCESSION NUMBER: 0001000096-99-000417 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990811 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: 99683523 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 [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended June 30, 1999 OR [ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0- World Services, Inc. -------------------------- (Exact name of Company as specified in its charter) A South Dakota corporation I.R.S. Employer Identification No.46-0355586 PO Box 786 Aberdeen, SD 57402 ------------------------------ (Address of Principal Executive Offices) (605) 225-4131 ----------------------- (Registrant's telephone number, including area code) Not Applicable ----------------------- (former address, if changed from last report) Indicate by checkmark 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 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. ___X___Yes _______No Indicate the number of shares outstanding of the registrant's common stock as of the latest practicable date: As of June 30, 1999, there were 2,639,679 shares of common stock outstanding. INDEX PART I. FINANCIAL INFORMATION: Item 1. Balance Sheet as of June 30, 1999 ............. 1 Statements of Operations for Quarters Ended June 30, 1999 and 1998 ........................ 2 Statements of Operations for the Six Months Ended June 30, 1999 and 1998 .................. 3 Statements of Cash Flows for the Six Months Ended June 30, 1999 and 1998 .................. 4 Notes to Financial Statements ................. 5 Item 2. Management'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 Information ............................. 10 Item 6. Exhibits and Reports on Form 10-Q ............. 10 WORLD SERVICES, INC. BALANCE SHEET June 30, 1999 ASSETS CURRENT ASSETS Cash $ 43,435.89 Money Market Fund 49.49 Certificates of Deposit 1,093,000.00 Interest Receivable 23,550.64 ---------------- TOTAL CURRENT ASSETS 1,160,036.02 INVESTMENTS AND OTHER ASSETS Investment-Super 8 Developers 568,000.00 ---------------- TOTAL OTHER ASSETS 568,000.00 ---------------- TOTAL ASSETS $ 1,728,036.02 ================ LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Stock Redemption payable $ 41,321.25 Accounts Payable 11,000.00 ---------------- TOTAL CURRENT LIABILITIES 52,321.25 STOCKHOLDERS EQUITY Common stock, par value $.001 per share; (50,000,000 shares authorized)with 2,640,000 shares issued 2,715.00 Additional paid in capital 6,364,354.75 Accumulated Deficit (4,691,354.98) ---------------- TOTAL STOCKHOLDERS' EQUITY 1,675,714.77 ---------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,728,036.02 ================ 1 WORLD SERVICES, INC. STATEMENTS OF OPERATIONS For the Quarters Ended June 30, 1999 and 1998 1999 1998 ---- ---- REVENUE Dividend Income $ 79,695.20 $ 159,390.40 Interest Income 14,313.51 13,296.28 ------------- ------------- TOTAL REVENUE 94,008.71 172,686.68 ------------- ------------- EXPENSES Accounting Fees 3,177.50 5,486.38 Contract Wages & Consulting 12,260.00 22,584.10 Faxes 231.75 51.00 Legal Fees 1,536.67 10,179.22 Director Fees 1,950.00 750.00 Office Supplies 15.96 264.80 Printing 809.00 545.00 Postage 2,363.29 1,501.08 Supplies 87.70 18.32 Telephone 38.05 47.51 Rent 750.00 500.00 Annual Meeting 2,913.26 0.00 Loss on Uncollect. Note 0.00 4,000.00 ------------- ------------- TOTAL EXPENSES 26,133.18 45,927.41 ------------- ------------- INCOME(LOSS)BEFORE INCOME TAXES 67,875.53 126,759.27 INCOME TAXES 0.00 0.00 ------------- ------------- NET INCOME (LOSS) $ 67,875.53 $ 126,759.27 ============= ============= INCOME PER SHARE (Basic & Diluted) .03 .05 ============= ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,640,000 2,640,000 ============= ============= 2 WORLD SERVICES, INC. STATEMENTS OF OPERATIONS For the Six Months ended June 30, 1999 and 1998 1999 1998 ---- ---- REVENUE Dividend Income $ 79,695.20 $ 159,390.40 Interest Income 28,610.43 16,459.04 ------------- ------------- TOTAL REVENUE 108,305.63 175,849.44 ------------- ------------- EXPENSES Accounting Fees 8,919.50 9,149.94 Contract Wages & Consulting 13,645.00 25,803.10 Faxes 250.50 123.00 Legal Fees 2,037.80 11,596.97 Director Fees 2,400.00 2,100.00 Office Supplies 15.96 401.28 Miscellaneous 0.00 308.00 Printing 809.00 545.00 Postage 2,468.89 1,760.45 Supplies 135.80 238.32 Telephone 49.03 156.47 Rent 1,500.00 1,250.00 Annual Meeting 2,913.26 0.00 Loss on Uncollect. Note 0.00 4,000.00 ------------- ------------- TOTAL EXPENSES 35,144.74 57,432.53 ------------- ------------- INCOME BEFORE INCOME TAXES 73,160.89 118,416.91 INCOME TAXES 0.00 0.00 ------------- ------------- NET INCOME $ 73,160.89 $ 118,416.91 ============= ============= INCOME PER SHARE (Basic & Diluted) .03 .05 ============= ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,640,000 2,640,000 ============= ============= 3
WORLD SERVICES, INC. STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1999 and 1998 1999 1998 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 73,160.89 $ 118,416.91 Adjustment to reconcile net income to net cash provided by operating activities: (Increase) Decrease in: Interest Receivable (4,971.64) 8,658.46 Other Assets 0.00 (10,357.85) Increase (Decrease) in: Accounts Payable 0.00 22,376.28 Stock Redemption Payable (3,067.00) (5,589.50) ------------- -------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 65,122.25 133,504.30 ------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Certificates of Deposit (70,000.00) (90,000.00) ------------- -------------- NET CASH USED BY INVESTING ACTIVITIES (70,000.00) (90,000.00) ------------- -------------- NET INCREASE(DECREASE)IN CASH (4,877.75) 43,504.30 CASH AT BEGINNING OF PERIOD 48,313.64 65,451.44 ------------- -------------- CASH AT END OF PERIOD $ 43,435.89 $ 108,955.74 ============= ============== SUPPLEMENTAL DISCLOSURES Cash payments for: Income taxes $ 0.00 $ 0.00 ============= ============== Interest paid $ 0.00 $ 0.00 ============= ============= 4
WORLD SERVICES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 1999 In the opinion of management of World Services, Inc., (the Company), the accompanying unaudited financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the company as of June 30, 1999, and the results of operations and cash flows for the six months ended June 30, 1999 and 1998. 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, 1998. 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, 1998, the Company had net operating loss carry forwards for income tax purposes totaling approximately $2,700,000 which expire in the years 1999 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. NOTE 3 - Y2K COMPLIANCE - -------------------------------------------------------------------------------- The Failure of Systems and Equipment on which we depend to be Year 2000 compliant could adversely affect our business. Computer programs or other embedded technology that have been written using two digits to define the applicable year and that have time-sensitive logic may recognize a date using "00" as the Year 1900 rather than the Year 2000. This could result in widespread miscalculations or system failures. If we and the 5 WORLD SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONT'D) FOR THE PERIOD ENDED JUNE 30, 1999 banks where we have deposits or the company (S8MD) in which we hold a minority stock interest are unable to address Year 2000 issues in a timely manner, it could result in material financial risk, including the loss of revenue and unanticipated costs. Therefore, we plan to devote all resources necessary to resolve significant Year 2000 issues in a timely manner. Both information technology systems and non-IT systems using embedded technology may be affected by the Year 2000. We have completed the assessment phase of our Year 2000 program. We only have one computer and it's software is Y2K compliant. Since we are currently a non-operating company, we expect little impact of Y2K issues on our cash flow or financial condition. We have completed the process or verification of whether banks and S8MD with which we have material relationships are Year 2000 compliant. The process of verification included contacting each vendor's IT department to determine their state of Year 2000 readiness and requesting written documentation outlining each vendor's Year 2000 compliance plan. We estimate that expenditures for Year 2000 issues will be less than $1,000.00 for fiscal 1999. However, we are not able to determine the total costs for our year 2000 program or whether the Year 2000 will have a material effect on our financial condition, results of operations or cash flows. 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 - JUNE 30, 1999, COMPARED TO DECEMBER 31, 1998 - -------------------------------------------------------------------------------- During the six months ended June 30, 1999, cash decreased approximately $4,900, as a result of purchasing certificates of deposits which are now held by the Company. Interest receivable increased from $18,579 at December 31, 1998, to $23,551 at June 30, 1999. Primarily as a result of the increase in certificates of deposit and interest receivable, current assets increased by $70,094, from $1,089,942 at December 31, 1998, to $1,160,036 at June 30, 1999. Current liabilities decreased $3,067 from $55,388 at December 31, 1998, to $52,321 at June 30, 1999. The decrease is the result of payments made on stock redemption payable. As a result of the Company's net income for the six months of $73,161, the accumulated deficit decreased from $4,764,516 at December 31, 1998, to $4,691,355 at June 30, 1999. As a result, total stockholders equity increased from 1,602,554 at December 31, 1998, to $1,675,715 at June 30, 1999. In August of 1997, the Company completed a reverse stock split followed by a forward stock split. Following the reverse stock split, there were a number of fractional shares which were redeemed. Not all of the fractional shares had been submitted for payment by December 31, 1998 or June 30, 1999. As a result, the 'current liabilities' portion of the balance sheet reflects a "stock redemption payable." During the six months ended June 30, 1999, the Company redeemed outstanding fractional shares with a value of approximately $3,067. The total number of outstanding shares of common stock reflected on the balance sheet does not give any effect to the fractional shares outstanding. The company has sufficient funds available to meet its capital obligations in the foreseeable future. As noted, the future conduct of World Services' business 7 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) is dependent upon a number of factors, and there can be no assurance that World Services will be able to conduct its operations as contemplated herein. Certain statements contained in this report, such as the possibility that World Services may acquire an operating business or, if any such business is acquired that it can be successfully operated, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks including, but not limited to: the possibility that World Services will not be able to complete any such acquisition on economic terms, if at all; and if such an acquisition does occur, the possibility that World Services will not be able to operate the business successfully. Furthermore, if any acquisition does occur, it will likely be accompanied by a change of control, and there can be no assurance that such change of control will be beneficial to World Services or its existing shareholders. RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1998 - -------------------------------------------------------------------------------- Total revenue for the six months ended June 30, 1999, was $108,306 as compared to $175,849 for the comparable period ended June 30, 1998, a decrease of $67,543. This decrease was due to a significantly smaller dividend from Super 8 Developers. The dividends were smaller due to Super 8 Developers'need to withhold funds for accelerated motel development and rapid growth. Operating expenses were $35,145 for the six months ended June 30, 1999, compared to $57,433 for the comparable period ended June 30 1998, a decrease of $22,288. This decrease was in legal, consulting fees, and loss on uncollectible note. The large decrease in legal fees was because the 1997 OTS matter has been resolved. Based on the foregoing, the net income available to stockholders for the six months ended June 30, 1999, was $73,161, which translates to a net income per share of $0.03 based on 2,640,000 weighted average shares outstanding. This compares to the net income after taxes for the six months ended June 30, 1998, of $118,416, which translates to a net income per share of $0.05 based on 2,640,000 weighted average shares outstanding at that time. 8 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The weighted average number of shares has been adjusted for the reverse and forward stock splits completed in August of 1997 and for the repurchase of the fractional shares resulting from the reverse stock split, all as described in the Company's proxy statement for the shareholders' meeting in August of 1997. No major changes in income or expenses are anticipated for the rest of the year. 9 WORLD SERVICES, INC. PART II. OTHER INFORMATION ITEM 1. - LEGAL PROCEEDINGS - -------------------------------------------------------------------------------- None. 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 June 24, 1999, the Company held a special meeting of its shareholders in lieu of an annual meeting. At that meeting, the following nominees were reelected to the Board of Directors: Ronne Tarrell, Delores Bower, David Jorgenson, Delbert Harty, and Terry Heinz. No other matters were considered at the special meeting. ITEM 5. - OTHER INFORMATION - -------------------------------------------------------------------------------- None. ITEM 6. - EXHIBITS - -------------------------------------------------------------------------------- Exhibit 27 - Financial Data Schedule. 10 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. August 4, 1999 WORLD SERVICES, INC. By: /s/ Ronne Tarrell ------------------------------------- Ronne Tarrell, President, Chief Executive Officer and Principal Financial Officer 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the June 30, 1999 financial statements of World Services, Inc. and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1999 JUN-30-1999 1,136,485 0 23,551 0 0 1,160,036 0 0 1,728,036 52,321 0 0 0 2,715 1,673,000 1,728,036 0 94,009 0 0 26,133 0 0 67,876 0 0 0 0 0 67,876 .026 .026
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