-----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, GRXNkvDhfKtbyPZzV3w3i5ZTssbWtbKg9edDZWgaSR+KF5MAkGL1Ef0GKOony0dY mRpYtoSKxhG4662Ts9KJUw== 0001050502-98-000236.txt : 19980817 0001050502-98-000236.hdr.sgml : 19980817 ACCESSION NUMBER: 0001050502-98-000236 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 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: 98687792 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 6-30-98 Commission File Number____________ World Services, Inc. ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) South Dakota 46-0355586 - -------------------------------------------------------------------------------- (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) PO Box 786 Aberdeen, South Dakota 57402 ----------------------------------------------------------------- (Address if principal executive offices) (Zip Code) (605) 225-4131 -------------- Registrant's telephone number, including area code 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 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 stock as of the close of the period covered by this report. As of June 30, 1998, Registrant had 2,639,679 shares of its $.001 par value common stock outstanding. INDEX PART I. FINANCIAL INFORMATION: Item 1. Balance Sheet as of June 30, 1998 .................. 1 Statements of Operations for Quarters Ended June 30, 1998 and 1997 ............................. 2 Statements of Operations for the Six Months Ended June 30, 1998 and 1997 ....................... 3 Statements of Cash Flows for the Six Months Ended June 30, 1998 and 1997 ....................... 4 Notes to Financial Statements ...................... 5 Item 2. Management's discussion and Analysis of Financial Condition and Results of Operations: Liquidity and Capital Resources .................... 6 Results of Operations .............................. 7 PART II. OTHER INFORMATION: Item 1. Legal Proceedings .................................. 8 Item 2. Changes in Securities .............................. 8 Item 3. Default Upon Senior Securities ..................... 8 Item 4. Submission of matters to a Vote of Security Holders ............................................ 8 Item 5. Other Information .................................. 9 Item 6. Exhibits and Reports on Form 10-Q .................. 9 WORLD SERVICES, INC. BALANCE SHEET June 30, 1998 ASSETS ------ CURRENT ASSETS Cash $ 108,955.74 Certificates of Deposit 430,000.00 Interest Receivable 11,386.00 ---------------- TOTAL CURRENT ASSETS 550,341.74 INVESTMENTS AND OTHER ASSETS United States Treasury Note 413,846.28 Investment-Super 8 Developers 568,000.00 ---------------- TOTAL OTHER ASSETS 981,846.28 ---------------- TOTAL ASSETS $ 1,532,188.02 ================ LIABILITIES AND STOCKHOLDERS EQUITY ----------------------------------- CURRENT LIABILITIES Accounts Payable $ 22,376.28 Stock Redemption payable 67,806.50 ---------------- TOTAL CURRENT LIABILITIES 90,182.78 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 (4,925,064.51) ---------------- TOTAL STOCKHOLDERS' EQUITY 1,442,005.24 ---------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,532,188.02 ================ 1 WORLD SERVICES, INC. STATEMENTS OF OPERATIONS For the Quarters Ended June 30, 1998 and 1997 1998 1997 ---- ---- REVENUE Dividend Income $ 159,390.40 $ 239,085.60 Interest Income 13,296.28 24,857.51 Stock Transfer Fees 0.00 19.50 Undistributed Income/Loss 0.00 37,000.00 ---------------- ---------------- TOTAL REVENUE 172,686.68 300,962.61 ---------------- ---------------- EXPENSES Accounting Fees 5,486.38 8,615.80 Contract Wages & Consulting 22,584.10 1,720.00 Faxes 51.00 139.50 Legal Fees 10,179.22 16,176.60 Director Fees 750.00 1,950.00 Office Supplies 264.80 0.00 Printing 545.00 982.35 Postage 1,501.08 333.45 Supplies 18.32 182.66 Telephone 47.51 39.75 Rent 500.00 1,820.00 Travel 0.00 447.80 Loss on Uncollectible Note 4,000.00 0.00 ---------------- ---------------- TOTAL EXPENSES 45,927.41 32,407.91 ---------------- ---------------- INCOME BEFORE INCOME TAXES 126,759.27 268,554.70 INCOME TAXES 0.00 0.00 ---------------- ---------------- NET INCOME $ 126,759.27 $ 268,554.70 ================ ================ INCOME PER SHARE (Basic & Diluted) .04 * ================ ================ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,640,000 5,229,907 ================ ================ * Less than $0.01 per share 2 WORLD SERVICES, INC. STATEMENTS OF OPERATIONS For the Six Months ended June 30, 1998 and 1997 1998 1997 ---- ---- REVENUE Dividend Income $ 159,390.40 $ 239,085.60 Interest Income 16,459.04 24,857.51 Stock Transfer Fees 0.00 39.75 Undistributed Income/Loss 0.00 37,000.00 ---------------- ---------------- TOTAL REVENUE 175,849.44 300,982.86 ---------------- ---------------- EXPENSES Accounting Fees 9,149.94 8,615.80 Contract Wages & Consulting 25,803.10 2,640.00 Faxes 123.00 139.50 Legal Fees 11,596.97 27,463.20 Director Fees 2,100.00 3,150.00 Office Supplies 401.28 119.35 Printing 545.00 982.35 Postage 1,760.45 411.50 Supplies 238.32 201.73 Telephone 156.47 44.12 Rent 1,250.00 1,820.00 Travel 0.00 447.80 Miscellaneous Expense 308.00 0.00 Loss on Uncollectible Note 4,000.00 0.00 ---------------- ---------------- TOTAL EXPENSES 57,432.53 46,035.35 ---------------- ---------------- INCOME BEFORE INCOME TAXES 118,416.91 254,947.51 INCOME TAXES 0.00 0.00 ---------------- ---------------- NET INCOME/COMPREHENSIVE INCOME $ 118,416.91 $ 254,947.51 ================ ================ INCOME PER SHARE (Basic & Diluted) .04 * ================ ================ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,640,000 5,229,907 ================ ================ * Less than $0.01 per share 3 WORLD SERVICES, INC. STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1998 and 1997 1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Income/Comprehensive Income $ 118,416.91 $ 254,947.51 Adjustment to reconcile net income to net cash used in operating activities: Equity in Earning of Affiliates 0.00 (37,000.00) (Increase) Decrease in: Interest Receivable 8,658.46 0.00 Other Assets (10,357.85) 1,832.50 Increase (Decrease) in: Accounts Payable 22,376.28 7,639.70 Stock Redemption Payable (5,589.50) 0.00 -------------- -------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 133,504.30 227,419.71 -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Certificates of Deposit (90,000.00) (200,000.00) -------------- -------------- NET CASH USED BY INVESTING ACTIVITIES (90,000.00) (200,000.00) -------------- -------------- NET INCREASE IN CASH 43,504.30 27,419.71 CASH AT BEGINNING OF PERIOD 65,451.44 27,652.56 -------------- -------------- CASH AT END OF PERIOD $ 108,955.74 $ 55,072.27 ============== ============== 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, 1998 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, 1998, and the results of operations and Statements of Cash Flows for the six months ended June 30, 1998 and 1997. 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, 1997. 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, 1997, the Company had net operating loss carry forwards for income tax purposes totaling approximately $3,100,000 which expire in the years 1998 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. 5 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, 1998, COMPARED TO DECEMBER 31, 1997 - -------------------------------------------------------------------------------- During the six months ended June 30, 1998, cash increased approximately $43,500 as a result of the receipt of a dividend of approximately $160,000 received from Super 8 Motels less the purchase of a $90,000 certificate of deposit which is now held by the Company. Interest receivable decreased from $20,044 at December 31, 1997, to $11,386 at June 30, 1998. Primarily as a result of the receipt of the Super 8 Motel Dividend, current assets increased by $124,846, from $425,496 at December 31, 1997, to $550,342 at June 30, 1998. Current liabilities increased $16,787, from $73,396 at December 31, 1997, to $90,183 at June 30, 1998. The increase is the result of payables accrued near the end of the quarter including $8,099 owed to Murray Woulfe as a result of the outcome of prior pending litigation and $11,000 due Ronne Tarrell for contract services. As a result of the Company's net income for the six months of $118,417, the accumulated deficit decreased from $5,043,481 at December 31, 1997, to $4,925,065 at June 30, 1998. As a result, total stockholders equity increased from 1,323,588 at December 31, 1997, to $1,442,005 at June 30, 1998. 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, 1997 or June 30, 1998. As a result, the 'current liabilities' portion of the balance sheet reflects a "stock redemption payable." During the six months ended June 30, 1998, the Company redeemed 6 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) outstanding fractional shares with a value of approximately $5,600. The total number of outstanding shares of common stock reflected on the balance sheet does not give any effect to the fractional shares outstanding. RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1997 - -------------------------------------------------------------------------------- Total revenue for the six months ended June 30, 1998, were $175,849 as compared to $300,983 for the comparable period ended June 30, 1997, a decrease of $125,133. The decrease is due to the sale in October 1997 of the First Savings & Loan investment. This decreased dividend income and also decreased their undistributed income by $37,000. Operating expenses were $57,433 for the six months ended June 30, 1998, compared to $46,035 for the comparable period ended June 30 1997, an increase of $11,397. The majority of this increase was in contract wages and consulting including the cost of payment to Murray Woulfe as a result of the negative consequences of litigation. Based on the foregoing, the net income available to stockholders for the six months ended June 30, 1998, was $118,416.91, which translates to a net income per share of less than $0.01 based on 2,640,000 weighted average shares outstanding. This compares to the net income after taxes for the six months ended June 30, 1997, of $254,948, which translates to a net income per share of less than $0.01 based on 5,229,907 weighted average shares outstanding at that time. 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 August 1997. 7 WORLD SERVICES, INC. PART II. OTHER INFORMATION ITEM 1. - LEGAL PROCEEDINGS - -------------------------------------------------------------------------------- The Company is not a party to any legal proceedings except as follows, and no such proceedings are known to be contemplated. The Company was a plaintiff in a civil action in the Circuit Court of the Fifth Judicial Circuit of the State of South Dakota (Civ97-187, entitled "World Services, Inc. vs. Murray Woulfe") against Murray Woulfe, a former president of World Services, on a promissory note. The actions sought recovery of $19,000 plus interest and costs. Mr. Woulfe denied liability and claimed that he owed World Services no obligation under the promissory note. The matter was scheduled for trial in May of 1998 and was held before one of the Circuit Judges of the Fifth Judicial Circuit in and for the County of Brown, State of South Dakota. As to the ultimate result, Plaintiff expected to prevail; however, the defendant had the right of appeal to the appellate court of the State of South Dakota. Mr. Woulfe made material counterclaims against Would Services. The defendant prevailed and therefore World Services did not recover the $19,000 plus interest and costs. The counterclaim resulted in the plaintiff owing the defendant $8,009.10 and writing off $4,000 in receivables. The financial statements reflect these results. ITEM 2. - CHANGES IN SECURITIES - -------------------------------------------------------------------------------- None. ITEM 3. - DEFAULT UPON SENIOR SECURITIES - -------------------------------------------------------------------------------- None. ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - -------------------------------------------------------------------------------- There were no shareholder meetings and no matters were submitted to a vote of shareholders during the second quarter of the fiscal year. 8 WORLD SERVICES, INC. PART II. OTHER INFORMATION (Continued) ITEM 5. - OTHER INFORMATION - -------------------------------------------------------------------------------- None. ITEM 6. - EXHIBITS - -------------------------------------------------------------------------------- Exhibit 27 - Financial Data Schedule. 9 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 10, 1998 WORLD SERVICES, INC. By: /s/ Ronne Tarrell --------------------------------- Ronne Tarrell, President, Chief Executive Officer and Principal Financial Officer 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30, 1998 FINANCIAL STATEMENTS OF WORLD SERVICES, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1998 JUN-30-1998 538,956 0 11,386 0 0 550,342 0 0 1,532,188 90,183 0 0 0 2,715 1,439,290 1,532,188 0 175,849 0 0 57,433 0 0 118,417 0 0 0 0 0 118,417 .00 .00
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