-----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, LGXm/Esd7RvbqK4T//2CdLXg0g4My3I45kMJ/WLo6xN5a9V2uqFjsdkg0viS2Jlb tdjL2NogKKy8HNLQDNkqEQ== 0001050502-99-000136.txt : 19990325 0001050502-99-000136.hdr.sgml : 19990325 ACCESSION NUMBER: 0001050502-99-000136 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990324 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/A SEC ACT: SEC FILE NUMBER: 000-13499 FILM NUMBER: 99571220 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/A 1 FORM 10-Q/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A#1 QUARTER REPORT UNDER SECTION 13 0R 15(d) Quarter Ended 9-30-98 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) 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 X 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months Yes X (or for such shorter period that the registrant was required to ----- file such reports), and (2) has been subject to such filing No 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, 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 September 30, 1998 .................1 Statements of Operations for Quarters Ended September 30, 1998 and 1997 ............................2 Statements of Operations for the Nine Months Ended September 30, 1998 and 1997 ......................3 Statements of Cash Flows for the Nine Months Ended September 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 Y2K Compliance .........................................8 PART II. OTHER INFORMATION: Item 1. Legal Proceedings ......................................9 Item 2. Changes in Securities ..................................9 Item 3. Default Upon Senior Securities .........................9 Item 4. Submission of matters to a Vote of Security Holders ................................................9 Item 5. Other Information .....................................10 Item 6. Exhibits and Reports on Form 10-Q .....................10 WORLD SERVICES, INC. BALANCE SHEET September 30, 1998 ASSET CURRENT ASSETS Cash $ 89,220.49 Certificates of Deposit 580,000.00 Interest Receivable 14,408.00 ------------- TOTAL CURRENT ASSETS 683,628.49 INVESTMENTS AND OTHER ASSETS United States Treasury Note 419,387.58 Investment-Super 8 Developers 568,000.00 ------------- TOTAL OTHER ASSETS 987,387.58 ------------- TOTAL ASSETS $1,671,016.07 ============= LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Stock Redemption payable $ 66,656.50 ------------- TOTAL CURRENT LIABILITIES 66,656.50 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 (4,762,710.18) ------------- TOTAL STOCKHOLDERS' EQUITY 1,604,359.57 ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,671,016.07 ============= 1 WORLD SERVICES, INC. STATEMENTS OF OPERATIONS For the Quarters Ended September 30, 1998 and 1997 1998 1997 ---- ---- REVENUE Dividend Income $ 159,390.40 $ 0.00 Interest Income 13,502.33 6,541.84 Undistributed Income/Loss 0.00 8,100.00 ------------- ------------- TOTAL REVENUE 172,892.73 14,641.84 ------------- ------------- EXPENSES Accounting Fees 2,399.00 3,120.80 Contract Wages & Consulting 4,249.61 13,907.20 Faxes 30.00 141.75 Legal Fees 773.87 7,591.77 Director Fees 1,350.00 3,150.00 Office Supplies 366.71 13.80 Printing 119.00 6,786.94 Postage 416.00 2,252.05 Supplies 36.20 133.30 Telephone 48.01 77.77 Rent 750.00 0.00 Annual Meeting 0.00 462.06 ------------- ------------- TOTAL EXPENSES 10,538.40 37,637.44 ------------- ------------- INCOME(LOSS)BEFORE INCOME TAXES 162,354.33 (22,995.60) INCOME TAXES 0.00 0.00 ------------- ------------- NET INCOME (LOSS) $ 162,354.33 $ (22,995.60) ============= ============= INCOME PER SHARE (Basic & Diluted) .06 * ============= ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,640,000 2,640,000 ============= ============= * Less than $0.01 per share. 2 WORLD SERVICES, INC. STATEMENTS OF OPERATIONS For the Nine Months ended September 30, 1998 and 1997 1998 1997 ---- ---- REVENUE Dividend Income $ 318,780.80 $ 239,085.60 Interest Income 29,961.37 31,399.35 Stock Transfer Fees 0.00 39.75 Undistributed Income/Loss 0.00 45,100.00 ------------- ------------- TOTAL REVENUE 348,742.17 315,624.70 ------------- ------------- EXPENSES Accounting Fees 11,548.94 11,736.60 Contract Wages & Consulting 30,052.71 16,547.20 Faxes 153.00 281.25 Legal Fees 12,370.84 35,054.97 Director Fees 3,450.00 6,300.00 Office Supplies 767.99 133.15 Printing 664.00 7,769.29 Postage 2,176.45 2,663.55 Supplies 274.52 335.03 Telephone 204.48 121.89 Rent 2,000.00 1,820.00 Travel 0.00 447.80 Miscellaneous Expense 308.00 0.00 Annual Meeting 0.00 462.06 Loss on Uncollectible Note 4,000.00 0.00 ------------- ------------- TOTAL EXPENSES 67,970.93 83,672.79 ------------- ------------- INCOME BEFORE INCOME TAXES 280,771.24 231,951.91 INCOME TAXES 0.00 0.00 ------------- ------------- NET INCOME $ 280,771.24 $ 231,951.91 ============= ============= INCOME PER SHARE (Basic & Diluted) .10 .08 ============= ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,640,000 2,640,000 ============= ============= * Less than $0.01 per share. 3
WORLD SERVICES, INC. STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1998 and 1997 1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $280,771.24 $231,951.91 Adjustment to reconcile net income to net cash used in operating activities: Equity in Earning of Affiliates 0.00 (45,100.00) (Increase) Decrease in: Interest Receivable 5,636.46 0.00 Other Assets (15,899.15) 1,490.13 Increase (Decrease) in: Stock Redemption Payable (6,739.50) 0.00 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 263,769.05 188,342.04 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Certificates of Deposit (240,000.00) (200,000.00) ----------- ----------- NET CASH USED BY INVESTING ACTIVITIES (240,000.00) (200,000.00) ----------- ----------- NET INCREASE IN CASH 23,769.05 (11,657.96) CASH AT BEGINNING OF PERIOD 65,451.44 27,652.56 ----------- ----------- CASH AT END OF PERIOD $ 89,220.49 $ 15,994.60 =========== =========== 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 SEPTEMBER 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 September 30, 1998, and the results of operations and Statements of Cash Flows for the nine months ended September 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 - SEPTEMBER 30, 1998, COMPARED TO DECEMBER 31, 1997 During the nine months ended September 30, 1998, cash increased approximately $23,800 as a result of the receipt of a dividend of approximately $318,800 received from Super 8 Motel Developers less the purchase of $240,000 certificates of deposits which are now held by the Company. Interest receivable decreased from $20,044 at December 31, 1997, to $14,408 at September 30, 1998. Primarily as a result of the receipt of the Super 8 Motel Developers Dividend, current assets increased by $258,132, from $425,496 at December 31, 1997, to $683,628 at September 30, 1998. Current liabilities decreased $6,739, from $73,396 at December 31, 1997, to $66,657 at September 30, 1998. The decrease is the result of payments made on stock redemption payable. As a result of the Company's net income for the nine months of $280,771, the accumulated deficit decreased from $5,043,481 at December 31, 1997, to $4,762,710 at September 30, 1998. As a result, total stockholders equity increased from 1,323,588 at December 31, 1997, to $1,604,360 at September 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 September 30, 1998. As a result, the 'current liabilities' portion of the balance sheet reflects a "stock redemption payable." During the nine months ended September 30, 1998, the Company redeemed outstanding fractional shares with a value of approximately $6,700. The total number of outstanding shares of common stock reflected on the balance sheet does not give any effect to the fractional shares outstanding. 6 WORLD SERVICES, INC. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 Total revenue for the nine months ended September 30, 1998, was $348,742 as compared to $315,625 for the comparable period ended September 30, 1997, an increase of $33,117. The increase is due to an exceptionally good dividend paid by Super 8 Motel Developers because of the profitable sale of one of their motels. Operating expenses were $67,971 for the nine months ended September 30, 1998, compared to $83,673 for the comparable period ended September 30 1997, a decrease of $15,702. The majority of this decrease was in legal fees. Based on the foregoing, the net income available to stockholders for the nine months ended September 30, 1998, was $280,771.24, which translates to a net income per share of $.10 based on 2,640,000 weighted average shares outstanding. This compares to the net income after taxes for the nine months ended September 30, 1997, of $231,951, which translates to a net income per share of $.08 based on 2,640,000 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 Y2K COMPLIANCE The Failure of Systems and Equipment on which we depend to by 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 banks where we have deposits or the subsidiary company 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 not completed the process of verification of whether banks and subsidiary with which we have material relationships are Year 2000 compliant. We intend to complete this verification process with our banks and subsidiary by the quarter ending June 30, 1999. The process of verification includes 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. 8 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 World 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 $8,099.10 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. 9 WORLD SERVICES, INC. PART II. OTHER INFORMATION (Continued) 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. March 24, 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 WORLD SERVICES, INC. 9-MOS DEC-31-1998 SEP-30-1998 669,220 0 14,408 0 0 683,628 0 0 1,671,016 66,657 0 0 0 2,715 1,601,645 1,671,016 0 348,742 0 0 67,971 0 0 280,771 0 0 0 0 0 280,771 .00 .00
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