FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 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 Number 0-11533 GREEN GOLD CONSOLIDATED __________________________________________________________ (Exact name of registrant as specified in its charter) CALIFORNIA 33-0023916 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 591 West Los Angeles Avenue, Moorpark, CA 93021 (Address of principal executive office) (Zip Code) (805) 530-3858 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark 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 [ ] PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEET March 31, September 30, 1998 1997 (Unaudited) --------- ------------ ASSETS Assets: Cash and cash equivalents $ 487,000 $ 656,000 Notes receivable 646,000 807,000 Inventories of growing crops 15,000 15,000 Accrued interest receivable 19,000 32,000 Property held for sale 1,195,000 1,159,000 Other assets 19,000 16,000 ---------- ---------- TOTAL ASSETS $2,381,000 $2,685,000 ========= ========= LIABILITIES AND PARTNERS' EQUITY Liabilities: Accounts payable and accrued liabilities $ 41,000 $ 49,000 ---------- ---------- TOTAL LIABILITIES 41,000 49,000 Partners' equity 2,340,000 2,636,000 ---------- --------- TOTAL LIABILITIES AND PARTNERS' EQUITY $2,381,000 $2,685,000 ========= ========= See accompanying notes to financial statements GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (Unaudited) For the Six Months Ending March 31, 1998 1997 ----------- --------- CROP SALES $ 110,000 $ 82,000 OPERATING COSTS AND EXPENSES: Cultural Cae Costs 80,000 96,000 Professional services 77,000 66,000 Depreciation, property tax and other 42,000 29,000 ----------- ---------- Total Operating Costs and Expenses 199,000 191,000 LOSS FROM OPERATIONS (89,000) (109,000) OTHER INCOME (EXPENSES): Realized gross profit 27,000 14,000 Interest income 91,000 101,000 Other income 6,000 7,000 ---------- ---------- NET INCOME $ 35,000 $ 13,000 =========== ========== NET INCOME PER LIMITED PARTNERSHIP INTEREST $ .0035 $ .0013 =========== =========== Weighted average number of limited partnership interests outstanding during the period used to compute earnings per limited partnership interest 9,986,000 9,986,000 ========= ========= See accompanying notes to financial statements GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited) For Three Months Ending March 31, 1998 1997 ---------- --------- < c> CROP SALES $ 74,000 $ 82,000 Cultural Care Costs 40,000 52,000 Professional Services 40,000 37,000 Depreciation, property tax and other 8,000 4,000 ---------- --------- Total Operating Costs and Expenses 88,000 93,000 INCOME (LOSS) FROM OPERATIONS (14,000) (11,000) OTHER INCOME (EXPENSES): Realized gross profit 25,000 8,000 Interest Income 45,000 47,000 Other Income 2,000 2,000 ---------- --------- NET INCOME $ 58,000 $ 46,000 ========== ========= NET INCOME PER LIMITED PARTNERSHIP INTEREST $ .0058 $ .0046 ========== ========= Weighted average number of limited partnership interests outstanding during the period used to compute earnings per limited partnership interest 9,986,000 9,986,000 ========= ========= See accompanying notes to financial statements GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENT OF CASH FLOWS For the Six Months Ended March 31, 1998 and 1997 (Unaudited) March 31, March 31, 1998 1997 ----------- ---------- Cash flows from operating activities: Net income $ 35,000 $ 13,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization -0- 1,000 Deferred profit recognized (27,000) (14,000) Changes in assets and liabilities: Decrease in interest receivables 13,000 5,000 (Increase) decrease in other assets (3,000) 1,000 (Decrease) increase in accounts payable and accrued liabilities (8,000) 1,000 ------------ ---------- Net cash provided by operating activities 10,000 7,000 ------------ ---------- Cash flows from investing activities: Collection on notes receivable 152,000 31,000 ------------ ---------- Net cash provided by investing activities 152,000 31,000 ------------ ---------- Cash flows from financing activities: Distributions to limited partners (320,000) (250,000) Distributions to general partner (11,000) (12,000) ----------- ---------- Net cash used by financing activities (331,000) (262,000) ----------- ---------- Net (decrease) in cash (169,000) (224,000) Cash at September 30 656,000 591,000 --------- --------- Cash at March 31 $ 487,000 $ 367,000 ========= ========= See accompanying notes to financial statements GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS (Unaudited) A. SIGNIFICANT ACCOUNTING POLICIES Property and Depreciation - Property is stated at the lower of cost or net realizable value. Depreciation is provided on a straight-line method over the estimated useful lives of the respective assets. Inventories - Inventories, consisting of growing crops, is valued at the lower of cost or net realizable value under the first-in, first-out (FIFO) method. Cost is defined as cultural care costs related to the growing crops. Income Taxes - The Partnership reports its tax returns on the cash basis of accounting. No provision for income taxes is included in the accompanying financial statements as the Partnership's results of operations are distributed to the partners for inclusion in their respective income tax returns. Profit Recognition on Real Estate Sales - It is the Partnership's policy to defer profit on real estate sales until such time as the purchaser's cumulative investment and continued involvement in the property meet the minimum criteria for full profit recognition as set forth in the Financial Accounting Standards Board Statement No. 66, Accounting for Sales of Real Estate. Until such time as profit can be recognized under the full accrual method, the cost recovery and installment methods are used. Net Income Per Limited Partnership Interest - Net income per limited partnership interest was calculated using the weighted average of limited partnership interests outstanding during the year and the Limited Partners' share of the net income. B. GENERAL Green Gold Consolidated was organized in accordance with the Provisions of the California Uniform Limited Partnership Act for the purpose of receiving the assets and liabilities of twelve limited partnerships under common management and thereby consolidating the operations of those partnerships under an exchange transaction effective June 30, 1983. Under the exchange transaction, the Partnership issued 10,000,000 limited partnership interests (pro rata) to the holders of interests in the twelve individual limited partnerships in exchange for the assets and liabilities of those partnerships. Under the provisions of the partnership agreement, profits and losses are allocated in the ratio of 93.5% to the Limited Partners and 6.5% to the General Partner, provided that prior to the first fiscal quarter during which a distribution is made to the General Partner from the proceeds of the property sales or refinancing, all gains and losses resulting from property sales are allocated in the ratio of 99% to the Limited Partners and 1% to the General Partner. The combination of the twelve partnerships into one partnership was treated as a reorganization of entities under common control, accounted for similar to a "pooling of interest". C. NOTES RECEIVABLE Notes receivable consist of the following as of: March 31, September 30, 1998 1997 --------- ----------- First trust deed notes $ 1,398,000 $ 1,693,000 Less: Deferred profit on real estate sales (653,000) (787,000) Allowance for doubtful accounts (99,000) (99,000) ---------- --------- $ 646,000 $ 807,000 ========== ========== D. PROPERTY Property is comprised of the following: March 31, September 30, 1998 1997 Land $1,195,000 $1,159,000 Farm equipment 151,000 151,000 Trees 276,000 276,000 --------- --------- Total 1,622,000 1,586,000 Accumulated depreciation (427,000) (427,000) ---------- ---------- $1,195,000 $1,159,000 ========= ========= E. EARNINGS (LOSS) PER LIMITED PARTNERSHIP INTEREST Earnings (loss) per limited partnership interest have been computed by dividing the aggregate limited partners' share of net income (loss) by the weighted average number of limited partnership interests outstanding during the period, 9,986,000 in 1998 and 1997, respectively. F. MANAGEMENT AGREEMENT The Partnership has an agreement with Las Posas Investment Company and Mr. Neno Spondello, Jr. to manage and market the Partnership properties. G. STATEMENT BY MANAGEMENT In the opinion of the Management, the financial information presented herein reflects all adjustments which are necessary to a fair statement of the results for the interim periods presented. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Crop sales for the quarter ended March 31, 1998, were $74,000, compared to $82,000 for the same quarter in 1997. The quarterly decrease in crop revenue is attributed to picking 124,000 pounds of avocados this quarter compared to 131,000 the prior year's quarter ended March 31. Crop prices for the quarter ended March 31, 1998, averaged $.59 per pound compared to $.63 per pound in the same quarter in 1997. Avocado production in 1998 is budgeted at 487,000 pounds; however, this may vary somewhat based on weather conditions, the impact of the normal tree cycle and the effects of the "avocado" persea mite. Pounds produced in 1997 were 416,000. Operating costs and expenses for the quarter ended March 31, 1998, decreased $5,000, from $93,000 to $88,000. Cultural care costs decreased $12,000 from $52,000 to $40,000. The main reason for the decrease results from significantly reduced irrigation and water costs due to the heavy rainfall. Professional Services increased $3,000 from $37,000 to $40,000. The increase results from investor services costs related to the conversion to Windows and payment of the 2% of gross partnership cash receipts to the "manager" for its services which was higher than the prior quarter ended March 31, due to a loan payoff. Other expenses increased $4,000 from $4,000 to $8,000 mainly as a result of $3,000 in property taxes paid on one parcel foreclosed in the quarter ended December 31, 1997. Other income increased $12,000 from $46,000 to $58,000. The increase is mainly attributed to recognizing deferred profit of $25,000 from the early payoff of one note totaling $118,000 during the quarter ended March 31, 1998. There were no sales in the quarter ended March 31, 1998. The marketing and sales program is actively underway for all of the remaining 17 parcels totaling 165 acres. Sales activity is increasing and we expect offers on several parcels next quarter. Liquidity and Capital Resources As of March 31, 1998, the Partnership has cash reserves of approximately $451,000 to cover operating expenses and the small amount of remaining real estate development costs. This is expected to be sufficient to comply with the business plan. PART II OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (b) No reports on Form 8-K were filed by the Registrant during the quarter ended March 31, 1998. SIGNATURES Pursuant to the requirements 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. DATE: May 13, 1998 GREEN GOLD CONSOLIDATED, a California limited partnership (Registrant) By: Economic Consultants, a California Partnership, General Partner By: /s/Daniel Lee Stephenson Daniel Lee Stephenson, General Partner By: /s/Tom A. Leevers Tom A. Leevers, General Partner