AMENDED
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended Commission file
ended March 31, 1997, No. 33-17679-D
PIERCE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1067694
(State or other jurisdiction of (I.R.S. Employer I.D.)
incorporation or organization)
13275 E. Freemont Place #101A, Englewood, CO 80112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 792-0719
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 proceeding 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
Class Outstanding at March 31, 1997
Common Stock, no par value 6,380,703
INDEX
PART I - FINANCIAL INFORMATION *
ITEM 1. Unaudited Financial Statements
Balance Sheets - March 31, 1997 (unaudited)
and June 30, 1996 3
Statements of Operations - Three Months Ended
March 31, 1997 (unaudited) and Year To Date
With Last Year Comparisons 4
Consolidated Statement of Changes in
Stockholders' Equity -
For The Nine Months Ended March 31, 1997
(unaudited)
and the Years Ended 1995 and 1996 5
Statement of Cash Flows - Nine Months Ended
March 31, 1997 (unaudited) and March 31, 1996 6
Notes to Financial Statements 7
ITEM 2. Management's Discussion and Analysis 10
PART II - OTHER INFORMATION
ITEMS 1 THROUGH 6 11
Signature 12
*The accompanying financial statements are not covered by an independent
certified public accountants' report.
PIERCE INTERNATIONAL, INC.
BALANCE SHEETS
UNAUDITED
ASSETS March 31, June 30,
1997 1996
<C >
CURRENT ASSETS:
Cash $6,861 $13,004
Investments and Stocks 162 15,747
Accounts Receivable 55,459 46,492
Other 367 367
Total current assets 62,849 75,610
PROPERTY AND EQUIPMENT:
(Note 1)
Undeveloped land mineral
property (Note 3) 434,918 434,918
Furniture and equipment 7,705 7,705
Strawboard equipment (Note 4) 57,120 57,120
499,743 499,743
Less accumulated depreciation
and amortization (5,453) (4,791)
494,290 494,952
$557,139 $570,562
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities 64,355 15,780
Advances from officers/
directors/stockholders
(Note 5) 240,401 230,649
Total current
liabilities 304,756 246,429
NOTE PAYABLE (Note 6) 200,000 200,000
STOCKHOLDERS' EQUITY
(Notes 7&8)
Preferred stock, no par value;
400,000 shares authorized;
60,000 shares issued and
outstanding
as of March 31, 1997 15,000
Common stock, no par value;
30,000,000 shares authorized;
6,380,703 and 5,980,703
shares issued and outstanding
as of March 31, 1997 and
June 30, 1996, respectively 844,542 844,542
Accumulated deficit (807,159) (720,409)
37,383 124,133
$557,139 $570,562
See notes to financial statements.
PIERCE INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE YEAR TO DATE
MONTHS ENDED (NINE MONTHS)
MARCH 31, MARCH 31,
(UNAUDITED) (UNAUDITED)
1997 1996 1997 1996
REVENUE:
Net sales $0 $0 $100,000 $ 0
Cost of goods
sold - - (70,121) -
0 0 29,879 0
EXPENSES:
Administrative 8,946 10,886 31,151 30,357
Bad debt
reserve 24,087 - 58,194 -
Outside
services 17,210 11,299 41,993 26,556
Advertising
and
promotion - 924 (300) 1,511
Total
expenses 51,243 23,109 131,038 58,424
NET OPERATING
INCOME (LOSS)(51,243) (23,109) (101,159) (58,424)
Other incomen 6,000 200 18,000 26,588
Loss on
investment - - (3,499) -
Gain (loss) on
disposition of
assets - 2,936 - 3,273
Foreign exchange
gain (loss) - - (92) -
NET INCOME
(LOSS) (45,243) (19,973) (86,750) (28,563)
NET INCOME
(LOSS) PER
COMMON SHARE ($0.007) ($0.003) ($0.014) ($0.005)
WEIGHTED
AVERAGE NUMBER
OF SHARES
OUTSTANDING 6,380,703 5,980,703 6,380,703 5,980,703
See notes to financial statements.
PIERCE INTERNATIONAL, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
AND THE THREE YEARS ENDED JUNE 30, 1995 & 1996
TOTAL
COMMON STOCK PREFERRED AMOUNT ACCUMULATED STOCKHOLDERS'
SHARES SHARES DEFICIT EQUITY
BALANCES,
JUNE 30, 1994 149,317,572 - 1,052,462 ($1,187,088) ($134,626)
Additional
Paid in Capital
to Subsidiary - - 34,719 - 34,719
Adj. for foreign
sub. translation - - - - 1,769
Chg. in minority
interest - - 15,000 - 15,000
Chg. in foreign
sub. translation - - - - (10,256)
Stock in lieu of
compensation 200,000 - - - -
(no market value)
PIDI investment
to Equity Method
from Consolidated - - (257,639) 420,992 171,840
Net Income
for the year - - - 52,465 52,465
BALANCES,
JUNE 30, 1995 149,517,572 - 844,542 (713,631) 130,911
25 for 1
Reverse split
March 13,
1996 (143,536,869) - - - -
Net loss for the
year - - - (6,778) (6,778)
BALANCES,
JUNE 30, 1996 5,980,703 - 844,542 (720,409) 124,133
Stock in lieu
of compensation 400,000 - - - -
Net loss for the
quarter ended
September 30, 1996 - - - (15,450) (15,450)
BALANCES,
SEPTEMBER 30,
1996 6,380,703 - 844,542 (735,859) 108,683
Net loss for
the quarter ended
December 31, 1996 - - - (26,057) (26,057)
BALANCES,
DECEMBER 31,
1996 6,380,703 - 844,542 (761,916) 82,626
Private placement
of convertible
preferred - 60,000 15,000 - -
Net loss for the
quarter ended
March 31, 1997 - - - (45,243) (45,243)
BALANCES,
MARCH 31,
1997 6,380,703 60,000 $859,542 ($807,159) $37,383
See notes to financial statements.
PIERCE INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31,
1997 1996
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) ($86,750) ($28,563)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization 662 662
Changes in operating assets
and liabilities:
Decrease (Increase) in
accounts receivable (8,967) 1,098
Decrease (Increase) in
related party receivable - (13,142)
Decrease (Increase) in
trading investments - (12,682)
(Decrease) Increase in accounts
payable and accrued
expenses 48,575 26,143
Increase (Decrease) in deferred revenue - 35,144
(Gain) Loss on sale of investments - (3,273)
Net cash used in operating
activities (46,480) 5,387
CASH FLOWS FROM INVESTING
ACTIVITIES:
(Increase) decrease in investments 15,585 -
Investment in Strawboard - (1,125)
Net cash used in investing
activities 15,585 (1,125)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Receipts/payments on advances from
officers/directors/stockholders 9,752 (3,882)
Proceeds from private placement offering 15,000 -
Net cash provided by
financing activities 24,752 (3,882)
(DECREASE) INCREASE IN CASH (6,143) 380
CASH, beginning of period 13,004 808
CASH, end of period $6,861 $1,188
See notes to the financial statements.
PIERCE INTERNATIONAL, INC.
UNAUDITED
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Operations - Pierce International, Inc. (PI) was incorporated under the
laws of the State of Colorado on July 22, 1987, for the purpose of obtaining
capital to seek potentially profitable business opportunities. Currently, PI
has business interest in two industries, natural resources and industrial
development.
Net Income Per Common Share - Net income (loss) per common share is
computed based upon the weighted average number of shares outstanding during the
period. Common stock equivalents were not considered (for losses only), as
their effect would be antidilutive.
Property, Equipment, Depreciation and Amortization - Property and
equipment are stated at cost. Depreciation is being provided by the straight-
line method over estimated useful lives of three to five years. All costs
related to the acquisition (including associated legal and other costs),
exploration, evaluation, and development, of the mineral properties
have been capitalized. These costs will be amortized by the units-of-production
method of accounting based upon estimated recoverable reserves.
Continuing Operations - The accompanying financial statements have been
prepared on a going concern basis, which contemplates continuity of operations
and realization of assets and satisfaction of liabilities in the normal
course of business. The continuation of the Company as a going concern is
dependent upon the Company raising additional capital, and attaining and
maintaining profitable operations. The Company has suffered recurring losses
from operations that raise substantial doubt about its ability to continue as a
going concern.
2. UNAUDITED INFORMATION:
The information furnished herein was taken from the books and record of
the Company without audit. However, such information reflects all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary to reflect properly the results of the interim periods
presented. Results of operations for the periods presented are not necessarily
indicative of the results to be expected for the year. These interim financial
statements should be read in conjunction with the Company's
annual report on Form 10-K for the year ended June 30, 1996.
3. UNDEVELOPED MINERAL PROPERTY:
On June 11, 1996, PI reclaimed the "Como" property from Pierce
International Discovery, Inc. (PIDI). PIDI, a 17.24% owned subsidiary, failed
to comply with the stock purchase agreement. Como consists of gold and gravel
mining leases on a property situated approximately 50 miles southwest of
Denver, Colorado, near Como, Colorado in Park County.
4. STRAWBOARD INVESTMENT:
The Company purchased strawboard equipment for $57,120. This equipment is
seen as an investment and the Company intends to resell the equipment.
5. RELATED PARTY PAYABLE AND RELATED PARTY TRANSACTIONS:
Advances include $189,401 due Pierce D. Parker, officer and director, or
his company, Parker Consulting Services, and $51,000 is accrued consulting fees
due Pierce D. Parker.
6. COMMITMENTS:
As of March 31, 1997, PI had the following long term note payable:
PCS Profit Sharing Plan $200,000
PI is obligated to pay $200,000 to Parker Consulting Services Profit
Sharing Plan, owned by Pierce D. Parker, for funds it pledged for the purpose of
funding the Como project. This debt is to be paid from net profits generated by
the Como property.
7. STOCKHOLDERS' EQUITY:
As of March 31, 1997, PI had 6,380,703 common shares issued and
outstanding. There are 30,000,000 shares authorized. A reverse split of 1 for
25 shares was approved on March 13, 1996.
Of the total shares outstanding, 160,000 shares were issued as part of
PI's initial public offering and are free trading stock. All other shares have
been held a minimum of 1 year and could be sold under Rule 144.
For the quarter ended March 31, 1997, the Company issued 60,000 shares of
convertible Series I preferred stock. The stock was issued in conjunction with
a private placement conducted by the Company. There are 400,000 shares of
preferred stock authorized and may be determined by the Board of Directors as to
dividend rights, dividend rate, conversion rights, voting rights, redemption
rights and terms, liquidation preferences, the number of shares constituting the
series and the designation of each series.
The Series I Convertible Preferred Stockholders are entitled to
dividends when and as declared by the Company's Board of Directors from funds
which are legally available. The Series I Preferred Stock is convertible, at
any time into an identical number of shares of the Company's Common Stock.
Holders of the Series I Convertible Preferred Stock are entitled to one vote per
share on all matters submitted to a vote of the Company's shareholders.
Series I Convertible Preferred Stock does not have preemptive rights and it
is not redeemable.
8. INCENTIVE STOCK OPTION PLAN:
On August 10, 1987, the Company adopted an Incentive Stock Option Plan (the
"Plan") under which options granted are intended to qualify as "incentive
stock options" under Section 422A of the Internal Revenue code of 1954, as
amended (the "Code"). Pursuant to the Plan, options to purchase up to 400,000
shares of the Company's Common Stock may be granted to employees of the Company.
The Plan is administered by the Board of Directors which is empowered to
determine the terms and conditions of each option, subject to the limitation
that the exercise price cannot be less than the market value of the Common Stock
on date of the grant (110% of the market value in the case of
options granted to an employee who owns 10% or more of the Company's outstanding
Common Stock) and no option can have a term in excess of 10 years (5 years in
the case of options granted to employees who own 10% or more of the Company's
Common Stock).
As of the date of this report, no options have been granted under this
Plan.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the Quarter Ended March 31, 1997.
Introduction
The Company is concentrating on its two major industries, natural
resources and industrial development. The Company is making a concentrated
effort to sell strawboard equipment, and to presell strawboard.
Liquidity
Working capital at March 31, 1997 was a negative $241,907. A significant
portion of current liabilities are advances from stockholders. Cash flow
continues to be irregular and the Company will continue to rely heavily on its
current investments to produce future cash flow.
Results of Operations
During the quarter ended March 31, 1997, the Company had net loss of
$45,243. As the Company develops its two primary business operations, costs have
increased in the areas of legal, accounting, travel, and outside consulting
fees.
PART II - OTHER INFORMATION
ITEMS #1 THROUGH #6(a) - No response required.
ITEM 6(b) - No reports were filed on the Form 8-K during the quarter ended
March 31, 1997.
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PIERCE INTERNATIONAL, INC.
Dated: August 15, 1997 By:/s/ Pierce D. Parker
Pierce D. Parker,
President (Chief Financial and
Accounting Officer)