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: June 30, 1993
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: 33-31639
Finca Consulting, Inc.
(Exact name of registrant as specified in its Charter)
Colorado 84-1121635
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Koenigsallee 106, 40215 Duesseldorf, Germany
(Address of principal executive offices) (Zip Code)
(011-49-211) 384860
(Registrant's telephone number, including area code)
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 filed such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1993, 2,040,937 shares of Registrant's Common Stock,
$.01 par value, and 16,305 shares of Registrant's Convertible Preferred Stock,
$.00001 par value were issued and outstanding.
Finca Consulting, Inc.
Index
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote
of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
PART I FINANCIAL INFORMATION
ITEM 1
Finca Consulting, Inc. and Subsidiaries
Index to the Consolidated Financial Statements
June 30, 1993
Consolidated Balance Sheets.....................................................
Consolidated Statements of Operations...........................................
Consolidated Statements of Cash Flows...........................................
Notes to the Consolidated Financial Statements..................................
Finca Consulting, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
1993 1992
----------- -----------
Assets
Current Assets
Cash ..................................................................... $ 409,167 $ 374,915
Marketable securities .................................................... 36,540 37,480
Prepaid expenses ......................................................... -- 4,369
Stock subscription receivable ............................................ 798,232 --
Other current assets ..................................................... 62,334 86,188
Sales tax refunds receivable ............................................. -- 98,216
Receivable due from related parties ...................................... 532,813 59,529
----------- -----------
Total Current Assets ................................................ 1,839,086 660,697
----------- -----------
Property and Equipment, at cost
Land ..................................................................... 19,663 19,826
Buildings ................................................................ 83,866 84,560
Office furniture and equipment ........................................... 211,192 195,602
----------- -----------
314,721 299,988
Less: accumulated depreciation and amortization .......................... (110,460) (96,731)
----------- -----------
Net Property and Equipment .......................................... 204,261 203,257
----------- -----------
Other Assets
Deposits ................................................................. 55,330 58,354
Capital cost - office premium, net of accumulated amortization of $10,438
and $9,646, respectively ................................................. 16,519 17,534
Investment in Vintage Car ................................................ 182,589 226,226
Investment in real estate - Spain ........................................ 577,817 551,263
Goodwill, net of accumulated amortization of $1,066 and $538, respectively 41,599 42,480
Other assets ............................................................. 148,071 50,617
----------- -----------
Total Other Assets .................................................. 1,021,925 946,474
----------- -----------
Total Assets ........................................................ 3,065,272 1,810,428
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses .................................... 238,708 131,323
Customer credit balances ................................................. 1,034,321 176,783
----------- -----------
Total Current Liabilities ........................................... 1,273,029 308,106
----------- -----------
Minority interests in subsidiary ......................................... 45,632 45,632
----------- -----------
Finca Consulting, Inc. and Subsidiaries
Consolidated Balance Sheets
(continued)
(Unaudited)
June 30, December 31,
1993 1992
----------- -----------
Stockholders' Equity
Common stock, $.01 par value, 20,000,000 shares authorized, 2,040,937 and
1,939,895 shares issued and outstanding, respectively .................... 20,409 19,399
Preferred stock; $.00001 par value, 20,000,000 shares authorized, 16,305
and 16,305 shares issued and outstanding, respectively ................... 1 1
Capital in excess of par value ........................................... 4,271,799 3,474,577
Accumulated deficit ...................................................... (2,488,039) (1,971,242)
Cumulative translation adjustment ........................................ (57,559) (66,045)
----------- -----------
Total Stockholders' Equity ............................................. 1,746,611 1,456,690
----------- -----------
Total Liabilities and Stockholders' Equity ............................. $ 3,065,272 $ 1,810,428
=========== ===========
See notes to the consolidated financial statements.
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1993 1992 1993 1992
----------- ----------- ----------- -----------
Revenues and Sales Commissions ............ $ 2,805,320 $ 2,273 $ 6,372,014 $ 5,743
Cost of Shares and Options ................ 1,988,473 -- 3,858,584 --
----------- ----------- ----------- -----------
Gross Profit .............................. 816,847 2,273 2,513,430 5,743
Selling, general and administrative
expenses .................................. 1,528,361 152,583 3,016,785 240,453
----------- ----------- ----------- -----------
(Loss) From Operations .......... (711,514) (150,310) (503,355) (234,710)
----------- ----------- ----------- -----------
Other Income (Expense)
Interest income ........................ 4 5,600 398 10,206
Interest expense ....................... (13,017) -- (13,840) --
----------- ----------- ----------- -----------
Total Other Income (Expense) ...... (13,013) 5,600 (13,442) 10,206
----------- ----------- ----------- -----------
Net (Loss) ................................ $ (724,527) $ (144,710) $ (516,797) $ (224,504)
=========== =========== =========== ===========
Net (Loss) Per Share ...................... $ (2.82) $ (0.14) $ (3.95) $ (0.23)
=========== =========== =========== ===========
Weighted Average Number of Common
Shares Outstanding......................... 2,040,937 1,068,511 2,040,937 962,190
=========== =========== =========== ===========
See notes to the consolidated financial statements.
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
-------------------------
1993 1992
--------- ---------
Cash Flows From Operating Activities
Net (Loss) ........................................................... $(516,797) $(224,504)
Adjustments to Reconcile Net (Loss) to Net Cash Provided by (Used for)
Operating Activities
Depreciation and amortization ..................................... 59,261 11,662
Decrease in marketable securities ................................. 940 --
Decrease in prepaid expenses ..................................... 4,369 2,962
Decrease (increase) in other current assets ....................... 23,854 (174,708)
Decrease in sales tax refunds receivable .......................... 98,216 --
(Increase) in other assets ........................................ (97,454) (33,020)
Increase in accounts payable and accrued expenses ................. 107,385 28,400
Increase in customer credit balances .............................. 857,538 --
(Increase) in receivable due from related parties ................. (473,284) --
Decrease (increase) in deposits ................................... 3,024 (16,221)
--------- ---------
Net Cash Provided by (Used for) Operating Activities ............ 67,052 (405,429)
--------- ---------
Cash Flows From Investing Activities
Purchase of property and equipment ................................... (14,733) (46,433)
Investment in real estate - Spain .................................... (26,554) (153,846)
--------- ---------
Net Cash (Used for) Investing Activities ........................ (41,287) (200,279)
--------- ---------
Cash Flows From Financing Activities
Proceeds from issuance of common stock ............................... -- 639,904
Stock offering costs ................................................. -- (102,000)
Payments on note payable to affiliate ................................ -- (2,156)
--------- ---------
Net Cash Provided by Financing Activities ....................... -- 535,748
--------- ---------
Effect on Exchange Rate Changes on Cash ................................. 8,487 53,577
--------- ---------
Net Increase (Decrease) in Cash ......................................... 34,252 (16,383)
Cash at Beginning of the Period ......................................... 374,915 873,607
--------- ---------
Cash at the End of the Period ........................................... $ 409,167 $ 857,224
========= =========
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock ............................................. $ 798,232 $ --
========= =========
See notes to the consolidated financial statements.
Finca Consulting, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
(Unaudited)
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the six month period ended June 30, 1993 are not necessarily indicative of
the results that may be expected for the year ended December 31, 1993. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Registrant Company and Subsidiaries' annual
report on Form 10-K for the year ended December 31, 1992.
The balance sheet at December 31, 1992 has been derived from the audited
financial statements of that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
Finca Consulting, Inc. and Subsidiaries
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and Notes thereto included herein.
Results of Operations
Substantially all of the Company's revenues of $2,805,320 for the quarter,
and of $6,372,014 for the six months period, ended June 30, 1993, were generated
by its subsidiary, Opti-Wert-Interest, AG ("OWI-AG") through sales commissions
derived from its retail securities brokerage activities. OWI-AG has three (3)
sales offices in Germany, located in the cities of Dusseldorf, Leipzig and
Munich.
For the quarter ended June 30, 1993, the Company suffered a net loss of
$724,527 due principally to an approximate 22% drop in revenues accompanied by a
more than 50% decrease in gross profits of OWI-AG from the previous quarter
ended March 31, 1993. Gross profits tend to be more volatile due to margin
fluctuations in the stock and bond markets, and therefore affect the Company's
performance more significantly than volume changes. Selling, general and
administrative expenses for the quarter amounted to $1,528,361, rising
approximately 3%, or $40,000, from the previous quarter. Management expects
renewed growth in revenues during the upcoming quarters, however, cannot predict
with accuracy movements of securities markets and resulting margins.
Liquidity and Capital Resources
The Company had total assets as of June 30, 1993 of $3,065,272, of which
$1,839,086 were current assets, and working capital of $566,057. During the
quarter, the Company sold 28,355 shares of its common stock through private
placements with European investors pursuant to Regulation S promulgated under
the Securities Act of 1933, as amended, with net proceeds therefrom of $444,005.
Cash reserves at the end of the quarter were sufficient, at $409,167; the
negative impact of the loss for the quarter was compensated by a similar
increase in customer deposits.
PART II - OTHER INFORMATION
ITEM 1.Legal Proceedings.
There were no pending or threatened legal proceedings during this period.
ITEM 2.Changes In Securities.
During the quarter, the Company sold 28,355 shares of its common stock
through private placements with European investors, with net proceeds
therefrom of $444,005.
ITEM 3.Defaults Upon Senior Securities.
Not Applicable.
ITEM 4.Submission of Matters to a Vote of Securities.
Not Applicable.
ITEM 5.Other Information
Not Applicable.
ITEM 6.Exhibits and Reports on Form 8-K
(a) (3)(i) Articles of Incorporation: incorporated by reference to the
Company's Form S-18 Registration Statement, filed with the Securities and
Exchange Commission on October 17, 1989, and declared effective on June 29,
1990.
(3)(i) Articles of Amendment to Articles of Incorporation: incorporated by
reference to the Exhibit to the Company's Form 10-K for the fiscal year ended
December 31, 1991 filed on June 4, 1992 with the Securities and Exchange
Commission.
(3)(ii) Bylaws:incorporated by reference to the Company's Form S-18
Registration Statement, filed with the Securities and Exchange Commission on
October 17, 1989, and declared effective on June 29, 1990.
(21) Subsidiaries of the Company:
(i) Finca Consulting Costa Brava, S.A. - is a corporation formed under
the laws of the Country of Spain and is the name under which it conducts
business.
(ii) Finca Consulting, Limited - is a corporation formed under the laws
of the Country of the united Kingdom and is the name under which it conducts
business.
(iii) Finca Consulting, GmbH - is a corporation formed under the laws
of the Country of Germany and is the name under which it conducts business.
(iv) Opti-Wert-Interest AG - is a corporation formed under the laws of
the Country of Switzerland and conducts its retail securities and options
business in Germany.
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the period covered by this
report on Form 10-Q.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
FINCA CONSULTING, INC.
(Registrant)
Date: December 20, 1997 By: /s/Volker Montag
Volker Montag, President
Principal Financial Officer