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: September 30, 1995
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 September 30, 1995, 2,146,633 shares of Registrant's Common
Stock, $.01 par value, and 4,295,672 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
September 30, 1995
Financial Statements
Consolidated Balance Sheets................................................
Consolidated Statements of Operations......................................
Consolidated Statements of Changes in Stockholders' Equity.................
Consolidated Statements of Cash Flows......................................
Notes to the Consolidated Financial Statements.............................
Finca Consulting, Inc. and Subsidiaries
Consolidated Balance Sheets
September
30, 1995 December 31,
(Unaudited) 1994
------------ ------------
Assets
Current Assets
Cash ................................................................. $ 2,791,100 $ 953,633
Marketable securities ................................................ 1,655,936 43,585
Accounts receivable .................................................. 11,267 10,265
Other current assets ................................................. 152,410 65,347
Receivable due from related parties .................................. 1,217,595 522,561
------------ ------------
Total Current Assets ............................................ 5,828,308 1,595,391
------------ ------------
Property and Equipment, at cost
Land ................................................................. 115,563 115,563
Buildings ............................................................ 462,254 492,254
Office furniture and equipment ....................................... 355,184 280,512
------------ ------------
933,001 888,329
Less: accumulated depreciation and amortization ...................... (323,657) (238,756)
------------ ------------
Net Property and Equipment ...................................... 609,344 649,573
------------ ------------
Other Assets
Deposits ............................................................. 6,967 8,087
Investment in Vintage Cars ........................................... 17,574 87,972
Investment in subsidiary ............................................. 180,000 --
Other assets ......................................................... 70,469 66,127
------------ ------------
Total Other Assets .............................................. 275,010 162,186
------------ ------------
Total Assets .................................................... 6,712,662 2,407,150
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses ................................ 206,692 279,541
Customer credit balances ............................................. 1,902,093 833,374
Income taxes payable ................................................. 68,221 --
------------ ------------
Total Current Liabilities ....................................... 2,177,006 1,112,915
------------ ------------
Minority interests in subsidiary ..................................... 45,632 45,632
------------ ------------
Finca Consulting, Inc. and Subsidiaries
Consolidated Balance Sheets
(continued)
September
30, 1995 December 31,
(Unaudited) 1994
------------ ------------
Stockholders' Equity
Common stock, $.01 par value, 20,000,000 shares authorized, 2,146,633
shares issued and outstanding ..................................... 21,466 21,466
Preferred stock, $.00001 par value, 20,000,000 shares authorized,
4,295,672 and 1,704,451 shares issued and outstanding, respectively 43 17
Capital in excess of par value ....................................... 13,757,571 7,927,857
Accumulated deficit .................................................. (9,402,541) (6,813,246)
Treasury stock, 275,812 and 189,899 common shares, respectively ...... (2,758) (1,899)
Cumulative translation adjustment .................................... 116,243 114,408
------------ ------------
Total Stockholders' Equity ...................................... 4,490,024 1,248,603
------------ ------------
Total Liabilities and Stockholders' Equity ...................... $ 6,712,662 $ 2,407,150
============ ============
See notes to the consolidated financial statements
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
Revenues .............................. $ 11,974,528 $ 3,961,483 $ 22,468,216 $ 15,694,919
Cost of Shares and Options ............ 7,800,454 3,636,817 17,221,490 11,427,728
------------ ------------ ------------ ------------
Gross Profit .......................... 4,174,074 324,666 5,246,726 4,267,191
Operating Expenses
Selling, general and administrative 3,388,198 1,550,111 7,836,021 5,560,729
------------ ------------ ------------ ------------
Income (Loss) From Operations 785,876 (1,225,445) (2,589,295) (1,293,538)
------------ ------------ ------------ ------------
Other (Expense)
Interest expense ................... -- (1,587) -- (25,313)
------------ ------------ ------------ ------------
Total Other Income (Expense) .. -- (1,587) -- (25,313)
------------ ------------ ------------ ------------
Net Income ............................ $ 785,876 $ (1,227,032) $ (2,589,295) $ (1,318,851)
============ ============ ============ ============
Net Income (Loss) Per Share ........... $ .37 $ (.57) (1.21) $ (.61)
============ ============ ============ ============
Weighted Average Number of Common
Shares Outstanding..................... 2,146,633 2,146,633 2,146,633 2,146,633
============ ============ ============ ============
See notes to the consolidated financial statements.
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity
From December 31, 1994 Through September 30, 1995
(Unaudited)
Preferred Stock Common Stock
-------------------------- -----------------------------
Capital
in Excess
Par Par of Par
Shares Value Shares Value Value
Balance - December 31, 1994 ...... 1,704,451 $ 17 2,146,633 $ 21,466 $ 7,927,857
Issuance of preferred shares, less
offering costs of $2,086,890 .. 2,591,221 26 -- -- 6,096,991
Acquisition of treasury shares ... -- -- -- -- (267,277)
Foreign currency transaction gain -- -- -- -- --
Net (Loss) for the six month
period ended June 30, 1995 .... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
4,295,672 $ 43 2,146,633 $ 21,466 $ 13,757,571
Balance - September 30, 1995
============ ============ ============ ============ ============
Treasury Stock
--------------------------
Cumulative
(Accumulated Translation
Shares Amount Deficit) Adjustment
Balance - December 31, 1994 ...... 189,899 $ (1,899) $ (6,813,246) $ 114,408
Issuance of preferred shares, less
offering costs of $2,086,890 .. -- -- -- --
Acquisition of treasury shares ... 85,913 (859) -- --
Foreign currency transaction gain -- -- -- 1,835
Net (Loss) for the six month
period ended June 30, 1995 .... -- (2,589,295) --
------------ ------------ ------------ ------------
Balance - September 30, 1995...... 275,812 $ (2,758) $ (9,402,541) $ 116,243
============ ============ ============ ============
See notes to the consolidated financial statements.
Finca Consulting, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
------------------------------
1995 1994
----------- -----------
Cash Flows From Operating Activities
Net Income (Loss) ................................................. $(2,589,295) $(1,985,387)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating
Activities:
Depreciation and amortization .................................. 155,299 78,422
(Increase) in accounts receivable .............................. (1,002) --
(Increase) decrease in marketable securities ................... (1,612,351) --
(Increase) in other current assets ............................. (87,063) (87,235)
(Increase) in receivable due from related parties .............. (695,034) (103,639)
Decrease in deposits ........................................... 1,120 38,640
Decrease in capital cost ....................................... -- 15,426
(Increase) decrease in other assets ............................ (4,342) 71,929
Increase (decrease) in accounts payable and accrued expenses ... (72,849) 44,268
Increase in customer credit balances ........................... 1,068,719 530,853
Increase in income taxes payable ............................... 68,221 --
----------- -----------
Net Cash Provided by Operating Activities .................... (3,768,577) (1,396,723)
----------- -----------
Cash Flows From Investing Activities
Purchase (disposition) of property and equipment .................. (44,672) 66,219
Investment in subsidiary .......................................... (180,000) --
Disposition of goodwill ........................................... -- 40,487
----------- -----------
Net Cash (Used) in Investing Activities ...................... (224,672) 106,706
----------- -----------
Cash Flows From Financing Activities
Issuance of preferred shares ...................................... 6,097,017 2,024,708
Acquisition of treasury shares .................................... (268,136) (365,255)
Payment on note payable ........................................... -- (19,195)
----------- -----------
Net Cash Provided by Financing Activities .................... 5,828,881 1,640,258
----------- -----------
Effect on Exchange Rate Changes on Cash .............................. 1,835 50,207
----------- -----------
Net Increase in Cash ................................................. 1,837,467 400,448
Cash at Beginning of the Period ...................................... 953,633 351,701
----------- -----------
Cash at the End of the Period ........................................ $ 2,791,100 $ 752,149
=========== ===========
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 three and nine month periods ended September 30, 1995 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1995. 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,
1994.
The balance sheet at December 31, 1994 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 in Item 1 above.
Results of Operations
Substantially all of the Company's revenues during the quarter were generated
by its subsidiary, Opti-Wert-Interest AG ("OWI-AG") through sales commissions
derived from its retail securities brokerage activities.
Revenues increased from $6,483,022 in the prior quarter and $3,961,483 in the
third quarter of 1994, to $11,974,528 in the third quarter this year. Coupled
with an improved gross margin and moderate growth in selling, general and
administrative expenses which amounted to $3,388,198, the Company achieved a
significant net profit for the quarter, in the amount of $785,876 , reducing the
net loss for the year to-date to $2,589,295, compared to a loss of $1,318,851
for the same period last year. Management expects the growth trend to continue,
a result of expanded marketing efforts during the last several quarters.
Liquidity and Capital Resources
The Company had total assets as of September 30, 1995 of $6,712,662, of which
$5,828,308 were current assets. Working capital at the end of the quarter had
increased to $3,651,302. With a stronger balance sheet and improved liquidity,
the Company is now equipped to fund further expansions in its activities.
PART II - OTHER INFORMATION
ITEM 1.Legal Proceedings.
Many aspects of the Company's business involve risks of liability. The
Company has been named as a defendant in civil actions arising in the
ordinary course of business out its activities in securities and futures
options contracts. In the opinion of management of the Company, however,
the Company is not involved in any litigation or legal proceedings that
would have a material effect upon its financial condition.
ITEM 2.Changes In Securities.
Not Applicable.
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, GmbH - is a corporation formed under the laws of
the Country of Germany and is the name under which it conducts business.
(iii)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
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