SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTER REPORT UNDER SECTION 13 0R 15(d) March 31, 1997 0-13499 For Quarter Ended______________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.) 404 South Lincoln Aberdeen, South Dakota 57401 _________________________________________________________________ (Address if principal executive offices) (Zip Code) (605) 225-4131 Registrant's telephone number, including area code_______________ 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 Yes_____ during the preceding 12 months (or for such shorter period that the registrant was required to file such No______ reports), and (2) has been subject to such filing 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. Class Outstanding at March 31,1997 ______________________________ _______________________________ Common stock, $.01 par value 5,229,907 Page 1 of 8 Form 10-Q 1st Quarter INDEX PART I- FINANCIAL INFORMATION* Consolidated Balance Sheet - March 31, 1997 and March 31, 1996 3 Consolidated Statements of Operation - Three months ended March 31, 1997 and 1996 4 Consolidated Statements of Cash Flows - Three months ended March 31, 1997 and 1996 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis 7 PART II - OTHER INFORMATION Signatures 8 Financial Data Schedule * The accompanying financial statements are not covered by an Independent Certified Public Accountants' Report. -2- WORLD SERVICES, INC. BALANCE SHEET ASSETS March 31, March 31, 1997 1996 CURRENT ASSETS Cash and cash equivalents $ 14,045 $ 6,412 Certificate of Deposit 290,000 180,000 Accounts Receivable - other 17,000 - ------------ ------------ TOTAL CURRENT ASSETS 321,045 186,412 PROPERTY AND EQUIPMENT Office Equipment 2,882 - Accum Depr-Office Equipment (2,882) - ------------ ------------ TOTAL PROPERTY AND EQUIPMENT 0 0 INVESTMENTS AND OTHER ASSETS Investment in First Savings & Loan 335,000 307,000 Investment in Super 8 Motel Developers 568,000 568,000 Other 4,000 4,000 ------------ ------------ TOTAL OTHER ASSETS 907,000 879,000 ------------ ------------ TOTAL ASSETS $ 1,228,044 $ 1,065,412 ============ ============ LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ - $ - ----------- ------------ STOCKHOLDERS EQUITY Common stock, par value $.01 per share; (50,000,000 shares authorized 5,292,000 shares issued) 53,000 53,000 Additional paid in capital 6,497,000 6,497,000 Treasury Stock at cost, 128,350 shares (3,000) (3,000) Accumulated Deficit (5,318,956) (5,481,588) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 1,228,044 1,065,412 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,228,044 $ 1,065,412 ============ ============ See accompanying notes to these financial statements. -3- WORLD SERVICES, INC. STATEMENTS OF OPERATIONS Three Months Ended March 31, ------------------ - ---- 1997 1996 REVENUE Interest Income $ - $ 6,635 Dividend Income - - Miscellaneous Income 20 75 ----------- ----------- Total Revenue 20 6,710 ----------- ----------- EXPENSES Legal and accounting 11,287 9,987 Other general and administrative expenses 2,340 9,311 ----------- ----------- Total Expenses 13,627 19,298 ----------- ----------- NET INCOME (LOSS) $ (13,607) $ (12,588) =========== =========== INCOME (LOSS) PER SHARE OF COMMON STOCK * * =========== =========== AVERAGE NUMBER OF SHARES OUTSTANDING 5,229,907 5,229,907 =========== =========== ____________________________________________ *Less than $.01 per share. See accompanying notes to these financial statements. -4- WORLD SERVICES, INC. STATEMENTS OF CASH FLOWS Three Months Ended March 31, ------------------ - ---- 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ (13,607) $(12,588) Adjustment to reconcile net income (loss) to cash from operating activities: (Decrease) in accounts payable and accrued expenses - (10,000) ---------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (13,607) (22,588) CASH FLOWS FROM INVESTING ACTIVITIES: Maturity of certificate of deposit - 100,000 Purchase of certificate of deposit - (80,000) ---------- -------- NET CASH PROVIDED BY INVESTING ACTIVITIES 0 20,000 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (13,607) (2,588) CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD 27,652 9,000 ---------- -------- CASH AT END OF PERIOD $ 14,045 $ 6,412 ========== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash payments to: Income taxes $ - $ - ========== ======== Interest $ - $ 50 ========== ======== See accompanying notes to these financial statements. -5- WORLD SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 1. GENERAL: The Company has elected to omit substantially all other notes to the financial statements. These interim financial statements should be read in conjunction with the Company's annual report and report on Form 10-K for the year ended December 31, 1996. 2. UNAUDITED IMFORMATION: The information furnished herein was taken form the books and records 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 results for the interim periods presented. The results of operation for the periods presented are not necessarily indicative of the results to be expected for the year. -6- WORLD SERVICES, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION The Corporation expects to receive dividend income from Super 8 Motel Developers in the second quarter of over $239,000. The good performance of this investment is a major contributing factor to the overall improved financial condition of the Company. The annual stockholders meeting is scheduled for mid June of 1997. RESULTS OF OPERATIONS The Corporation showed an operating loss of ($13,607) for the three months ended March 31, 1997 as compared with ($12,588) loss for the same period a year earlier. - 7 - 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. APRIL________________ 24___, 1997 WORLD SERVICES, INC. /S/ RONNE TARRELL By__________________________________ Ronne Tarrell, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /S/ RONNE TARRELL APRIL________________ 24____, 1997 _______________________________ Ronne Tarrell, President, Principal Executive Officer, and Director /S/ DAVID JORGENSON APRIL________________ 24____, 1997 _______________________________ David Jorgenson, Secretary, Treasurer, Principal Accounting Officer, Principal Financial Officer, and Director /S/ DELORES BOWER APRIL________________ 24____, 1997 _______________________________ Delores Bower, Director /S/ DELBERT HARTY APRIL________________ 24____, 1997 _______________________________ Delbert Harty, Director /S/ TERRY HEINZ APRIL________________ 24____, 1997 _______________________________ Terry Heinz, Director - 8 -