UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to ____________
Commission file number _____________________________________
INTERUNION FINANCIAL CORPORATION
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(Exact name of small business issuer as specified in its charter)
Delaware 87-0520294
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(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)
1232 N. Ocean Way, Palm Beach, Fl 33480
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(Address of principal executive offices) (Zip Code)
(561) 845 -2849 (561) 844 - 0517
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(Issuer's telephone number) (Issuer's telecopier number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: $0.001 Par Value Common Shares -
1,916,549 as of June 30, 2002.
Transitional Small Business Disclosure Format (Check One) Yes [ ] No [X]
Page 1 of 11
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 2002
Three Months Ended Twelve Months Ended
----------------------- -----------------------
30-Jun-02 30-Jun-01 31-Mar-02 31-Mar-01
--------- --------- --------- ---------
REVENUES
Investment banking 0 0 13,134 272,957
Interest income 7,469 486 26,794 60,072
--------- --------- --------- ---------
7,469 486 39,928 333,029
--------- --------- --------- ---------
EXPENSES
Selling, general and administration 25,296 15,383 166,901 366,607
Write-down of Notes Receivable 0 0 0 633,286
Amortization and depreciation 0 0 0 5,588
Foreign exchange loss (gain) (34,044) 0 8517 16,808
Writedown in investment 0 0 0 27,379
Trading Loss 12,012 0 0 0
Interest 0 0 5,350 23,599
--------- --------- --------- ---------
3,264 15,383 180,768 1,073,267
--------- --------- --------- ---------
PROFIT (LOSS) FROM CONTINUING OPERATIONS BEFORE
UNDERNOTED ITEMS AND DISCONTINUED OPERATIONS 4,205 (14,897) (140,840) (740,238)
--------- --------- --------- ---------
DISPOSAL OF EQUITY INVESTMENT
Equity in net losses of unconsolidated affiliate 0 (455,596) (238,342) (1,163,455)
Gain on disposal of unconsolidated affiliate 0 0 756,669 0
--------- --------- --------- ---------
0 (455,596) 518,327 (1,163,455)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 4,205 (470,493) 377,487 (1,903,693)
--------- --------- --------- ---------
DISCONTINUED OPERATIONS
Income from operations of discontinued subsidiary 0 0 0 358,169
Loss on disposal of subsidiary 0 0 0 (780,401)
--------- --------- --------- ---------
LOSS FROM DISCONTINUED OPERATIONS 0 0 0 (422,232)
--------- --------- --------- ---------
NET INCOME (LOSS) FOR THE YEAR 4,205 (470,493) 377,487 (2,325,925)
========= ========= ========= ==========
EARNINGS (LOSS) PER COMMON SHARE - Basic and Diluted
Weighted average common shares outstanding 1,916,549 1,948,687 1,916,421 1,153,759
Basic earnings (loss) per share 0.002 (0.241) 0.197 (2.016)
Diluted earnings per share 0.002 0 0.197 0
Income (loss) before Discontinued Operations per share 0.002 (0.241) 0.197 (1.650)
Loss from Discontinued Operations per Share 0 0 0 (0.366)
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 2 of 11
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2002
As at June 30 As at March 31
------------------------- -------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
CURRENT ASSETS:
Cash and cash equivalents 1,648,720 9,046 2,464,985 7,356
Marketable Securities 104,500 0 0
Receivables 0 0 0 0
Receivable from affiliates 41,226 54,791 41,226 41,652
Refundable income taxes 7,502 835 7,502 7,502
Prepaid expenses and other current assets 6,249 5,400 7,061 5,400
Notes receivable, current portion 702,342 0 0 0
Assets of discontinued operations 0 0 0 0
---------- ---------- ---------- ----------
Total Current Assets 2,510,540 70,072 2,520,774 61,910
---------- ---------- ---------- ----------
NON-CURRENT ASSETS:
Property and equipment, net 0 0 0 0
Notes receivable, non-current portion 722,684 878,150 717,598 891,290
Investment in unconsolidated affiliates 0 1,735,539 0 2,191,135
---------- ---------- ---------- ----------
Total Non-Current Assets 722,684 2,613,689 717,598 3,082,425
---------- ---------- ---------- ----------
TOTAL ASSETS 3,233,223 2,683,761 3,238,372 3,144,335
========== ========== ========== ==========
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 36,918 74,050 46,272 89,130
Due to affiliates 0 3,399 0 3,399
Note Payable, current portion 0 85,000 0 60,000
---------- ---------- ---------- ----------
Total Current liabilities 36,918 162,449 46,272 152,529
---------- ---------- ---------- ----------
NON-CURRENT LIABILITIES:
NOTES PAYABLE, long-term portion 0 227,193 0 227,193
---------- ---------- ---------- ----------
Total Liabilities 36,918 389,642 46,272 379,722
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SHAREHOLDERS' EQUITY:
Capital stock and additional paid-in capital 10,666,293 10,616,293 10,666,293 10,616,293
Cumulative translation adjustment 0 0 0 0
Accumulated deficit (7,469,988) (8,322,174) (7,474,193) (7,851,680)
---------- ---------- ---------- ----------
Total shareholders' equity 3,196,305 2,294,119 3,192,100 2,764,613
---------- ---------- ---------- ----------
Total Liabilities and Shareholder's Equity 3,233,223 2,683,761 3,238,372 3,144,335
========== ========== ========== ==========
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 3 of 11
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
AS AT JUNE 30, 2002
As at June 30 As at March 31
------------------------- -------------------------
2002 2001 2002 2001
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CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL
Class A Preferred Stock, $0.10 par value
Authorized - 1,500,000 shares
Issued and outstanding - None 0 0 0 0
Class B Preferred Stock, $0.10 par value
Authorized - 1,000 shares
Issued and outstanding - None 0 0 0 0
Class C Preferred Stock, $0.10 par value
Authorized - 1,000 shares
Issued and outstanding - None 0 0 0 0
Common Stock, $0.001 par value
Authorized - 5,000,000 Shares
Issued and outstanding - 1,916,549 in 2002
and 1,899,974 in 2001 19,165 18,999 19,165 18,999
Additional Paid-in Capital 10,647,128 10,597,294 10,647,128 10,597,294
ACCUMULATED DEFICIT (7,469,988) (8,322,174) (7,474,193) (7,851,680)
---------- ---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 3,196,305 2,294,119 3,192,100 2,764,613
========== ========== ========== ==========
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 4 of 11
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD ENDED JUNE 30, 2002
Three Months Ended Twelve Months Ended
----------------------- -----------------------
30-Jun-02 30-Jun-01 31-Mar-02 31-Mar-01
--------- --------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Income (Loss) before discontinued operations 4,205 (470,493) 377,487 (1,903,693)
Loss from discontinued operations 0 0 0 (422,232)
--------- --------- --------- ---------
Total: 4,205 (470,493) 377,487 (2,325,925)
Adjustment to reconcile net loss to net
cash provided by (used in) operating activities
Depreciation and amortization 0 0 0 5,588
Equity in net losses of unconsolidated affiliate 0 455,596 238,342 1,163,455
Non cash operating expenses (income) 0 0 (29,282) 212,510
Net (income) loss from discontinued operations 0 0 0 422,232
Writedown of notes receivable 0 0 0 633,286
(Gain) loss on disposal of affiliate/subsidiary 0 0 (756,669) 0
Loss in marketable securities 0 0 0 27,379
--------- --------- --------- ---------
4,205 (14,897) (170,122) 138,525
Changes in non-cash operating assets and liabilities:
Decrease (increase) in Notes Receivable 0 0 0 0
(Increase) decrease in marketable securities (104,500) 0 0 0
(Increase) decrease in accounts receivable and other assets 812 6,667 (1,661) 69,054
Increase (decrease) in accounts payable and accrued liabilities (9,354) 9,920 7,142 (331,850)
--------- --------- --------- ---------
NET CASH FLOWS USED IN OPERATING ACTIVITIES (108,837) 1,690 (164,641) (124,271)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Notes Payable 0 0 (287,193) 0
Proceeds of notes payable 0 0 0 60,000
--------- --------- --------- ---------
NET CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES 0 0 (287,193) 60,000
--------- --------- --------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of investment 0 0 2,709,463 0
Repayment of Notes Receivable 0 0 200,000 0
Investment in notes receivable (707,428) 0 0 0
--------- --------- --------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (707,428) 0 2,909,463 0
--------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH (816,265) 1,690 2,457,629 (64,271)
CASH AND CASH EQUIVALENTS - Beginning of Year 2,464,985 7,356 7,356 71,627
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS - End of the period 1,648,720 9,046 2,464,985 7,356
========= ========= ========= =========
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 5 of 11
INTERUNION FINANCIAL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 2002
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1. Interim information is un-audited; however, in the opinion of management,
all adjustments necessary for a fair statement of interim results have been
included in accordance with Generally Accepted Accounting Principles. All
adjustments are of a normal recurring nature unless specified in a separate note
included in these Notes to Un-audited Consolidated Financial Statements. The
results for interim periods are not necessarily indicative of results to be
expected for the entire fiscal year. These financial statements and notes should
be read in conjunction with the Company's annual consolidated financial
statements and the notes thereto for the fiscal year ended March 31, 2002,
included in its Form 10-KSB for the year ended March 31, 2002.
2. Earning (loss) per share is computed using the weighted average number of
common shares outstanding during the period.
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL
In June 2000, the Company acquired its 243,750 Common Share at the rate of
$0.6153 per share in settlement of $150,000 note receivable from an unrelated
party.
In September 2000, the Company converted its Class "A" Preferred Shares into
Common Shares at the rate of 1 to 10. Consequently, in lieu of 1,500,000 Class
"A" Preferred Shares the Company issued 15,000,000 Common Shares from the
treasury under regulation "S".
In November 2000, in a special meeting of the shareholders' of the company it
was resolved to execute a reverse split in the issued and outstanding common
stock of the Company in the ratio of ten (10) to one (1). Consequently the
number of issued and outstanding common stock of the Company reduced to
1,899,974 in the 3rd quarter of fiscal 2001.
During the year ending March 31, 2001, the Company incurred an expense of
$50,000 on account of Director's Fee. The fee was paid by issuing 16,575 common
shares in the fiscal year 2002. This increased the number of issued and
outstanding common stock of the company to 1,916,549.
SALE OF ASSETS AND DISCONTINUATION OF OPERATIONS
During the second quarter of fiscal 2001 ending September 30, 2000, the Company
sold its investment banking subsidiary, Credifinance Capital Corp. (CFCC).
Effective September 30, 2000, Credifinance Capital Corp. is no longer part of
the Company. As a result of the disposal of the operations of Credifinance
Capital Corp. as of September 30, 2000, the Company reported a profit of
$358,169 from the discontinued operations. However, as a result of disposal of
the discontinued assets of Credifinance Capital Corp., the Company incurred a
loss of $780,401.
From September 30, 2000 to December 20, 2001, the only investment asset on which
InterUnion was reporting its minority interest was in InterUnion Asset
Management Limited (IUAM). IUFC owned 42.8% of IUAM until December 20, 2001.
During the third quarter of fiscal 2002 ending December 31, 2001, the Company
sold its 42.8% owned subsidiary and remaining operating asset, InterUnion Asset
Management Limited (IUAM). Effective December 20, 2001, the Company has no
interest in IUAM. As a result of the disposal of IUAM as of December 20, 2001,
the Company reported a gain on disposal of $756,669.
In accordance with Regulation S-X, the Company was required to disclose the
pro-forma Consolidated Balance Sheet and the pro-forma Consolidated Statement of
Operations had this disposition been completed as at the beginning of fiscal
2001. The Form 8-K/A was filed and dated March 15, 2002.
Page 6 of 11
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
(1) OVERVIEW
During the 1st quarter of fiscal 2003 ending June 30, 2002, InterUnion had nil
revenue from investment banking as a result of sale of its CFCC operations as of
September 30, 2000. The Company's net profit for the quarter ending June 30, 02
was $4,205 ($0.002 per share), mainly due to a Foreign Exchange gain of $34,044.
Selected financial data from InterUnion's financial statements is (figures in
000's except per share data):
3 mos. ended 3 mos. Ended 3 mos. ended
Jun 30- 02 Jun 30- 01 Jun 30- 00
------------ ------------ ------------
Working Capital 2,473 (92) 1,443
Cash Flow (816) 2 115
Total Assets 3,233 2,684 11,496
Shareholders' Equity 3,196 2,294 5,025
Common Share, # 1,916 1,899 3,999
Book Value Per Share 1.67 1.21 1.26
(2) NET REVENUES
For the first 3 months of fiscal 2003, InterUnion reported consolidated revenues
of $7,469 versus $486 a year earlier, an increase of $6,983 or 1,436.83%.
(3) EXPENSES
Selling, general and administration expenses for three months ending June 30,
2002, amounted to $25,296 as compared to $15,383 a year earlier, an increase of
$9,913 or 64.44%.
(4) NET INCOME FOR 3 MONTHS ENDING JUNE 30, 2002
Net profit for the 3 months ending June 30, 2002 was $4,205 (including a Foreign
Exchange gain of $34,044) or $0.002 per share based on a weighted average number
of shares of 1,916,549 versus a loss of $470,493 (including a loss from Disposal
of Equity Investments of $455,596) or $0.241 per share based on a weighted
average number of shares of 1,948,687 a year earlier.
The weighted average number of common shares outstanding for the three months
ending June 30, 2002, is 1,916,549 versus 1,948,687 a year earlier.
Page 7 of 11
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(5) NOTES RECEIVABLE, CURRENT PORTION
3 mos. ended 12 mos. ended
Jun 30 -02 Mar 31-02
------------ -------------
Notes Receivable from Credifinance Gestion (CFG)
bearing Interest @ 5% per annum with a maturity
date of March 31, 2003 $100,836 $ 0
This Note is unsecured
Notes Receivable from Credifinance Gestion (CFG)
bearing Interest @ 5% per annum with a maturity
date of September 30, 2002 100,136 0
This Note is unsecured
Notes Receivable from Credifinance Gestion (CFG)
bearing Interest @ 5% per annum with a maturity
date of September 30, 2002 501,370 0
This Note is secured by a pledge agreement by CFG
with the Security interest being 600,000 common
stock of B Twelve Inc.
-------- --------
$702,342 $ 0
======== ========
(6) LIQUIDITY AND CAPITAL RESOURCES
Date Number of Shares Amount Type
---- ---------------- --------- ----
May 1998 17,002 68,008 Regulation "S"
June 1998 35,000 140,000 Regulation "S"
July 1998 262,142 1,048,568 Regulation "S"
December 1998 10,000 40,000 Regulation "S"
February 1999 180,000 630,000 Regulation "S"
March 1999 25,000 87,500 Regulation "S"
March 1999 1,140 4,560 Regulation "S"
November 1999 114,500 57,250 Regulation "S"
November 1999 2,014,198 805,679 Regulation "S"
September 2000 15,000,000 150,000 Regulation "S"
April 2002 16,575 50,000 Regulation "S"
(7) CONCLUDING REMARKS
There are no other known trends, events or uncertainties that may have, or are
reasonably likely to have, a material impact on the Company's short-term or
long-term liquidity that have not been discussed above.
In addition, there is no significant income or loss that has risen from the
Company's continuing operations that has not been analyzed or discussed above.
In addition, there has not been any material change in any line item that is
presented on the financial statements that has not been discussed above.
Page 8 of 11
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(8) CERTAIN RISK FACTORS WHICH MAY IMPACT FUTURE OPERATIONS
The Company and its subsidiaries operate in a rapidly changing environment that
involves a number of factors, some of which are beyond management's control,
such as financial market trends and investors' appetite for new financings. It
should also be emphasized that, should the Company not be successful in
completing its own financing (either by debt or by the issuance of securities
from treasury), its strategy to grow by acquisition will be affected.
In the opinion of management the financial statements for the period ending June
30, 2002 accurately reflect the operations of the Company and its subsidiaries.
The Company has taken every reasonable step to ensure itself that its quarterly
financial statements do not represent a distorted picture to anyone having a
business reason to review such statements and who has also reviewed its previous
audited annual financial statements for the year ended March 31, 2002.
Forward-looking information included in Management's Analysis and Discussion
reflects management's best judgment based on known factors, and involves risks
and uncertainties. Actual results could differ materially from those anticipated
in these forward-looking information. Forward-looking information is provided by
InterUnion pursuant to the safe harbor established by recent securities
legislation and should be evaluated in the context of these factors.
Page 9 of 11
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding, nor is its property
the subject of a pending legal proceeding for which the claims, exclusive of
interest and costs, exceed 10% of the current assets of the Company on a
consolidated basis.
ITEM 2 - CHANGES IN SECURITIES
In the 1st quarter ending June 30, 2000 the Company acquired its 243,750 Common
Shares at the rate of $0.6153 per share for $150,000 in settlement of the note
receivable of $150,000 from an unrelated party. The above shares are held in
treasury. Consequently, the number of outstanding Common Shares declined to
3,999,373 from 4,243,123 as of March 31, 2000.
In September 2000, the Company converted its Class "A" Preferred Shares into
Common Shares at the rate of 1 to 10. Consequently, in lieu of 1,500,000 Class
"A" Preferred Shares the Company issued 15,000,000 Common Shares from the
treasury under regulation "S".
In November 2000, in a special meeting of the shareholders' of the company it
was resolved to execute a reverse split in the issued and outstanding common
stock of the Company in the ratio of ten (10) to one (1). Consequently the
number of issued and outstanding common stock of the Company reduced to
1,899,974 in the 3rd quarter of fiscal 2001.
During the year ending March 31, 2001, the Company incurred an expense of
$50,000 on account of Director's Fee. The fee was paid by issuing 16,575 common
shares in the fiscal year 2002. This increased the number of issued and
outstanding common stock of the company to 1,916,549.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There have been no defaults in the payment of principal or interest with respect
to any senior indebtedness of InterUnion Financial Corporation.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
99.1 Certification Pursuant to 18 U.S.C. Section 1350.
Page 10 of 11
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
InterUnion Financial Corporation
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(Registrant)
Date August 13, 2002 /s/ Georges Benarroch, Director
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(Signature)
Page 11 of 11