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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
(AMENDMENT NO.1)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1998
COMMISSION FILE NUMBER 0-27190
PARAMOUNT FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-3072768
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE JERICHO PLAZA, JERICHO, NEW YORK 11753
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(516) 938-3400
(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
FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
--------- --------
NUMBER OF SHARES OUTSTANDING AT SEPTEMBER 15, 1998:
1,997,500 SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE.
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<PAGE>
PARAMOUNT FINANCIAL CORPORATION
AMENDMENT NO.1 ON FORM 10-Q/A FOR THE QUARTER ENDED
JUNE 30, 1998
Three typographical errors contained in Paramount Financial
Corporation's Form 10-Q for the quarter ended June 30, 1998 (the
"Original Form 10-Q") are hereby corrected, as follows:
------------------
A. The numeric figure "13,644,228" is added to the
line item entitled "Additional paid-in capital" in the June 30,
1998 column on the Consolidated Balance Sheets in lieu of the
typographical error "13,664,228" in the Original Form 10-Q.
B. The numeric figure "17,500,000" is added as the
authorized number of shares of Common Stock, $.04 par value, on
the Consolidated Balance Sheets in lieu of the typographical
error "4,375,000" from the Original 10-Q.
C. The numeric figure "$13,644,228" is added to the
line item entitled "BALANCE, JUNE 30, 1998" in the column
entitled "Additional Paid-in-Capital" on the Consolidated
Statement of Changes in Stockholders' Equity in lieu of the
typographical error $13,664,228" in the Original Form 10-Q.
In addition, Footnote 5 to the Notes to Unaudited
Consolidated Financial Statements is amended in its entirety to
read as follows:
"Effective May 19, 1998, the Board of
Directors approved a reduction of the
authorized number of shares of common stock
from 35,000,000 to 17,500,000 and authorized
a one-for-four reverse stock split of the
Company's common stock. The par value of the
common stock was increased from $.01 to $.04
per share. Accordingly, all references in
the financial statements and notes to common
share data have been adjusted to reflect the
reverse stock split. Preferred stock
remained unchanged."
Except as provided above, there are no additional changes to
the Original Form 10-Q. The complete Consolidated Balance
Sheets, Consolidated Statement of Changes in Stockholders' Equity
and Notes to Consolidated Financial Statements, as hereby
corrected, are set forth on the next page hereof.
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
------------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
DECEMBER 31, JUNE 30,
ASSETS 1997 1998
------ ------------- ------------
(UNAUDITED)
Cash and cash equivalents . . . $ 2,209,649 $ 4,356,884
Investments available for sale 3,524,456 --
Accounts receivable . . . . . . 1,138,479 1,424,288
Net investment in direct finance
and sales-type leases . . . . 39,941,764 34,045,111
Assets held under operating
leases, net of accumulated
depreciation . . . . . . . . . 5,459,895 8,294,465
Other assets . . . . . . . . . 788,218 1,506,641
---------- ----------
Total assets . . . . . . . . . $53,062,461 $49,627,389
========== ==========
LIABILITIES AND SHAREHOLDERS'
-----------------------------
EQUITY
------
Notes payable . . . . . . . . . $ 2,656,365 $ 3,409,731
Accounts payable . . . . . . . 1,307,496 878,176
Accounts payable - leases . . . 708,568 382,753
Accrued expenses . . . . . . . 383,097 250,609
Obligations for financed
equipment - non-recourse . . . 40,287,404 37,338,900
Deferred income taxes . . . . . 73,848 --
---------- -----------
Total liabilities . . . . . . . 45,416,778 42,260,169
---------- -----------
Shareholders' equity:
Preferred stock, $.01 par
value; 5,000,000 shares
authorized, none outstanding -- --
Common stock, $.04 par
value; 17,500,000 shares
authorized, and 1,997,500
shares issued and
outstanding . . . . . . . . . 79,900 79,900
Additional paid-in capital . . 13,644,228 13,644,228
Accumulated deficit . . . . . . (6,049,080) (6,311,957)
Treasury stock, 12,500 and
19,000 shares at cost,
respectively, . . . . . . . . (29,365) (44,951)
---------- ----------
Total shareholders' equity . . 7,645,683 7,367,220
---------- ----------
Total liabilities and
shareholders' equity . . . . . $53,062,461 $49,627,389
========== ==========
See accompanying notes to financial statements.
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<PAGE>
PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
---------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1998
--------------------------------------
UNAUDITED
---------
COMMON STOCK
---------------------- ADDITIONAL
SHARES AMOUNT PAID-IN-CAPITAL
------ ------ ---------------
BALANCE, DECEMBER
31, 1997 . . . . . 1,997,500 $79,900 $13,644,228
Net loss . . . . . -- -- --
Purchase of
treasury -- -- --
stock . . . . . . --------- -------- ----------
BALANCE, JUNE 30,
1998 . . . . . . . 1,997,500 $79,900 $13,644,228
========= ======== ==========
ACCUMULATED TREASURY
(DEFICIT) STOCK TOTAL
---------- ----- -----
BALANCE, DECEMBER
31, 1997 . . . . . . ($6,049,080) $(29,365) $7,645,683
Net loss . . . . . . (262,877) -- (262,877)
Purchase of treasury
stock . . . . . . . -- (15,586) (15,586)
---------- ----------- ----------
BALANCE, JUNE 30,
1998 . . . . . . . . ($6,311,957) ($44,951) $7,367,220
========== =========== ==========
See accompanying notes to financial statements.
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<PAGE>
PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
------------------------------------------------
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions for
Form 10-Q and Regulation S-X related to interim period
financial statements and, therefore, do not include all
information and footnotes required by generally accepted
accounting principles. However, in the opinion of
management, all adjustments (consisting of normal recurring
adjustments and accruals) considered necessary for a fair
presentation of the financial position of Paramount
Financial Corporation and subsidiaries (the "Company") at
June 30, 1998 and its results of operations and cash flows
for the three and six months ended June 30, 1997 and 1998,
respectively, have been included. The results of operations
for the interim periods are not necessarily indicative of
the results that may be expected for the entire year.
Reference should be made to the annual financial statements,
including footnotes thereto, included in the Company's Form
10-K for the fiscal year ended December 31, 1997.
2. The financial statements for the three and six months ended
June 30, 1998 are consolidated to include the results of the
Company's two wholly owned subsidiaries, Paratech Resources,
Inc. and Deltaforce Personnel Services, Inc ("Deltaforce").
All material intercompany balances and transactions have
been eliminated.
3. On January 9, 1998, the Company acquired 100% of the
outstanding shares of Deltaforce, a privately held New York
City-based staffing company, for approximately $723,000,
which included $325,000 of notes payable. The acquisition
was accounted for as a purchase and accordingly the
operating results of Deltaforce have been included in the
Company's consolidated statements since the date of the
acquisition. The excess of the aggregate purchase price
over the fair market value of the net assets acquired of
approximately $626,000 has been recorded as goodwill and is
being amortized over 15 years.
4. In April 1998, the Company entered into a term loan with a
bank collateralized by $600,000 in cash maintained in an
investment account. Principal payments of approximately
$41,600 and interest are due on a quarterly basis through
April 20, 2001.
5. Effective May 19, 1998, the Board of Directors approved a
reduction of the authorized number of shares of common stock
from 35,000,000 to 17,500,000 and authorized a one-for-four
reverse stock split of the Company's common stock. The par
value of the common stock was increased from $.01 to $.04
per share. Accordingly, all references in the financial
statements and notes to common share data have been adjusted
to reflect the reverse stock split. Preferred stock
remained unchanged.
6. On August 3, 1998, the Company acquired the business of RBW
Staffing Services, Inc. (d/b/a "WordSmiths Staffing
Services"), a privately held, New York City-based staffing
company. The acquisition will be accounted for as a
purchase; accordingly, the purchase price will be allocated
to the underlying assets purchased based on their respective
estimated fair market values at the date of acquisition.
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SIGNATURES
Pursuant to the requirements 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.
PARAMOUNT FINANCIAL CORPORATION
Date: September 15, 1998 By: /s/ Paul Vecker
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Paul Vecker, Senior Vice
President and Chief
Financial Officer
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