SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the transition period from to .
Commission File Number 0-10893
ABF ENERGY CORP.
(Name of small business issuer in its charter)
Delaware 13-3007167
--------------------------- -------------------
(State or other jurisdiction of incorporation (IRS Employer I.D. Number)
or organization)
2 Winthrop Lane, Scarsdale, New York 10583
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number (914) 725-5474
--------------
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.00005 par value
(Title of class)
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 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
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
Issuer's revenues for its most recent fiscal year. $152,629 .
As of January 31, 2000, 132,729,800 shares of the issuer's common stock was
outstanding.
As of such date, the aggregate market value of the common stock held by
non-affiliates was approximately -0-.
DOCUMENTS INCORPORATED BY REFERENCE
No documents have been incorporated by reference.
<PAGE>
PART I
Item 1. Business
ABF Energy Corp. (The "Company") was incorporated under the laws of the
State of Delaware on June 29, 1981 to engage in oil and gas exploration,
acquisition and development of oil and gas properties and the sale of oil and
gas, if any, produced by these efforts. The Company is the successor to a New
York corporation bearing the identical name organized on December 3, 1979 and
merged into the Company on July 1, 1981. A wholly owned subsidiary, ABF Capital
Corp., ("Capital") was incorporated under the laws of the State of Delaware on
October 26, 1982 for the purpose of acquiring interests and leases, and acting
as a drilling contractor. In addition, Capital owns 80% of the shares of Dry
Transfer Decor Inc., a Delaware corporation which, in turn, is the successor to
a New Jersey corporation having the same name which had been organized in 1978.
During 1985, Dry Transfer issued a license for $75,000 and the assumption of
certain liabilities by a third party. In addition, it is to receive a royalty on
sales under the license agreement.
The Company has discontinued active operations of its 80% owned
subsidiary, Dry Transfer Decor, Inc. and does not expect to resume operations
thereof, but has licensed a third party to sell the product under a royalty
agreement. The licensee went out of business and no royalties have been
received.
Since 1986, the Company's oil and gas business has generally been
inactive.
Currently, management is attempting to locate a suitable acquisition or
merger candidate to enhance shareholder value.
Item 2. Properties
The Company utilizes office space at 2 Winthrop Lane, Scarsdale, New
York, which is the residence of the President, at no cost.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's shareholders
through the solicitation of proxies, or otherwise, during the year ended
December 31, 1999.
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
No established trading market in the Company's common stock existed
during the two years ended December 31, 1999.
The Company has never declared or paid any cash dividend on its Common
Stock and does not expect to declare or pay any such dividend in the foreseeable
future.
Item 6. Management's Discussion and Analysis
Results of Operations
The Company's operations during 1999 and 1998 consisted solely of
collecting minimum royalty payments due to the Company. Royalty income for 1999
and 1998 was $152,629 and $139,567, respectively. General operating expenses of
the Company totaled $99,046 in 1999 as compared to $83,617 in 1998. As a result,
the Company reported income from operations of $53,583 and $55,950 in 1999 and
1998, respectively.
The Company does not anticipate realizing any significant revenues or
conducting any material operations unless and until the Company consummates an
acquisition or merger with an operating business at which time the Company's
operating results are expected to reflect those of the business acquired or
merged with. Until such time, the Company expects to incur certain ongoing
expenses in connection with its search for a suitable merger or acquisition
candidate.
Liquidity and Capital Resources
The Company at December 31, 1999 had $139,568 in assets and liabilities
consisting of certain accrued expenses and loan payable totaling $39,326.
Impact of Inflation
Inflation has not been a major factor in the Company's business
since inception. There can be no assurances that this will continue if and when
the Company completes an acquisition or merger. Item 7. Financial Statements
Item 7. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Page
Auditors report on financial statements F - 2
Balance sheet as of December 31, 1999 F - 3
Statements of operations for the years ended December 31,
1999 and 1998 F - 4
Statements of changes in stockholders' equity for the years
ended December 31, 1999 and 1998 F - 5
Statements of cash flows for the years ended December 31,
1999 and 1998 F - 6
Notes to financial statements F - 7
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
of ABF Energy Corp. and Subsidiary
Englewood Cliffs, NJ
We have audited the accompanying balance sheet of ABF Energy Corp. and
Subsidiary as of December 31, 1999 and the related statements of operations,
stockholders' equity and cash flows for each of the years ended December 31,
1999 and 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, the financial position of ABF Energy Corp. and Subsidiary as of December
31, 1999 and the results of its operations and its cash flows for the years
ended December 31, 1999 and 1998 in conformity with generally accepted
accounting principles.
/s/Feldman Sherb Horowitz & Co., P.C.
Feldman Sherb Horowitz & Co., P.C.
Certified Public Accountants
New York, New York
February 2, 2000
F - 2
<PAGE>
ABF ENERGY CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
CURRENT ASSETS:
Cash $ 7,242
Marketable securities 95,050
Loan receivable 12,250
-----------
TOTAL CURRENT ASSETS 114,542
EQUIPMENT 25,026
-----------
$ 139,568
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 10,172
Current portion of loan payable 5,086
-----------
TOTAL CURRENT LIABILITIES 15,258
LOAN PAYABLE 20,928
STOCKHOLDERS' EQUITY:
Common stock, $.00005 par value,
authorized 200,000,000 shares: 152,209,800 issued 7,609
Paid-in capital 1,770,693
Treasury stock, at cost, 19,480,000 shares (974)
Accumulated deficit (1,677,009)
Other comprehensive income 3,063
-----------
TOTAL STOCKHOLDERS' EQUITY 103,382
-----------
$ 139,568
===========
See notes to financial statements
F - 3
<PAGE>
ABF ENERGY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
December 31,
----------------------------
1999 1998
------------- -------------
REVENUES:
Royalties $ 152,629 $ 139,567
EXPENSES:
General and administrative 99,046 83,617
------------- -------------
INCOME BEFORE OTHER INCOME (EXPENSES) 53,583 55,950
------------- -------------
OTHER INCOME (EXPENSES):
Dividend income 2,699 --
Investment loss (711) --
Interest expense (442) --
------------- -------------
1,546 --
------------- -------------
NET INCOME 55,129 55,950
COMPREHENSIVE GAIN - unrealized gain on investments 3,063 --
------------- -------------
NET INCOME APPLICABLE TO COMMON SHAREHOLDERS $ 58,192 $ 55,950
============= =============
NET INCOME PER SHARE $ -- $ --
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING 132,729,800 132,729,800
============= =============
See notes to financial statements
F - 4
<PAGE>
ABF ENERGY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Other
Common Stock Paid-In Accumulated Treasury Stock Comprehensive Stockholders'
--------------------
Shares Amount Capital Deficit Shares Cost Income Equity
------------ ------- ----------- ------------ ----------- ------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE - December 31, 1997 152,209,800 $ 7,609 $1,770,693 $(1,788,088) 19,480,000 $ (974) $ -- $ (10,760)
Net income -- -- -- 55,950 -- -- -- 55,950
----------- -------- ----------- ----------- ----------- ----------- ----------- -------------
BALANCE - December 31, 1998 152,209,800 7,609 1,770,693 (1,732,138) 19,480,000 (974) -- 45,190
Net income -- -- -- 55,129 -- -- -- 55,129
Other comprehensive income
- unrealized gain on
investments -- -- -- -- -- -- 3,063 3,063
----------- -------- ----------- ----------- ----------- ----------- ----------- -------------
BALANCE - December 31, 1999 152,209,800 $ 7,609 $1,770,693 $(1,677,009) 19,480,000 $ (974) $ 3,063 $ 103,382
=========== ======= =========== =========== =========== =========== =========== =============
</TABLE>
See notes to financial statements.
F-5
<PAGE>
ABF ENERGY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended
December 31,
---------------------
1999 1998
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 55,129 $ 55,950
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,128 --
Changes in assets:
Increase in loans receivable (12,250) --
Decrease in accounts payable (33) (7,110)
-------- --------
CASH PROVIDED BY OPERATIONS 45,974 48,840
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (91,988) --
-------- --------
(91,988) --
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in loans payable -- (7,500)
Payment of loan payable (2,138) --
-------- --------
(2,138) (7,500)
-------- --------
NET (DECREASE)/INCREASE IN CASH (48,152) 41,340
CASH AT BEGINNING OF YEAR 55,394 14,054
-------- --------
CASH AT END OF YEAR $ 7,242 $ 55,394
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Taxes $ 359 $ 359
======== ========
Interest $ 240 $ --
======== ========
Purchase of equipment through loan payable $ 28,154 $ --
======== ========
See notes to financial statements.
F - 6
<PAGE>
ABF ENERGY CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company was formed for the purpose of engaging in oil and gas exploration,
the acquisition and development of oil and gas properties, and the sale of oil
and gas produced by these efforts. The Company has also organized, sold and
operated and acted as a General Partner in oil and gas limited partnerships. The
Company discontinued all of its operations during 1985.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Net income (loss) per share - Net loss per share is computed based
upon the average of shares outstanding during the respective periods.
(b) Principles of Consolidation - The financial statements include the
accounts of the Company and its wholly-owned subsidiary, ABF Capital
Corp. ("Capital"). All significant intercompany transactions have been
eliminated.
(c) Restatement - the Company has restated its number of shares of
common stock issued and outstanding at December 31, 1998. This
restatement had no impact on previously reported results of operations
or stockholders' equity.
2. INCOME TAXES
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes ("SFAS No.
109"). SFAS No. 109 requires the recognition of deferred tax assets
and liabilities for both the expected impact of differences between
the financial statements and tax basis of assets and liabilities, and
for the expected future tax benefit to be derived from tax loss and
tax credit carryforwards. SFAS No. 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets. At December 31, 1999, the Company
had net deferred tax assets of $595,000. The Company has recorded a
valuation allowance for the full amount of the net deferred tax
assets.
The following table illustrates the source and status of the Company's
major deferred tax assets and (liabilities):
Net operating loss carryforward $ 595,000
Valuation allowance (595,000)
---------
Net deferred tax asset recorded $ -
=========
F-7
<PAGE>
The differences between income taxes computed by applying the
statutory federal income tax rate (35%) and income tax expense
(benefit) in the consolidated financial statements are:
Years ended December 31,
1999 1998
---- ----
Tax computed at statutory rate $ 20,500 $ 19,600
Tax benefit of net operating loss (20,500) (19,600)
------------ --------------
$ - $ -
============ ==============
The Company has net operating loss carryforwards for tax purposes
totaling $1,700,000 at December 31, 1999 expiring in the year 2002.
Substantially all of the carryforwards are subject to limitations on
annual utilization because there are "equity structure shifts" or
"owner shifts" involving 5% stockholders (as these terms are defined
in Section 382 of the Internal Revenue Code), which have resulted in a
more than 50% change in ownership.
3. ROYALTY INCOME
In 1982, Capital entered into sub-lease and drilling agreements with
two Limited Partnerships. Under the sub-lease agreements the Company
was entitled to minimum annual royalty payments. The collections of
approximately $6,000,000 of the minimum royalties were due in 1994 and
were backed by liability assumption agreements signed by the Limited
Partners. Revenues from minimum annual royalty agreements are recorded
upon receipt.
4. LOAN RECEIVABLE
The loan receivable represents an 10% interest bearing loans to a
company that is affiliated to an officer/director of the Company.
5. EQUIPMENT
Equipment is stated at cost. Depreciation is provided over the
estimated useful life of the equipment by the straight-line method.
The following is a summary of equipment at December 31, 1999:
Estimated Life Cost
Vehicle 3 years $28,154
Accumulated depreciation (3,128)
--------------
Net book value $25,026
==============
F-8
<PAGE>
6. LOAN PAYABLE
The loan payable represents a loan collateralized by the vehicle. The
loan bears interest at the rate of 4.90% per annum and is payable in
monthly installments of $521 through September 2004. Principal
payments through the next five years are as follows:
2000 $5,086
2001 $5,341
2002 $5,608
2003 $5,889
2004 $4,089
F - 9
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons,
Compliance With Section 16(a) of the Exchange Act
The Directors, officers and key executives of the Company are set forth
in the following table. The terms of Directors are for one year or until their
successors are elected and qualify.
Served as
Name and Address Age Director Since Position
Adolph Weissman (1) 71 1979 Chairman of Board
and President
(1) Parents and Founders of the Company as that term is defined under the
Securities Act of 1933, as amended.
Item 10. Executive Compensation
During 1999 and 1998, the Company paid compensation of $27,250 and
$24,000, respectively, to its current President.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of February 1, 2000 the number of
shares of the Company's Common Stock beneficially owned, or as to which there
was a right to acquire beneficial ownership within 60 days, by each beneficial
owner known to own more than five percent of the Company's Common Stock, by each
director, each executive officer and all directors, nominees for director and
all executive officers, directors and nominees for director as a group.
Name and Address of Amount and Nature Title of Percent
Beneficial Owner of Beneficial Ownership(1) Class of Class
Adolph Weissman 28,841,340 Common 18.9%
Ed Rose 33,170,000 Common 21.8%
Officers and Directors
as a group (2 persons) 62,011,340 Common 40.7%
(1) Unless noted otherwise, all shares indicated as beneficially owned are held
of record by, and the right to vote and transfer such shares lies with the
person indicated.
Item 12. Certain Relationships and Related Transactions
None.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ABF ENERGY CORP.
By:
Dated:
Adolph Weissman
Chairman of the Board and President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
By:
Adolph Weissman, Chairman of the Board and President
Date:
<TABLE> <S> <C>
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<NAME> ABF ENERGY CORP.
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<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
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<CASH> 7,242
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0
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