<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended October 31, 1998 Commission file number 0-5653
---------------- ------
BALA CYNWYD CORPORATION
--------------------------------------------------------------------------------
NEW JERSEY 22-1436237
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 CITY AVENUE BALA CYNWYD, PA 19004
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-667-8225
------------
_______________________________________________________________________________
Former name, former address and former fiscal year, if changed since last
report.
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 and (2) has been subject to such filing requirements for
the past 90 days.
___Yes _X_ No
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: COMMON, PAR VALUE $.05 PER SHARE
--------------------------------
OUTSTANDING at October 31, 1998 1,021,314
<PAGE>
BALA CYNWYD CORPORATION
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OCTOBER 31, 1998
--------------------------------------------------------------------------------
INDEX
Part I - Financial Information (unaudited):
Condensed balance sheet as of
October 31,1998 and January 31,1998 2
Condensed statement of operations
for the three-month and nine-month periods ended
October 31, 1998 and 1997 3
Condensed statement of cash flows
for the nine-month periods ended
October 31, 1998 and 1997 4
Notes to condensed financial statements 5
Report of independent accountants 6
Management's discussion and analysis of the
financial condition and results of operations 7
Part II - Other Information
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports of Form 8-K 8
Signature 9
1
<PAGE>
BALA CYNWYD CORPORATION
CONDENSED BALANCE SHEET
(unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCTOBER 31, JANUARY 31,
1998 1998
----------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $472,939 $467,350
Receivables, litigation 1,294 1,294
Due from shareholder 11,768 11,768
-------- --------
$486,001 $480,412
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliates $ 3,755 $ 3,436
Accrued expenses 13,400 16,250
Income taxes payable 5,999 9,892
-------- --------
23,154 29,578
-------- --------
Preferred stock, cumulative convertible, $.05 par
value; 500,000 shares authorized, 2,600
shares issued 130 130
Common stock, $.05 par value; 2,000,000 shares
authorized, 1,054,419 shares issued 52,721 52,721
Additional paid-in capital 462,327 462,327
Accumulated deficit (32,765) (44,778)
-------- --------
482,413 470,400
Less treasury stock, at cost:
Preferred stock (2,600 shares) (5,000) (5,000)
Common stock (33,105 shares) (14,566) (14,566)
-------- --------
Net shareholders' equity 462,847 450,834
------- --------
$486,001 $480,412
======== ========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
BALA CYNWYD CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 31, OCTOBER 31,
1998 1997 1998 1997
------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Revenue, interest income $ 5,415 $ 5,519 $ 16,164 $ 15,937
General and administrative expenses 722 439 3,026 2,833
------------ ------------- ------------ ------------
Income before provision
for income taxes 4,693 5,080 13,138 13,104
Provision for personal holding
company income taxes 375 1,194 1,125 3,582
------------ ------------- ------------ ------------
Net income $ 4,318 $ 3,886 $ 12,013 $ 9,522
============ ============= ============ ============
Net income per share,
basic and diluted $.00 $.00 $.01 $.01
==== ==== === ====
Weighted average number of
outstanding shares for basic
and diluted 1,021,314 1,021,314 1,021,314 1,021,314
========= ========= ========= =========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
BALA CYNWYD CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
OCTOBER 31,
1998 1997
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Net income $ 12,013 $ 9,522
Adjustments to reconcile net income to net
cash provided by operating activities:
Decrease in operating assets:
Rceivables - 14,835
Increase (decrease) in operating liabilities:
Accrued expenses (2,850) -
Income taxes payable (3,893) 3,582
-------- --------
Net cash provided by operating activities 5,270 27,939
-------- --------
Cash flows from investing activities:
Advances to/from shareholder, net 319 (3,586)
---------- --------
Net cash provided by investing activities 319 (3,586)
---------- --------
Net increase in cash and cash equivalents 5,589 24,353
Cash and cash equivalents at beginning of period 467,350 444,201
-------- --------
Cash and cash equivalents at end of period $472,939 $468,554
======== ========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
BALA CYNWYD CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
--------------------------------------------------------------------------------
1. In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments necessary to present fairly
the financial position as of October 31, 1998 and the results of operations
for the three-month and nine-month periods ended October 31, 1998 and 1997
and cash flows for the nine-month periods ended October 31, 1998 and 1997.
The results of operations for the nine-month period ended October 31, 1998
are not necessarily indicative of the results to be expected for the full
year.
2. Margolis & Company P.C., the Company's auditors, has performed a limited
review of the financial information included herein. Their report on such
review accompanies this filing.
5
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Bala Cynwyd Corporation
Bala Cynwyd, PA
We have reviewed the accompanying condensed balance sheet of Bala Cynwyd
Corporation as of October 31, 1998 and the related condensed statements of
operations for the three-month and nine-month periods ended October 31, 1998 and
1997 and cash flows for the nine-month periods ended October 31, 1998 and 1997.
These financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of January 31, 1998 and the related statements
of operations, shareholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated January 11, 2000, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed balance sheet as of January
31, 1998 is fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
Certified Public Accountants
Bala Cynwyd, Pennsylvania
June 30, 2000
6
<PAGE>
BALA CYNWYD CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(unaudited)
--------------------------------------------------------------------------------
Nature of Business
The Company presently conducts no business, but is searching for appropriate
investment and acquisition opportunities. Its only income consists of interest
from investment income.
Results of Operations
During the nine months ended October 31, 1998, the Company earned interest of
$16,164 as compared to $15,937 of interest earned in the nine months ended
October 31, 1997, an increase of $227. During the nine months ended October 31,
1998, the Company incurred general and administrative expenses of $3,026, an
increase of $193 as compared with the nine months ended October 31, 1997
expenses of $2,833.
Liquidity and Capital Resources
During the nine months ended October 31, 1998, the Company satisfied its working
capital needs from cash on hand at the beginning of the year and cash generated
from interest income during the period. As of October 31, 1998, the Company had
working capital of $462,847. This working capital is expected to provide the
Company with sufficient capital while it seeks a merger, acquisition or other
arrangement by and between the Company and a viable operating entity, although
there is no assurance that this will occur.
7
<PAGE>
BALA CYNWYD CORPORATION
Part II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports of Form 8-K
None
8
<PAGE>
BALA CYNWYD CORPORATION
SIGNATURE
--------------------------------------------------------------------------------
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.
BALA CYNWYD CORPORATION
/s/ Albert M. Zlotnick
---------------------------------
Albert M. Zlotnick, President and
Chief Executive Officer
Date: August 25, 2000
9
<PAGE>
BALA CYNWYD CORPORATION
APPENDIX A TO ITEM 601(c) OF REGULATION S-B
--------------------------------------------------------------------------------
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BALA CYNWYD CORPORATION AS OF AND FOR THE NINE MONTHS
ENDED OCTOBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
ITEM NUMBER AMOUNT ITEM DESCRIPTION
----------- ------ ----------------
5-02(1) $ 472,939 Cash and cash items
5-02(2) 0 Marketable securities
5-02(3)(a)(1) 0 Notes and accounts receivable, trade
5-02(4) 0 Allowances for doubtful accounts
5-02(6) 0 Inventories
5-02(9) 486,001 Total current assets
5-02(13) 0 Property, plant and equipment
5-02(14) 0 Accumulated depreciation
5-02(18) 486,001 Total assets
5-02(21) 23,154 Total current liabilities
5-02(22) 0 Bonds, mortgages and similar debt
5-02(28) 0 Preferred stock, mandatory redemption
5-02(29) 130 Preferred stock, no mandatory redemption
5-02(30) 52,721 Common stock
5-02(31) 409,996 Other shareholders' equity
5-02(32) 486,001 Total liabilities and shareholders' equity
5-03(b)1(a) 0 Net sales of tangible products
5-03(b)1 16,164 Total revenues
5-03(b)2(a) 0 Cost of tangible goods sold
5-03(b)2 0 Total costs and expenses applicable to
sales and revenues
5-03(b)3 3,026 Other costs and expenses
5-03(b)5 0 Provision for doubtful accounts and notes
5-03(b)(8) 0 Interest and amortization of debt discount
5-03(b)(10) 13,138 Income before taxes and other items
5-03(b)(11) 1,125 Income tax expense
5-03(b)(14) 12,013 Income from continuing operations
5-03(b)(15) 0 Discontinued operations
5-03(b)(17) 0 Extraordinary items
5-03(b)(18) 0 Cumulative effect, changes in
accounting principles
5-03(b)(19) 12,013 Net income
5-03(b)(20) .01 Earnings per share, basic
5-03(b)(20) .01 Earnings per share, diluted
