SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
____________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ending June 30, 1996
Commission File Number 0-7349
WEBCOR ELECTRONICS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 13-2695316
(state or other jurisdiction of (I.R.S. Employer
incorporation of organization)
identification No.)
1612 N. Osceola Avennue
Clearwater, Florida 34615
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code:
(813) 443 3434
Securities Registered pursuant to Section 12(g) of the Act
Common Stock, par value $.01 per share.
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).
Yes __________ No. ___ X _____
_____________
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the Registrant has filed all
documents and reports required to be filed by Sections 12,
13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan
confirmed by a court..
N/A Yes ___ No ____
The number of shares outstanding of the Registrant's common
stock is 3,476,370 (as of 10-Q January 31, 1989). The
Registrant is an inactive company with limited trading in
these securities. There has been virtually no regular
trading in the market of this security over the last six
years..
PART I-Financial Information
Item I. Financial Statements
WEBCOR CORPORATION
(a Dormant State Company)
for the quarter ending June 30, 1996
1996
Assets
Organization Cost $ 0.00
Total Assets $ 0.00
Liabilities and Shareholder's Equity
Stockholders' Equity
Common Stock par value at $.01 per share
20,000,000.00 shares authorized,
3,476,370.00 shares issued and outstanding $0.00
Preferred Stock, par value $.01.
1,000,000 shares authorized of preferred stock
Additional Paid in Capital $0.00
Deficit accumulated during development stage $0.00
Total Shareholders' Equity $0.00
Total Liabilities and Shareholders Equity $0.00
WEBCOR CORPORATION
(a Dormant State Company)
Income Statements
for the quarter ending June 30,1996
1996
Revenues and Expenses $0.00
WEBCOR ELECTRONICS, INC.
(a Dormant State Company)
Statements of Shareholder's Equity
for the quarter ending June 30, 1996
1996
Common Stock
(3,476,370.00 shares issued & outstanding) $0.00
Additional Paid in Capital $0.00
Accumulated Deficit $0.00
Balance April 1 $0.00
Net Income/(loss) for the year $0.00
Balance June 30 $0.00
WEBCOR ELECTRONICS, INC.
(A Dormant State Company)
June 30, 1996
Note 1. NATURE OF BUSINESS
WEBCOR, (A Dormant State Company), was incorporated on
December 3, 1971, under the laws of the State of Delaware.
The Company's business consisted of manufactuing and selling
cordless telephones, telephone accessories, electronic
scales and calculators. The Company's shares were traded on
the AMS exchange, but are now traded over-the-counter as a
penny stock. On February 1, 1989, The Company filed a
petition, No. 89-10328, in the U.S. Bankruptcy Court for the
District of Eastern District Of New York (Brooklyn). WEBCOR
attemted a re-organization for almost a year and a half. It
took another six years to finalize the affairs of the
Company. This bankruptcy proceeding began on February 1,
1989 and on November 13, 1996 the Registrant's Petition was
declared closed and the Trustee was discharged. Since
November 13, 1996, the Registrant has been totally inactive.
On December 26, 1996, Capston Network Company, a
stockholder, successfully reinstated the Registrant under
its original Delaware Charter.
Note 2. RELATED PARTY TRANSACTIONS
The Capston Network Company owns 5,000 shares in WEBCOR
ELECTRONICS, INC.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Corporate Background Information
WEBCOR ELECTRONICS, INC. (the"Registrant") was
incorporated on December 3, 1971 under the laws of the State
of Delaware. The Company's business consisted of
manufactuing and selling cordless telephones, telephone
accessories, electronic scales and calculators. On April 8,
1982, the Company registered its stock under Section 12(g)
of the Securities Exchange Act of 1934 (the "Exchange
Act").The Registrant conducted an initial public offering of
its Common Stock in May, 1982 pursuant to a Form S-1
registration Statement under the Securities Act of 1933 (the
"Securities Act").
After pursuing its business for several years, the
Registrant filed a voluntary petition under Chapter 11 of
the Bankruptcy Act on February 1, 1989. This proceeding was
filed in with the U.S. Bankruptcy Court for the Eastern
District of New York (Brooklyn) and designated as Case #
89-10328. On October 16, 1990, the Company's Chapter 11 case
was voluntarily converted to a case in Chapter 7 which
resulted in the orderly liquidation of all corporate assets
and the use of the proceeds to repay the Company's
creditors. On November 13, 1996 the Company's case under
Chapter 7 was closed by an order of the Court and the
trustee was discharged. As a result of the Bankruptcy, the
Company has no assets, liabilities, management or ongoing
operations and has not engaged in any business activities
since February, 1990. The Registrant has been totally
inactive since November 13, 1996.
During the pendancy of the Bankruptcy, the management
of the Registrant neglected to file franchise tax returns
with and pay the required franchise taxes to the State of
Delaware. As a result, the Company's corporate charter was
revoked by order of the Secretary of State of the State of
Delaware on March 1, 1991. Similarly, the management of the
Registrant neglected to file with the SEC either (a) the
regular reports that are required of all companies that have
securities registered under the Exchange Act, or (b) a
certification on Form 15 terminating its registration under
the Exchange Act. As a result, the Company remained a
Registrant under the Exchange Act but was seriously
delinquent in its SEC reporting obligations. According to
the National Quotation Bureau, the last published quotation
for the Company's Common Stock was posted by CARR SECURITIES
CORP., one of the Company's market makers, on October 15,
1996. At that time, the published quote was $$0.00 bid and
$0.10 asked. There have been no published quotations for the
Company's Common Stock since October 15, 1996.
Acting in its capacity as a Stockholder of the Company,
and without first receiving any consent, approval or
authorization of any other Stockholder or former officer or
director of the Company, Capston effected a renewal, revival
and restoration of the Company's certificate of
incorporation pursuant to Section 312 of the General
Corporation Law of the State of Delaware. In general,
Section 312 provides that any corporation may "procure an
extension, restoration, renewal or revival of its
certificate of incorporation, together with all the rights,
franchises, privileges and immunities and subject to all of
its duties, debts and liabilities which had been secured or
imposed by its original certificate of incorporation" upon
compliance with certain procedural requirements.
After reviewing the applicable files, Capston
determined that the only debt of the Company that was
"secured or imposed by its original certificate" was the
obligation of the Registrant to pay its Delaware taxes.
Therefore, Capston paid all past due franchise taxes on
behalf of the Company and then filed a Certificate of
Renewal, Revival, Extension and Restoration of the Company's
Certificate of Incorporation on behalf of the Company under
the authority granted by Section 312(h). This Certificate
was filed in the office of the Secretary of State of the
State of Delaware on December 26, 1996 and at the date of
this Proxy Statement the Company is lawfully incorporated,
validly existing and in good standing under the laws of the
State of Delaware.
Proposed Operations
While the Registrant has no assets, liabilities,
management or ongoing operations and has not engaged in any
business activities since February 1990, Capston believes
that it may be possible to recover some value for the
Stockholders through the adoption and implementation of a
Plan whereby the Registrant will be restructured as a "clean
public shell" for the purpose of effecting a business
combination transaction with a suitable privately-held
company that has both business history and operating assets.
Capston believes the Registrant will offer owners of a
suitable privately-held company the opportunity to acquire a
controlling ownership interest in a public company at
substantially less cost than would otherwise be required to
conduct an initial public offering. Nevertheless, Capston is
not aware of any empirical statistical data that would
independently confirm or quantify Capston's beliefs
concerning the perceived value of a merger or acquisition
transaction for the owners of a suitable privately-held
company. The owners of any existing business selected for a
business combination with the Registrant will incur
significant costs and expenses, including the costs of
preparing the required business combination agreements and
related documents, the costs of preparing the a Current
Report on Form 8-K describing the business combination
transaction and the costs of preparing the documentation
associated with any future reporting under the Exchange Act
and registrations under the Securities Act.
If the Plan is approved by the Stockholders, the
Registrant will be fully reactivated and then used as a
corporate vehicle to seek, investigate and, if the results
of such investigation warrant, effect a business combination
with a suitable privately-held company or other business
opportunity presented to it by persons or firms that seek
the perceived advantages of a publicly held corporation. The
business operations proposed in the Plan are sometimes
referred to as a "blind pool" because Stockholders will not
ordinarily have an opportunity to analyze the various
business opportunities presented to the Registrant, or to
approve or disapprove the terms of any business combination
transaction that may be negotiated by Capston on behalf of
the Registrant. Consequently, the Registrant's potential
success will be heavily dependent on the efforts and
abilities of Capston and its officers, directors and
consultants, who will have virtually unlimited discretion in
searching for, negotiating and entering into a business
combination transaction. Capston and its officers, directors
and consultants have had limited experience in the proposed
business of the Registrant. Although Capston believes that
the Registrant will be able to enter into a business
combination transaction within 12 months after the approval
of the Plan by the Stockholders, there can be no assurance
as to how much time will elapse before a business
combination is effected, if ever. The Registrant will not
restrict its search to any specific business, industry or
geographical location, and the Registrant may participate in
a business venture of virtually any kind or nature.
Capston and its officers, directors and consultants
anticipate that the selection of a business opportunity for
the Registrant will be complex and extremely risky. Because
of general economic conditions, rapid technological advances
being made in some industries, and shortages of available
capital, Capston believes that there are numerous privately-
held companies seeking the perceived benefits of a publicly
traded corporation. Such perceived benefits may include
facilitating debt financing or improving the terms on which
additional equity or may be sought, providing liquidity for
the principals of the business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity for all stockholders and
other factors.
Potential business opportunities may occur in many
different industries and at various stages of development,
all of which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex. Capston anticipates that the
Registrant will be able to participate in only one business
venture. This lack of diversification should be considered a
substantial risk inherent in the Plan because it will not
permit the Registrant to offset potential losses from one
venture against gains from another. Moreover, due to the
Registrant's lack of any meaningful financial, managerial or
other resources, Capston believes the Registrant will not be
viewed as a suitable business combination partner for either
developing companies or established business that are in
need of substantial additional capital.
Acquisition of Opportunities
In implementing a particular business combination
transaction, the Registrant may become a party to a merger,
consolidation, reorganization, joint venture, franchise or
licensing agreement with another corporation or entity. It
may also purchase stock or assets of an existing business.
After the consummation of a business combination
transaction, it is likely that the present Stockholders of
the Registrant will only own a small minority interest in
the combined companies. In addition, as part of the terms of
the acquisition transaction, all of the Registrant's
officers and directors will ordinarily resign and be
replaced by new officers and directors without a vote of the
Stockholders. Capston does not intend to obtain the approval
of the Stockholders prior to consummating any acquisition
other than a statutory merger that requires a Stockholder
vote. Capston and its officers, directors and consultants do
not intend to sell any shares held by them in connection
with a business acquisition.
It is anticipated that any securities issued in a
business combination transaction will be issued in reliance
on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a
negotiated element of a business combination, the Registrant
may agree to register such securities either at the time the
transaction is consummated or at some specified time
thereafter. The issuance of substantial additional
securities and their potential sale into any trading market
that may develop may have a depressive effect on such
market. While the actual terms of a transaction to which the
Registrant may be a party cannot be predicted, it may be
expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a so called "tax
free" reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code of 1986, as amended (the "Code") In
order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80%
or more of the voting stock of the surviving entity. In such
event, the stockholders of the Registrant would retain less
than 20% of the issued and outstanding shares of the
combined companies, which could result in significant
dilution in the equity of such stockholders. The Registrant
intends to structure any business combination in such manner
as to minimize Federal and state tax consequences to the
Registrant and any target company.
As part of the Registrant's investigation of potential
business opportunities, Capston and its officers, directors
and consultants will ordinarily meet personally with
management and key personnel, may visit and inspect material
facilities, obtain independent analysis or verification of
certain information provided, check reference of management
and key personnel, and take other reasonable investigative
measures, to the extent of the Registrant's limited
resources and Capston's limited expertise. The manner in
which the Registrant participates in an opportunity will
depend on the nature of the opportunity, the respective
needs and desires of the Registrant and other parties and
the relative negotiating strength of the Registrant and such
other management.
With respect to any business combination negotiations,
Capston will ordinarily focus on the percentage of the
Registrant which target company stockholders would acquire
in exchange for their ownership interest in the target
company. Depending upon, among other things, the target
company's assets and liabilities, the Registrant's
stockholders will in all likelihood only own a small
minority interest in the combined companies upon completion
of the business combination transaction. Any business
combination effected by the Registrant can be expected to
have a significant dilutive effect on the percentage of
shares held by the Registrant's current Stockholders.
Upon completion of a business combination transaction,
there can be no assurance that the combined companies will
have sufficient funds to undertake any significant
development, marketing and manufacturing activities.
Accordingly, the combined companies may be required to
either seek additional debt or equity financing or obtain
funding from third parties, in exchange for which the
combined companies might be required to issue a substantial
equity position. There is no assurance that the combined
companies will be able to obtain additional financing on
terms acceptable to the combined companies.
It is anticipated that the investigation of specific
business opportunities and the negotiation, drafting and
execution of relevant agreements, disclosure documents and
other instruments will require substantial management time
and attention and substantial costs for accountants,
attorneys and others. If a decision is made not to
participate in a specific business opportunity the costs
incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached
for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the
loss of the Registrant of the related costs incurred.
PART II-Other Information
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WEBCOR
Date: _______________ By____________________
Sally Fonner,
Acting Director
Acting President
and Acting Chief Financial Officer
Pursuant to the requirements of the Securities Exchange
Act of 1934 this report has been signed belowy by the
following person on behalf of the Registrant and in the
capacities and on the date indicated.
Date : ______________ By_____________________
Sally Fonner,
Acting Director
Acting President
and Acting Chief Financial Officer
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