vi
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
____________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1997
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 3,957,384 (according to the records of the transfer
agent, American Stock Transfer & Trust Company as of January
31, 1997). 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
Item 1. Business
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 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.
Item 2. Properties
None.
Item 3. Legal Proceedings
None.
Item 4. Submission of matters to a vote of Security
Holders
In February of 1997, the Registrant sent to its
stockholders a Notice of Special Meeting and Proxy Statement
which described a number of proposals relating to a plan of
reorganization proposed by Capston Network Company
(OCapstonO), a stockholder of the Company. Subsequently, on
March 10, 1997, a Special meeting of the Stockholders was
held and all of the proposals were approved by a majority
vote of the Stockholders. The principal proposals approved
by the stockholders were:
1. A proposal to ratify the actions of Capston in (i)
effecting a renewal, revival and restoration of the
Company's Certificate of Incorporation; (ii) adopting
amended by-laws to govern the business affairs of the
Company, and (iii) filing the reports and other
documents necessary to bring the Company current with
respect to its reporting obligations under the
Securities Exchange Act of 1934;
2. A proposal to elect a person designated by Capston to
serve as the sole member of the Board of Directors until
the 1998 annual Meeting of Stockholders, or until her
successor is elected and qualified;
3. A proposal to consider and vote upon proposed an
Amendment to the Company's Certificate of Incorporation
that will effect a reverse split of all issued and
outstanding shares of Common Stock in the ratio of one
(1) share of new Common Stock for each 11.5879 shares
presently outstanding so that immediately thereafter the
Company will have a total of 300,000 shares issued and
outstanding;
4. A proposal to consider and vote upon a proposal to issue
200,000 shares of Common Stock to persons designated by
Capston as compensation for services rendered in
connection with the implementation of the Plan;
5. A proposal to consider and vote upon a proposal which
will give the Board of Directors authority to pay an in-
kind Finder's Fee to unrelated third party finders who
introduce the Company to a suitable acquisition
prospect.
6. Consider and vote upon a proposal that will give the
Board of Directors discretionary authority to (i) change
the Company's name and (ii) issue up to 4,500,000 shares
of Common Stock to unrelated third parties, all without
prior stockholder approval, in connection with a
business combination transaction of the type
contemplated by the Plan; and
7. A proposal to consider and vote upon a proposed
Amendment to the Company's Certificate of Incorporation
that will increase the authorized capital stock of the
Company to 25,000,000 shares of $0.01 par value Common
Stock and 5,000,000 shares of $0.01 par value Preferred
Stock.
Detailed disclosure respecting each of the amendments
is set forth in the RegistrantOs Proxy Statement dated
January 29, 1997 which is incorporated herein by this
reference.
PART II
Item 5. Market for Registrant's Common Equity
There has been no consistent active trading in the
Registrant's security for over five years. It does not
currently have a market maker. It does have a new symbol
which is WBET. According to the transfer agent, American
Stock Transfer & Trust Company, there are 831 beneficial
owners as of January 31, 1997.
Item 6. Selected Financial Data.
Operating Revenues 1993 1994 1995 1996 1997
Income (Loss) from
Continuing Operation 0 0 0 0 17,815
Income (Loss) from
Continuing Operations
Per Share 0 0 0 0 0.004%
Total Assets 0 0 0 0 0
Long Term Obligations 0 0 0 0 0
Cash Dividends Declared 0 0 0 0 0
Per Common Share
Note 1. The Company was completely inactive during the
period commencing upon the filing of its petition under the
filing of its petition under Ch. 11 of the Bankruptcy Code
in 1989 and the restoration of its charter in 1996.
Accordingly there were no revenues, expenses, assets, or
liabilities during the fiscal years 1989 through 1996. The
reported loss from operations in fiscal 1997 resulted solely
from expenses incurred by Capston on behalf of the Company
in connection with the restoration of the Company's
corporate charter and the preparation and filing of certain
reports required under the Securities Exchange Act of 1934.
The off-setting credit was paid-capital, leaving the
liabilities and the assets of the Company at $0 as of March
31, 1997.
Item 7. Management Discussion and Analysis of Financial
Condition and Results of Operations.
This 10-K is for the purpose of providing financial
information in regard to the years that WEBCOR was in
bankruptcy. To that end, the attached financial statements
include an audited statement for November 13, 1996 when the
Registrant's petition was declared closed and the trustee
was discharged.
Management has attempted to reconstruct financial statements
for the years in which WEBCOR was in bankruptcy. This was
not possible due to the fact as a matter of routine the
Trustee abandons all Records of the Debtor's Estate.
Therefore, records necessary for reconstructing responsible
financial statements for the years in bankruptcy were not
available, but an audit as of the close of bankruptcy on
11/13/96 was completed and filed with the commission.
The Company had no operations on which to report during
bankruptcy or since that time. It is the intention of the
acting management to seek stockholder approval through a
future proxy to seek out and acquire a private company which
can cause the Company to once again become a viable
operating public company.
Item 8. Financial Statements and Supplementary Data.
For the information called for by this Item, see the
Financial Statements attached. Webcor Electronics, Inc. will
be entering the Small Business Issuer System with its first
quarterly filing of its 97-98 fiscal year.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
The Registrant's financial statements for the years ended
March 31, 1988 were audited by the firm of Mann Judd
Landau, Certified Public Accountants. As a result of the
bankruptcy, as discussed elsewhere herein, the Registrant
did not prepare audited financial statements from 1989 -
1996. In connection with the revival and restoration of the
Company's certificate of incorporation, the firm of Want &
Ender, Certified Public Accountants was retained to audit
the Registrant's balance sheet for the year ended 1996, and
to serve as the Registrant's auditor in the future. During
the fiscal years ended 1989, and the subsequent interim
period preceding the appointment of Mann Judd Landau, CPA,
there were no reportable disagreements between the
Registrant and the firm of Mann Judd Landau, Certified
Public Accountants, on any matter of accounting principles
or practices, financial statement disclosure, or auditing
scope or procedure. Want & Ender audited the Registrant's
financial statements for the year ended March 31, 1997.
PART III
Item 10. Directors and Executive Officers of the Registrant
Ms. Sally Fonner, age 48, the president and sole
stockholder of Capston, has assumed the duties of President,
Secretary, Treasurer and Sole Director of the Registrant
pending a Special Meeting of the Stockholders that is
presently scheduled for January 31, 1997. At that Meeting,
Ms. Fonner intends to seek re-election for a term of office
that is anticipated be no more than two years or until
permanent management can be located, whichever should occur
first in time. Ms. Fonner's sole purpose is to seek out
qualified new operations and management.
Item 11. Executive Compensation.
No officer or director of the Registrant has received any
compensation for services performed during the past three
years and no future compensation agreement between Ms.
Fonner and the Registrant is contemplated. Notwithstanding
the foregoing, the Registrant's proposed Proxy Statement
will provide for significant stock compensation to certain
individuals selected by Capston.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth the shareholdings of those
persons who own more than five percent of the Company's
common stock as of the date of this Report:
Title of Class Name / Address Amount of Percent of
Beneficial Owner
Beneficial Owner
Common Victor Reichenstein 985,507 27.00%
79 Express Street
Plainview, NY
11802
Capston Network Company 5,000 0.0014%
1612 N. Osceola Avenue
Clearwater, Fl
34615
The above information, with the exception of Capston Network
Company, is taken from the last filed 10-Q dated January 31,
1989. The transfer agent nor Capston has no information
which would indicate this information is still not the best
available. Capston believes that of these individuals has
sole investment and voting power with regard to the
securities listed opposite his name.
Item 13. Certain Relationships and Related Transactions
No officer, director or family member of an officer or
director is indebted to the Registrant.
Item 14. Exhibits, Financial Statement Schedules and
Reports.
Financial statements filed with this report:
Independent Auditor's report for financial statements
Consolidated Balance Sheet as of March 31, 1997 and
1996
Consolidated Statements of Operations for the years
ending March 31, 1997, 1996, 1995
Consolidated Statement of Changes in Shareholder's
Equity/(Deficit) for the years ending March
31, 1997, 1996, and 1995
Consolidated Statements of Cash Flows for the years
ended March 31, 1997, 1996, 1995
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: 6/20/97 By______/S/______________
Sally Fonner,
Director
President
and 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 : 6/20/97 By___________/S/__________
Sally Fonner,
Director
President
and Chief Financial Officer
WANT & ENDER, CPA, P.C.
CERTIFIED PUBLIC ACCOUNTANTS East 28th Street,
6th Floor
New York, NY 10016
MARTIN ENDER. CPA Telephone (212)684-2414
STANLEY Z. WANT, CPA, CFP Fax (212) 684-5433
Independent Auditor's Report
To the Shareholders and Board of Directors
WEBCOR ELECTRONICS INC.
We have audited the accompanying balance sheet of WEBCOR
ELECTRONICS, INC. (A Dormant State Company) at March 31,
1997 and 1996 and the related consolidated statements of
operations, changes in shareholders equity/(deficit), and
cash flows for each of the three years for the period ended
March 31, 1997, 1996, 1995. 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 have conducted our audit in accordance with generally
accepted auditing standards. These 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 also 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 our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of WEBCOR ELECTRONICS, INC. (A Dormant State
Company) at March 31, 1997 and 1996 and the consolidated
results of its operations and its cash flows for each of the
three years for the period ended March 1997, 1996, 1995 in
conformity with generally accepted accounting principles.
Martin Ender
Want & Ender CPA, P.C.
Certified Public Accountants
New York, NY
June 20, 1997
WEBCOR CORPORATION
(A Dormant State Company)
Consolidated Balance Sheet
March 31, 1997 and 1996
1997 1996
Assets
Organization Cost
Total Assets 0.00 0.00
Liabilities and Shareholder's Equity
Stockholders' Equity
Common Stock par value at $.01 per share;
20,000,000 shares authorized of common stock;
3,476,370.00 shares issued and outstanding 0 0
Additional Paid in Capital 17,815 0
Retained Earnings (Deficit) (17,815) 0
______ _____
Total Shareholders' Equity 0 0
______ _____
Total Liabilities and Shareholders Equity $ 0 $ 0
========= ========
*Close of Chapter 7 was 11/13/96, but the Company had ceased
all operations in 1990 with the US Bankruptcy Trustee taking
on responsibility for the orderly liquidation of corporate
assets and the use of the proceeds to repay the Company's
creditors.
See accompanying notes to financial statements
WEBCOR CORPORATION
(a Dormant State Company)
Consolidated Statements of Operations
for the years ending March 31, 1997 , 1996 and 1995
1997 1996 1995*
Current year 03-31-9603-31-95
____________ ________________
Revenues $ 0 $ 0 $ 0
Expenses
Administrative Expenses $17,365 $ 0 $ 0
Filing Fees $ 450. 0 $ 0
Net Income/Loss for the year $(17,815) $ 0 $ 0
========= ======== ======
*Close of Chapter 7 was 11/13/96, but the Company had ceased
all operations in 1990 with the US Bankruptcy Trustee taking
on responsibility for the orderly liquidation of corporate
assets and the use of the proceeds to repay the Company's
creditors.
WEBCOR ELECTRONICS, INC.
(a Dormant State Company)
Consolidated Statement of Changes in Shareholder's
Equity/(Deficit)
for the years ended March 31, 1995, 1996 and 1997
1997 1996 1995
03-31 03-31 03-31
Common Stock
(3,957,384 shares issued
& outstanding) $ 0 $ 0 $ 0
Additional Paid
in Capital 17,815 0 0
Balance April 1 0 0 0
Net Income/(loss)
for the year $ (17,815) 0 0
Balance March 31 $ 0 $ 0 $ 0
*Close of Chapter 7 was 11/13/96, but the Company had ceased
all operations in 1990 with the US Bankruptcy Trustee taking
on responsibility for the orderly liquidation of corporate
assets and the use of the proceeds to repay the Company's
creditors.
See accompanying notes to financial statements
WEBCOR ELECTRONICS, INC.
(A Dormant State Company)
Consolidated Statements of Cash Flows
for the years ending March 31, 1997 , 1996 and 1995
Current Year 1996 1995
03-31-97 03-31-96 03-31-95
Cash Flows from Operating
Activities
Net Income $ (17,815) $ 0 $ 0
Net Cash Provided (used) /
By Operating Activities 0 0 0
Expenses Paid by Capston 17,815 0 0
Net Increase (Decrease) in Cash 0 0 0
Cash at Beginning of Period 0 0 0
Cash at End of Period $ 0 0 0
======== = =
*Close of Chapter 7 was 11/13/96, but the Company had ceased
all operations in 1990 with the US Bankruptcy Trustee taking
on responsibility for the orderly liquidation of corporate
assets and the use of the proceeds to repay the Company's
creditors.
See accompanying notes to financial statements
WEBCOR ELECTRONICS, INC.
(A Dormant State Company)
March 31, 1997
Note 1. HISTORY OF THE COMPANY
WEBCOR ELECTRONICS, INC., (A Dormant State Company), was
incorporated on December 03, 1971, under the laws of the
State of Delaware. The Company conducted an initial public
offering of its Common Stock in August 1982 and in
connection with an application to list its Common Stock on
the AMEX system, the Company also registered its Common
Stock pursuant to Section 12(g) of the Securities Exchange
Act of 1934. The Company's Common Stock remained listed on
the AMEX system until April 09, 1987.
On February 01, 1989, the Company filed a voluntary
petition under Chapter 11 of the Bankruptcy ACT (Case No.
89-10328) in the U.S. Bankruptcy Court for the Eastern
District of New York on October 1,1990, the Company's case
under Chapter 11 was voluntarily converted into a case under
Chapter 7 of the Bankruptcy Act. As a result of the
voluntary conversion of the Company's bankruptcy case, all
assets of the Company were transferred to the Trustee in
Bankruptcy on the conversion date and the Company ceased all
operations. Subsequently, the Trustee in Bankruptcy
effected an orderly liquidation of corporate assets and used
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 in Bankruptcy 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 October,
1990.
Note 2. RESTORATION OF CORPORATE STATUS
On December 26, 1996, acting in its capacity as the holder
of 5,000 shares (0.0014%) of the Company's common stock,
and without first receiving the consent, approval or
authorization of any other person associated with the
Company, Capston Network Company effected a renewal, revival
and restoration of the Company's certificate of
incorporation pursurant to Section 312 of the General
Corporation Law of Delaware. Thereafter, Capston filed a 10-
K for the years ending March 31, 1989-1996, and a Proxy
Statement seeking approval and ratification of its actions,
along with authorization to seek a suitable business
combination transaction. This proxy statement was
ultimately distributed to the Company's stockholders and the
proposals therein were approved by the holders of a majority
of the Company's issued and outstanding shares.
Under the terms of the original Proxy Statement, Capston was
authorized to seek a suitable business combination
transaction on behalf of the Company and to submit the terms
of any proposed business combination transaction to the
Company's stockholders for their approval. Capston did not
receive and was not entitled to receive any equity interest
in the Company as a result of it's actions prior to the date
of the Proxy Statement. Moreover, Capston was not entitled
to reimbursement for any expenses incurred by it on behalf
of the Company except to the extent that the terms of a
business combination transaction provided for the
reimbursement of such expenses. However, because Sally
Fonner is both the President of WEBCOR ELECTRONICS, INC. and
Capston, prior Staff Accounting Bulletins required under
generally accepted accounting the treatment of debiting the
expenses with corresponding credit to paid-in capital.
Future expenses of Capston or others will be treated this
way. These expenses are actual cash expenditures and do not
reflect any costs associated with the operation of Capston
nor any personnel time or cost.
Note 3. FUTURE EXPENSES
Capston will continue to extend administrative expenses to
keep WEBCOR ELECTRONICS. INC. current with its reporting
requirements, keeping the Corporation in good standing, any
required proxy solicitation or acquisition efforts. These
amounts should not exceed $50,000 in out-of-pockets costs.
In addition, if approved, and as a result of a suitable
acquisition, additional fees paid for by issuance of equity
position would be for: (i) Capston of 200,000 shares,
(ii)up to 9,500,000 shares for an acquisition(s) and (iii)
up to 5% of the acquisition for a finder's fee .
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