U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
(Mark One)
[x] Annual report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 (Fee required)
For the fiscal year ended 1999
[ ] Transition report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 (No fee required)
For the transition period from to
Commission file number 0-12122
WINCROFT, INC.
(Name of Small Business Issuer in Its Charter)
ALEXANDER MARK INVESTMENTS (USA), INC.
(Previous Name )
Colorado 84-0601802
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Elthorne Gate, 64 High Street, Pinner Middlesex, England HA5 5QA
(Address of Principal Executive Offices) (Zip Code)
(011441) 81 429 7319
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, No 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 past
90 days.
[x] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in a
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 the fiscal year ended March 31, 1999 were
$10,224. The aggregate market value of the common shares held by non-
affiliates was $4,314,275 as of June 8, 1999.
The number of shares outstanding of the Registrants common stock no par
value was 5,140,100.
Documents Incorporated by reference: NONE
<PAGE>
PART 1
Item 1. Business
Wincroft, Inc. (_Registrant_ or _the Company_) is a technology company
focusing on hardware and software solutions for audio and video
communications over the Internet. Its trading activities commenced on
March 31, 1998 though the acquisition of VideoTalka a
videoconferencing system for the Internet. The acquisition of
VideoTalk was approved at a special meeting of shareholders of the
Company on 18th May 1998 at which time the directors and management of
the Company were changed and Mr. Jason Conway was appointed Chairman
and Chief Executive Officer of the Company. VideoTalk is a complete
hardware and software system which, when connected to a multimedia PC,
enables full duplex video conferencing over the Internet and over
local and wide area networks. VideoTalk will operate in the background
while not detracting from the PC's ability to run other software
programs simultaneously. It uses a PCI plug and play card that
provides high quality audio and video while achieving extremely low
processing load. VideoTalk does not require a sound card or a video
capture card and allows communication over the Internet with only a
28.8 kbps modem.
The Company's new management intends to enter into discussions with PC
manufacturers regarding the licensing of VideoTalk for inclusion with
forthcoming platforms, and will market the product to governmental
entities, larger and medium size corporations, and value-added
resellers.
The Company was organized in Colorado in May 1980 as part of a quasi-
reorganization of Colspan Environmental Systems, and has made several
acquisitions and divestments of businesses unrelated to its present
activities.
Acquisition and Divestments History
The Company restructured during 1986 with unrealizable assets being
written off and the name of the Registrant being changed to Apache
Resources Limited. Subsequently, the Company changed its name to
Danzar Investment Group, Inc. and formed, developed and spun off to
its stockholders five public companies, Pathfinder Data Group, Inc.,
Phoenix Network, Inc., WorthCorp, Inc., Forme Capital, Inc., and
Whitehorse Oil and Gas Corporation, Inc. Following these
distributions the Company had no investments in these companies. From
1988 to 1997 the Company had no business activities. Following a
change in the Registrants name to Alexander Mark Investments (USA),
Inc., the Company in May 1997 acquired a controlling interest in a
U.K. public company, Meteor Technology, plc. of which Mr. Daniel
Wettreich, the then President of the Company, was an officer and
director. Mr. Wettreich is also an officer and director of Camelot
Corporation which became the controlling shareholder of the Registrant
at that time. On 20th March, 1998, Camelot Corporation transferred
51% of the outstanding shares in the Company to Forsam Venture
Funding, Inc., a company affiliated with Mr. Wettreich. On 23rd
March, 1998, the Company disposed of its sole asset being its
shareholding in Meteor Technology, plc for $59,573. On 31st March
1998, the Company entered into an agreement with Third Planet
Publishing, Inc., a wholly owned subsidiary of Camelot Corporation to
purchase at Third Planet's historical cost all rights, title and
interest to VideoTalk for $7,002,056 payable by the issuance of common
and preferred shares in the Registrant and a Promissory Note in the
amount of $2,000,000. The purchase was conditional upon shareholder
approval of the transaction and the completion of the acquisition of
the majority of the outstanding stock of the Registrant by Mr. Jason
Conway. These transactions were approved by shareholders on May 18,
1998 as well as the approval of a 100 for 1 forward stock split to
increase the number of shares outstanding and various amendments to
the Articles of Incorporation amongst other things.
The Company now employs Mr. Conway on a full time basis as Chairman
and Chief Executive Officer.
Item 2. Properties
Registrant leases 300 square feet of office space on a month-to-month
basis for $500 per month at Elthorne Gate, 64 High Street, Pinner,
Middlesex HA5 5QA, England.
Item 3. Legal Proceedings
There are no proceedings to which any director, officer or affiliate
of the Registrant, or any owner of record (or beneficiary) of more
than 5% of any class of voting securities of the Registrant is a party
adverse to the Registrant.
Item 4. Submission of Matters to a Vote of Security Holders
On 18th May, 1998, subsequent to the financial period, a shareholders
meeting was held ratifying the appointment of auditors for the fiscal
year ended March 31, 1998, approving the amendments of the Articles of
Incorporation to change the Company name to Wincroft, Inc., approving
a 100 for 1 forward stock split to increase the number of common
shares outstanding without effecting the stated value of the common
shares, approving the amendment to the Articles of Incorporation to
create Preferred Shares, approving the transfer of control of the
Company to Jason Conway, approving the issuance of common and
preferred stock along with the Promissory Note to acquire the
VideoTalk product, and ratifying all actions of the previous officers
and directors of the Company.
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Registrant's Common Stock, no par value is traded over the counter
(OTC BB:WINN) and the market for the stock has been relatively
inactive. The range of low and high bid quotations (adjusted for 100
for 1 forward split on 18th May, 1998) for each calendar quarter
period of the Registrant's previous two fiscal years, as supplied by
the "pink sheets" of the National Quotation Bureau or the OTC Bulletin
Board quotes available on the Internet are shown below. The
quotations reflect interdealer prices, without retail markup, markdown
or commission and do not necessarily reflect actual transactions. The
Company's fiscal year end was 30th April and was changed to 31st March
in 1998.
<TABLE>
<S> <C> <C>
Bid Ask
Quarter Ending
April 30, 1997 .000156 .25
July 31, 1997 .000156 .25
October 31, 1997 .000156 .25
January 31, 1998 .000156 .03
March 31, 1998 .000156 .03
June 30, 1998 3.00 3.00
September 30, 1998 3.25 3.25
December 31, 1998 2.50 3.00
March 30, 1999 1.125 1.125
</TABLE>
The Registrant has no outstanding options or warrants for the purchase
of its Common Stock or any outstanding securities that are convertible
into Common Stock, except for those options described in Item 11.
As of June 8, 1999 there were approximately 370 shareholders of record
of Registrant's Common Stock.
Registrant has not paid cash dividends on its Common Stock and does
not anticipate paying cash dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition
and Result of Operations
During the year ended March 31, 1999 the Company had no activities
other than the development of a marketing plan by management. Losses
of $222,607 were due primarily to employee costs and rental expense
($299 for the previous period). On June 29, 1998, Registrant agreed
with Camelot Corporation at the request of Registrant, to satisfy
the outstanding Promissory Note payable to Camelot by Registrant in
the amount of $2,000,000 by way of the issuance of $2,000,000 of
Wincroft Non-voting Preferred Stock, Series B. These Preferred
Shares pay a dividend of 10% when and as declared by the board of
directors and will pay an additional yield equivalent to 10% of any
revenues derived by Registrant on sales of VideoTalk [tm]. The
Preferred Shares also call for redemption by Registrant in the event
VideoTalk is sold. Registrant requested this action in order to
assist in its fund raising capabilities. Registrant is seeking
funds to pay for working capital and marketing expenditures. As
its investment in VideoTalk is represented by goodwill, Registrant has
written off its VideoTalk investment in its financial statements, but
continues to seek opportunities to utilize the product.
During the period under review the Company acquired a dormant company,
Wincroft, (UK), Ltd., for a nominal amount which is intended to be its
active subsidiary in the United Kingdom. The Company has changed its
fiscal year end from April 30 to March 31 and therefore the figures
from last year are actually for the eleven months. The historic
numbers do not reflect the future activities of the Company and are
not indicative of the operating results for the current financial
period. The revenues for the period were minor, and consisted of
consulting fees received. Management has focused on researching and
creating a marketing plan for VideoTalk and continued to gather
research as it refined its marketing plan.
On 9th May, 1997, the Company acquired 4,072,798 (post-reverse split)
shares in Meteor Technology, plc (_Meteor_) from the Company's then
President Mr. Daniel Wettreich in exchange for 6,787,998 restricted
common shares in the Company. At the time of acquisition such Meteor
shares represented 57% of the then outstanding shares in Meteor, which
subsequently were diluted by additional share issuances by Meteor to
approximately 41% of the issued share capital of Meteor. During the
financial year comprising the eleven (11) months ending March 31,
1998, the Company's investment in Meteor represented its sole asset,
and the Company has elected to treat such asset as an investment in
its year end financial statements. On 23rd March, 1998, the Company
disposed of its shareholding in Meteor in two transactions. The
Company sold 2,940,000 Meteor shares to Forsam Venture Funding, Inc.,
a company affiliated with its then President Mr. Daniel Wettreich for
$43,000 of 8% Preferred Shares in Forsam Venture Funding, Inc. The
balance of the Meteor shares were sold to Abuja Consultancy, Ltd. for
$16,817 cash. The profit from the sale of these securities was
$45,997. Other than the acquisition and subsequent disposal of the
shares in Meteor the Company had no operations in the period ended
March 31, 1998. The Company also made a profit for the period of
$4,434 from the write off of an affiliated advance.
Liquidity and Capital Resources
The Registrant has met its shortfall of funds from operations during
prior periods by borrowings from its Directors and companies
affiliated with its Directors. There can be no assurance that the
Company will be able to continue to fund operations by borrowing. The
Registrant sold non-marketable securities for cash in the amount of
$32,980 resulting in a loss on non-marketable securities in the amount
of $10,020. Net cash used by operating activities was $123,102 ($55
in 1998). Net cash provided by investing activities was $27,677
($16,573 in 1998) and by financing activities was $68,656 (nil in
1998). During the period ended March 31, 1998, the Registrant issued
shares for the acquisition of Meteor shares which investment was
subsequently sold resulting in an increase in cash of $16,817.
The Registrant has received loans from an entity related to the
President.
The Registrant's present needs for liquidity principally relates to
its employees, facilities costs, marketing expenses, its obligations
for SEC reporting requirements and the minimal requirements for record
keeping. The Registrant has limited liquid assets available for its
continuing needs. In the absence of any additional liquid resources,
the Registrant will be faced with cash flow problems. Registrant will
seek to raise funds by way of private placement of common or preferred
shares to provide working capital and for marketing. Management
believes that license fees received from VideoTalk will generate
revenues and cash flow towards the end of the current financial
period. Registrant has no plans for significant capital expenditures
during the next twelve months. Management believes that cash provided
by financing activities and licensing fees together with the present
level of cash resources available to the Registrant will be sufficient
for its needs over the next twelve months. There are no known trends
demands, commitments or events that would result in or that is
reasonably likely to result in the Company's equity increasing or
decreasing in a material way other than the potential use of cash
resources in the normal course of business or additional fund raising.
Year 2000 Readiness Disclosure
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The issue is whether computer systems will properly
recognize date-sensitive information when the year changes to
2000. The Company believes that the Year 2000 issue will not pose
significant operational problems for the Company's computer systems
and will not have a material adverse effect on the Company's
financial condition or results of operations.
The Company believes that since the VideoTalk software is not date
dependent there should be no Year 2000 problems. Any contracts
to be entered into for suppliers of distributors of the VideoTalk
software, should an agreement be reached, would require Year 2000
certifications to ensure Year 2000 compliance by those entities.
<PAGE>
Item 7. Financial Statement and Supplementary Data
Independent Auditor's Report
Financial Statements for March 31, 1999 and March 31, 1998
Balance Sheets
Statement of Operations
Statement of Changes in Stockholders Equity
Statement of Cash Flows
Notes to Financial Statements
<PAGE>
LARRY O'DONNELL, CPA, P.C.
2280 South Xanadu Way, Suite 370, Aurora, CO 80014
Board of Directors and Shareholders
Wincroft, Inc.
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of Wincroft, Inc., as
of March 31, 1999, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the year ended
March 31, 1999 and the eleven months ended April 30, 1998. These
financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Wincroft, Inc., as of March 31, 1999, and the results of
its operations and its cash flows for the year ended March 31, 1999
and the eleven months ended March 31, 1998 in conformity with
generally accepted accounting principles.
Larry O'Donnell, CPA, P.C.
June 25, 1999
<PAGE>
WINCROFT, INC.
BALANCE SHEET
<TABLE>
<S> <C>
March 31, 1999
ASSETS
Current assets
Prepaid expenses $6,491
Property and equipment
Computer equipment 118,813
Other equipment 62,179
Leasehold improvements 26,370
207,362
Less accumulated depreciation 41,473
165,889
TOTAL ASSETS $172,380
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank overdraft $ 10,185
Accounts payable 25,078
Loan payable-related party 68,656
TOTAL LIABILITIES 103,919
Stockholders' Equity (Deficit):
Common stock; 75,000,000
Shares authorized
No par value; ($0.002 stated value)
5,140,100 issued and
outstanding on March 31, 1999 10,280
Preferred stock, 25,000,000
Shares authorized $.01
par value; 7,000 issued and
outstanding on March 31, 1999 70
Additional Paid in Capital 1,181,658
Retained earnings (deficit)
(1,122,416)
Treasury Stock (7,496,223 shares at cost) (1,133)
TOTAL STOCKHOLDERS' EQUITY 68,461
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $172,380
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
WINCROFT, INC.
STATEMENT OF OPERATIONS
<TABLE>
<S> <C> <C>
For the year ended Eleven (11) Months ended
March 31, 1999 March 31, 1998
Revenue $ 10,223 $ -0-
Expenses
General and Administrative 222,180 299
Total Expenses 222,180 (299)
Loss from sale of
Securities (10,020)
Income (Loss) Before Provision
for Income Taxes $ (222,607) $ (299)
Provision for Income Taxes -0-
Net Income (Loss) From
Operations $ (222,607) $ (299)
Basic Income (Loss)
Per Share $ (.044) ---
Weighted Average Number of
Shares Outstanding 5,140,100 7,576,522
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
WINCROFT, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the year ended March 31, 1999 and the 11 month period ending March
31, 1998
<TABLE>
<S> <C> <C> <C> <C>
Preferred Common
Stock Stock
Shares Amount Shares Amount
Balance April 30, 0 0 749,400 1,499
1997
Acquisition of
Meteor Technology 0 0 6,787,998 $ 13,576
Shares
Retirement of
Shares for nil 0 0 (7,495,539) 0
consideration
Adjustment for
for 100-1 forward 0 0 4,070,241 8,140
stock split
Write off of
accounts and
advances from
affiliates
Acquisition of 5,000 $50 1,028,000 $2,056
VideoTalk
Profit on sale of
securities
acquired from
related party
Net Profits for 11
months ended March 0 0 0 0
31, 1998
Balance March 31, 5,000 $50 5,140,100 10,280
1998
Conversion of note
payable to 2,000 20
preferred stock
Net Profit (Loss)
for Year Ended March
31, 1999
Balance March 31, 7,000 $70 5,140,100 $10,180
1999
</TABLE>
The accompanying notes are an integral part of these financial
statements.
WINCROFT, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)
For the year ended March 31, 1999 and the 11 month period ending March 31, 1998
<TABLE>
<S> <C> <C> <C> <C>
Additional Retained Treasury Total
Paid-In Earnings Stock Stockholders'
Capital Deficit Amount Equity
Balance April 30, 881,198 (885,932) $(1,133) $ (4,368)
1997
Acquisition of
Meteor Technology 0 0 0 $13,576
Shares
Retirement of
Shares for nil 0 0 0 0
consideration
Ajustment for
100-1 forward 8,140 0 0 0
stock split
Write off of
accounts and 4,678 4,678
advances from
affiliates
Acquisition of 229,378 0 0 $5,002,056
VideoTalk
Profit on sale of
securities 59,573 59,573
acquired from
related party
Net Profits for 11
months ended March 0 (13,875) 0 $(13,875)
31, 1998
Balance March 31, 1,181,678 (899,807) $(1,133) $291,068
1998
Conversion of note
payable to (20)
preferred stock
Net Profit (Loss)
for Year Ended March 31 1999 (222,607)
Balance March 31, $1,181,658 $(1,108,838) $(1,133) $ 68,461
1999
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
WINCROFT, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C>
For the year Eleven (11)
ended Months ended
March 31, 1999 March 31,1998
CASH FLOWS FROM OPERATING ACTIVITIES
Income (Loss) from Operations $(222,607) $ (299)
Adjustments to reconcile net income to net cash received from operation
activities:
Depreciation 41,473
Loss from sale of securities 10,020
(Increase) Decrease in:
Prepaid expenses (6,491)
Inventory 29,425
Increase (Decrease) in:
Accounts payable 25,078 244
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (123,102) (55)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
Purchase of equipment (5,303)
Proceeds from sale of securities 32,980 16,573
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 27,677 16,573
CASH FLOWS FROM FINANCING RESOURCES
Proceeds from loans payable-related
parties 68,656
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 68,656 ---
INCREASE (DECREASE) IN CASH (26,769) 16,518
BEGINNING CASH BALANCE 16,584 66
ENDING CASH BALANCE $(10,185) $16,584
Schedule of Noncash Investing and Financing Activities for the eleven
months ended March 31, 1998
Common Stock issued to acquire investment $13,576
Acquisition of VideoTalk through issuance of:
Common and preferred stock 231,484
Promissory note -
Sale of investment for nonmarketable securities 43,000
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
WINCROFT, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1998 and April 30, 1997
NOTE A: Summary of Significant Accounting Policies
Organization and Principles of Consolidation
The Company was organized in May, 1980, as part
of a quasi-reorganization of Colspan
Environmental Systems. At present, the Company
has no subsidiaries and is operating at a
reduced level. On 18th May, 1998, the Registrant
held a shareholders meeting, at which the
shareholders approved resolutions to ratify the
appointment of auditors for the fiscal year
ended March 31, 1998, to amend the Articles of
Incorporation to change the Company's name to
Wincroft, Inc., approved a 100 for 1 forward
stock split to increase the number of shares
outstanding without effecting the stated value
of the common shares, approved the amendment to
the Articles of Incorporation to create
Preferred Shares, approved the transfer of
control of the Company to Jason Conway, approved
the issuance of common and preferred stock along
with a Promissory Note to acquire the VideoTalk
product, and ratified all previous actions of
the officers and directors of the Company. The
financial statements reflect the VideoTalk
transaction as unconditional.
The financial statements include the
information for the subsidiary, Wincroft (UK),
Ltd. acquired by the Company during the period
under review for 1 pound. Wincroft (UK), Ltd.
had no operations before it was acquired
Adjustments were made to eliminate intercompany
transactions and for the conversion of Wincroft
(UK), Ltd.'s numbers from pounds to US Dollars.
The conversion from British Pounds to US Dollars
is based on US accounting guidelines. The
conversion rate for the balance sheet was
based on the published exchange rate at
March 31, 1999, one pound equals $1.67650.
Basic Earnings per Common Share
Effective December 15, 1997, the Registrant
adopted FAS128 regarding the earnings per share
calculations. The statement requires the
replacement of primary earnings per share with
basic earnings per share (_EPS_). Basic EPS is
computed by dividing income available to common
stockholders by the weighted-average number of
common shares outstanding during the period. A
diluted earnings per share is also presented
which is computed by increasing the average
number of common shares outstanding by the
number of additional shares that would be
outstanding if the options outstanding had been
exercised.
Property and Equipment
Property and equipment are carried at cost.
Major additions and betterments are capitalized,
whole replacements and maintenance and repairs
which do not improve or extend the life of the
respective assets are expensed. When the
property is retired or otherwise disposed of,
the related costs and accumulated depreciation
are removed from the accounts and any gain or
loss is reflected in operations.
Depreciation of equipment is provided on the
straight-line method over an estimated useful
life of five years.
Capital Stock
The number of shares authorized are 75,000,000
common and 25,000,000 preferred as of May 19,
1998. The number of common shares issued and
outstanding are 5,140,100, no par value at March
31, 1998 (post forward split) and 5,000 $0.01
par value preferred shares as a result of the
shareholders approval at the meeting held May
18, 1998. The number of common shares issued and
outstanding are 5,140,100, no par value at March
31, 1998 (post forward split) and 7,000 $0.01
par value preferred shares at March 31, 1999.
The holders of the Company's stock are entitled
to receive dividends at such time and in such
amounts as may be determined by the Company's
Board of Directors. All shares of the Company's
Common Stock have equal voting rights, each
share being entitled to one vote per share for
the election of directors and for all other
purposes. All shares of the Company's Preferred
Stock have a preference over the Common Stock in
the event of liquidation or similar action. The
Board of Directors of the Company are authorized
to create series of Preferred Shares designating
the rights as a result of the amendments
approved by the shareholders at the meeting held
May 18, 1998. The preferred shares have no
voting rights.
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect reported amount of
assets and liabilities and disclosure of
contingent assets and liabilities at the date of
the financial statements and the reported
amounts of revenues and expenses during the
reporting period. Actual results differ from
the estimates.
NOTE B: Income Taxes
The Company has incurred approximately
$1,200,000 in net operating losses. The
expiration dates for the net operating loss
carry forwards are from 1998 through 2018. Use
of these net operating loss carry forwards is
dependent on future taxable income. Deferred
tax assets of $350,000 have been offset entirely
by a valuation allowance.
The income tax expense for the eleven months
ended March 31, 1998 has been reduced by $7,500
by utilizing net operating loss carryovers.
NOTE C: Stock Options
On May 18, 1998, two directors of the Company
were granted stock options to purchase up to
10,000 each of newly issued shares of the
Company at a price of $3.00 per share, expiring
no earlier than ten years from the date of
grant.
NOTE D: Related Party Transactions
During the year ending 30th April, 1995 a
Company associated with Mr. Wettreich the
previous President of the Company, advanced $300
to the Company, and such amount was written off
during the period ending March 31, 1998.
On May 15, 1997, the then President of the
Company, Daniel Wettreich subscribed for
6,787,998 common shares and on May 20, 1997 he
exchanged 6,029,921 of those shares for common
shares in Adina, Inc. Adina exchanged those
shares for Preferred shares in Camelot
Corporation which then had control of the
Registrant. On 20th March, 1998, Camelot
transferred 51% of the then outstanding shares
in the Registrant to Forsam Venture Funding,
Inc. Mr. Wettreich is an officer and director
of Camelot, Adina and Forsam. On March 31, 1998
Forsam Venture Funding, Inc. surrendered
7,495,539 shares to the Company for the treasury
and they are no longer outstanding. The Company
did not pay Forsam Venture Funding, Inc. any
compensation for the surrendering of the shares.
The 6,686,998 shares subscribed by Daniel
Wettreich on May 15, 1997 were exchanged for
shares he owned of Meteor Technology, plc
(_Meteor_). The investment in Meteor was valued
at $13,576 which equaled the stated value of the
subscribed shares. The Company's holding in
Meteor was sold on March 23rd, 1998 for $59,573
resulting in a gain of $45,997. Because the
Company's holding in Meteor was temporary, the
results of Meteor's operations were not
recognized or disclosed in the Company's
financial statements.
On March 31, 1998, Forsam Venture Funding, Inc.
entered into a conditional contract to sell all
its Shares in Registrant to Mr. Jason Conway for
an undisclosed sum. On 18th May, 1998 with the
shareholders approval, the conditional contract
closed, Mr. Daniel Wettreich resigned as a
director and officer of Registrant as did all
the other directors and officers, and Mr. Conway
was appointed a director, and Chief Executive
Officer of Registrant.
On March 31, 1998, Registrant entered into a
conditional agreement with Third Planet
Publishing, Inc., a wholly owned subsidiary of
Camelot Corporation to acquire the VideoTalk
product for Third Planet Publishing, Inc.'s cost
of $7,002,056 payable by way of the issuance of
common stock, preferred stock and a Promissory
Note. The assets were valued at Third Planets
Publishing, Inc.'s carring value of tangible
assets of $231,484. This transaction required
shareholder approval which was forthcoming 18th
May, 1998. The note was converted to preferred
stock during the year ended March 31, 1999.
For and the year ended March 31, 1999 the eleven
(11) months ending March 31, 1998 the Company
incurred stock transfer fees to a Company
associated with Mr. Wettreich, the previous
President of the Company in the amounts of
$2,593 and $814, respectively. During the
period ended March 31, 1998, $4,134 was written
off.
On June 29, 1998, Registrant agreed with
Camelot Corporation at the request of
Registrant, to satisfy the outstanding
Promissory Note payable to Camelot by Registrant
in the amount of $2,000,000 by way of the
issuance of $2,000,000 of Wincroft Non-voting
Preferred Stock, Series B. These Preferred
Shares pay a dividend of 10% when and as
declared by the board of directors and will pay
an additional yield equivalent to 10% of any
revenues derived by Registrant on sales of
VideoTalk [tm]. The Preferred Shares also call
for redemption by Registrant in the event
VideoTalk is sold. Registrant requested this
action in order to assist in its fund raising
capabilities. Registrant is seeking funds to
pay for working capital and marketing
expenditures.
NOTE E: Lease commitment
Wincroft (UK), Ltd. has a lease for office
facilities which has been classified as an
operating lease. The lease requires annual
payments of approximately $32,500 with ending in
2008. On March 1st, 2003 the payment may
increase based on an inflation index. During
the year ended March 31, 1999 rent expense of
approximately $24,000 was recorded. Future
minimum lease payments are approximately $32,500
for each of the five years ending March 31,
2004.
<PAGE>
Item 8. Disagreements on Accounting and Financial
Disclosures
A Form 8-k dated May 12, 1998 was filed to
report a change in accountants. There has not
been a filing to report a disagreement on any
matter of accounting principle or financial
statement disclosure, within 24 months of the
date of the most recent statements.
PART III
Item 9. Directors and Executive Officers of the
Registrant
The following persons serve as Directors and/or Officers
of the Registrant:
Name Age Position Period Served Term
Expires
Jason Conway 31 President, May 1998 Next
Treasurer Annual
Director Meeting
Duncan James 39 Director May 1998 Next
Annual
Meeting
Jeffrey Graham 52 Director May 1998 Next
Annual
Meeting
Jason Conway
Jason Conway is a Director, Chairman and Chief Executive
Officer of the Company since May 1998. He was a Director
of Meteor Technology plc a U.K. software and
telecommunications public company from 1996 to March 1998
where he was responsible for the worldwide marketing of
computer videoconferencing and Internet software. He was
previously from 1989 an executive with National Car
Parks, the largest car park company in the UK culminating
in his appointment as a Regional Director in 1995. He is
a Chartered Surveyor and has a Bachelor of Science in
Estate Management from South Bank University in London.
Duncan F. James
Duncan F. James is a Director of the Company since May
1998. He is the principal of Duncan James Computer
Consultants, an independent computer systems consultancy
business since March 1998. Previously he was Manager of
Technology for DigiPhone International Limited since
October 1996. He was a Lecturer in Computer Science and
<PAGE> Communications with Middlesex University, London,
England from October 1994 and previously he was
Operations Manager for Ahead of Our Time Records Limited
an independent record label. He has a Bachelor of
Science in Applied Computing from Middlesex University in
the U.K.
Jeffrey M. Graham
Jeffrey M. Graham is a Director of the Company since May
1998. He is Principal of Hadley & Co, a firm of
Chartered Accountants in London, England that he founded
in 1993. From 1985-1991 he was Senior Executive Director
responsible for Finance & Administration at Sumitomo
Finance International, the UK based global investment
banking and capital markets subsidiary of The Sumitomo
Bank of Japan. From 1979-85 he was Chief Accountant
then Operations Manager at Sumitomo Finance. Previously
from 1976 he was UK Financial Controller for Carrier
Corporation. From 1972-76 he was a Senior Corporate
Finance Executive at Keyser Ullmann, the investment
banking house now part of Charterhouse Bank, having
previously worked for Price Waterhouse, London as an
auditor. He holds a Bachelor of Science in Economics
from University College London, qualified as a Chartered
Accountant in 1970, and has been a Fellow of the
Institute of Chartered Accountants in England and Wales
since 1979.
Item 10. Executive Compensation
The following table lists all cash compensation paid to
Registrant's executive officers as a group for services
rendered in all capacities during the fiscal period ended
March 31, 1998. No individual officer received
compensation exceeding $100,000; no bonuses were granted
to any officer, nor was any compensation deferred.
CASH COMPENSATION TABLE
Name of Individual Capacities in Cash
or Number in Group Which Served Compensation
-- -- NONE
Directors of the Registrant receive no salary for their
services as such, but are reimbursed for reasonable
expenses incurred in attending meetings of the Board of
Directors.
Registrant has no compensatory plans or arrangements
whereby any executive officer would receive payments from
the Registrant or a third party upon his resignation,
retirement or termination of employment, or from a change
in control of Registrant or a change in the officer's
responsibilities following a change in control.
Duncan James and Jeffrey Graham, directors have been
granted 10,000 ten year options each to acquire shares at
an exercise price of $3 per share.
<PAGE>
Item 11. Security Ownership of Certain Beneficial
Owners and Management
The following table shows the amount of common stock, no
par value, ($.002 stated value), owned as of May 18,
1998, by each person known to own beneficially more than
five percent (5%) of the outstanding common stock of the
Registrant, by each director, and by all officers and
directors as a group (3 persons). Each individual has
sole voting power and sole investment power with respect
to the shares beneficially owned.
<TABLE>
<S> <C> <C>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Jason Conway 1,961,600 38.15%
Elthorne Gate, 64 High Street
Pinner, Middlesex HA5 5QA,England
Duncan James 10,000 (1) 0.0%
34 Charteris Road, Finsbury Park,
Islington, London N4 3AB, England
Jeffrey Graham 10,000 (2) 0.0%
69 Cat Hill
Barnet, Herts, EN4 8HP, England
All Officers and Directors as 1,981,600 (1)(2) 38.15%
a group (3 persons) (1)(2)
Abuja Consultancy, Ltd. 600,000 11.67%
Oceanic House
P.O. Box 107
Duke Street
Grand Turk
Turks & Caicos Islands
Mick Y. Wettreich 1,542,000 (3) 30%
34 Monarch Ct.
Lyttleton Road
London England N2ORA
Daniel Wettreich 825,000 (4) 16.05%
6959 Arapaho, Suite 122
Dallas, Texas 75248
</TABLE>
(1) Includes 10,000 options granted to Duncan James,
which options are not exercised.
(2) Includes 10,000 options granted to Jeffrey Graham,
which options are not exercised.
(3) Includes 600,000 shares owned by Abuja Consultancy,
Ltd. which is affiliated with Mick Y. Wettreich.
(4) 700,000 of these shares are owned by Texas Country
Gold Development, Inc. and 125,000 by Forme Capital,
Inc., both of which companies Mr. Wettreich is a
director. Mr. Wettreich has disclaimed any beneficial
interest in these shares.
Item 12. Certain Relationships and Related Transactions
During the year ending 30th April, 1995 a Company
associated with Mr. Wettreich the previous President of
the Company, advanced $300 to the Company, and such
amount was written off during the period ending March 31,
1998.
On May 15, 1997, the former President of the Company,
Daniel Wettreich, subscribed for 6,787,998 restricted
common shares of the Registrant in exchange for
40,727,988 ordinary shares of Meteor Technology, plc a UK
public company. Subsequently, 6,029,921 of the
restricted shares were exchanged by Mr. Wettreich for
restricted common shares in Adina, Inc. Adina then
subscribed for 53,811,780 Preferred Shares, Series J of
Camelot Corporation paying for them with 6,029,921 common
shares of the Registrant.
On 20th March, 1998, Camelot transferred 51% of the then
outstanding shares in the Registrant to Forsam Venture
Funding, Inc. Mr. Wettreich is an officer and director
of Camelot, Adina and Forsam. On March 31, 1998 Forsam
Venture Funding, Inc. surrendered 7,495,539 shares to the
Company for the treasury and they are no longer
outstanding. The Company did not pay Forsam Venture
Funding, Inc. any compensation for the surrendering of
the shares.
On March 31, 1998, Forsam Venture Funding, Inc. entered
into a conditional contract to sell all its Shares in
Registrant to Mr. Jason Conway for an undisclosed sum.
On 18th May, 1998 with the shareholders approval, the
conditional contract closed, Mr. Daniel Wettreich
resigned as a director and officer of Registrant as did
all the other directors and officers, and Mr. Conway was
appointed a director, and Chief Executive Officer of
Registrant.
On March 31, 1998, Registrant entered into a conditional
agreement with Third Planet Publishing, Inc., a wholly
owned subsidiary of Camelot Corporation to acquire the
VideoTalk product for Third Planet Publishing, Inc.'s
cost of $7,002,056 payable by way of the issuance of
common stock, preferred stock and a Promissory Note.
This transaction required shareholder approval which was
forthcoming 18th May, 1998. The note bears interest at
10% and is due March 31, 2003.
For the eleven (11) months ending March 31, 1998 and the
year ended 30th April, 1997 the Company incurred stock
transfer fees to a Company associated with Mr. Wettreich,
the previous President of the Company in the amounts of
$814.50 and $9,573, respectively. Such amounts were
written off in the period ended March 31, 1998.
<PAGE>
On June 29, 1998, Registrant agreed with Camelot
Corporation at the request of Registrant, to satisfy
the outstanding Promissory Note payable to Camelot by
Registrant in the amount of $2,000,000 by way of the
issuance of $2,000,000 of Wincroft Non-voting Preferred
Stock, Series B. These Preferred Shares pay a dividend
of 10% when and as declared by the board of directors
and will pay an additional yield equivalent to 10% of
any revenues derived by Registrant on sales of VideoTalk
[tm]. The Preferred Shares also call for redemption by
Registrant in the event VideoTalk is sold.
<PAGE>
PART IV
Item 13. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
The following financial statements are included in Part
II, Item 8 of this report for the period ended March 31,
1998:
Balance Sheets
Statements of Operations
Statements of Changes in Shareholders' Equity
Statements of Cash Flows
Notes to Financial Statements
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and have therefore been
omitted.
Exhibits included herein:
3(a) Articles of
Incorporation: Incorporated by reference to
Registration
Statement filed on Form 10, May 10, 1984;
File No. 0-12122
3(b) Bylaws:Incorporated by Reference as immediately
above
22(a)Subsidiaries: Wincroft (UK) Limited
Reports on Form 8-K
Report dated May 12, 1998 reporting Item 4.
Report dated June 29, 1998 reporting Item 5
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
WINCROFT, INC.
(Registrant)
By: /s/ Jason Conway
Jason Conway, Chairman, Chief Executive Officer,
and President
Date: June 30, 1999
Pursuant to the requirements of the Securities Exchange
Act of 1934, 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: /s/ Jason Conway
Jason Conway, Director; Chairman and
Chief Executive Officer, and President,
(principal executive officer); Treasurer
(principal financial and accounting
officer)
Date: June 30, 1999
By: /s/ Duncan James
Duncan James, Director
Date: June 30, 1999
By: /s/ Jeffrey Graham
Jeffrey Graham, Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6491
<PP&E> 207362
<DEPRECIATION> 41473
<TOTAL-ASSETS> 172380
<CURRENT-LIABILITIES> 103919
<BONDS> 0
0
70
<COMMON> 10280
<OTHER-SE> 68461
<TOTAL-LIABILITY-AND-EQUITY> 172380
<SALES> 0
<TOTAL-REVENUES> 10224
<CGS> 0
<TOTAL-COSTS> 222180
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 222607
<INCOME-TAX> 222607
<INCOME-CONTINUING> 222607
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<CHANGES> 0
<NET-INCOME> 222607
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