U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
xQuarterly report under Section 13, or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1998
oTransition report under Section 13 or 15 (d) of the Exchange
Act
For the transition period from ________________ to _________________
Commission file number 0-12122
WINCROFT, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Colorado 84-0601802
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Elthorne Gate, 64 High Street, Pinner, Middlesex HA5 5QA
(Address of Principal Executive Offices)
011 44 81 429 7300
(Issuer's Telephone Number, Including Area Code)
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.
xYes oNo
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13, or 15 (d) of the Exchange Act
after the distribution of securities under a plan confirmed by a
court.
oYes oNo
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
5,140,100 common stock, no par value.
<PAGE>
WINCROFT, INC.
and subsidiary
I N D E X
Page No.
Part I FINANCIAL INFORMATION:
Item 1. Consolidated Balance
Sheets 3
Consolidated Statements of
Operations 4
Consolidated Statements of
Cash Flows 5
Notes to Consolidated
Financial Statements
(unaudited) 6
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 6
Part II OTHER INFORMATION 7
<PAGE>
WINCROFT, INC. and subsidiary
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
<TABLE>
<S> <C> <C>
ASSETS
September 30, 1998 March 31,1998
(Unaudited) (Audited)
Current Assets:
Cash $ 24,043 $ 16,584
Loan Receivable 10,988 -
Prepaids 3,944 -
Total current assets 38,975 16,584
Non-marketable Securities - 43,000
Investment in VideoTalk 7,002,056 7,002,056
Equipment 2,975 -
Total Assets $7,044,006 $7,061,640
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Note Payable $ - $2,000,000
Accounts Payable 4,064 -
Taxes Payable 460 -
Total current liabilities $ 4,524 $ 2,000,000
Total liabilities $ 4,524 $ 2,000,000
Foreign Currency Adjustment 389 -
Stockholders' Equity (Deficit):
Common stock no par value,75,000,000
shares authorized; 5,140,100 and
5,140,100 shares issued at September
30, 1998 and March 31, 1998, respect-
ively 10,280 10,280
Preferred Stock 25,000,000 authorized
$.01 par value 7,000 and 5,000 issued
at September 30, 1998 and March 31,
1998, respectively 70 50
Additional paid in capital 7,888,223 5,888,243
Retained Earnings (858,347) (835,800)
Less treasury stock, 7,496,223
shares at cost (1,133) (1,133)
7,039,093 5,061,640
$7,044,006 $7,061,640
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
WINCROFT, INC. and subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
September 30, September 30,
1997 1997
1998 Restated 1998 Restated
Revenue $ 10,224 $ - $10,224
Cost of Revenue - - - -
Gross Profit - - - -
Operating Expenses:
Administrative expenses (18,750) (22,751) (1,732)
Total Operating Expenses (18,750) (22,751) (1,732)
Realized Loss on Sale
of Securities (10,020) - (10,020) -
Net Income (Loss) (18,546) (22,547) (1,732)
Net Income (Loss) per share* * * * *
Weighted Average Number of 5,140,100 7,536,600 5,140,100 7,536,600
Shares outstanding
*less than (.01) per share
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
WINCROFT, INC. and subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
Six Months Ended
September 30,
<S> <C> <C>
1997
1998 Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(22,547) $(1,732)
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation and amortization -
(Gain) loss on disposal of assets 10,020
Foreign Currency 389
Change in assets and liabilities:
Accounts receivables and Prepaids (3,944)
Taxes 460
Accounts payable and accrued expenses 4,064 1,688
Net cash used by operating activities (11,562) (44)
CASH FLOW FROM INVESTING ACTIVITIES:
Loan Receivable (10,988)
Purchases of property and equipment (2,975)
Sales or Purchases of marketable securities 32,980
Net cash used by investing activities 19,017
CASH FLOW FROM FINANCING ACTIVITIES:
Net cash provided (used) by
financing activities -
NET INCREASE (DECREASE) IN CASH 7,455 (44)
CASH AT BEGINNING OF PERIOD 16,588 66
CASH AT END OF PERIOD $24,043 $ 22
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ - $ -
SCHEDULE OF NON CASH INVESTING AND FINANCIAL ACTIVITIES:
Loan Payable by the issuance of
Preferred Stock $ 2,000,000
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
WINCROFT, INC. and subsidiary
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Financial Statements
The accompanying unaudited financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
The financial statements include the information for the
subsidiary, Wincroft (UK), Ltd. acquired by the Company during the
period under review.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. These statements should be read
in conjunction with the audited financial statements and notes
thereto included in the Registrant's annual Form 10-KSB for the
eleven months ended March 31, 1998. The results of the operations
for the six month period ended September 30, 1998 are not
necessarily indicative of the operating results for the fiscal
year ending March 31, 1999.
The consolidated financial statements for the comparative six
months in 1997, included the accounts of the Company and the
majority owned company, Meteor Technology, plc. ("Meteor"). At
the year end, the Company determined that the interest should be
treated as an investment not a pooling of interest thus the
quarterly numbers have been restated to treat the interest as an
investment.
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
September 30, 1998 and March 30, 1998, one pound equals $1.70 and
$1.70, respectively. The conversion used for the statement of
operations was based on an average exchange rate for the six
months ended September 30, 1998 and September 30, 1997. This
conversion rate was one pound equals $1.70 for period ended March
30, 1998 and $1.7 for period ended September 30, 1998.
Item 2. Management Discussion and Analysis of Financial
Condition and Results of Operations
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 the six
month ending October 31. 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, as management has focused on researching and creating a
marketing plan for VideoTalk. During the period under review, the
Company requested and Camelot agreed to convert the $2,000,000
note owed to Camelot into preferred shares of the Company. These
shares provide a yield tied to the revenue of VideoTalk and
require redemption should VideoTalk be sold.
Liquidity and Capital Resources
The Registrant has met its shortfall of funds from operations
during prior periods by the sale of its majority owned
subsidiaries assets, and by borrowing from its Directors and
companies affiliated with its Directors. 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 for the six months was
$11,562 ($ 44 in 1997). Net cash provided by investing activities
was $19,017 ($0 in 1997) and by financing activities was $0 ($0 in
1997).
The Registrant's present needs for liquidity principally relates
to its employee and 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.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
(1) Articles of Incorporation: Incorporated by
reference to
Registration Statement filed
on Form 10, May 10, 1984;
File No. 0-12122
(2) Bylaws: Incorporated by reference as
immediately above.
(b) Reports on Form 8-K
Report dated June 29, 1998 reporting Item 5.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.
WINCROFT, INC.
(Registrant)
By: /s/ Jason Conway
JASON CONWAY, PRESIDENT
Date: November 10, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000726435
<NAME> WINCROFT, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-30-1999
<PERIOD-END> SEP-30-1998
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<PP&E> 2975
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