UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for the transition period from _______ to _______
Commission File No. 0-13084
WARRANTECH CORPORATION
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
_____Delaware____ ___13-3178732____
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
300 Atlantic Street, Stamford, Connecticut ___06901___
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 975-1100
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each Exchange on which registered
Common Stock $.007 par value
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.007 par value
_______________________________________________________________________________
(Title of Class)
Indicate by checkmark whether the Registrant (1) has filed all reports 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), and (2) has been subject to such filing
requirements for the past 90 days.
Yes _____ No ___X___
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding as of September 30, 1999
Common Stock, par value $.007 per share 15,222,861 shares
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Index
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Page
PART I - FINANCIAL INFORMATION 3
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 3
Item 2. Changes in Securities 3
Item 3. Defaults Upon Senior Securities 3
Item 4. Submission of Matters to a Vote of Security-Holders 3
Item 5. Other Information 4
Item 6. Exhibits and Reports on Form 8-K 4
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PART I - FINANCIAL INFORMATION
Registrant is not able to furnish the financial information required
pursuant to Part I of its Form 10-Q for the period ended September 30, 1999,
because it is still awaiting the receipt of the views of the Chief Accountant's
Office of the Division of Corporation Finance ("DCF") of the Securities and
Exchange Commission concerning the revenue recognition accounting policy which
Registrant should apply. The DCF informed Registrant on October 1, 1999 that it
believes that Registrant should recognize revenue from extended service
contracts in which Registrant is the obligor in accordance with Financial
Accounting Standards Board Technical Bulletin 90-1, and Registrant is performing
the calculations necessary to comply with this accounting policy. The DCF
further informed Registrant that, with respect to service contracts in which
Registrant is not the obligor, it believes that Registrant is required to
recognize administrative fees on a straight-line basis over the life of the
contracts which Registrant administers. Registrant currently defers only a
portion of the administrative fee income which pertains to administrating claims
over the life of the contracts and recognizes the balance of the income in the
period in which the service contracts are sold because a substantial amount of
the revenue relates to expenses which are incurred in connection with the
acquisition of the service contract business. After being informed of the DCF's
position with respect to revenue from contracts in which Registrant is not the
obligor, Registrant requested the DCF to reconsider its position, and the DCF
has agreed to do so. Pursuant to the request of the DCF, Registrant furnished
information to the DCF concerning the manner in which Registrant allocates
revenue from such service contracts. Registrant is awaiting the DCF's position
following its reconsideration of this matter. Registrant intends to file its
financial information after receipt of the DCF's position.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security-Holders
Not Applicable
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Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27. Financial Data Schedule*
(b) Reports on Form 8-K:
Form 8-K, dated August 26, 1999 and filed on August 27, 1999, reporting
information in response to Item 4, concerning Changes in Registrant's Certifying
Accountant.
Form 8-K/A, dated and filed on September 10, 1999, containing corrections
to the Form 8-K, filed on August 27, 1999.
Form 8-K, dated and filed as of September 10, 1999, containing information
in response to Item 5, "Other Events," reporting the decision of the Nasdaq
Listing Qualifications Panel which delisted Registrant's common stock from the
Nasdaq Stock Market effective as of the close of business on September 2, 1999
due to the delay in the filing of Registrant's Form 10-K for the fiscal year
ended March 31, 1999. Registrant also reported that it filed an appeal from the
decision to the Nasdaq Listing and Hearing Review Council. The Report further
stated that Registrant intended to seek the views of the Securities and Exchange
Commission concerning Registrant's revenue recognition policy, and further
announced that the Board of Directors of Registrant authorized the repurchase of
up to $1.5 million of the Company's common stock.
Form 8-K/A, dated and filed on September 14, 1999, annexing a letter dated
September 13, 1999 from Registrant's former certifying accountant, Ernst &
Young, LLP.
Form 8-K/A, dated and filed on September 28, 1999, annexing a letter dated
September 24, 1999 from Registrant's former certifying accountant, Ernst &
Young, LLP.
Form 8-K, dated and filed on October 18, 1999, containing information in
response to Item 5, "Other Events," reporting Registrant's receipt of the
position of the DCF with respect to Registrant's revenue recognition policy.
Registrant further reported that, following Registrant's notification of the
position of the DCF to PriceWaterhouseCoopers LLP ("PWC"), which is the
successor firm of Coopers & Lybrand, L.L.P., PWC informed Registrant that the
reports of Coopers & Lybrand, L.L.P. with respect to Registrant's consolidated
financial statements for the fiscal years ended March 31, 1998, March 31, 1997,
March 31, 1996 and March 31, 1995, were withdrawn. Coopers & Lybrand, L.L.P. was
Registrant's certifying accountant for those years.
* To be filed as amendment.
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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, thereunto duly authorized.
Warrantech Corporation
Date: November 15, 1999 By: /s/ Richard F. Gavino
------------------------
Name: Richard F. Gavino,
Title: Executive Vice President, Chief
Financial Officer and Accounting
Officer
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