SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1998
Commission File Number 2-98083-A
CATHEL PARTNERS, LTD.
(Exact name of registrant as specified in Its charter)
DELAWARE 59-2571253
(State of Incorporation) (I.R.S. Employer Identification Number)
68 Schraalenberg Road, PO Box 233,
Harrington Park, NJ 07640
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, with area code: (201) 784-5190
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common stock of $.00001 par value 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 twelve 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 X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B in this form, and no disclosure will be contained, to the
best of Registrant's knowledge, in 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
State Issuer's Revenues for its most recent fiscal year. $-0-
Aggregate market value of the voting stock held by non-affiliates of
registrant: $0 as of December 31, 1998
Number of shares outstanding as of December 31, 1998: 469,203
Documents incorporated by reference: Exhibits contained in the Form 10-KSB for
the year ended December 31, 1989.
Part I.
Item 1 DESCRIPTION OF BUSINESS
GENERAL DEVELOPMENT
Cathel Partners, Ltd. (formerly B.C. Communication, Inc.)(the
"Company") was incorporated in the state of Delaware on June 7, 1985. The
Company originally intended to develop, produce, and distribute programs of a
talk and interview format for commercial and pay television. The Company
exhausted its funds on the incomplete production of a show and decided to seek
other business opportunities which would offer growth and development.
On February 14, 1987, the Company acquired 73.75 percent of Kinetic
Systems, Inc., a Delaware corporation, which was trying to develop a closed
chamber, forced hot air, liquid heating system for use in residential and
commercial buildings. On March 31, 1988, pursuant to a February 14, 1987
agreement, the Company received the remaining 26.25 percent of Kinetic Systems,
Inc., in exchange for 78,750,000 shares of the Companies common stock. Kinetic
Systems, Inc., became a wholly owned subsidiary of the Company.
On January 28, 1993, the Company sold 100 percent of the issued and
outstanding shares of common stock of Kinetic Systems, Inc., to the Barrister
Group, Ltd., for $100,000. The Company has been inactive since 1993.
Earnings per Share - The net income (loss) per share is based on the
weighted average number of share outstanding during the period.
Income Taxes - Deferred income taxes are recorded to reflect the tax
consequences on future years of differences between the tax bases of assets and
liabilities and their financial reporting amounts at each year end. The tax
benefit to operating losses and tax credit carryforwards are recognized if
management believes, based on available evidence, that is more likely than not
that they will be realized. Investment tax credits are accounted for under the
flow-through method.
Anticipated Effect of Recently Issued Statements of Financial
Accounting Standards - The Company does not expect the effect of recently issued
Financial Accounting Standards, when adopted, to have a material impact on its
financial statements and results of operations.
The Company has a net operating loss carryforward of $1,125,134 which
expires from 2001 through 2013.
In September, 1985, the Company sold 25,000,000 units at $.01 per unit
in a public offering, each unit consisting of one share of common stock and two
redeemable warrants. The redeemable warrants were exerciseable at $.015 per
share of common stock. 49,423,000 warrants were exercised resulting in net
proceeds to the Company of $741,344.
On February 14, 1987, the Company exchanged 221,250,000 shares of
common stock in exchange for 73.75 percent of the common stock of Kinetic
Systems, Inc.
On April 14, 1988, the Company's Board of Directors amended an
agreement with Mr. Eugene Perkins, inventor of Kinetic Systems, Inc. heating
systems, and in lieu of cash, issued to Mr. Perkins 20,000,000 shares of
restricted shares of common stock valued at $350,000 for additional research and
development of the heating system.
On March 31, 1988, pursuant to a February 14, 1987 agreement, the
Company issued 78,750,000 shares of common stock in exchange for the remaining
26.25 percent of Kinetic Systems, Inc.
In November, 1995, the Company, by amendment to its certificate of
incorporation, changed its name to cathel Partners, Ltd.
In 1995, the Company recorded a 1,000 for 1 reverse stock split
reducing the number of shares outstanding to 469,203.
The Company has experienced operating loss of $1,291,939 since
inception. The Company needs to acquire a company or raise capital if it is to
continue as a going concern.
Item 2. DESCRIPTION OF PROPERTY
The Company's President, Robert Schuck, provides the Company with
limited office space in his offices at no charge.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal actions involving the Company.
<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Registrant submitted no matters to a vote of its security holders
during its fiscal year ended December 31, 1998.
Part II.
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The Company's Common Stock has not been traded since 1993.
(b) As of December 31, 1997, there were approximately 832 holders of the
Company's Common Stock.
(c) No dividends were paid during the fiscal year ending Dec. 31, 1997.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OR PLAN OF OPERATION
Financial Condition
During 1998 the Company was inactive, as it was in 1997. Therefore no changes
have occurred in the Company's financial condition. The minor expenses have been
paid by the President of the Company, and he will continue to do so until such
time as a company is acquired or capital is raised.
ITEM 7. FINANCIAL STATEMENTS
The financial statements are attached hereto at page 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company did not change accountants for the fiscal year ending 1998.
<PAGE>
Part III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS OF REGISTRANT
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Robert N. Schuck 62 President and Director
Herbert Maslo 61 Director
John J. Gitlin 56 Vice President, Secretary and Director
</TABLE>
Robert Schuck. Mr. Schuck has been President and a Director of the Company
since February 1987. In addition, Mr. Schuck is an officer and/or director of
various affiliates of the Company. Mr. Schuck has been a director of Power Tech
Systems, Inc. since September 1988. He has been Executive Vice President and a
director of Telecard Ltd. from 1989 to 1997, and is President and a director of
HITK Corporation ("HITK"), a publicly-held corporation which holds 53.27% of the
issued and outstanding shares of the Company.
Herbert Maslo. Herbert Maslo has been a Director of the Company since March
1994. In March 1990, he became a director and President of Power Tech Systems,
Inc. Prior to that, Mr. Maslo had retired from New York Telephone, a division of
Nynex, after 23 years where he held various engineering positions including
central office planning, installations and engineering as a project manager. Mr.
Maslo holds a B.A. degree in Mechanical Engineering from the Newark College of
Engineering.
John Gitlin. John Gitlin has been an officer and a director of the Company since
May 1998. From 1978 to 1982, Mr. Gitlin held the position of staff attorney with
the United States Department of Justice, Antitrust Division. From 1982 through
April of 1994, he was a partner in the law firm of Fischer, Gitlin & Sanger in
Dallas, Texas. From May 1994 to 1997, Mr. Gitlin held the position of Secretary
with Executive Telecard, Ltd. From October 1997, Mr. Gitlin has been an officer
of HITK Corporation and a director of HITK since January 1997.
ITEM 10. EXECUTIVE COMPENSATION
No compensation was paid to any officer or director of the Company
during the fiscal year ending December 31, 1998.
Item 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 31, 1998, of
each officer or director of the Company, by each person or firm who owns more
than 5% of the Company's outstanding shares and by all officers and directors of
the Company as a group.
Number of Percentage
Name Shares of shares
Owned owned
Robert Schuck(3) 200 0.001
85 Norwood
Norwood, NJ 07648
Herbert Maslo 0 0
John Gitlin(2) 0 0
3008 Falls Church Lane
Mesquitte, Texas 75149
HITK Corporation(1) 269,
63 Schraelenburg Rd.
Harrington Park, NJ
(1) As of July, 1999, Messrs. Schuck and Gitlin are holders of the majority
interest in HITK Corporation, and therefore have control over that
corporation.
(2) In July, 1999 HITK Corporation ('HITK') entered into agreements whereby
John Gitlin, who was owed approximately $155,000 in legal fees by HITK, got
paid $140,000 and 500,000 restricted shares of HITK. This agreement was
subject to the issuance of an opinion which HITK got on December 17, 1999.
(3) In July, 1999 HITK Corporation ('HITK') entered into agreements whereby
Robert Schuck, who was owed approximately $1,040,000 in fees by HITK for
back salary pursuant to a plan of reorganization approved for HITK in a
bankruptcy proceeding which commenced in 1989, lowered the debt by $24,000
in exchange for 1,600,000 restricted shares of HITK. This agreement was
subject to the issuance of an opinion which HITK received on December 17,
1999.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no related party transactions in the fiscal year ended
December 31, 1998.
Item 13. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
(a) All required exhibits are incorporated herein by reference
from the Company's Form 10-KSB filed for the year ending December 31, 1990.
(b) No Financial Statement Scheduled or reports on Form 8-K
are required to be filed herewith.
<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.
DATE: December 12, 1999 By: /s/ Robert Schuck
--------------------------------
ROBERT SCHUCK
President
Director
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 dates indicated.
DATE: December 12, 1999 By: /s/ Robert Schuck
--------------------------------
ROBERT SCHUCK
President
Director
<PAGE>
SANFORD H. FEIBUSCH
CERTIFIED PUBLIC ACCOUNTANT
9 CARPENTER COURT
MONSEY, NEW YORK 10952
(914) 368 2397
FAX (914) 368 4110
Board of Directors and Stockholders
Cathel Partners, Ltd.
I have audited the accompanying balance sheet of Cathel Partners, Ltd. as
of December 31, 1998, and the related statements of operations, stockholders'
equity, and cash flows for the years ended December 31, 1998 and 1997. 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 by 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 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 financial statements referred to above present
fairly, in all material respects, the financial position of Cathel Partners,
Ltd. at December 31, 1998, and the results of its operations and its cash flows
for the years ended December 31, 1998 and 1997, in conformity with generally
accepted accounting principles.
As discussed in Note 4, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying Financial Statements do
not include any adjustments to the Financial Statements that might be necessary
should the Company be unable to continue as a going concern.
/s/Sanford H. Feibusch
Sanford H. Feibusch, CPA
June 29, 1999
Monsey, New York
<PAGE>
<TABLE>
<CAPTION>
CATHEL PARTNERS, LTD.
(FORMERLY B.C. COMMUNICATIONS, INC.)
(A development stage company)
BALANCE SHEET
ASSETS
December 31,
1998
Current Assets:
<S> <C>
Cash $ 345
-----
Total Assets $ 345
=====
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable $ 7,000
Stockholders Equity:
Common Stock $.00001 par value
500,000,000 shares authorized
469,203 shares issued and outstanding.
Additional paid-in capital 1,285,279
Retained (Deficit) (1,291,939)
-------------
Total Stockholders' Equity (Deficit) (6,655)
Total Liabilities and Stockholders' Equity $ 345
=====
</TABLE>
The accompanying Notes are an integral part of these Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CATHEL PARTNERS, LTD.
(FORMERLY B.C. COMMUNICATIONS, INC.)
(A development stage company)
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
---- ----
<S> <C> <C>
Revenue $ -0- $ -0-
Operating Expenses 72 72
-- --
Net (Loss) $(72) $(72)
===== =====
Earnings per share $ .00 $ .00
===== =====
Weight Average Shares Outstanding 469,203 469,203
The accompanying Notes are an integral part of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CATHEL PARTNERS, LTD.
(FORMERLY B.C. COMMUNICATIONS, INC.)
(A development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
Common Stock Additional Retained
Paid-In Earnings
Shares Amount Capital (Deficit)
------ ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance - January 1, 1997 469,432 $ 5 $1,285,279 $(1,291,723)
Net (Loss) year ended
December 31, 1997 (72)
------- -------- ----------- -----------
Balance-December 31,1997 469,632 5 1,285,279 (1,291,795)
Net (Loss) year ended
December 31, 1998 (72)
------- -------- ----------- -----------
Balance-December 31,1998 469,432 5 1,285,279 (1,291,867)
</TABLE>
The accompanying Notes are an integral part of these Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CATHEL PARTNERS, LTD.
(FORMERLY B.C. COMMUNICATIONS, INC.)
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
------ ------
Cash Flow from Operations:
<S> <C> <C>
Net Loss $ (72) $ (72)
------ ------
Net Cash Flow from Operations 72 72
---- --
Cash - Beginning 417 489
--- ---
Cash - Ending $ 345 $ 417
===== =====
The accompanying Notes are an integral part of these Financial Statements.
</TABLE>
<PAGE>
CATHEL PARTNERS, LTD.
(FORMERLY B. C. COMMUNICATIONS, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
Note 1 - Summary of Significant Accounting Policies
Organization of Business - Cathel Partners, Ltd. (formerly B.C. Communication,
Inc.)(the "Company") was incorporated in the state of Delaware on June 7, 1985.
The Company originally intended to develop, produce, and distribute programs of
a talk and interview format for commercial and pay television. The Company
exhausted its funds on the incomplete production of a show and decided to seek
other business opportunities which would offer growth and development.
On February 14, 1987, the Company acquired 73.75 percent of Kinetic Systems,
Inc., a Delaware corporation, which was trying to develop a closed chamber,
forced hot air, liquid heating system for use in residential and commercial
buildings. On March 31, 1988, pursuant to a February 14, 1987 agreement, the
Company received the remaining 26.25 percent of Kinetic Systems, Inc., in
exchange for 78,750,000 shares of the Companies common stock. Kinetic Systems,
Inc., became a wholly owned subsidiary of the Company.
On January 28, 1993, the Company sold 100 percent of the issued and outstanding
shares of common stock of Kinetic Systems, Inc., to the Barrister Group, Ltd.,
for $100,000. The Company has been inactive since 1993.
Earnings per Share - The net income (loss) per share is based on the weighted
average number of share outstanding during the period.
Income Taxes - Deferred income taxes are recorded to reflect the tax
consequences on future years of differences between the tax bases of assets and
liabilities and their financial reporting amounts at each year end. The tax
benefit to operating losses and tax credit carryforwards are recognized if
management believes, based on available evidence, that is more likely than not
that they will be realized. Investment tax credits are accounted for under the
flow-through method.
Anticipated Effect of Recently Issued Statements of Financial Accounting
Standards - The Company does not expect the effect of recently issued Financial
Accounting Standards, when adopted, to have a material impact on its financial
statements and results of operations.
<PAGE>
CATHEL PARTNERS, LTD.
(FORMERLY B.C. COMMUNICATIONS, INC.)
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
Note 2 - Income Taxes
The Company has a net operating loss carryforward of $1,125,134 which expires
from 2001 through 2013.
Note 3 - Stockholders' Equity
In September, 1985, the Company sold 25,000,000 units at $.01 per unit in a
public offering, each unit consisting of one share of common stock and two
redeemable warrants. The redeemable warrants were exerciseable at $.015 per
share of common stock. 49,423,000 warrants were exercised resulting in net
proceeds to the Company of $741,344.
On February 14, 1987, the Company exchanged 221,250,000 shares of common stock
in exchange for 73.75 percent of the common stock of Kinetic Systems, Inc.
On April 14, 1988, the Company's Board of Directors amended an agreement with
Mr. Eugene Perkins, inventor of Kinetic Systems, Inc. heating systems, and in
lieu of cash, issued to Mr. Perkins 20,000,000 shares of restricted shares of
common stock valued at $350,000 for additional research and development of the
heating system.
On March 31, 1988, pursuant to a February 14, 1987 agreement, the Company issued
78,750,000 shares of common stock in exchange for the remaining 26.25 percent of
Kinetic Systems, Inc.
In 1995, the Company recorded a 1,000 for 1 reverse stock split reducing the
number of shares outstanding to 469,203.
Note 4 - Going Concern
The Company has experienced operating loss of $1,291,939 since inception. The
Company needs to acquire a company or raise capital if it is to continue as a
going concern.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the three month period ended March 31, 1998 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Dec-31-1998
<CASH> 345
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 345
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 345
<CURRENT-LIABILITIES> 345
<BONDS> 0
0
0
<COMMON> 469,203
<OTHER-SE> (6,655)
<TOTAL-LIABILITY-AND-EQUITY> 345
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 72
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 72
<INCOME-TAX> 0
<INCOME-CONTINUING> 72
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
