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Previous: HALDANE BERNARD ASSOCIATES INC, 10QSB/A, 1998-12-31 |
Next: HALDANE BERNARD ASSOCIATES INC, 10QSB/A, 1998-12-31 |
Securities and Exchange Commission
Washington D.C. 20549
Form 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended November 30, 1997
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from____________________to_______________________
Commission file number 000-18097
-----------------------------------------------------
BERNARD HALDANE ASSOCIATES, INC.
--------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 59-2720407
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
192 Lexington Avenue, 15th Floor, New York, New York 10016
----------------------------------------------------------
(address of principal executive offices)
(212) 679-3360
--------------
(Issuer's telephone number)
Not Applicable
--------------
(Former name, former address and former fiscal year,
if changed since last report)
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 the past 90 days.
Yes X No___
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: November 30, 1997
-----------------
Class Outstanding at November 30, 1997
----- --------------------------------
Common Stock, $.00001 Par Value 1,148,865 shares
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
PAGE
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets
as of November 30, 1997 (Unaudited)
and May 31, 1997 3 - 4
Consolidated Statements of Income
(Unaudited) for the Three and Six Months Ended
November 30, 1997 and 1996 5
Consolidated Statements of Cash Flows
(Unaudited) for the Six Months Ended
November 30, 1997 and 1996 6 - 7
Notes to Consolidated Financial Statements (Unaudited)
as of November 30, 1997 8 - 9
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II. OTHER INFORMATION AND SIGNATURES
Signatures 11
</TABLE>
-2-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1997 1997*
---------------- ----------------
(Restated) (Restated)
(Unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 2,033,595 $ 1,698,099
Short-term investments 56,626 55,426
Accounts receivable - net of allowance for doubtful
accounts of $360,000 and $290,000, respectively 333,379 419,470
Notes receivable 174,180 149,080
Due from related parties 5,235 11,001
Prepaid expenses and miscellaneous receivables 92,743 60,158
Deferred taxes 174,000 145,000
---------------- ----------------
Total current assets 2,869,758 2,538,234
---------------- ----------------
OTHER ASSETS:
Licenses - net of accumulated amortization of
$1,756,688 and $1,657,917, respectively 765,840 864,611
Equipment, fixtures and leasehold improvements - net of
accumulated depreciation of $36,998 and $28,871, respectively 52,311 50,831
Security deposits and other 83,101 79,103
Notes receivable 428,540 451,309
---------------- ----------------
Total other assets 1,329,792 1,445,854
---------------- ----------------
TOTAL ASSETS $ 4,199,550 $ 3,984,088
================ ================
*The balance sheet at May 31, 1997 is derived from the audited consolidated
financial statements of that date.
</TABLE>
-3-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1997 1997*
---------------- ----------------
(Restated) (Restated)
(Unaudited)
CURRENT LIABILITIES:
<S> <C> <C>
Current maturities of long-term debt $ 249,943 $ 235,240
Accounts payable 104,118 207,316
Accrued expenses and other current liabilities 64,200 8,147
Income taxes payable 151,633 141,510
---------------- ----------------
Total current liabilities 569,894 592,213
---------------- ----------------
OTHER LIABILITIES:
Long-term debt 468,266 498,839
Deferred rent payable 13,679 13,679
---------------- ----------------
481,945 512,518
Total liabilities 1,051,839 1,104,731
---------------- ----------------
STOCKHOLDERS' EQUITY:
Common stock ($.00001 par value; 950,000,000
shares authorized, 1,148,865 shares issued
and outstanding) 12 12
Additional paid-in capital 2,738,015 2,738,015
Retained earnings 916,122 647,768
---------------- ----------------
3,654,149 3,385,795
Less: Treasury stock (199,500 and 179,500 shares at cost) 506,438 506,438
---------------- ----------------
Total stockholders' equity 3,147,711 2,879,357
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,199,550 $ 3,984,088
================ ================
</TABLE>
*The balance sheet at May 31, 1997 is derived from the audited consolidated
financial statements of that date.
-4-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
------------ ------------
1997 1996 1997 1996
---- ---- ---- ----
REVENUES:
<S> <C> <C> <C> <C>
Royalty income $ 1,336,446 $ 1,197,333 $ 632,911 $ 615,158
Consulting income 15,059 - 15,059 -
Interest, dividends and other income 85,269 50,492 31,897 26,404
Sub-license income 80,154 89,712 38,433 45,994
------------ ------------ ---------- ----------
Total revenues 1,516,928 1,337,537 718,300 687,556
------------ ------------ ---------- ----------
EXPENSES:
Payroll and related costs 324,810 188,010 179,421 103,200
Other general and administrative 609,295 507,127 285,905 271,599
Amortization 98,771 98,771 49,386 49,386
Interest 28,898 30,519 14,459 15,260
------------ ------------ ---------- ----------
Total expenses 1,061,774 824,427 529,171 439,445
------------ ------------ ---------- ----------
INCOME BEFORE PROVISION FOR INCOME TAXES 455,154 513,110 189,129 248,111
PROVISION FOR INCOME TAXES 186,800 205,000 76,800 99,000
------------ ------------ ---------- ----------
INCOME FROM CONTINUING OPERATIONS 268,354 308,110 112,329 149,111
DISCONTINUED OPERATIONS:
Income from operations of travel agency to
be disposed of (net of income taxes of $-0-,
$12,000, $-0- and $12,000, respectively) - 17,963 - 28,204
------------ ------------ ---------- ----------
NET INCOME $ 268,354 $ 326,073 $ 112,329 $ 177,315
============ ============ ========== ==========
NET EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
Continuing operations $ .26 $ .30 $ .11 $ .15
Discontinued operations - .02 - .03
------------ ------------ ---------- ----------
$ .26 $ .32 $ .11 $ .18
============ ============ ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 1,044,492 1,014,035 1,044,492 1,005,134
============ ============ ========== ==========
DIVIDENDS NONE NONE NONE NONE
==== ==== ==== ====
</TABLE>
-5-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 30,
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 268,354 $ 326,073
(Income) loss from discontinued operations - (17,963)
Adjustments to reconcile net income to net cash provided by operating
activities:
Expenses (income) not requiring the use of cash:
Provision for losses on accounts and notes receivable 70,000 80,000
Depreciation 8,127 1,574
Amortization of licenses 98,771 98,771
Interest expense - imputed 20,880 22,521
Interest income - imputed (19,794) (1,350)
Deferred income taxes (29,000) (24,000)
Changes in assets and liabilities:
Accounts receivable 16,091 (77,203)
Prepaid expenses (32,585) (5,646)
Cash overdraft - (18,044)
Accounts payable and other current liabilities (47,145) 89,800
Income taxes payable 10,123 38,500
Net liabilities of discontinued operations - net - (2,231)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 363,822 510,802
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments (1,200) (1,140)
Increase in security deposits (3,998) -
(Increase) decrease in due from related parties 5,766 (32,752)
Acquisition of fixed assets (9,607) (5,801)
Additions to notes receivable (79,903) (533,507)
Payments of notes receivable 97,366 111,051
Net assets of discontinued operations - net - 2,200
------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 8,424 (459,949)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of debt (36,750) (49,000)
Repurchase of common stock - (55,115)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (36,750) (104,115)
------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 335,496 (53,262)
CASH AND CASH EQUIVALENTS - beginning 1,698,099 1,615,073
------------ ------------
CASH AND CASH EQUIVALENTS - ending $ 2,033,595 $ 1,561,811
============ ============
</TABLE>
-6-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 30,
1997 1996
------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
<S> <C> <C>
Interest $ 28,898 $ 30,519
Income taxes 205,800 210,500
</TABLE>
-7-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 1997
The accompanying interim consolidated financial statements are unaudited and
include the accounts of Bernard Haldane Associates, Inc. ("Haldane") and its
subsidiaries.
NOTE 1
In the opinion of management, the accompanying interim consolidated
financial statements contain all material and significant adjusting and
eliminating entries consisting only of normal recurring adjustments and
eliminations necessary to present fairly the financial condition as of
November 30, 1997 and the results of operations and cash flows for the six
months ended November 30, 1997. The results of operations for the six month
period ended November 30, 1997 are not necessarily indicative of the
results of operations for the year ending May 31, 1998.
NOTE 2
The Company utilizes Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," to record income taxes.
The major temporary difference which gives rise to deferred taxes is the
allowance for doubtful accounts.
NOTE 3
The calculation of earnings per share for the six and three months ended
November 30, 1997 and 1996 is based on the modified treasury stock method.
NOTE 4
On May 31, 1996, the Company adopted a plan to terminate its travel agency
operations. The operations were disposed of in December 1996. The operating
results of the travel agency segment for the six and three months ended
November 30, 1996 are shown separately in the accompanying consolidated
income statement. Revenues of the travel agency segment, net of direct
expenses, amounted to $67,027 and $64,189 for the six and three months
ended November 30, 1996, respectively, and are not included in consolidated
revenues.
-8-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 1997
NOTE 5
Haldane hired a financial advisory company and attorneys to evaluate the
possibility of going private. Haldane's president and the former
president's spouse have offered to purchase the shares of common stock
owned by the public investors at $3 per share, which is the valuation made
by the financial advisory company in its fairness opinion. The estimated
number of shares to be purchased is approximately 205,000 shares or
$615,000.
NOTE 6
Additional paid-in capital and retained earnings at May 31, 1996 have been
adjusted to record the cumulative equity of minority interests in losses
for the period 1989 through February 1995, not previously recorded. On
February 2, 1995 such interests were purchased through the issuance of
75,000 shares of common stock. The error had no effect on net income for
years subsequent to May 31, 1995.
-9-
<PAGE>
BERNARD HALDANE ASSOCIATES, INC.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 or 15(d) OF THE
SECURITIES ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY
THE FOLLOWING PERSONS ON BEHALF OF THIS REGISTRANT IN THE
CAPACITIES INDICATED.
BERNARD HALDANE ASSOCIATES, INC.
(Registrant)
/s/ Jerold Weinger December 31, 1998
___________________________ DATED:_________________
JEROLD WEINGER, president/
treasurer/director
Jeffrey G. Klein December 31, 1998
___________________________ DATED:_________________
Jeffrey G. Klein, secretary/
director
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S BALANCE SHEET AS OF NOVEMBER 30, 1997 AND UNAUDITED STATEMENT OF
OPERATIONS FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> May-31-1998
<PERIOD-START> Jun-01-1997
<PERIOD-END> Nov-30-1997
<CASH> 2,033,595
<SECURITIES> 0
<RECEIVABLES> 693,379
<ALLOWANCES> 360,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,869,758
<PP&E> 89,309
<DEPRECIATION> 36,998
<TOTAL-ASSETS> 4,199,550
<CURRENT-LIABILITIES> 569,894
<BONDS> 0
12
0
<COMMON> 0
<OTHER-SE> 3,147,699
<TOTAL-LIABILITY-AND-EQUITY> 4,199,550
<SALES> 0
<TOTAL-REVENUES> 1,516,928
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,032,876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,898
<INCOME-PRETAX> 455,154
<INCOME-TAX> 186,800
<INCOME-CONTINUING> 268,354
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 268,354
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
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