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 1996
[ ] 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 33-10894
FORME CAPITAL, INC.
(Name of Small Business Issuer in Its Charter)
DELAWARE 75-2180652
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
17770 Preston Road, Dallas, Texas 75252
(Address of Principal Executive Offices) (Zip Code)
(214) 733-3005
(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:
None
(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]
<PAGE>
Issuer's revenues for its most recent fiscal year is $82,490.
As of July 13, 1996, the aggregate market value of the voting stock
held by non-affiliates was $19,531.
The number of shares outstanding of the Registrant's common stock
$0.001 par value was 11,500,000 at July 18, 1996.
Documents Incorporated by Reference.
Registration Statement filed on April 10, 1987, File No. 33-10894.
PART 1
Item 1. Business
Forme Capital, Inc. (Registrant) was incorporated in Delaware on
December 2, 1986, as a wholly owned subsidiary of Danzar Investment
Group, Inc. ("Danzar"), and on April 10, 1987 all Registrant's issued
shares were distributed to Danzar stockholders. Prior to 1989,
Registrants only activity was the creation and spinning off to its
stockholders of six blind pool companies. Registrant is a real estate
investment and management company.
Item 2. Properties
Registrant owns offices at 17770 Preston Road, Dallas, Texas
75252 which it leases to Camelot.
Item 3. Legal Proceedings
No legal proceedings to which the Registrant is a party is
subject or pending and no such proceedings are known by the Registrant
to be contemplated. 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
No matters were submitted to security holders during the last
quarter of the fiscal year.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Registrant's common stock is traded over-the-counter on the OTC
Bulletin Board under the designation FRMC, and the market for the
stock has been relatively inactive. The range of high and low bid
quotations for the quarters of the last three years are listed below.
The quotations are taken from the "pink sheets" of the National
Quotation Bureau and the OTC Bulletin Board. They reflect
inter-dealer prices, without retail mark-up, mark-down or commission,
and may not necessarily represent actual transactions.
<PAGE>
<TABLE>
Quarter Ending Low Bid High Bid
<S> <C> <C>
July 31, 1994 0.015625 0.25
October 31, 1994 0.015625 0.25
January 31, 1995 0.015625 0.25
April 30, 1995 0.015625 0.25
July 31, 1995 0.020000 0.20
October 31, 1995 0.015625 0.20
January 31, 1996 0.015625 0.20
April 30, 1996 0.015625 0.20
</TABLE>
As of July 18, 1996, there were approximately 1,036 shareholders
on record of Registrant's common stock, including the shares held in
street name by brokerage firms.
Registrant has not paid dividends on its common stock and does
not anticipate paying such dividends in the foreseeable future.
Registrant has 100,000,000 shares of Preferred Stock authorized.
21,495 shares of 10% Non-Cumulative Preferred Stock, Series A have
been issued in lieu of an outstanding debt. On June 11, 1990,
Registrant issued 50,000 shares of 10% Non-Cumulative Preferred Stock,
Series B, in a private placement with its then principle stockholder.
On January 31, 1991 formal control of the company changed from
Zara Wettreich, Separate Property to Camelot Corporation. On
September 10, 1993, formal control of the Company reverted back to
Zara Wettreich, Separate Property from Camelot Corporation. The
shares were purchased for 50% of the bid price of the shares.
On April 30, 1993, Registrant acquired a 92.73% interest in the
Forme Joint Venture from Camelot Corporation by the transfer from
Camelot to Registrant of $36,683. Forme Properties, Inc., a
subsidiary of Registrant owns the remaining 7.27% interest in the
joint venture.
On September 10, 1993, the Company issued 466,571 shares of 10%
Non-Cumulative, Preferred Stock, Series C in exchange for two office
buildings with a book value of $466,571.
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of
Operations
1996
Revenues decreased from $82,490 as compared to $154,097 for the
previous year, a decrease of 46%. Costs and expenses decreased to
$86,309 from $248,224. The decrease primarily resulted from the
decrease in the number of rental properties and the related upkeep and
expenses. The last of the residential property foreclosures occurred
resulting in the office property as the sole rental property. The
final foreclosures resulted in a gain of approximately $100,000.
<PAGE>
1995
Revenue has increased to $154,097 from $145,178 in the previous
year, an increase of 6.1%. Rental and Administrative expenses
increased to $124,030 from $73,007 the previous year an increase of
69.8% due to higher taxes, maintenance, repair and leasing
commissions. During the year, Management determined that certain
residential rental properties did not any longer represent viable long
term investments and ceased making mortgage payments on those
properties allowing the mortgagors to foreclose on these properties.
Management anticipates that the foreclosure proceedings will be
completed on these properties shortly and that a gain of approximately
$44,000 will be recognized when all the proceedings have been
completed.
1994
Rental revenues increased from $77,778 in 1993 to $142,313 in
1994 (an increase of 83%) primarily due to the purchase of office
buildings from Camelot Corporation, a company affiliated with the
President. The property at 17770 Preston Road was purchased on
September 10, 1993. Camelot entered into a lease of the property for
a 5 year period at $6,666 per month. Other income consists of deposit
forfeitures and miscellaneous amounts received in connection with
rental properties. Rental and Administrative expenses increased to
$73,007 from $52,813 (an increase of 38%) in 1994 due to higher taxes,
maintenance, repair, and leasing commissions, and additional rental
expenses associated with the purchase of office buildings from
Camelot.
Total assets have increased to $1,359,579 from $655,557 on April
30, 1994, a 107% increase. This is primarily due to the purchase of
office buildings from Camelot Corporation, and the subsequent sale
of 17738 Preston Road, Dallas, Texas. Other assets also increased by
the issuance of a note receivable to an affiliated company for
$470,000. Current liabilities increased by issuance of notes payable
of $250,000 and a decrease in payable to stockholder of $21,967.
Liquidity and Capital Resources
Registrant has met its shortfall of funds from operations during
prior periods by borrowing from its Directors and companies or persons
affiliated with its Directors. In the absence of other financial
resources, future cash requirements will continue to be met through
funds provided by the Directors and/or the raising of equity capital
or loans.
The Registrant's present needs for liquidity principally relates
to its real estate operations, and its obligations for its SEC
reporting requirements. The Registrant has limited liquid assets
available for its continuing needs. The Company believes cash flow
from operations will satisfy operation expenditure needs for the year
ending April 30, 1997.
Item 7. Consolidated Financial Statements
<PAGE>
FORME CAPITAL, INC.
Index to Consolidated Financial Statements
Independent Auditors Report - 1996 7
Independent Auditors Report - 1995 8
Consolidated Balance Sheet 9
Consolidated Statements of Operations 10
Consolidated Statement of Changes in
Stockholders' Equity 11
Consolidated Statements of Cash Flows 12-13
Notes to Consolidated Financial Statements 14-20
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
<TABLE>
CONSOLIDATED BALANCE SHEET
April 30, 1996
<S>
ASSETS
<C>
CURRENT ASSETS
Cash and cash equivalents $ 75,124
Available for sale securities, including
allowance for change in market value
of $16,000 57
Prepaid expenses and other 1,411
Total Current Assets 654,588
PROPERTY AND EQUIPMENT - at cost:
Land 21,200
Buildings and improvements 241,350
262,550
Less accumulated depreciation 25,770
236,780
$ 891,368
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
CURRENT LIABILITIES:
Notes payable - related parties $ 390,000
Accounts payable 22,502
Accrued expenses 6,987
Security deposits held 10,000
Total Current Liabilities 429,489
LONG-TERM DEBT 100,000
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
100,000,000 shares authorized;
Issued and outstanding:
21,495 shares of Series A 215
50,000 shares of Series B 500
466,571 shares of Series C 4,665
Common stock $.001 par value, 25,000,000
shares authorized, 11,500,000 shares,
issued and outstanding 11,500
Capital in excess of par value 482,419
Unrealized loss on securities available for sale (16,000)
Accumulative deficit (121,420)
361,879
$ 891,368
</TABLE>
See Notes to Financial Statements.
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
Years Ended April 30, 1996 and 1995
<TABLE>
<S> 1996 1995
REVENUES: <C> <C>
Rental income $ 82,490 $149,522
Gain on foreclosure of property 4,575
82,490 154,097
COSTS AND EXPENSES:
Rental and administrative 38,660 124,030
Depreciation 7,782 38,919
Interest 39,867 85,275
86,309 248,224
INCOME (LOSS) FROM OPERATIONS (3,819) (94,127)
INTEREST INCOME 13,324 36,538
INCOME (LOSS) BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 9,505 (57,589)
INCOME TAX BENEFIT 25,000
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM 34,505 (57,589)
EXTRAORDINARY ITEM-GAIN ON
EXTINGUISHMENT OF DEBT NET OF
INCOME TAX EFFECT OF $25,000 75,762
NET INCOME (LOSS) 110,267 (57,589)
DIVIDENDS ON PREFERRED
STOCK (46,657) (46,657)
NET INCOME (LOSS) ATTRIBUTABLE
TO COMMON STOCKHOLDERS $(63,610) $(104,246)
EARNINGS PER COMMON SHARE:
INCOME BEFORE EXTRAORDINARY
ITEM $ .00 $ (.01)
EXTRAORDINARY ITEM .01
NET INCOME (LOSS) $ .01 $ (.01)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,500,000 11,500,000
</TABLE>
See Notes to Financial Statements.
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Years Ended April 30,
<TABLE>
Preferred Common Capital in
Stock Stock Excess of
Shares Amount Shares Amount Par Value
<S> <C> <C> <C> <C> <C>
Balance April 30, 1994 538,066 $5,380 11,500,000 $11,500 $575,733
Preferred stock dividends (46,657)
Net loss
Balance April 30, 1995 538,066 $5,380 11,500,000 $11,500 $529,076
Preferred stock dividends (46,657)
Unrealized loss on
secuirities available
for sale
Net income
Balance April 30, 1996 538,066 $5,380 11,500,000 $11,500 $482,419
</TABLE>
<TABLE>
Unrealized Total
Loss on Accumulated Stockholders'
Securities Deficit Equity
<S> <C> <C> <C>
Balance April 30, 1994 $ $ (174,098) $ 418,515
Preferred stock dividends (46,657)
Net loss (57,589) (57,589)
Balance April 30, 1995 $ (231,687) $ 314,269
Preferred stock dividends (46,657)
Unrealized loss on securities
available for sale (16,000) (16,000)
Net income 110,267 110,267
Balance April 30, 1996 (16,000) $ (121,420) $ 361,879
</TABLE>
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended April 30, 1996 and 1995
<TABLE>
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 110,267 $ (57,588)
Adjustments to reconcile net loss
to net cash from operating activities:
Depreciation 7,781 38,919
Gain on foreclosure of property (100,762) (4,575)
Change in assets and liabilities:
(Increase) decrease in:
Interest receivable 3,013
Prepaid expenses and deposits 2,608 7,046
Increase (decrease) in:
Accounts payable and accrued expenses (7,772) 54,876
Security deposits held (3,885) (3,635)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 8,237 38,056
CASH FLOW FROM INVESTING
ACTIVITIES:
Purchase of marketable securities (144,053)
Retirement of property and equipment 1,385
Issuance of notes receivable (416,000)
Repayments on notes receivable 236,000 200,000
NET CASH USED BY INVESTING ACTIVITIES (91,947) (214,615)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid to preferred shareholder (46,657) (46,657)
Increase in notes payable 240,000
Repayment of real estate loans and mortgages
NET CASH PROVIDED BY
FINANCING ACTIVITIES (46,657) 189,751
NET INCREASE IN CASH 53,527 13,192
CASH, BEGINNING 21,597 8,405
CASH, ENDING $ 75,124 $ 21,597
</TABLE>
See Notes to Financial Statements
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 1996 and 1995
(Continued)
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
INTEREST $39,867 $85,275
INCOME TAXES $ - $ -
Noncash Investing and Financing Activities:
Foreclosure of property reduced mortgage debt by $614,673 and
$72,894 and reduced property net book value by $513,911 and $68,299 in
the years ended April 30, 1996 and 1995, respectively.
Marketable securities were acquired for a note receivable for
$450,000 in the year ended April 30, 1996.
See Notes to Financial Statements
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business Activity
Forme Capital, Inc. (Forme or the Company) was incorporated as a
Delaware corporation in 1986. Through September 10, 1993, Camelot
Corporation ("Camelot"), a company affiliated with the Registrant's
president, owned 80% of the Company's outstanding common shares. In
September 1993, Camelot sold all of its restricted common shares of
Forme to a related party.
The Company conducts its rental real estate operations, in
Dallas, Texas primarily through its wholly-owned subsidiary, Forme
Properties, Inc., a real estate investment and management company.
The Company evaluates its renters' creditworthiness and generally
requires a security deposit. In March 1989, the Company formed Forme
Joint Venture (the `Venture'), with an unrelated party to invest in
real estate properties. The Company owned a 7.27% interest in
Venture. In October 1989, Camelot purchased the unrelated venturer's
interest in the Venture. In April 1993, the Company acquired
Camelot's interest in Venture. As of April 30, 1993, the Company owns
100% of the interest in the Venture.
Principles of Consolidation
The consolidated financial statements include the accounts of
Forme and its subsidiaries. Significant intercompany accounts and
transactions have been eliminated.
<PAGE>
Property and Equipment
Property and equipment are carried at cost. Major additions and
betterments are capitalized while replacements and maintenance and
repairs that do not improve or extend the life of the respective
assets are expensed. When property is retired or otherwise disposed
of, the related costs and accumulated depreciation and amortization
are removed from the accounts and any gain or loss is reflected in
operations.
Depreciation and amortization of property and equipment are
calculated on the straight-line method over the following estimated
useful lives:
Estimated
Useful Lives
Buildings 27.5 - 31.5 Years
Furniture, fixtures and equipment 5 - 7 Years
Investments
The Company's marketable securities are classified as available
for sale. The securities are reported at fair market value and gains
and losses from changes in fair value are included in net income in
the period of change. The average cost method is used to determine
realized gains and losses.
Loss Per Share
Loss per common share is computed on the basis of the weighted
average number of common shares outstanding during the respective
periods. Stock options are antidilutive and are not included in the
weighted average common shares as common stock equivalents.
Statements of Cash Flows
For purposes of reporting cash flows, the Company considers cash
and certificates of deposit with original maturities of three months
or less to be cash equivalents.
Revenue Recognition
Revenue consists of rental income and security deposit
forfeitures. Rental income and security deposit forfeitures are
recognized as they are earned.
Use of Estimates
The preparation of financial statements is conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts 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 could differ
from those estimates.
<PAGE>
NOTE 2 - NOTES RECEIVABLE
The Company had loaned a total of $686,000 to Camelot secured by
receivables and all of the unpledged assets of Camelot. The notes
bore interest at 8% and were due on demand. Approximately $13,000 and
$36,000 is included in interest income for the years ended April 30,
1996 and 1995. The Company received payments totaling $236,000 and
$200,000 during the years ended April 30, 1996 and 1995, respectively.
Also during the year ended April 30, 1996, the Company acquired
600,000 shares of Camelot in exchange for the remaining $450,000.
NOTE 3 - INVESTMENTS IN MARKETABLE EQUITY SECURITIES
Unrealized gains and losses of marketable securities available
for sale as of April 30, 1996 are as follows:
Gross unrealized
Gains Losses
Tyrex Oil Co. $ - $16,000
The Company's investment is Camelot Corporation stock is
restricted and therefore not available to be traded. Therefore, the
unrealized gain on Camelot Corporation stock is not being recognized
in the financial statements.
NOTE 4 - MORTGAGES
During the year ended April 30, 1995, management determined that
certain rental properties were not being operated profitably. Also,
the net realizable value of those properties would be less than the
mortgages against them. As a result, the Company ceased making its
mortgage payments on those properties and allowed the mortgagors to
foreclose on the properties.
During the year ended April 30, 1995, one property had gone
through foreclosure proceedings. The Company has recognized a gain of
$4,575 as a result of the foreclosure. During the year ended April
30, 1996, the remaining properties had gone through foreclosure
proceedings. A gain of approximately $100,000 has been recognized.
NOTE 5 - NOTE PAYABLE AND LONG-TERM DEBT
Notes payable consist of the following at April 30, 1996:
Note payable to the brother of the President due on
demand, interest only at 8% payable monthly, secured
by second lien on 17770 Preston Road, Dallas,
Texas, and security interest in all assets.
Note payable to the father of the President due
April 11, 2014, interest only at 8% payable monthly,
secured by Deed of Trust on 17770 Preston Road,
Dallas, Texas. $100,000
$490,000
Less Current Portion 390,000
$100,000
<PAGE>
Approximately $40,000 and $21,500 is included in interest expense
for related interest on the above notes for the years ended April 30,
1996 and 1995, respectively.
NOTE 6 - INCOME TAXES
The Company and its wholly-owned subsidiaries file a consolidated
Federal income tax return for the period September 11, 1993 through
April 30, 1994. Prior to September 11, 1993 (see Note 1), the Company
and its wholly-owned subsidiaries filed a consolidated Federal income
tax return with Camelot Corporation. The Company has had no current
State or Federal Income Tax expense for the years ended April 30, 1996
and 1995.
The Company adopted, effective for the year ended April 30, 1994,
the Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". Under the asset and liability approach specified
by SFAS No. 109, deferred tax assets and liabilities are determined
based on the difference between financial statement and tax bases of
assets and liabilities as measured by the currently enacted tax rates.
Deferred tax expense or benefit is the result of the changes in
deferred tax assets and liabilities.
Deferred income taxes arise from the temporary differences
between financial statement and income tax recognition of net
operating losses and unrealized gains and losses of marketable
securities.
The components of deferred taxes in the accompanying balance
sheets are summarized below:
Deferred tax assets arising from:
Net operating loss carryover $25,000
Unrealized loss on securities 4,000
Less Valuation Allowance (29,000)
________
Deferred taxes - net $ -
========
At April 30, 1996 , the Company has approximately $100,000 of
unused Federal net operating loss carryforwards, which expire in the
years 2003 through 2009.
NOTE 7- STOCKHOLDERS' EQUITY
On September 10, 1993, the Company issued 466,571 shares of
Series C Preferred Stock to Camelot in exchange for two office
buildings with a book value of $466,571.
In December 1993, the wife of the President of the Company
purchased 5,250,000 shares of common stock of the Company for $41,015.
The Company is authorized to issued 100,000,000 shares of
preferred stock in series with rights and privileges as designated by
the board of directors.
<PAGE>
As of April 30, 1994, the Company had designated three classes of
preferred stock. The first class, designated as Series A, 10% Non-
cumulative Preferred Stock, has 21,495 shares outstanding at April 30,
1994. The second class, designated as Series B, 10% Non-cumulative
Preferred Stock, has 50,000 shares outstanding at April 30, 1994. The
third class designated as Series C, 10% Non-cumulative Preferred stock
has 466,571 shares outstanding at April 30, 1994. Each series has a
stated par value of $.01 per share, has no voting rights, pay
dividends at the discretion of the board of directors, and has
priority for payment upon dissolution of the Company over the common
stock. All shares are held by Camelot Corporation.
On December 13, 1993, the Company issued stock options of
2,000,000 shares of its common stock to the President of the Company
expiring ten years from the date of grant at an exercise price of
$0.15625. Stock options outstanding as of April 30, 1994 were
2,000,000.
NOTE 8 - RELATED PARTY TRANSACTIONS
During fiscal year 1995 and 1996, a company affiliated with the President
of the Company provided the Company with management and other services
valued at $67,000 and $20,000 respectively. These fees were paid in cash
and are included in general and administrative expense. The President and
Corporate Secretary of the Company are employees of an affiliate and
receive no compensation from the Company.
During the fiscal year 1994, the Company leased a 10,000 square
foot office building to Camelot under a five year lease at $6,667 per
month beginning September 10, 1993 through September 10, 1998. Rental
income was approximately $57,800 for 1994, 41% of the Company's rental
income. The lease included the following terms and conditions:
1. The Company has an option to buy Camelot's furniture and
equipment located on the premises at Camelot's book value during the
term of the lease.
2. The Company has a ten-year option to purchase 2,000,000
restricted common shares of Camelot at an exercise price of $0.625
which includes piggyback rights.
3. Rental payments automatically increase to 150% of prevailing
market rates at the time Mr. Wettreich ceases to be a director
of Camelot.
A company affiliated with the President provides services as a
securities transfer agent. For the years ended April 30, 1996, and
1995, the Company incurred expenses of $ 981 and $983 respectively.
During the fiscal year 1995 and 1996, the Company paid $46,657 in
preferred stock dividends to Camelot.
<PAGE>
NOTE 9 - ACQUISITIONS AND DISPOSITIONS
On September 10, 1993, the Company acquired from Camelot
Corporation, its former majority stockholder, a vacant office property
located at 17738 Preston Road, Dallas, Texas and an office property
occupied by Camelot located at 17770 Preston Road, Dallas, Texas. The
consideration was Camelot's book value of $466,571, payable by the
issuance by Registrant of 466,571 10% Preferred Shares Series C.
On December 10, 1993, Registrant sold 17738 Preston Road for
$258,000 to an unaffiliated party, and net profit in excess of book
value in the amount of $30,810 was paid to Camelot as agreed between
the parties in the original contract of sale. Registrant has received
net cash of $202,636 from the sale.
Item 8. Disagreements on Accounting and Financial Disclosure
A Form 8-K was filed on July 11, 1995 reflecting a change in
accountants from Lane Gorman Trubitt, L.L.P., to Larry O'Donnell, CPA,
P.C. There were no disagreements on any matter of accounting
principle or financial statement disclosure.
<PAGE>
PART III
Item 9. Directors and Executive Officers of the Registrant
The following persons serve as Directors and/or Officers of the
Registrant:
<TABLE>
Name Age Position Period Served Term Expires
<S> <C> <C> <C> <C>
Daniel Wettreich 44 President, December 1986 Next Annual
Treasurer, Meeting
Director
Jeanette Fitzgerald 35 Director, January 1991 Next Annual
Secretary Meeting
</TABLE>
Daniel Wettreich
Daniel Wettreich is Chairman, President and Director of the
Company since December 1986. He is also a Director and Officer of all
its subsidiaries. Since September 1988, he has been the Chief
Executive Officer, President and Director of Camelot Corporation(1), a
NASDAQ listed public company in CD-ROM software. Since 1981, he has
been the President and Director of Wettreich Financial Consultants,
Inc., a financial consulting company. Additionally, he currently
holds directors positions in the following public companies Danzar
Investment Group, Inc., Malex, Inc., Adina, Inc., and Tussik, Inc.,
which are dormant companies seeking merger opportunities. In July
1993, he was appointed a Director of Goldstar Video Corporation(2)
following an investment by Camelot. From January 1985 to February
1988 he was a founding director of Phoenix Network, Inc., a public
telecommunications company listed on the American Stock Exchange.
Mr. Wettreich has a Bachelor of Arts in Business Administration from
the University of Westminister, London, England.
Jeanette P. Fitzgerald
Jeanette Fitzgerald is the Secretary and a Director since January
1991. She is also a director and secretary of the Company's
subsidiaries. She is a member of the State Bar of Texas and the
Business Law and Oil, Gas and Mineral Law sections. She is also the
Corporate Secretary and Director of Wettreich Financial Consultants,
Inc. She is also Vice President and General Counsel and a Director of
Camelot Corporation(1). Further, she is a Director of Tussik, Inc.,
Malex, Inc., Adina, Inc., and Danzar Investment Group, Inc., which are
public companies. In July 1993, she was appointed a Director of
Goldstar Video Corporation(2) following an investment by Camelot. She
graduated from Texas Tech University School of Law receiving both a
Doctorate of Jurisprudence and a Masters of Business Administration in
May 1986. Previous to that, she graduated from the University of
Michigan with a Bachelors of Business Administration in December 1982.
<PAGE>
(1) A subsidiary of Camelot Corporation, Camelot Entertainment filed
Chapter 7 liquidation in January, 1995.
(2) Goldstar Video Corporation filed for protection from creditors
pursuant to Chapter 11 in October, 1993, the proceeding was converted to a
liquidation proceeding and has since closed.
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 year ended April 30, 1996. No
individual officer received compensation exceeding $100,000; no
bonuses were granted to any officer, nor was any compensation
deferred.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
<S> <C> <C> <C> <C>Other
Name & Principal Year Salary Bonus Annual
Position Compensation
Daniel Wettreich 1996 - - -
Chairman and 1995 - - -
CEO (1)
Jeanette Fitzgerald 1996 - - -
Vice President, 1995 - - -
General Counsel and
Secretary(1)
</TABLE>
<TABLE>
Long Term Compensation
Awards Payouts
Restricted
Stock Options LTIP All other
Year Award(s) /SARs Payouts Compensation
<S> <C> <C> <C> <C> <C>
Daniel Wettreich 1996 - - - $ 20,000(1)
Chairman and 1995 - - - 67,000(1)
CEO(1)
Jeanette Fitzgerald 1996 - - - 20,000(1)
Vice President, 1995 - - - 67,000(1)
General Counsel and
Secretary(1)
</TABLE>
(1) Daniel Wettreich and Jeanette Fitzgerald, Directors and Officers
of Registrant, are employees of a company affiliated with Mr.
Wettreich, which company provided Registrant with management services
and was paid $67,000 for the year ended April 30, 1995, and $20,000
for the year ended April 30, 1996.
<PAGE>
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.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth as of July 18, 1996 information
known to the management of the Company concerning the beneficial
ownership of Common Stock by (a) each person who is known by the
Company to be the beneficial owner of more than five percent of the
shares of Common Stock outstanding, (b) each director at that time, of
the Company (including subsidiaries) owning Common Stock, and (c) all
directors and officers of the Company (including subsidiaries) as a
group (2 persons).
<TABLE>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
<S> <C> <C> <C>
Daniel Wettreich 12,250,000 (1)(2) 90.7%
17770 Preston Road
Dallas, Texas 75252
Jeanette P. Fitzgerald 14,201 0%
17770 Preston Road
Dallas, Texas 75252
All Officers and Directors 12,264,201 (1)(2) 90.8%
as a group (2 persons)
Zara Wettreich,
Separate Property 10,250,000 75.9%
17770 Preston Road
Dallas, Texas 75252
</TABLE>
(1) 10,250,000 of these shares are in the name of Zara Wettreich,
Separate Property. Mr. Wettreich has disclaimed any
beneficial interest in the shares owned by his wife.
(2) Includes an option to purchase 2,000,000 shares granted to
Daniel Wettreich, which option is not exercised.
Item 12. Certain Relationships and Related Transactions
Registrant is the former parent company of Malex, Inc. and Adina,
Inc., and has agreed with the Wettreich Heritage Trust an affiliate of
the President that upon any disposition of control (i.e. 50%) of the
stock held by the Trust in Malex and Adina, that the Trust will repay
200% of Registrant's out-of-pocket costs incurred in effecting the
distribution of those companies, not to exceed the cash consideration
received by the Trust.
<PAGE>
During fiscal years 1995 and 1996, a company affiliated with the
President of the Company provided the Company with management and
other services valued at $67,000 and $20,000, respectively. These
fees were paid in cash and are included in general and administrative
expense. The President and Corporate Secretary of the Company are
employees of the affiliate and receive no compensation from the
Company.
During the fiscal year 1994, the Company leased a 10,000 square
foot office building to Camelot under a five year lease at $6,667 per
month beginning September 10, 1993 through September 10, 1998. Rental
income was approximately $57,800 for 1994, 41% of the Company's rental
income. The lease included the following terms and conditions:
1. The Company has an option to buy Camelot's furniture
and equipment located on the premises at Camelot's book value during
the term of the lease.
2. The Company has a ten-year option to purchase 2,000,000
restricted common shares of Camelot at an exercise price of $0.625
which includes piggyback rights.
3. Rental payments automatically increase to 150% of
prevailing market rates at the time Mr. Wettreich ceases to be a
director of Camelot.
A company affiliated with the President provides services as a
securities transfer agent. For the years ended April 30, 1995, and
1996 the Company incurred expenses of $983 and $981 respectively.
During the fiscal year 1995 and 1996, the Company paid $46,657
and $46,657 respectively, in preferred stock dividends to Camelot.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits included herein:
3(a) Articles of Incorporated by reference to Registration
Incorporation Statement filed on April 10, 1987, File
No.33-10894
3(b) ByLaws Incorporated by Reference as immediately
above
22(a) Subsidiaries
(b) Reports on Form 8-K:
None.
EXHIBIT 22(a)
SUBSIDIARIES
Forme Management, Inc. 100%
Forme Properties, Inc. 100%
<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 n its behalf by the undersigned, thereunto duly
authorized.
FORME CAPITAL, INC.
(Registrant)
By: /s/ Daniel Wettreich
President
Date: July 31, 1996
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/ Daniel Wettreich
Director; President (Principal
Executive Officer); Treasurer
(Principal Financial Officer)
Date: July 31, 1996
By: /s/ Jeanette P. Fitzgerald
Director
Date: July 31, 1996
<PAGE>
FORME CAPITAL, INC.
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
APRIL 30, 1994
<TABLE>
Costs
Capitalized
Subsequent
Building & To Building & Total
Description Location Land Improvements Acquisition Land Improvements (a)
<S> <C> <C> <C> <C> <C> <C> <C>
Dallas, TX Scottsdale $5,256 $ 80,225 $ 2,674 $5,256 $ 82,899 $88,155
Dallas, TX Quail Run 5,261 76,693 - 5,261 76,693 81,954
Dallas, TX Brush Creek 5,022 72,466 2,149 5,022 74,615 79,637
Dallas, TX Varnet 5,885 58,074 - 5,885 58,074 63,959
Dallas, TX Devonshire 6,365 63,869 3,775 6,365 67,644 74,009
Dallas, TX Kingswood 6,019 60,990 - 6,019 60,990 67,009
Dallas, TX Ferris
Creek 23,000 148,257 4,305 23,000 152,562 175,562
Dallas, TX North Park 14,100 86,886 - 14,100 86,886 100,986
Dallas, TX Preston
17770 21,200 242,735 - 21,200 242,735 263,935
$92,108 $890,195 $ 12,903 $92,108 $903,098 $995,206
</TABLE>
<TABLE>
Life (Yrs.) on
which Depreciation
in Latest Statement
Accumulated Date of Date of Operations
Description Location Depreciation(b) Construction Acquired is Computed
<S> <C> <C> <C> <C> <C>
Dallas, TX Scottsdale $ 16,433 1955 26-May-89 27.5
Dallas, TX Quail Run 11,624 1961 24-Apr-90 27.5
Dallas, TX Brush Creek 11,492 1978 30-Apr-90 27.5
Dallas, TX Varnet 8,396 1956 30-May-90 27.5
Dallas, TX Devonshire 10,005 1956 21-Sep-90 27.5
Dallas, TX Kingswood 8,704 1962 26-Sep-90 27.5
Dallas, TX Ferris Creek 36,561 1977 05-Apr-90 27.5
Dallas, TX North Park 17,663 1969 22-Nov-90 27.5
Dallas, TX Preston 17770 7,200 1981 10-Sep-93 31.5
</TABLE>
(a) Reconciliation of real estate carrying value of three years ended
April 30, 1994 is as follows:
<TABLE>
<C> <C> <C>
<S> 1994 1993 1992
Balance at beginning of the year $ 731,271 $ 469,725 $ 465,917
Additional during the year - 466,571 261,546 3,808
Acquisitions (202,636) - -
Deductions during the year - - -
Balance at end of year $ 995,206 $ 731,271 $ 469,725
</TABLE>
<PAGE>
(b) Reconciliation of accumulated depreciation carrying value for the
three years ended April 30, 1994 is as follows:
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
Balance at beginning of the year $ 92,712 $ 64,310 $ 37,165
Additional during the year - 35,398 28,402 27,145
Acquisitions - - -
Deductions during the year - - -
Balance at end of year $ 128,110 $ 92,712 $ 64,310
</TABLE>
Note: During the year ending April 30, 1992, the total additions of
$247,235 were acquired through equity financing and no additional debt was
incurred. There was one acquisition in 1993 with an affiliate for $174,190
and an acquisition in 1994 for $466,571 financed through the issuance of
preferred stock. The properties are carried at the same amount for
financial statement and Federal Income Tax purposes.
<PAGE>
