U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
x Quarterly report under Section 13, or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended October 31,1998
Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from ________________ to
_________________
Commission file number 33-10894
FORME CAPITAL, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 75-2180652
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2415 Midway Suite 115, Carrollton, Texas 75006
(Address of Principal Executive Offices)
(972) 818-3443
(Issuer's Telephone Number, Including Area Code)
(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 past 90 days.
x Yes No
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.
Yes 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:
11,500,000, common stock, $.001 par value.
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FORME CAPITAL, INC. AND SUBSIDIARIES
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) 7
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 7
Part II OTHER INFORMATION 9
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FORME CAPITAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
ASSETS
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October 31, 1998 April 30, 1998
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $ 162,388 $ 126,611
Available for sale securities including allowance for
change in market value of $-0- on October 31, 1998
and $500,000 on April 30, 1998 331,757 -
578,053
Prepaid expenses and deposits 1,283 1,283
Loan Receivable - related party 215,000
Loan Receivable 40,000 7,000
Accounts Receivable (349) -
Total current assets 750,079 134,894
PROPERTY AND EQUIPMENT - at cost:
Land - 21,200
Buildings and improvements - 241,350
Furniture, fixtures and equipment 2,700 -
2,700 262,550
Less accumulated depreciation - (41,333)
2,700 221,211
OTHER ASSETS
Non marketable securities 249,000
TOTAL ASSETS $1,001,779 $356,111
</TABLE>
See accompanying notes to these consolidated financial statements.
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FORME CAPITAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
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October 31, 1998 April 30, 1998
(Unaudited) (Audited)
CURRENT LIABILITIES:
Account payable $ 4,952 $ -
Accounts payable - related parties 4,000 4,000
Accrued expenses 18,315 9,200
Total current liabilities 27,267 13,200
LONG-TERM DEBT - related party - 100,000
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
100,000,000 shares authorized:
21,495 shares of Series A issued
and outstanding 215 215
50,000 shares of Series B issued
and outstanding 500 500
466,571 shares of Series C issued
and outstanding 4,665 4,665
390,000 shares of Series D issued
and outstanding 3,900 3,900
249 shares of Series W issued
and outstanding 2 -
Common stock $.001 par value, 25,000,000 shares
authorized 11,500,000 shares issued
and outstanding 11,500 11,500
Capital in excess of par value 1,070,853 775,205
Retained earnings (deficit) (117,122) (53,075)
Unrealized gain (loss) on
marketable securities - (500,000)
974,513 242,911
$1,001,779 $356,111
</TABLE>
See accompanying notes to these consolidated financial statements.
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FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended
October 31,
1998 1997
REVENUES:
Rental income $ -0- $ 30,342
Sale of Investment 787,985 -
Total Revenue 787,985 30,342
COSTS AND EXPENSES:
Net cost of investment 309,251 -
General and administrative 133,032 4,748
Depreciation 1,431 1,946
Interest expense 1,956 4,650
445,670 11,344
INCOME (LOSS) FROM OPERATIONS 342,315 19,998
OTHER INCOME:
Interest income 1,454 79
Other Income (expense) 20,083
NET PROFIT (LOSS) FROM OPERATIONS 343,769 1,006
DIVIDENDS ON PREFERRED STOCK (4,800) (11,665)
NET PROFIT (LOSS) ATTRIBUTABLE
TO COMMON STOCKHOLDERS $338,969 $(12,671)
NET PROFIT (LOSS) PER COMMON SHARE $ .029 $ (.0011)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,500,000 11,500,000
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Six Months Ended
October 31,
1998 1997
REVENUES:
Rental income $ 0 50,342
Sale of Investment 787,985 -
Total Revenue 787,985 50,342
COSTS AND EXPENSES:
Net cost of investment 309,251 -
General and administrative 140,491 10,258
Depreciation 5,322 3,891
Interest expense 3,289 14,343
458,353 28,492
INCOME (LOSS) FROM OPERATIONS 329,632 21,850
OTHER INCOME:
Interest income 2,400 210
Other Income (expense) - (20,083)
NET PROFIT (LOSS) FROM OPERATIONS 332,032 1,977
DIVIDENDS ON PREFERRED STOCK (4,800) (23,329)
NET PROFIT (LOSS) ATTRIBUTABLE
TO COMMON STOCKHOLDERS $327,232 $(21,351)
NET PROFIT (LOSS) PER COMMON SHARE $ .028 $ (.0019)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,500,000 11,500,000
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Six Months Ended
October 31
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit $327,232 $ 1,977
Adjustments to reconcile net profit
to net cash from operating activities:
Depreciation and amortization 5,322 3,891
(Gain) loss on disposal of assets (478,733) 20,082
Change in assets and liabilities, net of
effects from purchase of subsidiaries:
Notes Payable (100,000) (390,000)
(Increase) decrease in prepaid expenses
and deposits - (29)
Increase (decrease) accounts payable
and accrued expenses 14,067 1,557
Accounts Receivable 349 (17,008)
Net cash provided by operating
activities 239,592 (379,530)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,700) (10,507)
Purchase of marketable securities (331,757) (43,116)
Proceeds from sale of marketable securities 487 47,636
Proceeds from sale of investment 787,985 -
Net cash from investing activities 454,015 (5,987)
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of Preferred Stock - 390,000
Dividends paid to preferred shareholder (4,800) (23,329)
Loans to unrelated party (40,000) -
Loans to related party (215,000) -
Net cash used by financing activities (250,200) (11,664)
NET INCREASE (DECREASE) IN CASH 35,777 (13,978)
CASH AT BEGINNING OF PERIOD 126,611 (18,846)
CASH AT END OF PERIOD $162,388 $ 20,191
SUPPLEMENTAL INFORMATION:
Cash paid for interest $3,289 $ 14,343
Cash paid for taxes $ - $ -
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NONCASH INVESTING AND FINANCING ACTIVITIES
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Six Months Ended
October 31,
1998 1997
During the period under review,
Registrant issued 249 Preferred Shares, Series W
valued at $10,000 each in exchange for Wincroft,
Inc. restricted common stock 249,000
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED 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.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) 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 10-KSB filing for the year ended April 30,
1998.
Item 2. Management Discussion and Analysis of Financial Condition
and Results of Operations
As noted in the annual report, the office rental building was sold at
the end of September, 1998. Total assets have increased to
$1,001,779 as compared to $356,111 at April 30, 1998, as a result of
the proceeds from the sale of the building. The three months ended
October 31, 1998 showed a profit of $338,969 compared to $(12,671)
the previous year. The gain was due primarily to the sale of the
building. The Registrant is now seeking other business opportunities
and in August the Registrant hired four individuals and signed a
twelve month lease for approximately 5000 square feet of office
premises. In September the Registrant accepted a subscription
agreement from The Wettreich Children's Trust, a trust of which the
President's children are beneficiaries, for 249 Preferred Shares,
Series W with payment for such shares being 125,000 restricted common
shares in Wincroft, Inc. Wincroft, Inc. is publicly traded with a
market value at the time of approximately $2.00 per share.
Liquidity and Capital Resources
The Registrant's present needs for liquidity principally relates to
its obligations for its working capital and the minimal requirements
for record keeping. Since August, 1988, the Registrant has four
employees and signed a short term lease for premises. Management
believes that the Registrant has sufficient liquidity for its needs
for the next twelve months, but Registrant will need to develop
operations, internally or externally to fund its expenses. At
present the Registrant has no material sources for external liquidity
other than loans from affiliated companies or its Directors.
Year 2000 Readiness Disclosure
The Company is aware of the issues associated with the programming
code in existing computer systems as the year 2000 approaches. The
issue is whether computer systems will properly recognize date-
sensitive information when the year changes to 2000. Management is
currently assessing the year 2000 compliance issue. The Company will
expend necessary resources to assure that its computer systems are
reprogrammed in time to deal effectively with transactions in the
year 2000 and beyond. The Company presently believes that, with
modifications to existing software and conversions to new software,
the Year 2000 issue will not pose significant operational problems
for the Company's computer systems as so modified, converted or
replaced. The Company also believes that the cost of conversion,
modification or replacement will not have a material adverse effect
on the Company's financial condition or results of operations.
However, if such modifications and conversions are not completed
timely or third parties on which the Company relies are unable to
address this issue in a timely manner, the Year 2000 issue may have a
material impact on the operations of the Company.
<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 April 10, 1987;
File No. 33-10894
(2) Bylaws: Incorporated by reference as
immediately above.
(b) Reports on Form 8-K
None
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.
FORME CAPITAL, INC.
(Registrant)
By: /s/ Daniel Wettreich
DANIEL WETTREICH, PRESIDENT
Date: December 14, 1998
[ARTICLE] 5
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[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] APR-30-1998
[PERIOD-END] OCT-31-1998
[CASH] 162388
[SECURITIES] 331757
[RECEIVABLES] 254651
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 750079
[PP&E] 2700
[DEPRECIATION] 0
[TOTAL-ASSETS] 1001779
[CURRENT-LIABILITIES] 27267
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 9282
[COMMON] 11500
[OTHER-SE] 210392
[TOTAL-LIABILITY-AND-EQUITY] 1001779
[SALES] 787985
[TOTAL-REVENUES] 787985
[CGS] 445670
[TOTAL-COSTS] 445670
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 3289
[INCOME-PRETAX] 327232
[INCOME-TAX] 327232
[INCOME-CONTINUING] 327232
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 327232
[EPS-PRIMARY] .028
[EPS-DILUTED] .028
</TABLE>
