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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 January 31,1999
o 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 Road, Suite 115, Carrollton, Texas 75006
(Address of Principal Executive Offices)
(972) 733-3005
(Issuer's Telephone Number, Including Area Code)
17770 Preston Road, Dallas, Texas 75252
(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 o 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.
o Yes o 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.
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 4
Operations
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
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
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ASSETS
January 31, 1999 April 31,1998
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $7,480 $ 126,611
Prepaid expenses and deposits 1,283 1,283
Loans receivable-related party 400,000 7,000
Loan receivable 100,000 -
Total current assets 508,763 134,894
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
Available for sale on securities,
including allowance for change
in market value of $-0- on
January 31, 1999 and $500,000 on
April 30, 1998 26,754 -
Investments-Art 63,701 -
Non marketable securities 249,000 -
339,455 -
TOTAL ASSETS $850,918 $ 356,111
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ITEM 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 1,338 -
Accounts payable-related parties - 4,000
Accrued expenses - 9,200
Taxes payable 5,805 -
Total current liabilities 7,143 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 4,666 4,666
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 1,070,859 775,205
Unrealized loss on securities
available for sale - (500,000)
Retained Earnings (247,867) (53,075)
$ 843,775 $242,911
$ 850,918 $356,111
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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
January 31,
1999 1998
REVENUES:
Rental income $ -0- $ 51,025
Sale of Investment -0- -0--
Total Revenue -0- 51,025
COSTS AND EXPENSES:
Net cost of investment - -
General and administrative 140,259 40,864
Depreciation - 1,945
Interest expense - 2,000
140,259 44,809
INCOME (LOSS) FROM OPERATIONS (140,259) 6,216
OTHER INCOME:
Interest income 697 245
Other Income (expense) 20,082
NET PROFIT (LOSS) FROM OPERATIONS (139,562) 26,543
DIVIDENDS ON PREFERRED STOCK (4,800) (11,664)
NET PROFIT (LOSS) ATTRIBUTABLE
TO COMMON STOCKHOLDERS $(144,362) $ 14,879
NET PROFIT (LOSS) PER COMMON SHARE $(.013) $ .001
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,500,000 11,500,000
</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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Nine Months Ended
January 31,
1999 1998
REVENUES:
Rental Income - 101,367
Sale of Investment 787,985 -
787,985 101,367
COSTS AND EXPENSES:
Net cost of investment 309,251
General and administrative 280,750 51,122
Depreciation 5,322 5,836
Interest expense 3,289 16,343
598,612 73,301
PROFIT (LOSS) FROM OPERATIONS 189,373 28,066
OTHER INCOME:
Interest income 3,097 455
NET PROFIT (LOSS) FROM OPERATIONS 192,468 28,521
DIVIDENDS ON PREFERRED STOCK (9,600) (34,993)
NET PROFIT (LOSS) ATTRIBUTABLE
TO COMMON STOCKHOLDERS $ 182,868 $ ( 6,472)
NET PROFIT (LOSS) PER COMMON SHARE $ .016 $ -0-
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,500,000 11,500,000
</TABLE>
See accompanying notes to these consolidated financial
statements.
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FORME CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Nine Months Ended
January 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit 182,868 (6,472)
Adjustments to reconcile net profit
to net cash from operating activities:
Depreciation and amortization 5,322 5,836
(Gain) Loss on disposal of assets (478,733) 20,082
Change in assets and liabilities, net of
effects from purchase of subsidiaries:
(Increase) decrease in prepaid expenses
and deposits - (1,566)
Increase (decrease) accounts payable and
accrued expenses (6,057) 37,885
Net cash (used) provided by operating
activities (296,600) (354,317)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase (decrease) in Note payable (100,000) (390,000)
(Increase) decrease in loan receivable (493,000) -
Purchase of Property and Equipment (2,700) (10,507)
Sale(Purchase)of marketable securities (26,754) 7,946
Sale (Purchase) of investment art (63,701) -
Proceeds from sale of investment 787,985 __________
Net cash(used)provided by Investing
activities 101,830 7,936
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid to preferred shareholder (9,600) (34,993)
Sale of Preferred Stock - 390,000
Net cash(used)provided by financing
activities (9,600) 355,007
NET INCREASE (DECREASE) IN CASH (119,131) (8,636)
CASH AT BEGINNING OF PERIOD 126,611 20,191
CASH AT END OF PERIOD 7,480 11,555
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 3,291 $29,592
Cash paid for taxes $ 40,081 $11,148
</TABLE>
See accompanying notes to these consolidated financial
statements.
Forme Capital, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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NONCASH INVESTING AND FINANCING ACTIVITIES
Nine Months Ended
January 31,
1999 1998
During the period ending January 31,1999
the Registrant sold 249 Series W preferred Shares
to an affiliate of the President in exchange
for 249,000 restricted securities in
Wincroft, Inc. $249,000
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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 $850,918 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 January 31, 1998 showed a
loss of $144,362 compared to a profit of $14,879 the
previous year. The loss was primarily due to the cost of
salaries. The Registrant is now seeking other business
opportunities. In September 1998, 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, 1998,
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.
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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: March 15, 1999
[ARTICLE] 5
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[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] APR-30-1999
[PERIOD-END] JAN-31-1999
[CASH] 7480
[SECURITIES] 26754
[RECEIVABLES] 500000
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 508763
[PP&E] 2700
[DEPRECIATION] 0
[TOTAL-ASSETS] 850918
[CURRENT-LIABILITIES] 7143
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 9283
[COMMON] 11500
[OTHER-SE] 822992
[TOTAL-LIABILITY-AND-EQUITY] 850918
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 598612
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 3289
[INCOME-PRETAX] 182868
[INCOME-TAX] 182868
[INCOME-CONTINUING] 182868
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 182868
[EPS-PRIMARY] .016
[EPS-DILUTED] .016
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