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 April 30, 2000
[ ] 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.)
6959 Arapaho, Suite 122, Dallas, Texas 75248
(Address of Principal Executive Office) (Zip Code)
(Former Address of Principal Executive Office) (Zip Code)
(972) 386-8907
(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
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]
Issuer's revenues for its most recent fiscal year is $403,000.
As of July 27, 2000 the aggregate market value of the voting stock held by
non-affiliates was $1,000.
The number of shares outstanding of the Registrant's common stock $0.001
par value was 3,028,571 at July 27, 2000.
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. During the period 1989 to 1998 Registrant was a real
estate company, and from 1999 to 2000 Registrant invested in fine art. On
April 10, 2000, Registrant sold its artwork and associated assets to a
company affiliated with its President, Daniel Wettreich. (See Item
6. Management's Discussion and Analysis of Financial Condition).
Registrant is now seeking an acquisition and/or merger
transaction, and is effectively a blind pool company.
Registrant has no operations or substantial assets, and intends to seek
out and obtain candidates with which it can merge or whose operations or
assets can be acquired through the issuance of common stock and possibly
debt. Existing shareholders of Registrant will, in all probability,
experience significant dilution of their ownership of Registrant and
should experience an appreciation in the net book value per share.
Management will place no restrictions on the types of businesses which
may be acquired. In determining the suitability of a combination
partner, Management will require that the business being acquired has a
positive net worth, that it show evidence of being well-managed, and
that its owners and management have a good reputation within the
business community.
Item 2. Properties
Registrant previously leased approximately 2,000 square feet of office
space in Dallas, Texas for a term of three years commencing June, 1999. On
April 10, 2000 Registrant assigned such lease to an affiliate of its
President, and now shares office space on an informal basis with that
affiliate.
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.
<PAGE>
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.
On May 24, 2000 an Information Statement was mailed to the
stockholders of Registrant in connection with action taken by the Board of
Directors and the holders of at least eighty percent (80%) of the
outstanding shares of the Company's Common Stock by Written Consent. The
Information Statement was furnished solely for the purpose of informing
stockholders, in the manner required under the Securities Exchange Act of
1934, as amended, of these corporate actions before they take effect. The
Company, as authorized by the necessary approvals of the board of directors
and stockholders owning at least eighty percent (80%) of the issued and
outstanding shares of Common Stock, adopted two amendments to the Company's
Certificate of Incorporation, as amended.
I. One for thirty-five reverse common stock split of the authorized and
outstanding common stock
II. Increasing the authorized common shares to 100,000,000
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 FCTL and the market for the stock has
been relatively inactive. The range of high and low bid quotations for the
quarters of the last two years are listed below. The quotations are taken
from the OTC Bulletin Board. They reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not necessarily represent
actual transactions.
Quarter Ending Low Bid High Bid
April 30, 1998 0.015625 0.25
July 31, 1998 0.015625 0.015625
October 31, 1998 0.015625 0.015625
April 30, 1999 0.015625 0.015625
July 31, 1999 0.00 1.125
October 31, 1999 0.00 1.125
January 31, 2000 0.00 1.125
April 30, 2000 0.00 1.125
As of July 27, 2000, there were approximately 520 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 with
none outstanding as at April 30, 2000. 21,495 shares of 10% Non-Cumulative
Preferred Stock, Series A were previously 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 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. On
September 31, 1997, the Company issued
<PAGE>
390,000 shares of 10% Non-Cumulative, Preferred Stock, Series D in exchange
for $390,000. In September 1998 the Company issued 249 Preferred Shares
Series W in exchange for 125,000 restricted common shares in Wincroft,
Inc., a public company. During the period, 258,000 Preferred Shares, Series
F were issued in exchange for artwork appraised at $258,000. During the
period ending April 2000, Registrant purchased for cancellation the 21,495
Series A Preferred, the 50,000 Series B Preferred, and the 466,571 Series C
Preferred were purchased for cancellation for par value of $.01 per share
from Camelot Corporation for $5,381. During the period, the 390,000 Series
D Preferred were purchased for cancellation by the issuance of 3,900 new
restricted common shares. On April 12, 2000, Registrant entered into an
agreement with the The Wettreich Children's Trust ("WCT"), a trust
affiliated with the President whereby it acquired 249 Preferred Shares
Series W and 258,000 Preferred Shares Series F for cancellation. The
consideration was the transfer to WCT of 566,337 10% Preferred Shares of
Forme Art Investments, Inc. and 134,000 common shares of Wincroft, Inc.
On January 31, 1991 formal control of the company changed from Zara
Wettreich, Separate Property to Camelot Corporation. On September 10,
1993, control of the Company reverted back to Zara Wettreich, Separate
Property from Camelot Corporation. On June 13, 2000, after the completion
of a 1 for 35 reverse stock split, control of the Company changed to Mick
Y. Wettreich who subscribed for 2,700,000 newly issued common shares for
par value.
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations
2000
During the financial period ended April 30, 2000, Management decided that
due to the limited financial resources of Forme it cannot effectively
pursue its art business, and on April 10, 2000, Forme Capital, Inc.
("Forme") entered into an agreement whereby it sold its artwork and
associated fixtures and equipment and all rights, title and interest to
the name and website victorian-paintings.com and the whole of the issued
and outstanding share capital of its non-trading subsidiary
victorian-paintings.com, Inc. to Forme Art Investments, Inc. ("FAI")
a company affiliated with its President, Daniel Wettreich. The
consideration was $1,322,922 payable $756,585 in cash and $566,337 by the
issuance to Forme by FAI of 566,337 10% preferred shares.
The transaction was valued at the cost of these assets to Forme, all of
which assets were acquired by Forme during the previous 18 months, such
asset purchases being financed primarily by loans from affiliates. The
cash consideration received by Forme was used to repay all outstanding
indebtedness of Forme.
Registrant is now seeking an acquisition and/or merger
transaction, and is effectively a blind pool company.
Registrant has no operations or substantial assets, and intends to seek
out and obtain candidates with which it can merge or whose operations or
assets can be acquired through the issuance of common stock and possibly
debt. Existing shareholders of Registrant will, in all probability,
experience significant dilution of their ownership of Registrant and
should experience an appreciation in the net book value per share.
Management will place no restrictions on the types of businesses which
may be acquired. In determining the suitability of a combination
partner, Management will require that the business being acquired has a
positive net worth, that it show evidence of being well-managed, and
that its owners and management have a good reputation within the
business community. Management intends to seek out business combination
partners by way of its business
<PAGE>
contacts, including possible referrals from the Registrant's
accountants and attorneys, and may possibly utilize the services of a
business broker.
It is the present expectation of the Management of Registrant that in
connection with any such merger or acquisition of operations or assets
that the Management of Registrant will be transferred to the new
controlling shareholders. The Management of Registrant intends to
negotiate covenants with any such company or controlling shareholders
that it/they will maintain Registrant's registration with the
Securities and Exchange Commission, comply with the terms of its
Articles of Incorporation and Bylaws in all respects, maintain and promote
an orderly market in Registrant's Common Stock and otherwise treat
Registrant's shareholders fairly.
Liquidity and Capital Resources
The Registrant's cash resources and liquidity are extremely limited.
The Registrant has no assets to use as collateral to allow the
Registrant to borrow, and there is no available external funding
source. If no combination partner can be found within twelve months,
Registrant will experience severe cash flow difficulties. Registrant's
principal needs for capital are for Securities and Exchange Commission
reporting requirements, bookkeeping and professional fees.
1999
The office rental building was sold at the end of September, 1998
resulting in a profit on the sale of $478,734. Total assets have
increased to $788,443 as compared to $356,111 at April 30, 1998, as a
result of the proceeds from the sale of the building. The period showed
a loss of $76,136 compared to $82,301 the previous year. The loss
was primarily due to loss on sale of securities and increased general and
administrative expenses.
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.
Registrant has commenced investing and trading in antique art, and
established a new subsidiary called victorian-paintings.com inc. to pursue
its strategy.
On March 15, 1999, the Company entered into an agreement whereby it
purchased artwork valued at $258,000 from Abuja Consultancy, Ltd. paying
for such purchase by the issuance of 258,000 Preferred Shares, Series
F. Such restricted shares are non-convertible, non-assessable, non-voting
and bear a yield of 5% per annum. The value of the artwork was
determined by a Certified member of the International Society of
Appraisers.
<PAGE>
Item 7. Consolidated Financial Statements
FORME CAPITAL, INC.
Index to Consolidated Financial Statements
Independent Auditor's Report F-1
Consolidated Balance Sheet F-2
Consolidated Statements of Operations and
Other Comprehensive Income F-3
Consolidated Statements of Changes in
Stockholders' Equity F-4
Consolidated Statements of Cash Flows F-5 to F-6
Notes to Consolidated Financial Statements F-7 to F-11
<PAGE>
Larry O'Donnell, CPA, P.C.
Telephone(303) 745-4545 2280 South Xanadu Way
Suite 370
Aurora, Colorado 80014
Independent Auditor's Report
Board of Directors and Stockholders
Forme Capital, Inc. and Subsidiaries
I have audited the accompanying consolidated balance sheet of Forme
Capital, Inc. and Subsidiaries as of April 30, 2000 and the related
consolidated statements of operations and other comprehensive income,
changes in stockholders' equity and cash flows for the years ended April
30, 2000 and 1999. 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 my 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 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 consolidated financial position of Forme
Capital, Inc. and Subsidiaries as of April 30, 2000 and the consolidated
results of their operations and their consolidated cash flows for the years
ended April 30, 2000 and 1999, in conformity with generally accepted
accounting principles.
Larry O'Donnell, CPA, P.C.
May 8, 2000
F-1
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
April 30, 2000
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 891
Total current assets $ 891
PROPERTY AND EQUIPMENT - at cost:
Furniture, fixtures and equipment -
Less accumulated depreciation -
-
TOTAL ASSETS $ 891
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued Expenses $ 3,000
Total current liabilities $ 3,000
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
100,000,000 shares authorized; nil
issued and outstanding -
Common stock $.001 par value,
25,000,000 shares authorized 11,503,900 shares
issued and outstanding 11,504
Capital in excess of par value 693,528
Retained Earnings (707,141)
(2,109)
$ 891
</TABLE>
See Notes to Financial Statements
F-2
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Other Comprehensive Income
Years ended April 30, 2000 and 1999
<TABLE>
<S> <C> <C>
2000 1999
Revenues
Consulting and Services $ 403,000 $ -
Costs and expenses
General and administrative 497,982 409,716
Depreciation 4,323
Interest 13,906 3,289
511,888 417,328
Income (loss) from operations (108,888)(417,328)
Other income (loss)
Sale of real estate investment 631,596
Interest income 15,336 14,964
Recognized (loss) on securities
available for sale (275,586) (514,163)
(260,250) 132,397
Net income (loss) (369,138) (284,931)
Other Comprehensive Income
Unrealized gains (losses) on securities
Loss realized 276,805 500,000
Unrealized losses (276,805)
276,805 223,195
Total comprehensive
income (loss) (92,333) (61,736)
Dividends on preferred stock 17,600 (14,400)
Total comprehensive income attributable to
common stockholders $ (109,933)$ (76,136)
Earnings per common share: $ (.01)$ (.01)
Weighted average common shares
outstanding 11,500,000 11,500,000
</TABLE>
See Notes to Financial Statements
F-3
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Years ended April 30, 2000 and 1999
<TABLE>
<S> <C> <C> <C> <C>
Preferred Common
Stock Amount Stock Amount
Shares Shares
Balance at 928,066 9,281 11,500,000 11,500
April 30,
1998
Preferred 249 2
stock issued
for
securities
Preferred 258,000 2,580
stock issued
for artwork
Loss
recognized
on
securities
Unrealized
loss on
securities
Preferred
stock
dividends
Net income ________ ______ __________ _______
for the year
Balance at 1,186,315 $11,863 11,500,000 $11,500
April 30,
1999
Common stock
exchanged (390,000) (3,900) 3,900 4
for
preferred
stock
Preferred
stock (796,315) (7,963)
exchanged
for artwork
and
securities
Preferred
stock
dividends
Loss
recognized
securities
Net income ________ ______ __________ _______
for the year
Balance at 11,503,900 $11,504
April 30,
2000
See Notes to Financial Statements
F-4
Capital Unrealized Accumulated
Increase Loss on Deficit
in excess Securities Shareholders'
of Par Equity
Value
Balance at 775,205 (500,000) (53,072) 242,914
April 30,
1998
Preferred 248,998 249,000
stock
issued for
securities
Preferred 255,420 258,000
stock
issued for
artwork
Loss 500,000 500,000
recognized
on
securities
Unrealized (276,805) (276,805)
loss on
securities
Preferred (14,400) (14,400)
stock
dividends
Net income _________ ________ (284,931) (284,931)
for the
year
Balance at $1,265,223 $(276,805) $(338,003) $673,778
April 30,
1999
Common
stock 3,896
exchanged
for
preferred
stock
Preferred
stock (557,995) (569,598)
exchanged
for artwork
and
securities
Preferred (17,600) (17,600)
stock
dividends
Loss 276,805 276,805
recognized
securities
Net income _________ ________ (369,138)
for the (369,138)
year
Balance at $693,524 $(707,741) $(2,115)
April 30,
2000
See Notes to Financial Statements
F-4
</TABLE>
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 2000 and 1999
<TABLE>
<S> <C> <C>
2000 1999
Cash Flows From Operating Activities
Net income $ (369,138) $(284,931)
Adjustments to reconcile net loss
to net cash from operating activities:
Depreciation 4,326
Gain on Sale of Property 275,586 (631,596)
Loss on securities 514,163
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 7,000
Prepaid expenses and deposits 1,283
Increase (decrease) in:
Accounts payable and accrued
Expenses (11,665) 1,465
Net Cash Provided (Used) by
Operating Activities (105,217) (388,290)
Cash Flows From Investing Activities
Proceeds from sale of property 848,922
Purchase of marketable securities (336,509)
Proceeds from sale of marketable securities 1,219 294,541
Purchase of art (886,770) (173,884)
Sale of art 756,585
Purchase of equipment (4,317)
Repayment on loan receivable 888,749
Advances on loans receivable (544,617) (344,132)
Net Cash Provided by Investing
Activities 215,166 284,621
Cash Flows From Financing Activities
Dividends paid to preferred shareholder (17,600) (14,400)
Proceeds from loans payable 1,077,800
Payments on loans payable (1,077,800)
Payments of notes payable (100,000) (100,000)
Proceeds from notes payable 100,000
Net Cash Used by Financing Activities (117,600) (14,400)
Net Increase (Decrease ) in Cash (7,651) (118,069)
Cash, Beginning 8,542 126,611
Cash, Ending $ 891 $ 8,542
</TABLE>
See Notes to Financial Statements
F-5
<PAGE>
FORME CAPITAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Years ended April 30, 2000 and 1999
<TABLE>
<S> <C> <C>
Supplemental disclosures of cash flow
information
2000 1999
Cash paid during the year for:
Interest $ 13,906 $ 3,289
Income taxes - -
Noncash Investing and Financing Activities:
During 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
During 1999 the Registrant sold 258,000
Series F Preferred Shares in exchange for artwork $258,000
During 2000 the Registrant purchased for cancellation
the 21,495 Series A Preferred, the 50,000 Series B Preferred,
and the 466,571 Series C for par value of $.01 per share
from Camelot Corporation $ 5,381
During 2000 the Registrant purchased
for cancellation 390,000 Series D Preferred in exchange
for 3,900 new restricted common shares $3,900
During 2000 the Registrant purchased
for cancellation 249 Series W Preferred and
258,000 Series F Preferred from an affiliate of the
President in exchange for 566,337 10% Preferred
in Forme Art Investments, Inc. and 134,000
common shares of Wincroft, Inc. $566,337
During 2000 the Registrant exchanged
art investments with a cost of $1,322,922
for $756,585 in cash and 566,337 shares of 10%
Preferred in Forme Art Investments $566,337
</TABLE>
See Notes to Financial Statements
F-6
<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. From January 31, 1991 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 does not have a business
operation. Management intends to seek out merger candidates whose
operations and assets can be acquired through stock.
Principles of Consolidation
The consolidated financial statements include the accounts of Forme
and its subsidiaries. Significant intercompany accounts and transactions
have been eliminated.
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
expenses. 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 estimated useful lives of 5 - 31.5
years.
Earnings Per Share
Earnings 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 weighed average
common shares as common stock equivalents.
F-7
<PAGE>
Investments
The Company's marketable securities are classified as available for sale.
Securities classified as available for sale are carried in the financial
statements at fair value unless they are restricted from trade fair value
of marketable securities is determined based on quoted market prices for
those securities. Restricted securities are carried at the lower of cost
or fair value. Realized gains and losses, determined using the first-in,
first-out method, are included in earnings; unrealized holding gains and
losses are reported as a separate component of stockholders' equity.
The Company records impairments to its available-for-sale securities
whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable.
Statement of Cash Flows
For purposes of reporting cash flows, the Company considers cash and
money market accounts to be cash equivalents.
Use of Estimates
The preparation of financial statements in 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.
Note 2 - NOTES RECEIVABLE AND INVESTMENT IN CAMELOT
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 is included
in interest income for the year ended April 30, 1996. The Company received
payments totaling $236,000 during the year ended April 30, 1996. Also
during the year ended April 30, 1996, the Company acquired 600,000 shares
of Camelot in exchange for the remaining $450,000. In July 1997, Camelot
declared a 1-40 reverse stock split so the Company owned a total of 16,250
common shares of Camelot. The shares were delisted from NASDAQ and
substantially declined in value. The shares were disposed of during the
year ended April 30, 1999.
F-8
<PAGE>
Note 3 - INVESTMENTS IN MARKETABLE EQUITY SECURITIES
Unrealized gains and losses of marketable securities available for
sale as of April 30, 1999 are as follows:
Gross unrealized
Gains (Losses)
Wincroft, Inc. 1999 $(276,805)
The Company's investment in Wincroft stock is restricted and therefore
not available to be traded. The investment is carried at the lower of cost
or fair value. Wincroft stock is publicly traded. The value of the stock
at the time it was acquired was a discount from the market price of the
shares as the securities received were restricted. The value of the stock,
for purposes of determining an unrealized loss, was based on the market
price at the time of issuance versus the market price at April 30, 1999.
The securities value declined to an extent that management determined to
reduce the entire asset to zero.
NOTE 5 - NOTES PAYABLE
Notes payable consist of the following at April 30, 1999 :
1999
Note payable to the father of the President, due on demand,
interest only at 7% payable monthly $100,000
Approximately $14,000 and $3,300 is included in interest expense for
related interest on the above note for the years ended April 30, 2000 and
1999, respectively.
NOTE 6 - INCOME TAXES
The Company and its wholly-owned subsidiaries file consolidated
Federal income tax returns. The Company has no current state or federal
income tax expense for the years ended April 30, 2000 and 1999.
The Company adopted the Statement of Financial Accounting 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.
F-9
<PAGE>
The components of deferred taxes in the accompanying balance sheets
are summarized below:
Deferred tax assets arising from:
Net operating loss carryover $180,000
Less valuation allowance (180,000)
Deferred taxes - net $ -
At April 30, 2000 the Company has approximately $700,000 of unused
Federal net operating loss carryforwards, which expire in years 2003
through 2010.
NOTE 7 - STOCKHOLDERS' EQUITY
The Company has designated six classes of preferred stock. Each class
is 10% Non-cumulative Preferred Stock. 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. Series A, B, and C were 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. These stock
options were surrendered on April 30, 2000.
On April 24, 2000 the Board of Directors approved a reverse stock split
of its authorized and outstanding shares of its common stock on the basis
of 1 new share for every 35 shares. The record date for the reverse split
will be May 3, 2000.
NOTE 8 - RELATED PARTY TRANSACTIONS
The Company received a consulting fee of $400,000 and performed other
services for $3,000 during 2000.
The Company paid $17,600 and $14,400 for the years ended April 30,
2000 and 1999 respectively in preferred stock dividends to related parties.
The Company paid approximately $14,400 and $3,300 for each of the
years ended April 30, 2000 and 1999 in interest on related party notes
payable.
The Company uses a securities transfer agent affiliated with the
President and paid $14,700 for the year ended April 30, 1999.
F-10
<PAGE>
On April 10, 2000 the Company sold all of its investment in art plus
related assets to a Company which was affiliated with the Company's
president. The assets were sold at their original cost. The Company
received $756,858 in cash and preferred stock in the affiliated company
which was valued at $566,337.
On April 12, 2000 the Company exchanged these preferred shares and all of
its investment in Wincroft, Inc. common stock for 249 shares of Series W
Preferred shares and 258,000 shares of Series F Preferred Shares.
F-11
<PAGE>
Item 8. Disagreements on Accounting and Financial Disclosure
There were no disagreements on accounting and/or financial disclosure by
the Company or its auditors.
PART III
Item 9. Directors and Executive Officers of the Registrant
The following persons serve as Directors and/or Officers of the
Registrant:
Name Age Position Period ServedTerm Expires
Daniel Wettreich 48 President, December 1986Next Annual
Treasurer, Meeting
Director
Daniel Wettreich
Daniel Wettreich is Chairman, President and Director of the Company
since December 1986. Since September 1988, he has been President and
Director of Camelot Corporation(1), a public company. Additionally, he
currently holds directors positions in Wincroft, Inc. and Malex, Inc.,
which are dormant public companies seeking merger opportunities. From July
1996 to July 1998 he was a director of Constable Group plc, a United
Kingdom Company.(3) In July 1993, he was appointed a Director of Goldstar
Video Corporation(2) following an investment by Camelot. Mr. Wettreich
has a Bachelor of Arts in Business Administration from the University of
Westminister, London, England.
(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, and has converted to a liquidation
proceeding.
(3) A subsidiary, Meteor Payphones and its subsidiaries filed for voluntary
liquidation in March 1998. Constable Group plc filed for voluntary
liquidation in July 1998.
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, 2000. No individual officer
received compensation exceeding $100,000; no bonuses were granted to any
officer, nor was any compensation deferred.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
Compensation
Awards Payouts
Restr
Name and Other icted Optio LTIP All
Principal Year Salary Bonus Annual Stock ns/ Payo- Other
Position Award SARs uts Compens-
Compe- (s) ation
nsati
on
Daniel 2000 - - - - $
Wettreich 1999 95,000 - - - -
Chairman and 1998 - - - - - -
CEO (1) - 30,000
</TABLE>
Until July 1998 Directors of the Registrant receive no salary or
their services as such, but are reimbursed for reasonable expenses incurred
in attending meetings of the Board of Directors. During 1999 the President
of Registrant received an annual salary of $120,000 for his services. The
President now receives no salary.
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 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 27, 2000 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 (1 person).
<TABLE>
<S> <C> <C>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Daniel Wettreich 292,857 (1) 9.67%
6959 Arapaho Road, Suite 122
Dallas, Texas 75248
All Officers and Directors 292,857 (1) 9.67%
as a group (1 person)
Mick Y. Wettreich 2,700,000 89.15%
1 Shelley Close
Edgware, Middlesex
England
</TABLE>
<PAGE>
(1) 292,857 of these shares are in the name of Zara Wettreich,
Separate Property. Mr. Daniel Wettreich has disclaimed any
beneficial interest in the shares owned by his wife.
Item 12.Certain Relationships and Related Transactions
A company affiliated with the President provides services as a
securities transfer agent. For the years ended April 30, 2000, the Company
incurred expenses of $14,700.
During fiscal 1999 the Company provided the wife of its President a
total of $400,000 6% interest unsecured loans of which $270,000 was repaid
as at April 30, 1999 and the balance is repaid as at April 30, 2000. Also
during 1999, Company's affiliated with the President of the Company were
loaned a total of $24,667 of which $8,000 was repaid as at April 30, 1999
and the balance is repaid as at April 30, 2000.
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:
Report on April 10, 2000 reporting Item 2.
Report on April 12, 2000 reporting Item 2.
Report on April 24, 2000 reporting Item 1 and 5.
EXHIBIT 22(a)
SUBSIDIARIES
NONE
<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, 2000
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 and Accounting Officer)
Date: July 31, 2000