<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-KSB/A
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER 0-16631
BOCA RATON CAPITAL CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
FLORIDA 59-2763089
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
6516 VIA ROSA, BOCA RATON, FL 33433
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561) 750-2252
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:
COMMON STOCK, $.001 PAR VALUE
CHECK WHETHER THE ISSUER (1) HAS 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 ISSUER WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS
BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
CHECK IF THERE IS NO DISCLOSURE OF DELINQUENT FILERS IN RESPONSE TO ITEM
405 OF REGULATION S-B CONTAINED IN THIS FORM, AND NO DISCLOSURE WILL BE
CONTAINED, TO THE BEST OF THE ISSUER'S KNOWLEDGE, IN 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 ]
THE ISSUER'S REVENUES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 WERE
APPROXIMATELY $192,200 WHICH CONSISTED OF APPROXIMATELY $36,600 IN TOTAL
INVESTMENT INCOME AND APPROXIMATELY $155,600 IN NET UNREALIZED AND REALIZED GAIN
ON INVESTMENTS.
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE ISSUER AS OF MARCH 24, 1997 (COMPUTED BY REFERENCE TO THE AVERAGE BID AND
ASKED PRICES OF ISSUER'S COMMON STOCK REPORTED ON THE OTC ELECTRONIC BULLETIN
BOARD ON SUCH DATE) WAS $771,435. DIRECTORS AND OFFICERS AND TEN PERCENT OR
GREATER SHAREHOLDERS ARE CONSIDERED AFFILIATES FOR PURPOSES OF THIS CALCULATION
BUT SHOULD NOT NECESSARILY BE DEEMED AFFILIATES FOR ANY OTHER PURPOSE.
THE NUMBER OF SHARES OUTSTANDING OF ISSUER'S COMMON STOCK AS OF MARCH 24,
1997 WAS 1,125,270.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES__ NO X
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<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page
PART II
<S> <C>
ITEM 7 - FINANCIAL STATEMENTS.......................................................................... 1
</TABLE>
i
<PAGE> 3
ITEM 7 - FINANCIAL STATEMENTS
The financial statements required by this Item, the accompanying notes
thereto and the report of independent accountants are included as part of this
Form 10-KSB/A and immediately follow the signature page of this Form 10-KSB/A.
1
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on August 27, 1997.
Signatures Title
---------- -----
/s/Alan L. Jacobs President, Chief Executive Officer
- ----------------------------- and Director (Chief Executive Officer)
Alan L. Jacobs
/s/Alan L. Jacobs* Chief Financial Officer,
- ---------------------------- Secretary and Treasurer (Principal
Franklyn B. Weichselbaum Financial and Accounting Officer)
/s/Alan L. Jacobs* Director
- ----------------------------
Robert H. Arnold
/s/Alan L. Jacobs* Director
- ----------------------------
Ronald L. Miller
/s/Alan L. Jacobs* Director
- ----------------------------
C. Lawrence Rutstein
/s/Alan L. Jacobs* Director
- ----------------------------
Alan H. Weingarten
* Pursuant to a Power of Attorney incorporated herein by reference to Exhibit
24.1 of the Registrant's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996.
2
<PAGE> 5
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
REPORT ON AUDITS OF FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<PAGE> 6
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Pages
<S> <C>
Report of Independent Accountants F-1
Consolidated Balance Sheet as of December 31, 1996 F-2
Consolidated Statements of Income for the Years Ended
December 31, 1996 and 1995 F-3
Consolidated Statements of Shareholders' Equity
for the Years Ended December 31, 1996 and 1995 F-4
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996 and 1995 F-5
Notes to Consolidated Financial Statements F-6 - F-11
</TABLE>
<PAGE> 7
[COOPERS & LYBRAND LOGO] [LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and the
Board of Directors of Boca Raton Capital Corporation
We have audited the accompanying consolidated balance sheet of Boca Raton
Capital Corporation and Subsidiaries (the "Company") as of December 31, 1996
and the related consolidated statements of income, shareholders' equity, and
cash flows for each of the two years in the period then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Boca Raton
Capital Corporation and Subsidiaries as of December 31, 1996, and the results
of their operations and their cash flows for each of the two years in the
period then ended in conformity with generally accepted accounting principles.
[SIG]
COOPERS & LYBRAND L.L.P.
Miami, Florida
January 31, 1997, except for Note 9 and the last paragraph of Note 7, as to
which the date is July 30, 1997
F-1
<PAGE> 8
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 1996
<TABLE>
<CAPTION>
1996
<S> <C>
ASSETS
Cash $ 518,645
Note receivable 350,000
Prepaid expenses 7,000
-----------
Total assets $ 875,645
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 84,887
-----------
Total liabilities 84,887
-----------
Shareholders' equity:
Common stock, $.001 par value; authorized 40,000,000
shares; 1,125,270 shares issued and outstanding 1,125
Additional paid-in capital 4,002,936
Accumulated deficit (3,213,303)
-----------
Total shareholders' equity 790,758
-----------
Total liabilities and shareholders' equity $ 875,645
===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
<PAGE> 9
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
for the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Investment income:
Interest $ 36,637 $ 126,781
Other 0 29,212
----------- -----------
Total investment income 36,637 155,993
----------- -----------
Operating expenses:
General and administrative 222,299 172,448
Professional fees 198,448 142,599
Interest 2,937 200,529
----------- -----------
Total operating expenses 423,684 515,576
----------- -----------
Operating loss (387,047) (359,583)
----------- -----------
Realized and unrealized gain (loss) on investments:
Net realized gain on investments 1,244,374 1,504,927
Net decrease in unrealized appreciation of investments (1,088,750) (792,896)
----------- -----------
Net realized and unrealized gain on investments 155,624 712,031
----------- -----------
Income (loss) before income taxes and extraordinary item (231,423) 352,448
Income tax expense 0 95,894
----------- -----------
Net income (loss) before extraordinary item (231,423) 256,554
Extraordinary item - gain on extinguishment of debt 278,026 0
----------- -----------
Net income $ 46,603 $ 256,554
=========== ===========
Income (loss) per share:
Income (loss) before extraordinary gain $ (0.21) $ 0.23
Extraordinary gain 0.25 0
----------- -----------
Net income $ 0.04 $ 0.23
=========== ===========
Weighted average number of shares outstanding 1,125,270 1,125,270
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 10
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
for the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Shares Par Paid-In Accumulated
Outstanding Value Capital Deficit Total
----------- ------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 1,125,270 $ 1,125 $ 6,534,795 $ (3,516,460) $ 3,019,460
Net income 0 0 0 256,554 256,554
--------- ------- ----------- ------------ -----------
Balance, December 31, 1995 1,125,270 1,125 6,534,795 (3,259,906) 3,276,014
Net income 0 0 0 46,603 46,603
Distribution to shareholders 0 0 (2,531,859) 0 (2,531,859)
--------- ------- ----------- ------------ -----------
Balance, December 31, 1996 1,125,270 $ 1,125 $ 4,002,936 $ (3,213,303) $ 790,758
========= ======= =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-4
<PAGE> 11
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 46,603 $ 256,554
Adjustments to reconcile net income to net cash used in
operating activities:
Decrease in unrealized appreciation of investments 1,088,750 792,896
Gain on sale of investment (1,244,374) (1,504,927)
Extraordinary gain on extinguishment of debt (278,026) 0
Interest accrued but not paid on defaulted note 0 200,529
Increase in other assets (7,000) 0
Decrease in accounts payable and accrued expenses (40,337) 0
----------- -----------
Net cash used in operating activities (435,384) (458,839)
----------- -----------
Cash flows from investing activities:
Proceeds from sale of investment 1,245,000 1,505,469
Proceeds from note receivable 0 522,514
Issuance of notes receivable (350,000) 0
----------- -----------
Net cash provided by investing activities 895,000 2,027,983
----------- -----------
Cash flows from financing activities:
Distribution to shareholders (2,531,859) 0
Payments of notes payable (310,000) 0
----------- -----------
Net cash used in financing activities (2,841,859) 0
----------- -----------
Net increase (decrease) in cash (2,382,243) 1,569,144
Cash, beginning of year 2,900,888 1,331,744
----------- -----------
Cash, end of year $ 518,645 $ 2,900,888
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes $ 14,907 $ 39,087
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-5
<PAGE> 12
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Business
Boca Raton Capital Corporation ("BRCC") was a non-diversified,
closed-end investment company, which had elected and was granted the
status as a Business Development Company ("BDC") under the Investment
Company Act of 1940 (the "1940 Act"). During 1995, BRCC's Board of
Directors were of the opinion that the shareholders return on assets
was not sufficient to continue operations as a BDC. As such, BRCC's
election to withdraw from its status as a BDC was filed with the
Securities and Exchange Commission and became effective as of December
22, 1995. No material impact to the financial statements resulted
from BRCC's change in status.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of BRCC and
its wholly-owned subsidiaries (collectively the "Company"). All
material intercompany balances and transactions have been eliminated
in consolidation.
VALUATION OF PORTFOLIO INVESTMENTS
The Company follows Statement of Financial Accounting Standards
("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". Under SFAS No. 115, investments are classified as
either held to maturity, trading or available for sale depending upon
whether the investment is a debt or equity security and management's
intent with regards to the investment. The Company's investment in
RailAmerica was classified as trading which called for the investment
to be carried at fair value and changes in market value be credited or
charged to income. Investments for which market quotations are
readily available are valued at market. In the absence of market
quotations, investments are valued at their fair value as determined
in good faith by the Board of Directors. Due to the inherent
uncertainty of this valuation, these estimates may differ
significantly from the values that would have been used had a ready
market for the investments existed.
NET INCOME PER COMMON SHARE
Net income per common share is computed using the weighted average
number of common shares outstanding during each year.
Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share", establishes standards for computing and
presenting earnings per share and must be implemented by BRCC for both
interim and annual periods ending after December 31, 1997. This
pronouncement is not expected to have a material impact on the
financial statements of the Company.
F-6
<PAGE> 13
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the 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, particularly with respect to the fair value
determination of investments, and the differences could be material.
2. PORTFOLIO INVESTMENTS:
During 1996, the Company sold its 375,000 shares of RailAmerica, Inc.
common stock, which represented its total investment as of December
31, 1995, and received net proceeds of $1,245,000. The Company
recorded a net realized gain of $155,624 during the year ended
December 31, 1996 as a result of this sale.
3. DEFAULTED NOTE PAYABLE AND ACCRUED INTEREST:
The Company had a note payable to a financial institution which was
taken over by regulatory authorities. At the time of the takeover,
the Company had suspended payments on this note in an effort to
negotiate extensions, refinance the obligation or reach a settlement.
The Company had adjusted the cumulative interest accrued on the note
to reflect the default rate of 18% in 1995. In 1996, a full
settlement was reached in the matter which consisted of payment of
principal of $310,000 and a release from all obligation. The
favorable settlement in this matter has been reflected as an
extraordinary item resulting from extinguishment of debt in the amount
of $278,026.
4. INCOME TAXES:
The Company accounts for income taxes pursuant to the provisions of
SFAS No. 109, "Accounting for Income Taxes". SFAS No. 109 requires
recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between
the financial statement and tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the differences are
expected to reverse.
F-7
<PAGE> 14
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. INCOME TAXES, CONTINUED:
The provision for income taxes for 1996 and 1995 is summarized as
follows:
<TABLE>
<CAPTION>
1996 1995
------ --------
<S> <C> <C>
Current:
Federal $ 0 $ 62,945
State 0 32,949
------ --------
0 95,894
------ --------
Deferred:
Federal 0 0
State 0 0
------ --------
0 0
------ --------
Total provision $ 0 $ 95,894
====== ========
</TABLE>
The significant components of the net deferred tax assets as of
December 31, 1996, are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforward $ 885,127
Other 98,132
Valuation allowance (983,259)
---------
Net deferred tax assets $ 0
=========
</TABLE>
SFAS No. 109 requires a valuation allowance against deferred tax
assets if, based on the weight of available evidence, it is more
likely than not that some or all of the deferred tax assets will not
be realized. At December 31, 1996, the Company has established a 100%
valuation allowance against net deferred tax assets.
For income tax purposes, the Company had a change in ownership during
1993 in connection with a private placement offering. The change in
ownership resulted in an annual limitation on the amount of pre-change
ownership net operating loss carryforwards which can be utilized to
offset the Company's future taxable income. The annual limitation is
approximately $128,000 and will be increased by the Company's
pre-change built in gains when recognized.
F-8
<PAGE> 15
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. INCOME TAXES, CONTINUED:
As of December 31, 1996, the Company has available for federal income
tax reporting purposes pre-change net operating losses of
approximately $1,900,000 and post-change net operating losses of
approximately $381,000. These net operating loss carryforwards expire
in the years 1998 through 2008. Should the proposed merger discussed
in Note 7 occur, utilization of those net operating loss carryforwards
could be further limited.
RATE RECONCILIATION
A reconciliation of the difference between actual income tax expense
and income taxes computed at the federal statutory tax rate is as
follows:
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Federal statutory rate 34.00 % 34.00 %
State rate net of federal benefit 3.63 % 3.63 %
Benefit of NOL with prior period valuation allowance (37.63)% (10.42)%
------ ------
0.00 % 27.21 %
====== ======
</TABLE>
5. CONCENTRATION OF CREDIT RISK:
Financial instruments, which potentially subject the Company to
concentration of credit risk, consist primarily of cash and note
receivable. The Company maintains a majority of its cash with
financial institutions that management considers to have a high credit
standing. At times, such amounts may be in excess of the FDIC insured
limits. The Company has a note receivable in the amount of $350,000
(See Note 7) with a single counterparty. The Company did not require
the counterparty to provide collateral for the note; however, the
principal and accrued interest thereon has been individually
guaranteed by each of the three counterparty shareholders and their
respective spouses. The Company, however, does not anticipate
nonperformance by the counterparty.
6. RELATED PARTY TRANSACTIONS:
The Company and Josephthal were parties to a financial consulting
agreement through March 1995 for which the Company paid Josephthal
Lyon & Ross Incorporated ("Josephthal") $3,000 a month in consulting
fees for services provided by Mr. Alan Jacobs, President and Chief
Executive Officer of the Company. Until January 1, 1996, Mr. Jacobs
was an employee of Josephthal. In March 1995, the consulting agreement
was terminated. Beginning in April 1995 and through December 31,
1995, the Company agreed to pay Mr. Jacobs $3,000 a month in
consulting fees directly. Starting in 1996, the monthly consulting
fee was increased to $5,000 per month.
F-9
<PAGE> 16
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
6. RELATED PARTY TRANSACTIONS, CONTINUED:
Pursuant to a consulting agreement, the Company paid Mr. Franklyn
Weichselbaum, as the Treasurer and Chief Financial Officer of the
Company, $2,200 per month in consulting fees. Starting in 1996, the
monthly consulting fee was increased to $3,500 per month.
On January 11, 1996, the Board of Directors approved the payment of a
retainer to each director of the Company of $10,000 for services to be
rendered as a director during 1996 and granted 10,000 options to each
of the four independent directors and to its two officers. This
retainer is in addition to the normal recurring fees received of
$1,500 per director per meeting attended. Each option entitles the
holder, for a period of four years commencing on April 15, 1996, to
purchase shares of the Company's common stock at an initial exercise
price of $3.00 per share. The exercise price exceeded the market
price per share and the book value per share of the Company's common
stock on the date of grant. The exercise price was subsequently
adjusted to $0.75 per share to reflect the special cash distribution
of $2.25 per share of common stock (See Note 8).
General and administrative expenses for 1996 are substantially
comprised of directors' fees and related expenses and consulting fees
paid to the officers.
7. PROPOSED MERGER:
In 1996, the Company entered into an agreement to merge CRP
Acquisition Corporation ("CRP"), its wholly-owned subsidiary, with and
into Clean Room Products, Inc., a New York corporation. The proposed
merger is subject to, among other things, the satisfactory completion
by the Company of a legal and business review of Clean Room Products,
Inc., and approval by the shareholders of the Company. CRP designs
and constructs clean rooms and associated products for the
semiconductor, pharmaceutical, biotechnology, medical device and other
industries. In addition, CRP's film division produces UltracleanTM
packaging materials for these industries. If the proposed merger is
consummated, Clean Room Products, Inc. will become a wholly-owned
subsidiary.
In connection with the proposed merger, on December 12, 1996, the
Company extended a loan to CRP. The loan was in the original
principal amount of $350,000 with an interest rate equal to the prime
rate, plus one percent (1%) per annum. The principal and the accrued
interest, thereon, is due and payable on April 30, 1997. Each of the
three CRP shareholders and their respective spouses have guaranteed
repayment of this note.
As of July 30, 1997, CRP has not repaid the loan.
8. SPECIAL CASH DISTRIBUTIONS:
On January 11, 1996, the Board of Directors approved a special cash
distribution of $2.25 per share to the shareholders of record on
January 11, 1996. The special cash distribution was approved by the
Company's shareholders at a special meeting held on February 29, 1996
and the special cash distribution was paid on March 11, 1996.
F-10
<PAGE> 17
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. SUBSEQUENT EVENT:
In June 1997, Weitzer Homebuilders Incorporated and Harry Weitzer
commenced an action against the Company for unspecified damages in
connection with a failed merger alleging breach of an agreement and
plan of merger, fraudulent inducement, and fraudulent and negligent
misrepresentation. The Company is vigorously defending its rights
against any alleged wrongdoing. The Company is unable to estimate the
potential loss, if any, that may result from this matter.
F-11
