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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
COMMISSION FILE NUMBER 0-16631
BOCA RATON CAPITAL CORPORATION
(Exact name of small business issuer as specified in its charter)
FLORIDA 59-2763089
(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
6516 Via Rosa, Boca Raton, FL 33433
(Address of principal executive offices)
(561) 750-2252
(Issuer's telephone number)
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 the past 90 days. Yes X No
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 1,125,270 shares as of May 8, 1997.
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BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-QSB
QUARTER ENDED MARCH 31, 1997
Page No.
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets - 3
March 31, 1997 and December 31, 1996
Consolidated Statements of Operations -
Three Months Ended March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements - 6
Item 2 Management's Discussion and Analysis - 7
PART II OTHER INFORMATION
Item 1 Legal Proceedings 7
Item 4 Submission of Matters to a Vote of Security Holders 8
Item 5 Other Information 8
Item 6 Exhibits and Reports on Form 8-K 9
Signatures 10
Exhibit Index 11
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BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
1997 1996
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(Unaudited) *
<S> <C> <C>
ASSETS
Cash $ 359,261 $ 518,645
Note receivable 358,000 350,000
Prepaid expenses 35,000 7,000
----------- -----------
Total assets $ 752,261 $ 875,645
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses 50,083 84,887
----------- ----------
Total liabilities 50,083 84,887
----------- ----------
Stockholders' equity:
Common stock, $.001 par value; authorized
40,000,000 shares; issued and outstanding,
1,125,270 shares at March 31, 1997 and
December 31, 1996, respectively 1,125 1,125
Additional paid-in capital 4,002,936 4,002,936
Accumulated deficit (3,301,883) (3,213,303)
----------- -----------
Total stockholders' equity 702,178 790,758
----------- -----------
Total liabilities and stockholders' equity $ 752,261 $ 875,645
=========== ===========
</TABLE>
* From audited financial statements
See accompanying notes to consolidated financial statements.
3
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BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended March 31, 1997 and 1996
(Unaudited)
-----------
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
Investment income:
Interest income $ 10,323 $ 25,043
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Total investment income: 10,323 25,043
---------- ----------
Operating expenses:
General and administrative 61,728 120,490
Legal 34,860 29,667
Audit and tax 2,315 8,600
Interest -- 16,587
---------- ----------
Total operating expenses 98,903 175,344
---------- ----------
Net loss (88,580) (150,301)
---------- ----------
Earnings per share:
Weighted average number of shares 1,125,270 1,125,270
========== ==========
Net loss $ (0.08) $ (0.13)
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (88,580) $ (150,301)
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Increase in prepaid expenses (36,000) (38,500)
Decrease in accounts payable
and accrued expenses (34,804) (37,441)
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Net cash provided by (used in) operating activities (159,384) (226,242)
--------- -----------
Cash flows from financing activities:
Payment of special cash distribution on common stock -- (2,531,858)
--------- -----------
Net increase in cash (159,384) (2,758,100)
Cash, beginning of period 518,645 2,900,888
--------- -----------
Cash, end of period $ 359,261 $ 142,788
========= ===========
Supplemental disclosures of cash flow information
Cash paid during the year for interest $ -- $ 2,937
========= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
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BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The consolidated financial statements of Boca Raton Capital Corporation
and Subsidiaries (the Company) included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations.
In the opinion of management, the consolidated financial statements
contain all adjustments which are of a recurring nature, and disclosures
necessary to present fairly the consolidated balance sheets of the Company as of
March 31, 1997 and December 31, 1996, the related consolidated statements of
operations for the three months ended March 31, 1997 and 1996, and the
consolidated statements of cash flows for the three months ended March 31, 1997
and 1996.
NOTE 2: VALUATION OF PORTFOLIO INVESTMENTS
The Company's investment in RailAmerica, Inc., as of March 31, 1996,
was comprised of 375,000 shares of common stock, which represented approximately
an 8% interest in RailAmerica, Inc.. The fair value of this investment as
determined by the Board of Directors was $1,089,375, compared to the Company's
cost of $626. At March 31, 1996, all shares were subject to a lock-up agreement
that restricted the Company's ability to sell the shares. In light of this, at
March 31, 1996, the Board of Directors reduced the fair value of these shares by
twenty percent from the average bid and asked prices. Transfer of the shares
were also subject to the provisions of Rule 144. The Company sold the above
shares in July of 1996.
NOTE 3: INCOME TAXES
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. 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 (as defined below) occur, utilization of those net operating loss
carryforwards could be further limited.
6
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PART II
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The Company reported net loss of $88,580 and $150,301 for the three
months ended March 31, 1997 and 1996, respectively. The net loss consisted of
investment income of $10,323 and $25,043 less operating expenses of $98,903 and
$175,344 for the three months ended March 31, 1997 and 1996, respectively.
Total investment income of $10,323 for the three months ended March 31,
1997 consisted of interest income. This is compared to total investment income
of $25,043 for the three months ended March 31, 1996 which consisted of interest
income. The decrease in investment income is a result of the decrease in the
Company's assets due to the payment of operating expenses and the special cash
distribution made in March of 1996.
Operating expenses for the three months ended March 31, 1997 consisted
of general and administrative expenses of $61,728 and professional fees of
$37,175. Such expenses for the comparable period of 1996 consisted of general
and administrative expenses of $120,490, professional fees of $38,267 and
interest expense of $16,587. The decrease of $72,675 in general and
administrative expenses was primarily a result of the payment in January 1996
of an annual retainer fee for 1996 of $10,000 per director ($50,000 in the
aggregate), and costs related to a special meeting of shareholders held in
February 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company has $359,261 in cash and total liabilities of $50,083 at
March 31, 1997. The Company has no liabilities due longer than twelve months.
The Company has no sources of cash flow at present apart from interest
income. The Company has minimal current operating expenses.
At March 31, 1997 the Company did not maintain lines of credit, and
none are anticipated.
ITEM 1 - LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings. In January 1997,
the Company was notified by Weitzer Homebuilders Inc. (WHB) legal counsel that
WHB intended to seek alleged damages in connection with unspecified claims
relating to the Terminated Merger. As of the date hereof, to the best of the
Company's knowledge,
7
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WHB has not commenced a legal proceeding. In the event that WHB commences a
legal action, the Company intends to vigorously defend its rights against any
alleged claims.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
first quarter of the fiscal year ended December 31, 1997.
ITEM 5 - OTHER INFORMATION
On December 12, 1996, the Company entered into an Agreement and Plan of
Merger and Reorganization (the "Merger Agreement") with CRP Acquisition Corp., a
New York corporation and wholly-owned subsidiary of the Company ("Merger Sub"),
and Clean Room Products, Inc., a New York Corporation ("CRP"). The Merger
Agreement was subsequently amended by the parties thereto as of March 26, 1997.
Subject to the terms and conditions of the Merger Agreement, as amended, Merger
Sub shall be merged with and into CRP in accordance with New York law (the
"Proposed Merger"). The Proposed Merger is subject to the satisfaction or waiver
(if permissible) of certain conditions, including, but not limited to, the
approval of the Company's shareholders. The Company intends to submit the
Proposed Merger to the vote of the Company's shareholders at a special meeting
of shareholders as soon as practicable. 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
Ultraclean(TM) packaging materials for these industries.
In connection with the Proposed Merger, on December 12, 1996, the
Company extended a loan (the "CRP Loan") to CRP. The CRP Loan was in the
original principal amount of $350,000 with an interest rate equal to the prime
rate of Citibank, N.A. plus one percent (1%) per annum. The principal, and the
accrued interest thereon, of the CRP Loan was due and payable on April 30, 1997.
Each of the three shareholders of CRP and their respective spouses have
individually guaranteed the repayment of the principal, and accrued interest
thereon, of the CRP Loan.
8
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are filed herewith:
2.1 Amended and Restated Agreement and Plan of Merger and Reorganization, dated
as of March 26, 1997, by and among the registrant, CRP Acquisition Corp. and
Clean Room Products, Inc.; incorporated by reference to Exhibit 2.1 of the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1996 (the "1996 10-KSB").
3.1 Amended and Restated Articles of Incorporation of the registrant;
incorporated by reference to Exhibit 28.0 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989 (the "1989 10-K").
3.9 Amended Bylaws of the registrant, as amended January 6, 1995; incorporated
by reference to Exhibit 3.9 of the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1994 (the "1994 10-KSB").
27.5 Financial Data Schedule for the three months ended March 31, 1997.
9
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 9, 1997 /s/ Alan L. Jacobs
-----------------------------------
Alan L. Jacobs, President
(Principal Executive Officer)
Date: May 9, 1997 /s/ Franklyn B. Weichselbaum
-----------------------------------
Franklyn B. Weichselbaum
Chief Financial Officer & Treasurer
10
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EXHIBIT INDEX
27.5 Financial Data Schedule for the three months ended March 31, 1997.
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
CONTAINED IN THE COMPANY'S QUARTERLY REPORT FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 359,261
<SECURITIES> 0
<RECEIVABLES> 358,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 752,261
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 752,261
<CURRENT-LIABILITIES> 50,083
<BONDS> 0
0
0
<COMMON> 1,125
<OTHER-SE> 701,053
<TOTAL-LIABILITY-AND-EQUITY> 752,261
<SALES> 0
<TOTAL-REVENUES> 10,323
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 98,903
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (88,580)
<INCOME-TAX> 0
<INCOME-CONTINUING> (88,580)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (88,580)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
