<PAGE> 1
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 June 30, 1997
Commission File Number 0-16631
BOCA RATON CAPITAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA 59-2763089
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(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
6516 Via Rosa, Boca Raton, FL 33433
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(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 August 11,
1997.
<PAGE> 2
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-QSB
QUARTER ENDED JUNE 30, 1997
PART I FINANCIAL INFORMATION Page No.
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Item 1 Financial Statements
Consolidated Balance Sheets - 3
June 30, 1997 and December 31, 1996
Consolidated Statements of Operations -
Three and Six Months Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 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 8
Item 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Other Information 9
Item 6 Exhibits and Reports on Form 8-K 9
Signatures 11
Exhibit Index 12
<PAGE> 3
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
----------- -----------
(Unaudited) *
<S> <C> <C>
Cash $ 301,171 $ 518,645
Note receivable 366,000 350,000
Prepaid expenses 28,000 7,000
----------- -----------
Total assets $ 695,171 $ 875,645
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 90,837 $ 84,887
----------- -----------
Total liabilities 90,837 84,887
----------- -----------
Stockholders' equity:
Common stock, $.001 par value; authorized 40,000,000
shares; issued and outstanding, 1,125,270 shares
at June 30, 1997 and December 31, 1996, respectively 1,125 1,125
Additional paid-in capital 4,002,936 4,002,936
Accumulated deficit (3,399,727) (3,213,303)
----------- -----------
Total stockholders' equity 604,334 790,758
----------- -----------
Total liabilities and stockholders' equity $ 695,171 $ 875,645
=========== ===========
</TABLE>
*From audited financial statements
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the six and three months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income:
Interest income $ 19,912 $ 27,503 $ 9,589 $ 2,460
----------- ----------- ----------- -----------
Total Investment income: 19,912 27,503 9,589 2,460
----------- ----------- ----------- -----------
Operating expenses:
General and administrative 107,381 151,671 45,653 31,181
Legal 95,505 28,804 60,645 --
Audit and tax 3,450 12,375 1,135 3,775
Interest -- 2,937 -- (13,650)
----------- ----------- ----------- -----------
Total operating expenses 206,336 195,787 107,433 21,306
----------- ----------- ----------- -----------
Operating loss (186,424) (168,284) (97,844) (18,846)
Realized and unrealized gain (loss) on investments:
Net realized gain on investments -- 1,244,374 -- 1,244,374
Net decrease in unrealized appreciation of investments -- (1,088,750) -- (1,088,750)
----------- ----------- ----------- -----------
Net realized and unrealized gain on investments -- 155,624 -- 155,624
----------- ----------- ----------- -----------
Income (loss) before extraoridinary item (186,424) (12,660) (97,844) 136,778
Extraordinary item - gain on extinguishment of debt -- 278,026 -- 278,026
----------- ----------- ----------- -----------
Net income (loss) $ (186,424) $ 265,366 $ (97,844) 414,804
=========== =========== =========== ===========
Income (loss) per share:
Income (loss) before extraordinary gain $ (0.17) $ (0.01) $ (0.09) $ 0.12
Extraordinary gain -- 0.25 -- 0.25
----------- ----------- ----------- -----------
Net income (loss) $ (0.17) $ 0.24 $ (0.09) $ 0.37
=========== =========== =========== ===========
Weighted average number of shares 1,125,270 1,125,270 1,125,270 1,125,270
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
BOCA RATON CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (186,424) $ 265,366
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Decrease in unrealized appreciation of investments 1,088,750
Increase in note receivable (16,000) --
Gain on sale of investment -- (1,244,374)
Extraordinary gain on extinguishment of debt -- (278,026)
Increase in prepaid expenses (21,000) (28,000)
Increase (decrease) in accounts payable
and accrued expenses 5,950 (68,783)
----------- -----------
Net cash provided by (used in) operating activities (217,474) (265,067)
----------- -----------
Cash flows from investing activities:
Proceeds from sale of investment -- 1,245,000
----------- -----------
Net cash provided by (used in) investing activities -- 1,245,000
----------- -----------
Cash flows from financing activities:
Principal payments on notes payable -- (310,000)
Payment of special cash distribution on common stock -- (2,531,858)
----------- -----------
Net cash provided by (used in) financing activities -- (2,841,858)
----------- -----------
Net decrease in cash (217,474) (1,861,925)
Cash, beginning of period 518,645 2,900,888
----------- -----------
Cash, end of period $ 301,171 $ 1,038,963
=========== ===========
Supplemental disclosures of cash flow information
Cash paid during the year for interest $ -- $ 2,937
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
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
June 30, 1997 and December 31, 1996, the related consolidated statements of
operations for the six and three months ended June 30, 1997 and 1996 and the
consolidated statements of cash flows for the six months ended June 30, 1997 and
1996
NOTE 2: 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 carryfowards 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
carryfowards would be further limited.
6
<PAGE> 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
The Company reported net income (loss) of $(186,424) and $265,366 for
the six months ended June 30, 1997 and 1996, respectively. The net loss in the
six months ended June 30, 1997 consisted of investment income of $19,912 less
operating expenses of $206,336. Included in the net income for the six months
ended June 30, 1996 was a net unrealized and realized gain of $155,624. The
balance of net income (loss) consisted of investment income of $27,503 less
operating expenses of $195,787 for the six months ended June 30,1996, and an
extraordinary gain of $278,026 resulting from the extinguishment of debt in the
six months ended June 30, 1996.
Total investment income of $19,912 for the six months ended June 30,
1997 consisted of interest income. This is compared to total investment income
of $27,503 for the six months ended June 30, 1996 which consisted of interest
income. The decrease in interest 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 six months ended June 30, 1997 consisted of
general and administrative expenses of $107,381 and professional fees of
$98,955. Such expenses for the comparable period of 1996 consisted of general
and administrative expenses of $151,671, professional fees of $41,179 and
interest expense of $2,937. The decrease of $44,290 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. The increase on professional fees is due to the Proposed Merger
with Clean Room Products, Inc.
The Company reported a net income (loss) of $(97,844) and $414,804 for
the three months ended June 30, 1997 and 1996, respectively. The net loss
consisted of investment income of $9,589 and $2,460 less operating expenses of
$107,433 and $21,306 for the three months ended June 30, 1997 and 1996,
respectively. In addition, the Company had an extraordinary gain of $278,026
resulting from the extinguishment of debt in the three months ended June 30,
1996.
Total investment income of $9,589 for the three months ended June 30,
1997 consisted of interest income. This is compared to total investment income
of $2,460 for the three months ended June 30, 1996 which consisted of interest
income.
7
<PAGE> 8
Operating expenses for the three months ended June 30, 1997 consisted
of general and administrative expenses of $45,653 and professional fees of
$61,780. Such expenses for the comparable period of 1996 consisted of general
and administrative expenses of $31,181, professional fees of $3,775 and interest
expense of $(13,650). The increase of $14,472 in general and administrative
expenses and the increase on professional fees of $58,005 are primarily due to
the Proposed Merger with Clean Room Products, Inc. The decrease in interest
expense was related to the debt extinguishment.
Liquidity and Capital Resources
The Company has $301,171 in cash and total liabilities of $90,838 at
June 30, 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 June 30, 1997 the Company did not maintain lines of credit, and none
are anticipated.
If the Proposed Merger, as discussed below, is not consummated the
Company's current resources will be insufficient to meet the Company's
obligations for the next 12 months. As a result , the Company would be forced to
cease its operations.
PART II
ITEM 1 - LEGAL PROCEEDINGS
On June 30, 1994, BRCC entered into an Agreement and Plan of Merger (
"Weitzer Agreement") with Weitzer Homebuilders Incorporated ("WHB"), WHB Merger
Sub, Inc. ("Sub"), Harry Weitzer and certain corporations controlled by Harry
Weitzer (collectively, the "Weitzer Entities"). The Weitzer Entities terminated
the proposed merger ("Failed Merger") on December 23, 1994. In June 1997, WHB
and Harry Weitzer (collectively , the Weitzer Plaintiffs") commenced an action
in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach
County, Florida, against BRCC for breach of the Weitzer Agreement, fraudulent
inducement and fraudulent and negligent misrepresentation in connection with the
Failed Merger. The Weitzer Plaintiffs alleged unspecified damages in this
action. BRCC is vigorously defending its rights against the alleged claims.
8
<PAGE> 9
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the six
months ended June 30, 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 (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 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 CPR Loan was due and payable on April 30, 1997.
Each of the three shareholders of CPR and their respective spouses have
individually guaranteed the repayment of the principal, and accrued interest
thereon, of the CRP Loan. As of August 11, 1997, the CPR Loan has not been
repaid.
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, CPR 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-K").
9
<PAGE> 10
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").
27.6 Financial Data Schedule for the six months ended June 30, 1997.
10
<PAGE> 11
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: August 11, 1997 /s/ Alan L. Jacobs
-----------------------------------
Alan L. Jacobs, President
(Principal Executive Officer)
Date: August 11, 1997 /s/ Franklyn B. Weichselbaum
-----------------------------------
Franklyn B. Weichselbaum
Chief Financial Officer & Treasurer
11
<PAGE> 12
EXHIBIT INDEX
27.6 Financial Data Schedule for the six months ended June 30, 1997.
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS
CONTAINED IN THE COMPANY'S QUARTERLY REPORT REPORT FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 301,171
<SECURITIES> 0
<RECEIVABLES> 366,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 695,171
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 695,171
<CURRENT-LIABILITIES> 90,837
<BONDS> 0
0
0
<COMMON> 1,125
<OTHER-SE> 603,209
<TOTAL-LIABILITY-AND-EQUITY> 695,171
<SALES> 0
<TOTAL-REVENUES> 19,912
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 206,336
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (186,424)
<INCOME-TAX> 0
<INCOME-CONTINUING> (186,424)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (186,424)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
