<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
--------------------------------------
For the Quarter Ended June 30, 2000
Commission File Number 0-7704
REFAC
-----
(Exact name of registrant as specified in its charter)
Delaware 13-1681234
--------------------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
The Hudson River Pier
---------------------
115 River Road, Edgewater, New Jersey 07020-1099
------------------------------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (201) 943-4400
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
--- ---
The number of shares outstanding of the Registrant's Common Stock, par
value $.10 per share, as of August 1, 2000 was 3,795,261.
<PAGE>
REFAC
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Condensed Consolidated Balance Sheets
June 30, 2000 (unaudited) and December 31, 1999 3
Condensed Consolidated Statements of Operations
Six and three months ended June 30, 2000 and 1999 (unaudited) 4
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 2000 and 1999 (unaudited) 5
Notes to Condensed Consolidated Financial Statements (unaudited) 6-10
Management's Discussion and Analysis of Financial
Conditions and Results of Operations 11-14
Part II. Other Information 15-16
</TABLE>
Page 2
<PAGE>
REFAC
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
------------------- --------------------
(UNAUDITED)
ASSETS
------
<S> <C> <C>
Current Assets
Cash and cash equivalents $5,760,000 $5,158,000
Royalties receivable 1,066,000 1,153,000
Accounts receivable, net 1,911,000 1,425,000
Prepaid expenses 632,000 521,000
Inventory 449,000 -
------------------- --------------------
Total current assets 9,818,000 8,257,000
------------------- --------------------
Property and equipment, net 2,546,000 2,232,000
Licensing-related securities 4,052,000 7,145,000
Investments being held to maturity 2,725,000 3,331,000
Other assets 641,000 583,000
Goodwill, net 6,174,000 6,299,000
--------------------
-------------------
$25,956,000 $27,847,000
=================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $456,000 $674,000
Accrued expenses 612,000 439,000
Amounts payable under service agreements 501,000 417,000
Income taxes payable - 716,000
------------------- --------------------
Total current liabilities 1,569,000 2,246,000
------------------- --------------------
Deferred income taxes 1,183,000 2,365,000
Other liabilities-deferred compensation 445,000 445,000
Stockholders' Equity
Common stock, $.10 par value 545,000 545,000
Additional paid-in capital 9,984,000 9,984,000
Retained earnings 24,125,000 22,299,000
Accumulated other comprehensive income 2,354,000 4,212,000
Treasury stock, at cost (13,874,000) (13,874,000)
Receivable from issuance of common stock and warrants (375,000) (375,000)
------------------- --------------------
Total stockholders' equity 22,759,000 22,791,000
------------------- --------------------
$25,956,000 $27,847,000
=================== ====================
</TABLE>
See accompanying notes to the unaudited condensed consolidated financial
statements
Page 3
<PAGE>
REFAC
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------------------------------------------------------
2000 1999 2000 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Licensing-related activities $2,040,000 $1,929,000 $978,000 $965,000
Creative consulting fees 3,602,000 1,326,000 1,752,000 545,000
Consumer product sales 712,000 - 5,000 -
Realized gains and dividends
on licensing-related securities 2,606,000 3,257,000 1,296,000 1,680,000
Dividend and interest income 245,000 190,000 111,000 97,000
------------------------------------------------------------------------
Total Revenues 9,205,000 6,702,000 4,142,000 3,287,000
------------------------------------------------------------------------
Costs and Expenses
Licensing-related activities 781,000 1,052,000 348,000 529,000
Creative consulting expenses 2,265,000 1,228,000 1,069,000 565,000
Consumer product sales costs 476,000 - 2,000 -
Selling, general and administrative expenses 2,959,000 1,675,000 1,365,000 940,000
------------------------------------------------------------------------
Total costs and expenses 6,481,000 3,955,000 2,784,000 2,034,000
------------------------------------------------------------------------
Income before provision for taxes on income 2,724,000 2,747,000 1,358,000 1,253,000
Provision for taxes on income 898,000 875,000 451,000 389,000
------------------------------------------------------------------------
Net income $1,826,000 $1,872,000 $907,000 $864,000
========================================================================
------------------------------------------------------------------------
Diluted earnings per share $0.48 $0.49 $0.24 $0.23
========================================================================
Basic earnings per share $0.48 $0.49 $0.24 $0.23
========================================================================
------------------------------------------------------------------------
Diluted weighted average shares outstanding 3,799,961 3,811,865 3,795,261 3,807,202
========================================================================
------------------------------------------------------------------------
Basic weighted average shares outstanding 3,795,261 3,795,261 3,795,261 3,795,261
========================================================================
</TABLE>
See accompanying notes to the unaudited condensed consolidated financial
statements
Page 4
<PAGE>
REFAC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
---------------------------------------
2000 1999
---------------------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $1,826,000 $1,872,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 380,000 222,000
Realized gains on sale of licensing-related securities (2,466,000) (3,044,000)
Deferred income taxes (223,000) (177,000)
(Increase) decrease in assets:
Royalties receivable 87,000 (189,000)
Accounts receivable (486,000) 279,000
Prepaid expenses (111,000) (188,000)
Other assets (61,000) 122,000
Inventory (449,000) --
Other 3,000 --
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (45,000) 12,000
Amounts payable under service agreements 84,000 (39,000)
Income taxes payable (716,000) 119,000
---------------------------------------
Net cash used in operating activities (2,177,000) (1,011,000)
---------------------------------------
Cash Flows from Investing Activities
Proceeds from sales of investments being held to maturity 1,000,000 1,043,000
Proceeds from sales of licensing-related securities 2,742,000 3,288,000
Purchase of investments being held to maturity (394,000) (1,000,000)
Purchase of property and equipment (569,000) (1,700,000)
---------------------------------------
Net cash provided by investing activities 2,779,000 1,631,000
---------------------------------------
Net increase in cash and cash equivalents 602,000 620,000
Cash and cash equivalents at beginning of period 5,158,000 2,973,000
---------------------------------------
Cash and cash equivalents at end of period $5,760,000 $3,593,000
=======================================
</TABLE>
See accompanying notes to the unaudited condensed consolidated financial
statements
Page 5
<PAGE>
REFAC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (all of which were
normal recurring adjustments) necessary to present fairly the consolidated
financial position of Refac (the "Company") at June 30, 2000 and December 31,
1999, and the results of its operations, its cash flows and comprehensive income
for the six month interim period presented.
The accounting policies followed by the Company are set forth in Note l to
the Company's consolidated financial statements in the Company's Annual Report
on Form 10-K for the year ended December 31, 1999, which is incorporated herein
by reference.
2. The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year.
3. The following table reconciles the numerators and denominators of the
basic and diluted earnings per share computations.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
-------------------------------------------------- --------------------------------- ---------------------------------
Description 2000 1999 2000 1999
-------------------------------------------------- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Basic shares 3,795,261 3,795,261 3,795,261 3,795,261
Dilution: Stock Options and Warrants 4,700 16,604 -- 11,941
Diluted Shares 3,799,961 3,811,865 3,795,261 3,807,202
Income available to common shareholders $1,826,000 $1,872,000 $907,000 $864,000
Basic earnings per share $0.48 $0.49 $0.24 $0.23
Diluted earnings per share $0.48 $0.49 $0.24 $0.23
</TABLE>
4. During the six months ended June 30, 1999, the Company operated
principally in two industry segments - - - "Licensing of Intellectual Property
Rights" and "Creative Consulting Services". In September 1999, the formed Refac
Consumer Products, Inc. for the purchase and manufacture of consumer products
and now operates in three industry segments.
The accounting policies used to develop segment information correspond to
those described in the summary of significant accounting policies (See Note 1 of
the 1999 Annual Report). Segment profit or loss is based on profit or loss from
operations before the provision or benefit for income taxes. The reportable
segments are distinct business units operating in different industries and are
separately managed. As of June 30, 2000, the Company has allocated dividend and
interest income
Page 6
<PAGE>
REFAC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
to each segment. The prior period presentations have been reclassified to
conform to the current period presentation.
The following information about the business segments are for the six month
period ended June 30, 2000.
<TABLE>
<CAPTION>
Manufacture
and
Licensing of Creative Marketing of
Intellectual Consulting Consumer
Description Property Rights Services Products Total
-------------------------- ---------------------- ---------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Total revenues $4,684,000 $3,777,000 $744,000 $9,205,000
Segment profit (loss) $3,051,000 $220,000 ($547,000) $2,724,000
Segment assets $14,575,000 $10,359,000 $1,022,000 $25,956,000
</TABLE>
The following information about the business segments are for the six month
period ended June 30, 1999.
<TABLE>
<CAPTION>
Manufacture
Licensing of Creative and Marketing
Intellectual Consulting of Consumer
Description Property Rights Services Products* Total
-------------------------- ---------------------- ---------------- ------------------- -----------------
<S> <C> <C> <C>
Total revenues $5,376,000 $1,326,000 N/A $6,702,000
Segment profit (loss) $3,371,000 ($624,000) N/A $2,747,000
Segment assets $22,169,000 $7,431,000 N/A $29,600,000
</TABLE>
* Segment commenced in September 1999.
Page 7
<PAGE>
REFAC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following information about the business segments are for the three
month period ended June 30, 2000.
<TABLE>
<CAPTION>
Manufacture
and
Licensing of Creative Marketing of
Intellectual Consulting Consumer
Description Property Rights Services Products Total
-------------------------- ---------------------- ---------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Total revenues $2,292,000 $1,831,000 $19,000 $4,142,000
Segment profit (loss) $1,502,000 $222,000 ($366,000) $1,358,000
</TABLE>
The following information about the business segments are for the three
month period ended June 30, 1999.
<TABLE>
<CAPTION>
Manufacture
Licensing of Creative and Marketing
Intellectual Consulting of Consumer
Description Property Rights Services Products * Total
-------------------------- ---------------------- ---------------- ------------------- ----------------
<S> <C> <C> <C>
Total revenues $2,742,000 $545,000 N/A $3,287,000
Segment profit (loss) $1,712,000 ($459,000) N/A $1,253,000
</TABLE>
* Segment commenced in September 1999.
A reconciliation of combined segment profit to consolidated net income is
as follows:
<TABLE>
<CAPTION>
Six Months End Six Months Ended
Description June 30, 2000 June 30, 1999
--------------------------------------- ---------------------- ------------------------
<S> <C> <C>
Total profit for reportable segments $2,724,000 $2,747,000
Income tax expense (898,000) (875,000)
Net income $1,826,000 $1,872,000
</TABLE>
Page 8
<PAGE>
REFAC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
End June 30, Ended June 30,
Description 2000 1999
--------------------------------------- ---------------------- ------------------------
<S> <C> <C>
Total profit for reportable segments $1,358,000 $1,253,000
Income tax expense (451,000) (389,000)
Net income $907,000 $864,000
</TABLE>
5. Comprehensive income consists of net income or loss for the current
period as well as income, expenses, gains, and losses arising during the period
that are included in separate components of equity. It includes the unrealized
gains and losses on the Company's licensing-related securities, net of taxes and
foreign currency translation adjustments.
The components of comprehensive income (loss), net of related tax, for
the six months ended June 30, 2000 are as follows:
<TABLE>
<CAPTION>
Description 2000
------------------------------------------------------------------- ------------------
<S> <C>
Net income $1,826,000
Less: Comprehensive losses, net of tax
Unrealized holding losses arising during the period on licensing-
related securities (231,000)
Reclassification adjustment for gain included currently in net
income ($1,627,000)
Comprehensive loss ($32,000)
</TABLE>
The components of accumulated other comprehensive income, net of
related tax, at June 30, 2000, consist of unrealized gains on licensing-related
securities, net of tax, and amounted to $2,354,000.
6. At June 30, 2000, the Company had open letters of credit to purchase
goods for $762,000.
7. On December 31, 1995, an action was commenced in the United States
District Court for the Eastern District of New Jersey against the Company by the
executrix of the estate of a former officer of the Company for compensation
allegedly due the deceased officer under an employment arrangement. The Company
believes that the claim is without any merit.
Page 9
<PAGE>
REFAC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On December 20, 1999, a claim was brought against the Company, as a
nominal defendant, and certain of its directors in the Supreme Court of the
State of New York, New York County, by a shareholder alleging claims against the
Company and certain members of the Company's Board of Directors for breach of
fiduciary duty and waste arising out of a Stock Repurchase Agreement and a
Retirement Agreement entered into between the Company and its then Chairman and
Chief Executive Officer, Eugene Lang. On February 29, 2000, the Company,
together with all other defendants, filed a motion to dismiss the Complaint in
its entirety on the grounds that plaintiff's claims are time barred by the
statute of limitations and that the Complaint fails to state a claim upon which
relief may be granted. The defendants' motion to dismiss has been fully briefed
and the parties are awaiting a decision on the motion or instructions from the
court regarding oral argument. The Company believes that the claims against the
Company and its directors are without merit.
8. Certain prior period amounts have been reclassified to conform to
the current period presentation.
9. Inventories are stated at the lower of cost or market; cost is
determined using the first-in, first out method. Inventory consists of finished
goods for $154,000 and raw materials for $295,000.
10. Effect of Recently Issued Accounting Pronouncements. Accounting for
Derivative Instruments and Hedging Activities. In June 1998, the FASB issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities",
which requires all entities to recognize all derivative instruments on their
balance sheet as either assets or liabilities measured at fair value. SFAS No.
133 also specifies new methods of accounting for hedging transactions,
prescribes the items and transactions that my be hedged, and specifies detailed
criteria to be met to qualify for hedge accounting. SFAS No. 133, as amended by
SFAS No. 137, is effective for fiscal years beginning after June 15, 2000. This
standard is not expected to have a material effect on the Company's financial
statements.
Page 10
<PAGE>
REFAC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
REVENUES for the six months ended June 30, 2000 were $9,205,000 as
compared to $6,702,000 for the comparable period in 1999. The increase of
$2,503,000, or 37%, is principally due to increases in revenues from creative
consulting services ($2,276,000), licensing-related activities ($111,000), sales
of consumer products ($712,000) and dividend and interest income ($55,000)
offset by a decrease of $651,000 in gains on the sale of licensing-related
securities and dividends.
Revenues for the three months ended June 30, 2000 were $4,142,000 as
compared to $3,287,000 for the comparable period in 1999. The increase of
$855,000, or 26% is principally due to increases in revenues from creative
consulting services ($1,207,000), licensing-related activities ($13,000), sales
of consumer products ($5,000) and dividend and interest income ($14,000) offset
by a decrease of $384,000 in gains on the sale of licensing-related securities
and dividends.
Revenues for the six and three months are summarized as follows:
<TABLE>
<CAPTION>
For the Six For the Three
Months Ended Months Ended
June 30, June 30,
Description 2000 1999 2000 1999
----------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues from licensing-related activities 22% 29% 24% 29%
Realized gains on sales and dividends from licensing- 28% 49% 31% 51%
related securities
Creative consulting services 39% 20% 42% 17%
Consumer product sales (commenced in September, 1999) 8% 0% 0% 0%
Dividends and interest 3% 2% 3% 3%
Total 100% 100% 100% 100%
</TABLE>
Revenues from Licensing-Related Activities consist of recurring royalty
payments for the use of licensed patents and trademarks, non-recurring, lump sum
license payments, agency fees and service fees. Recurring patent licensing
income and trademark agency fees increased $354,000, or 25%, for the six months
ended June 30, 2000 as compared to the same period of 1999. The increase of
recurring patent licensing income and trademark agency fees for the six months
ended June 30, 2000 is attributable to the increase in (i) trademark agency fees
of $224,000 and (ii) patent licensing
Page 11
<PAGE>
REFAC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
income of $183,000 offset by (iii) a decrease in patent enforcement fees of
$53,000. Revenues from non-recurring agreements vary from period to period
depending upon the nature of the licensing programs pursued for various
technologies in a particular year and the timing of successful completion of
licensing agreements. Non-recurring license fees decreased by $243,000 for the
six months ended June 30, 2000 as compared to the same period of 1999.
Recurring patent licensing income and trademark agency fees increased
$109,000 for the three months ended June 30, 2000 as compared to the same period
of 1999. The increase of recurring patent licensing income and trademark agency
fees for the three months ended June 30, 2000 is attributable to the increase in
(i) trademark agency fees of $26,000 and (ii) patent licensing income of
$111,000 offset by (iii) a decrease in patent enforcement fees of $28,000.
Revenues from non-recurring agreements vary from period to period depending upon
the nature of the licensing programs pursued for various technologies in a
particular year and the timing of successful completion of licensing agreements.
Non-recurring license fees decreased by $96,000 for the three months ended June
30, 2000 as compared as compared to the same period of 1999.
Expenses from Licensing-Related Activities consist principally of
amounts paid to licensors at contractually stipulated percentages of the
Company's specific licensing revenues and, in addition, includes expenses
related to the investigation, marketing, administration, enforcement,
maintenance and prosecution of patents, trademarks and license rights.
Licensing-related expenses decreased by $271,000 for the six months ended June
30, 2000, as compared to the same period of 1999. As a percentage of licensing
revenues, these expenses were 38% and 55% for the six months ended June 30, 2000
and 1999, respectively. The decrease is principally due to a recoupment of
expenses associated with one of the Company's patent licensing projects.
Licensing-related expenses decreased $181,000 for the three months
ended June 30, 2000, as compared to the same period of 1999. As a percentage of
licensing revenues, these expenses were 36% and 55% for the three months ended
June 30, 2000 and 1999, respectively. The decrease is principally due to a
recoupment of expenses associated with one of the Company's patent licensing
projects.
Income from Licensing-Related Securities consist of gains on sales and
dividends received on securities acquired by the Company in connection with its
licensing activities. As of June 30, 2000, licensing-related securities
consisted of 175,000 shares of KeyCorp common stock. The Company intends to sell
an additional 100,000 of such shares during the remaining six months of 2000,
and as of June 30, 2000, held two successive quarterly put options (at $27.4262
per share) and had sold two successive quarterly call options (at prices ranging
from $38.7015 to $39.3720 per share), each of which covers 50,000 shares.
Page 12
<PAGE>
REFAC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Creative Consulting Services
----------------------------
Creative Consulting Fees consist of product development and graphic
design services. Total creative consulting fees increased by $2,276,000 for the
six months ended June 30, 2000 versus the comparable period in 1999. This
increase includes $1,127,000 in graphic design fees billed by Refac David Morris
Creative, which the Company acquired in November 1999.
Total creative consulting fees increased by $1,207,000 for the three
months ended June 30, 2000 versus the comparable period in 1999. This percentage
decrease increase includes $516,000 in graphic design fees billed by Refac David
Morris Creative, which the Company acquired in November, 1999.
Expenses increased by $1,037,000 for the six month period ended June
30, 2000, as compared to 1999. This increase is principally due to the inclusion
of the expenses incurred by Refac David Morris Creative, which was acquired in
November 1999. As a percentage of creative consulting fees, the cost of
providing such services were 63% and 93% for the six months ended June 30, 2000
and 1999, respectively.
Expenses increased by $504,000 for the three month period ended June
30, 2000, as compared to 1999. This increase is principally due to the inclusion
of the expenses incurred by Refac David Morris Creative, which was acquired in
November 1999. As a percentage of creative consulting fees, the cost of
providing such services were 61% and 104% for the six months ended June 30, 2000
and 1999, respectively.
Manufacturing and Marketing of Consumer Products
------------------------------------------------
The Company formed Refac Consumer Products, Inc. ("RCP") in September
1999. Sales of $712,000 during the six months ended June 30, 2000 principally
consist of sales of imported consumer electronics sourced by RCP for a retailer.
RCP introduced its proprietary product line at the 2000 International Consumer
Electronics Show in Las Vegas, Nevada. Due to delays that the Company has
experienced in manufacturing these products, it expects only nominal sales in
2000.
Selling, General and Administrative Expenses increased by $1,284,000 in
the six month period ended June 30, 2000 as compared to the previous year. The
increase is principally attributable to RCP ($463,000), the acquisition of Refac
David Morris Creative ($79,000), salaries ($378,000), rent ($145,000) and
professional fees ($104,000).
Income Tax Provision. The Company's income tax provision of $898,000
for the six months ended June 30, 2000 reflects an effective tax rate of 34%
(the Federal statutory corporate
Page 13
<PAGE>
REFAC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
income tax rate), reduced by the statutory dividends received exclusion to
arrive at a net effective tax rate of 33%. The net effective tax rate for the
six months ended June 30, 1999 was 32%.
Inflation. The Company's income from licensing operations has not in
the past been materially affected by inflation. Likewise, while currency
fluctuations can influence licensing-related revenues, the diversity of foreign
income sources tends to offset individual changes in currency valuations.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Cash, cash equivalents, corporate bonds and U.S. Treasury Notes
decreased $4,000 from $8,489,000 at December 31, 1999 to $8,485,000 at June 30,
2000. The Company believes its liquidity position is adequate to meet all
current and projected financial needs.
As of June 30, 2000, the Company had open letters of credit to purchase
goods for $762,000.
The Company has commitments under leases covering its facilities and
under a Retirement Agreement with its founder and former Chief Executive Officer
(which has been provided for in the financial statements).
FORWARD LOOKING STATEMENTS
--------------------------
Statements about the Company's future expectations and all other
statements in this document other than historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and as that term is defined
in the Private Securities Litigation Reform Act of 1995. The Company intends
that the "forward-looking statements" contained herein be subject to the
above-mentioned statutory safe harbors. Since these statements involve risk and
uncertainties and are subject to change at any time, and the Company's actual
results could therefore differ materially from expected or inferred results.
Page 14
<PAGE>
Part II. Other Information
Item 6. Exhibit and Reports on Form 8-K
-----------------------------------------
(a) See Exhibit Index attached hereto.
(b) Reports on Form 8-K filed during the quarter: None
Signatures
----------
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REFAC
August 11, 2000 /s/ Robert L. Tuchman
-----------------------------------
Robert L. Tuchman, President and
Chief Executive Officer
August 11, 2000 /s/ David Capodanno
-----------------------------------
David Capodanno, Controller
(Principal Financial Officer)
Page 15
<PAGE>
EXHIBIT INDEX
Exhibit Page
No. No.
------- ---
27 Note 1 to the Company's Consolidated financial
statements contained in the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1999 is incorporated herein by
reference.
Page 16
