FORM 8-K/A #2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act 1934
Date of Report (Date of earliest event reported):
DECEMBER 31, 1997
-----------------------------
WINDSOR CAPITAL CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE 33-11935 59-2754843
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(State or other (Commission File I.R.S. Employer
jurisdiction of Number) Identification
incorporation) No.)
350 E. IRVING PARK ROAD
ROSELLE, ILLINOIS 60172
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(Address of principal executive offices) (Zip Code)
(630) 529-9424
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(Registrant's telephone number including area code)
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(Former name or former address, if changed since last report)
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<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired:
The audited financial statements required by Item 7(a) of Woodfield
Enterprises, Inc. as of December 31, 1996 and for the period from
July 15, 1996 (date of inception) to December 31, 1996 are included
as an exhibit to this Form 8-K/A #2.
The unaudited financial information required by Item 7(a) of
Woodfield Enterprises, Inc. as of and for the twelve month period
ended December 31, 1997 is included as an exhibit to this Form 8-K/A
#2.
(b) Pro Forma Financial Information:
Not applicable as the merger with Windsor Capital Corp. has been
accounted for as a capital transaction, in substance, rather than a
business combination.
(c) The following exhibits are included herein:
Exhibit 1 - Audited Financial Statements for Woodfield Enterprises,
Inc. as of December 31, 1996 and for the period from July 15, 1996
(date of inception) to December 31, 1996.
Exhibit 2 - Unaudited Financial Information for Woodfield
Enterprises, Inc. as of and for the twelve month period ended
December 31, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Windsor Capital Corp.
March 16, 1998 By: /s/ GARY N. MANSFIELD
-------------------------
Gary N. Mansfield
Chief Executive Officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
- ------- -----------
1 Audited Financial Statements for Woodfield Enterprises, Inc. as of
December 31, 1996 and for the period from July 15, 1996 (date of
inception) to December 31, 1996.
2 Unaudited Financial Information for Woodfield Enterprises, Inc. as of
and for the twelve month period ended December 31, 1997.
EXHIBIT 1
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
REPORT ON AUDIT OF FINANCIAL STATEMENTS
FOR THE PERIOD JULY 15, 1996 (DATE OF INCEPTION) TO
DECEMBER 31, 1996
<PAGE>
TABLE OF CONTENTS
PAGES
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Report of Independent Accountants 1
Financial Statements:
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Directors of
Woodfield Enterprises, Inc.
d/b/a Simply Cigars
We have audited the accompanying balance sheet of Woodfield Enterprises, Inc.
d/b/a Simply Cigars as of December 31, 1996 and the related statements of
operations, stockholders' equity and cash flows for the period from July 15,
1996 (date of inception) to December 31, 1996. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we 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.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Woodfield Enterprises, Inc.
d/b/a Simply Cigars as of December 31, 1996 and the results of its operations,
changes in stockholders' equity and cash flows for the period from July 15, 1996
(date of inception) to December 31, 1996 in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND, L.L.P.
Miami, Florida
March 11, 1997
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
BALANCE SHEET
December 31, 1996
ASSETS
Current assets:
Cash and cash equivalents $ 431,430
Receivables 26,303
Merchandise inventories 247,575
Prepaid expenses and other current assets 14,824
---------
Total current assets 720,132
Property and equipment, net 226,208
Other assets:
Deposits 10,385
Other 3,373
---------
$ 960,098
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 163,552
Note payable to stockholder 100,000
Accrued salaries, bonuses and employee benefits 28,834
Other accrued expenses 32,034
---------
Total current liabilities 324,420
---------
Commitments (Note 6)
Stockholders' equity:
Common stock, $0.001 par value; 5,000,000
shares authorized; 4,000,000 shares issued
and outstanding 4,000
Additional paid in capital 687,500
Stock Subscriptions Receivable (1,400)
Accumulated deficit (54,422)
---------
Total stockholders' equity 635,678
---------
$ 960,098
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 15, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1996
Sales $ 348,062
Cost of goods sold 161,414
---------
Gross profit 186,648
Selling, general and administrative expenses 241,070
---------
Net loss $ (54,422)
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<PAGE>
<TABLE>
<CAPTION>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD JULY 15, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1996
COMMON STOCK ADDITIONAL STOCK
NUMBER OF PAID-IN ACCUMULATED SUBSCRIPTION
SHARES AMOUNT CAPITAL DEFICIT RECEIVABLE TOTAL
---------- ---------- ---------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock
at inception 3,000,000 $ 3,000 $ 188,500 $ 0 $ (1,400) $ 190,100
Additional issuance of
common stock 1,000,000 1,000 499,000 0 0 500,000
Net loss 0 0 0 (54,422) 0 (54,422)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1996 4,000,000 $ 4,000 $ 687,500 $ (54,422) $ (1,400) $ 635,678
========== ========== ========== ========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 15, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1996
Cash flows from operating activities:
Net loss $ (54,422)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 7,697
Change in assets and liabilities:
Receivables (26,303)
Merchandise inventories (247,575)
Prepaid expenses and other current assets (14,824)
Deposits (10,385)
Other assets (3,373)
Accounts payable - trade 163,552
Accrued salaries, bonuses and employee benefits 28,834
Other accrued expenses 32,034
---------
Net cash used in operating activities (124,765)
---------
Cash flows from investing activities:
Capital expenditures (233,905)
---------
Net cash used in investing activities (233,905)
---------
Cash flows from financing activities:
Proceeds from borrowings 300,000
Repayment of amounts borrowed (200,000)
Proceeds from sale of common stock 690,100
---------
Net cash provided by financing activities 790,100
---------
Net increase in cash and cash equivalents 431,430
Cash and cash equivalents at beginning of period 0
---------
Cash and cash equivalents at end of period $ 431,430
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
NOTES TO FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS:
Woodfield Enterprises Inc., d/b/a Simply Cigars ("the Company") is a
speciality mall-based retailer of premium cigars and accessories. The
Company was incorporated pursuant to the laws of the State of Florida in
July 1996 and commenced operations in November 1996. The Company operates in
regional malls, primarily in the Midwest and Northeastern United States.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
MANAGEMENT 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 dates of the
financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
CASH EQUIVALENTS
Cash equivalents include short-term investments with a term to maturity of
three months or less when purchased.
REVENUE RECOGNITION
Revenue from sales of products is generally recognized upon delivery to
customers. The Company has established programs, which, under specific
conditions, enable customers to return products. The Company establishes
liabilities for estimated returns and allowances at the time of delivery to
customers.
INVENTORY
Inventory is stated at the lower of cost or market. Cost is determined using
the average cost method.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation on property and
equipment is provided on the straight-line method over the estimated useful
lives of the assets. Maintenance and repairs are charged to income as
incurred; improvements and betterments are capitalized. Upon the retirement
or sale of property and equipment, the accounts are relieved of the cost and
accumulated depreciation, and any resulting gains or losses are recognized.
6
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
INCOME TAXES
The Company provides for income taxes pursuant to the provisions of SFAS No.
109, "Accounting for Income Taxes". Deferred income taxes are determined
based upon differences between financial reporting and tax bases of assets
and liabilities and are measured using the enacted tax rates and laws that
will be in effect when the differences are expected to reverse. Deferred tax
assets are also established for the future tax benefits of loss and credit
carryovers. Valuation allowances are established for deferred tax assets
when it is more likely than not that such amounts will be realized.
3. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following:
1996
--------
Furniture and fixtures $214,974
Computer equipment 18,931
--------
233,905
Less accumulated depreciation 7,697
--------
$226,208
========
4. Note Payable:
The note payable to stockholder at December 31, 1996, is uncollateralized,
non-interest bearing, and is due on demand.
During the period July 15, 1996 (date of inception) to December 31, 1996,
one of the Company's principal stockholders loaned the Company an additional
$200,000. This loan was fully repaid by the Company by December 31, 1996.
7
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
NOTES TO FINANCIAL STATEMENTS
5. INCOME TAXES:
Based on the weight of available evidence, a valuation allowance has been
provided to offset a net deferred tax asset of approximately $20,000 at
December 31, 1996. This amount relates principally to the tax effect of net
operating loss carryforwards. The net operating loss carryforwards, which
amount to approximately $54,000 as of December 31, 1996, begin to expire in
2011.
6. COMMITMENTS:
As of December 31, 1996, the Company is committed for the payment of minimum
annual lease payments pursuant to operating leases for the operation of its
kiosk in regional malls as follows:
YEARS ENDING DECEMBER 31,
-------------------------
1997 $277,128
1998 110,601
1999 95,804
2000 19,113
--------
$502,646
========
Total rent charged to operations during the period ended December 31, 1996
was approximately $40,000. The terms of the Company's operating leases
include provisions for payment of additional rents based on specified
percentages of gross sales reported by the kiosk during lease periods. No
percentage rent payments were required for the period ended December 31,
1996.
7. STOCKHOLDERS' EQUITY (DEFICIT):
On October 24, 1996, the shareholders of the Company approved a resolution
which amended the Company's Restated Articles of Incorporation to increase
the number of authorized shares of common stock from 1,000 shares, par value
$1.00 to 5,000,000 shares, par value $0.001. All applicable share data have
been retroactively adjusted to give effect to this increase.
In connection with the issuance of common stock during the period July 15,
1996 (date of inception) to December 31, 1996, the Company issued warrants
to purchase 125,000 shares of common stock at an exercise price of $1.00 per
share, exercisable through November 30, 2001.
8
EXHIBIT 2
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
UNAUDITED FINANCIAL INFORMATION
AS OF AND FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 1997
<PAGE>
TABLE OF CONTENTS
PAGES
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Financial Statements:
Balance Sheets 1
Statement of Operations 2
Statement of Cash Flows 3
Notes to Financial Statements 4-6
<PAGE>
<TABLE>
<CAPTION>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
BALANCE SHEETS
DECEMBER 31, 1996 AND DECEMBER 31, 1997
(UNAUDITED)
DECEMBER 31, 1996 DECEMBER 31, 1997
----------------- -----------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 431,430 $ 2,361,854
Receivables 26,303 5,585
Merchandise inventories 247,575 743,920
Prepaid expenses and other current assets 14,824 51,229
----------- -----------
Total current assets 720,132 3,162,588
Property and equipment, net 226,208 513,294
Other assets:
Deposits 10,385 1,160
Other 3,373 6,418
----------- -----------
$ 960,098 $ 3,683,460
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 163,552 $ 550,040
Note payable to stockholder 100,000 0
Accrued salaries, bonuses and employee benefits 28,834 59,122
Other accrued expenses 32,034 141,002
----------- -----------
Total current liabilities 324,420 750,164
----------- -----------
Commitments (Note 3)
Stockholders' equity:
Common stock, $0.001 par value; 5,000,000
shares and 20,000,000 shares authorized;
4,000,000 and 7,745,000 shares issued and
outstanding in 1996 and 1997, respectively
4,000 7,745
Additional paid in capital 687,500 3,626,444
Stock Subscriptions Receivable (1,400) (1,400)
Accumulated deficit (54,422) (699,493)
----------- -----------
Total stockholders' equity 635,678 2,933,296
----------- -----------
$ 960,098 $ 3,683,460
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL INFORMATION.
1
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
STATEMENT OF OPERATIONS
FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 1997
(UNAUDITED)
1997
-----------
Sales $ 2,201,966
Cost of goods sold 1,158,513
-----------
Gross profit 1,043,453
Selling, general and administrative expenses 1,688,524
-----------
Net loss $ (645,071)
===========
SEE ACCOMPANYING NOTES TO FINANCIAL INFORMATION.
2
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
STATEMENT OF CASH FLOWS
FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 1997
(UNAUDITED)
1997
-----------
Cash flows from operating activities:
Net loss $ (645,071)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 64,509
Change in assets and liabilities:
Receivables 20,718
Merchandise inventories (496,345)
Prepaid expenses and other current assets (36,405)
Deposits 9,225
Other assets (3,045)
Accounts payable - trade 386,488
Accrued salaries, bonuses and employee benefits 30,288
Other accrued expenses 108,968
-----------
Net cash used in operating activities (560,670)
-----------
Cash flows from investing activities:
Capital expenditures (351,595)
-----------
Net cash used in investing activities (351,595)
-----------
Cash flows from financing activities:
Borrowings from stockholders 50,000
Repayment of amounts borrowed (150,000)
Proceeds from sale of common stock 2,456,172
Cash acquired in capital transaction, net 486,517
-----------
Net cash provided by financing activities 2,842,689
-----------
Net increase in cash and cash equivalents 1,930,424
Cash and cash equivalents at beginning of period 431,430
-----------
Cash and cash equivalents at end of period $ 2,361,854
===========
SEE ACCOMPANYING NOTES TO FINANCIAL INFORMATION.
3
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying balance sheets as of December 31, 1997 and 1996 and the
related statements of operations and cash flows for the twelve month period
ended December 31, 1997 are unaudited and have been prepared by Woodfield
Enterprises, Inc. (the "Company") in conformity with generally accepted
accounting principles. The balance sheet as of December 31, 1996 has been
derived from the Company's audited balance sheet. Certain information and
footnote disclosures normally included in the Company's annual financial
statements have been omitted.
The financial information, in the opinion of the Company, reflects all
adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation of the results for the period presented.
The results of operation for the twelve month period ended December 31,
1997 have not been subject to audit. In addition, in connection with a
transaction described more fully in Note 5, the Company has recently
changed its fiscal year-end to January 31, 1998.
2. PROPERTY AND EQUIPMENT:
Property and equipment at December 31, 1996 and 1997 consisted of the
following:
DECEMBER 31, DECEMBER 31,
1996 1997
----------- -----------
(UNAUDITED) (UNAUDITED)
Furniture and fixtures $214,974 $544,335
Computer equipment 18,931 18,931
Leasehold improvements -- 29,466
-------- --------
233,905 592,732
Less accumulated depreciation 7,697 79,438
-------- --------
$226,208 $513,294
======== ========
4
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
3. COMMITMENTS:
The Company operates principally in leased premises. Total rent charged to
operations during the year ended December 31, 1997 was approximately
$473,000. During the year ended December 31, 1997, the Company entered into
eight new operating leases with terms in excess of one year. The annual
lease payments for the new leases in the aggregate are approximately
$325,400. In addition, the new leases include provisions for payment of
additional rents based on specified percentages of gross sales reported by
the Company during the lease term. No percentage rent payments were
required for the year ended December 31, 1997.
4. ISSUANCE OF COMMON STOCK:
In the year ended December 31, 1997, the Company issued an additional
3,745,000 shares of its common stock.
5. MERGER WITH WINDSOR CAPITAL CORP.:
On December 31, 1997, the Company merged with and into Windsor Capital
Corp. ("Windsor"). Pursuant to the merger, 6,700,000 shares of Windsor's
common stock, par value $0.001 per share, were issued to the former
shareholders of the Company in a private transaction pursuant to Section
4(2) of the Securities Act of 1933, as amended. Prior to the merger, the
Windsor had 5,525,000 shares of common stock outstanding and effectuated a
recapitalization, which included a sale by Windsor's majority shareholder,
International Asset Management Group, Inc. ("IAMG") to the Company of
4,480,000 shares and 5,000,000 warrants, which were canceled by the Company
in accordance with the terms and conditions of the Agreement and Plan of
Merger among the Windsor, IAMG and the Company dated December 18, 1997 (the
"Merger Agreement"). Upon completion of the merger, Windsor had 7,745,000
shares of common stock outstanding, of which 6,700,000 were held by the
Company's former shareholders. This transaction has been accounted for as a
capital transaction, in substance, rather than a business combination. The
cash acquired in this transaction, net, was $486,517. The financial
statements of Windsor Capital Corp. subsequent to the date of the merger
will reflect the financial condition and results of operation of the
Company as the accounting successor in the transaction.
5
<PAGE>
WOODFIELD ENTERPRISES, INC.
d/b/a SIMPLY CIGARS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
6. SUBSEQUENT EVENTS:
On January 30, 1998, pursuant to an Agreement and Plan of Merger dated
January 29, 1998 (the "Merger Agreement"), Windsor acquired all of the
business and assets of Boynton Tobacconists, Inc., a privately-held Florida
corporation ("Boynton"), and assumed all of Boynton's liabilities. Pursuant
to the merger, 1,770,213 shares (valued by the parties at $2.6 million, or
$1.46875 per share, based on the contemporaneous market value of the
Windsor's common stock) of Windsor's common stock, par value $0.001 per
share, were issued to the former shareholder of Boynton in a private
transaction pursuant to Section 4(2) of the Securities Act of 1933, as
amended. Additional shares of Boynton's common stock, up to a maximum of
176,340, may be issued to the selling shareholder based on a final
valuation of certain assets and liabilities of Boynton as of January 30,
1998.
The acquired business involves the operation of a chain of six specialty
retail outlets in South Florida malls under the name "Smoker's Gallery."
These outlets specialize in the sales of cigars, pipes and related products
and accessories. In connection with the merger, the selling shareholder and
his wife entered into three-year employment agreements with Windsor,
pursuant to which they will serve, on a full time basis, as the
Registrant's Chief Operating Officer-Tobacconist Division and Director of
Operations-Tobacconist Division, respectively. The terms of the merger were
negotiated on an arms length basis by representatives of the constituent
corporations.
6
