SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended APRIL 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _________________
Commission File No. 33-26828
WINDSOR CAPITAL CORP.
--------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 58-1921737
------------------ ------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
7200 W. Camino Real, Suite 302
Boca Raton, Florida 33433
------------------------------------ --------------
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code: (561) 417-8364
Check whether the issuer (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 [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 9,999,053 shares of common
stock, $.001 par value per share were outstanding as of June 14, 2000.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WINDSOR CAPITAL CORP.
CONDENSED BALANCE SHEET
April 30, 2000
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 6,624
Receivables 28,417
Merchandise inventories 366,878
-----------
Total current assets 401,919
Property and equipment, net 27,560
Other assets:
Deposits 17,870
-----------
$ 447,349
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 275,327
Accrued salaries, bonuses and employee benefits 24,185
Other accrued expenses 98,100
-----------
Total current liabilities 397,612
-----------
Stockholders' equity:
Preferred stock, $0.01 par value; 10,000,000 shares
authorized; no shares issued and outstanding --
Common stock, $0.001 par value; 25,000,000 shares
authorized; 9,999,053 shares issued and outstanding 9,999
Additional paid in capital 3,788,421
Stock subscription receivable (1,400)
Accumulated deficit (3,747,283)
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Total stockholders' equity 49,737
-----------
$ 447,349
===========
The accompanying notes are an integral part of these financial statements.
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WINDSOR CAPITAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
APRIL 30,
2000 1999
---------------------------
Sales $ 637,875 $ 870,843
Costs of goods sold 406,598 557,053
---------------------------
Gross profit 231,277 313,790
Selling, general and administrative expenses 361,904 481,790
Loss on abandonment of stores 70,994 --
---------------------------
Operating loss (201,621) (168,000)
Other income 14,414 18,535
---------------------------
Net loss $ (187,207) $ (149,465)
===========================
Loss per common share, basic and diluted $ (.02) $ (.01)
===========================
Weighted average common
shares outstanding 9,999,053 9,999,053
===========================
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
WINDSOR CAPITAL CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
APRIL 30,
2000 1999
-----------------------
Cash flows from operating activities:
Net loss $(187,207) $(149,465)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 20,170 18,000
Loss on abandonment of stores 70,994 --
Change in assets and liabilities:
Receivables 41 30,031
Merchandise inventories 106,575 124,826
Prepaid expenses and other current liabilities 703 (29,046)
Deposits and other assets -- (2,036)
Accounts payable (41,098) 5,775
Accrued salaries, bonuses and employee benefits 8,538 10,629
Other accrued expenses (23,721) (12,400)
-----------------------
Net cash used in operating activities (45,005) (3,686)
Cash and cash equivalents at beginning of period 51,629 102,870
-----------------------
Cash and cash equivalents at end of period $ 6,624 $ 99,184
=======================
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
WINDSOR CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Company is a mall-based specialty retailer which operates four
in-line stores in South Florida malls under the name "Smoker's Gallery." These
stores carry a wide range of tobacco products and accessories, including cigars,
pipes and pipe tobacco, as well as upscale non-tobacco-related gift items
("gentlemen's accessories"). Until April 27, 2000, the Company operated six such
stores. On April 27, 2000, one store was closed as a result of the termination
of its lease. In addition, due to adverse business conditions, the Company
ceased operations at another unprofitable store on May 28, 2000, and abandoned
its property and equipment at that location to the landlord.
In addition, until June 1998, the Company owned and operated 14 kiosks
under the name "Simply Cigars" in malls located in Connecticut, Illinois,
Maryland, Massachusetts, Michigan and Ohio. These stores sold hand-rolled
premium cigars, cigar-related items and gentlemen's accessories. Most of the
Simply Cigars kiosks proved unprofitable, and in May 1998, the Company decided
to terminate its Simply Cigars operations. In early June 1998, the Company
closed two kiosks, and in August 1998, the Company sold three other kiosks. In
September 1998, the Company entered into an agreement to sell its remaining nine
kiosks; however, the prospective buyer failed to close. In November 1998, the
Company filed suit against the prospective buyer and, due to the lack of
alternatives, surrendered eight of the remaining nine kiosks to the respective
landlords in order to limit its liability for ongoing lease expenses as well as
to avoid additional operating losses. The final kiosk, which was not subject to
an ongoing lease, was sold. See Part II, Item 1 "Legal Proceedings".
The interim financial information included herein is unaudited. In the
opinion of management, such unaudited information reflects all adjustments,
consisting only of normal recurring accruals and other adjustments as disclosed
herein, necessary for a fair presentation of the unaudited information.
The results of operations for the three months ended April 30, 2000 are
not necessarily indicative of the results to be expected for the full year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Revenue from sales of products is generally recognized upon delivery to
customers. The Company has established programs which, under certain
conditions, enable customers to return products. The Company
establishes liabilities for estimated returns and allowances at the
time of delivery to customers.
4
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MERCHANDISE INVENTORIES
Merchandise inventories are stated at the lower of cost or market. Cost
is determined using the average cost method.
PROPERTY AND EQUIPMENT
Property and equipment is 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
expense 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.
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 future tax
benefits of loss and credit carryforwards. Valuation allowances are
established for deferred tax assets when it is more likely than not
that such amounts will not be realized.
3. GOING CONCERN CONSIDERATION
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company has experienced recurring
losses from operations and generated negative cash flows from operations of
$45,005 during the quarter ended April 30, 2000. In addition, as further
discussed in Note 4, the Company is subject to certain contingencies which, if
not favorably resolved, could have a significant negative impact on its future
cash flows. The Company continues to seek to reduce operating expenses through
reductions in corporate overhead and increase sales volume through promotional
discounts. In addition, the Company is considering seeking sources of funds
through additional capital contributions or through additional financing. The
Company is also pursuing either the sale of its remaining Smoker's Gallery
retail stores or the prompt closure of any remaining unprofitable Smoker's
Gallery retail stores. Finally, as also discussed in Note 4, the Company has
attempted to mitigate the potential financial impact of any contingencies which
may not be favorably resolved.
5
<PAGE>
3. GOING CONCERN CONSIDERATION (CONTINUED)
In the absence of achieving profitable operations, obtaining additional
debt or equity financing, or concluding successful negotiations for the sale or
closure of some or all of its remaining Smoker's Gallery retail stores, the
Company may not have sufficient funds to continue operations in Fiscal 2001.
4. CONTINGENCIES
On September 15, 1998, the Company entered into an Operating Agreement
and an Asset Purchase Agreement (collectively, the "Agreements") with Tropical
Republic, Inc. ("Tropical"), under which the responsibility for the operations
and expenses of the Company's then remaining nine Simply Cigars kiosks was
turned over to Tropical at various dates during September 1998, with the sale of
the kiosks to Tropical at an aggregate price of $130,000 scheduled to close in
October 1998. Tropical failed to close on the sale and failed to pay a
substantial portion of the operating expenses owed the Company under the
Agreements. On November 18, 1998, the Company filed suit in Broward County,
Florida, Circuit Court for breach of the Agreements against Tropical and its
principal James Joiner ("Joiner"), who personally guaranteed Tropical's
obligations under the Agreements.
In its complaint, the Company seeks damages in excess of $165,716: (i)
$120,000 for the balance owed on the purchase price after crediting Tropical's
$10,000 deposit; (ii) $45,716 for unpaid operating expenses accrued by Tropical
during its operation of the kiosks through October 31, 1998; and (iii) an
unspecified amount for potential liability to landlords under lease agreements
which extend past October 31, 1998.
Tropical and Joiner have answered the Complaint and denied liability
based on alleged misrepresentations by the Company concerning Simply Cigars'
business. In addition, the defendants have filed a counterclaim for rescission
of the Agreements and unspecified damages. The Company believes that its claims
are meritorious and the defendants' defenses and counterclaims are without
merit; however, there can be no assurance that the Company will prevail in this
litigation or that, if it obtains a judgment, it will be able to collect the
judgment.
As a result of Tropical's breach of the Agreements and the
unprofitability of the Simply Cigars business, the Company had no realistic
alternative but to surrender eight of its nine remaining kiosks to the
respective landlords as of November 1, 1998, in order to limit its liability for
ongoing lease expenses as well as to pay accrued rent through October 31, 1998,
which Tropical had agreed but failed to pay. The final kiosk, which was not
subject to an ongoing lease, was sold for $5,000. By surrendering these kiosks,
the Company obtained releases from future lease liability for all kiosk
locations except for the kiosks located at the Montgomery and Annapolis,
Maryland malls. Such future lease liability approximated $376,425 as of November
1, 1998: 27 months at $5,300 per month with respect to Montgomery; and 51 months
at $4,575 per month with respect to Annapolis. In November 1998, the Maryland
landlord threatened legal action against the Company; however, the Company is
unaware of the commencement of any such action and there has been no further
legal pressure by the landlord. The Company believes that it
6
<PAGE>
3. CONTINGENCIES (CONTINUED)
will be able to avoid at least a substantial portion of any future lease
liability to the Maryland landlord by asserting a credit equal to the fair
market rental value of the premises including the kiosks. Further, under the
Agreements with Tropical and Joiner, the Company believes that Tropical and
Joiner are fully responsible for any liability of the Company to the Maryland
landlords; however, there can be no assurance that the Company will not be
materially adversely affected if litigation is brought by the Maryland landlord.
On February 24, 1999, J.C. Pendergast, Inc. ("Pendergast"), filed suit
against the Company in the United States District Court for the Eastern District
of Wisconsin, alleging breach of contract based on a May 1997 purchase order,
signed by a former officer of the Company, for $738,850 worth of kiosks. In
August 1998, the Company had previously received a letter from attorneys
representing Pendergast requesting payment of approximately $180,000 for work
allegedly performed under the purchase order. The Company answered the Complaint
and asserted as affirmative defenses that (i) the purchase order was never
intended by the parties to reflect a binding contract, and (ii) the purchase
order was never authorized by the Company's Board of Directors and Pendergast
was aware of the lack of authorization due to the close personal friendship
between the Company's former officer and Pendergast's owner. In April 2000, the
case was settled based on the Company's agreement to pay a total of $38,000 to
Pendergast, with the first payment due on or before April 28, 2000, in the
amount of $9,500 and subsequent payments of $9,500 each due on June 1, July 1
and August 1, 2000. Under the settlement agreement, in the event that the
Company fails to make a payment within 30 days of the due date, then Pendergast
may, by submitting an affidavit of default to the court, obtain a judgment
against the Company in the amount of $150,000. The Company has made the first
payment due April 28, 2000 and the second payment due June 1, 2000.
On May 10, 2000, the Florida Department of Revenue ("FDR") concluded a
sales tax audit of the Smoker's Gallery Sawgrass Mall store for the period
September 1, 1994 to August 31, 1999. The FDR asserted that, as a result of the
audit, the Company owes approximately $31,300 in back taxes, interest and
penalties. The Company believes that most, if not all, of the FDR assessment is
improper because it is principally based on out-of-state and gift certificate
sales, for which no sales tax should be due. The Company is engaged in
negotiations with the FDR in an attempt to successfully settle the pending
assessment. If a prompt settlement cannot be reached, the Company intends to
vigorously dispute the assessment and file an administrative appeal. There can
be no assurance, however, that a favorable settlement will be reached or that
any appeal will be successful.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Except for historical information contained herein, certain matters set
forth in this Form 10-QSB are "forward looking", within the meaning of the
federal securities laws, and involve a number of risks and uncertainties that
could cause future results to differ materially from these statements and
trends. These forward-looking statements include, among others, statements
relating to the Company's business plan, which is based upon the Company's
interpretation and analysis of cigar industry trends and management's ability to
successfully market and sell its products to retail consumers. This plan
assumes, among other things, that (i) the Company will be able to enhance the
profitability of the Smoker's Gallery stores or, alternatively, promptly close
or sell unprofitable outlets and otherwise reduce its costs, (ii) the Company
will continue its cost-cutting program focused on reducing corporate overhead,
and (iii) the Company will be able to successfully diversify its revenues away
from solely tobacco-related products through business opportunities outside of
the tobacco industry. Many known and unknown risks, uncertainties and other
factors, including general economic conditions, government regulations and
taxation relating to the tobacco industry, changes in public perceptions of the
risks and benefits of tobacco use, and risk factors detailed from time to time
in the Company's Securities and Exchange Commission filings, may cause these
forward-looking statements to be incorrect, and may cause actual results to be
materially different from any future results.
RESULTS OF OPERATIONS
The following table sets forth certain items expressed in percentages of
revenues for the periods indicated:
QUARTER ENDED APRIL 30,
2000 1999
Revenues 100.0% 100.0%
Cost of revenues 63.7% 64.0%
-------------------
Gross profit 36.3% 36.0%
Selling, general and administrative expenses 56.8% 55.3%
Loss on abandonment of stores 11.1% 0.0%
-------------------
Operating loss (31.6)% (19.3)%
Other income 2.3% 2.1%
-------------------
Net loss (29.3)% (17.2)%
===================
During the quarter ended April 30, 2000, the Company's Smoker's Gallery
same store sales were down 27% from the same period in 1999. The Company
believes that this decline in sales is due to a general decline in same store
sales experienced throughout the retail tobacconist industry. The Company
believes that this general decline is due primarily to the greatly increased
number of retail outlets competing for premium cigar sales as well as a decline
in the demand for premium cigars. The Company has been materially adversely
affected by the decline in its same store sales.
8
<PAGE>
For the three months ended April 30, 2000 and 1999, the Company
reported net losses of $187,207 and $149,465, respectively. Revenue for the
three months ended April 30, 2000 and 1999 amounted to $637,875 and $870,843,
respectively. The decrease in revenue was due to the decline in Smoker's Gallery
same stores sales.
Gross profit for the three months ended April 30, 2000 and 1999
amounted to $231,277 (36.3% of sales) and $313,790 (36.0% of sales),
respectively.
Total selling, general and administrative expenses ("SG&A"), decreased
from $481,790 for the three months ended April 30, 1999 to $361,904 for the
three months ended April 30, 2000, a 25% decrease. This decrease is due mainly
to reductions in corporate overhead and related store expenses, including a
decrease in salaries and wages of approximately $72,000.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
At April 30, 2000, the Company had working capital of $4,307; however,
the Company has experienced recurring losses from operations and generated
negative cash flows from operations of $45,005 during the quarter ended April
30, 2000. In addition, as further discussed in Part II, Item 1 "Legal
Proceedings", the Company is subject to certain contingencies which, if not
favorably resolved, could have a significant negative impact on its future cash
flows. The Company continues to seek to reduce operating expenses through
reductions in corporate overhead and increase sales volume through promotional
discounts. In addition, the Company is considering seeking sources of funds
through additional capital contributions or through additional financing. The
Company is also pursuing either the sale of its remaining Smoker's Gallery
retail stores or the prompt closure of any remaining unprofitable Smoker's
Gallery retail stores. Finally, as also discussed in Part II, Item 5 "Other
Information", the Company has attempted to mitigate the potential financial
impact of any contingencies which may not be favorably resolved.
In the absence of achieving profitable operations, obtaining additional
debt or equity financing, or concluding successful negotiations for the sale or
closure of some or all of its remaining Smoker's Gallery retail stores, the
Company may not have sufficient funds to continue operations in Fiscal 2001.
Net cash used in operating activities increased substantially in the
three months ended April 30, 2000 to $45,005 from $3,686 for the three months
ended April 30, 1999. This increase is due mainly to the increase in the net
loss for the three months ended April 30, 2000 versus 1999 ($187,207 vs.
$149,465), and the increase in cash used to reduce accounts payable ($41,098
cash used in operating activities operations for the three months ended April
30, 2000 vs. $5,775 cash provided by operating activities for the three months
ended April 30, 1999) offset by (i) an increase in non-cash losses, i.e. loss on
abandonment of stores, ($70,994 for the three months ended April 30, 2000 vs.
$0 for the three months ended April 30, 1999), and (ii) a reduction in
receivables ($41 for the three months ended April 30, 2000 vs. $30,031 for the
three months ended April 30, 1999).
9
<PAGE>
IMPACT OF THE YEAR 2000
The Company used commercial software that was upgradeable to a
commercially available version that was Year 2000 compliant. The total costs
associated with required modifications to become Year 2000 compliant were not
material to the Company's financial position, results of operations or cash
flows.
The Company relies on third parties, particularly on third party
suppliers for its inventory. The Company has not experienced, nor does it
anticipate failure of third party suppliers to deliver inventory to the
Company's stores could adversely affect store sales.
The failure to correct a yet unknown material Year 2000 problem could
result in an interruption in, or failure of, certain normal business activities
or operations. Such failures could materially adversely affect the Company's
results of operations, liquidity and financial condition. The Company will
continue to monitor its mission-critical computer applications and those of its
third party suppliers and vendors throughout the year 2000 to ensure that any
latent Year 2000 matters that may arise are addressed promptly.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
a. WINDSOR CAPITAL CORP. V. TROPICAL REPUBLIC, INC., AND JAMES JOINER
On September 15, 1998, the Company entered into an Operating Agreement
and an Asset Purchase Agreement (collectively, the "Agreements") with Tropical
Republic, Inc. ("Tropical"), under which the responsibility for the operations
and expenses of the Company's then remaining nine Simply Cigars kiosks was
turned over to Tropical at various dates during September 1998, with the sale of
the kiosks to Tropical at an aggregate price of $130,000 scheduled to close in
October 1998. Tropical failed to close on the sale and failed to pay a
substantial portion of the operating expenses owed the Company under the
Agreements. On November 18, 1998, the Company filed suit in Broward County,
Florida, Circuit Court for breach of the Agreements against Tropical and its
principal James Joiner ("Joiner"), who personally guaranteed Tropical's
obligations under the Agreements.
In its complaint, the Company seeks damages in excess of $165,716: (i)
$120,000 for the balance owed on the purchase price after crediting Tropical's
$10,000 deposit; (ii) $45,716 for unpaid operating expenses accrued by Tropical
during its operation of the kiosks through October 31, 1998; and (iii) an
unspecified amount for potential liability to landlords under lease agreements
which extend past October 31, 1998.
10
<PAGE>
Tropical and Joiner have answered the Complaint and denied liability
based on alleged misrepresentations by the Company concerning Simply Cigars'
business. In addition, the defendants have filed a counterclaim for rescission
of the Agreements and unspecified damages. The Company believes that its claims
are meritorious and the defendants' defenses and counterclaims are without
merit; however, there can be no assurance that the Company will prevail in this
litigation or that, if it obtains a judgment, it will be able to collect the
judgment.
b. J.C. PENDERGAST, INC. V. WINDSOR CAPITAL CORP
On February 24, 1999, J.C. Pendergast, Inc. ("Pendergast"), filed suit
against the Company in the United States District Court for the Eastern District
of Wisconsin, alleging breach of contract based on a May 1997 purchase order,
signed by a former officer of the Company, for $738,850 worth of kiosks. In
August 1998, the Company had previously received a letter from attorneys
representing Pendergast requesting payment of approximately $180,000 for work
allegedly performed under the purchase order. The Company answered the Complaint
and asserted as affirmative defenses that (i) the purchase order was never
intended by the parties to reflect a binding contract, and (ii) the purchase
order was never authorized by the Company's Board of Directors and Pendergast
was aware of the lack of authorization due to the close personal friendship
between the Company's former officer and Pendergast's owner. In April 2000, the
case was settled based on the Company's agreement to pay a total of $38,000 to
Pendergast, with the first payment due on or before April 28, 2000, in the
amount of $9,500 and subsequent payments of $9,500 each due on June 1, July 1
and August 1, 2000. Under the settlement agreement, in the event that the
Company fails to make a payment within 30 days of the due date, then Pendergast
may, by submitting an affidavit of default to the court, obtain a judgment
against the Company in the amount of $150,000. The Company has made the first
payment due April 28, 2000 and the second payment due June 1, 2000.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
As a result of Tropical's breach of the Agreements and the
unprofitability of the Simply Cigars business, the Company had no realistic
alternative but to surrender eight of its nine remaining kiosks to the
respective landlords as of November 1, 1998, in order to limit its liability for
ongoing lease expenses as well as to pay accrued rent through October 31, 1998,
which Tropical had agreed but failed to pay. The final kiosk, which was not
subject to an ongoing lease, was sold for $5,000. By surrendering these kiosks,
the Company obtained releases from future lease liability for all kiosk
locations except for the kiosks located at the Montgomery and Annapolis,
Maryland malls. Such future lease liability approximated $376,425 as of November
1, 1998: 27 months at $5,300 per month with respect to Montgomery; and 51
11
<PAGE>
months at $4,575 per month with respect to Annapolis. In November 1998, the
Maryland landlord threatened legal action against the Company; however, the
Company is unaware of the commencement of any such action and there has been no
further legal pressure by the landlord. The Company believes that it will be
able to avoid at least a substantial portion of any future lease liability to
the Maryland landlord by asserting a credit equal to the fair market rental
value of the premises including the kiosks. Further, under the Agreements with
Tropical and Joiner, the Company believes that Tropical and Joiner are fully
responsible for any liability of the Company to the Maryland landlords; however,
there can be no assurance that the Company will not be materially adversely
affected if litigation is brought by the Maryland landlord.
On May 10, 2000, the Florida Department of Revenue ("FDR") concluded a
sales tax audit of the Smoker's Gallery Sawgrass Mall store for the period
September 1, 1994 to August 31, 1999. The FDR asserted that, as a result of the
audit, the Company owes approximately $31,300 in back taxes, interest and
penalties. The Company believes that most, if not all, of the FDR assessment is
improper because it is principally based on out-of-state and gift certificate
sales, for which no sales tax should be due. The Company is engaged in
negotiations with the FDR in an attempt to successfully settle the pending
assessment. If a prompt settlement cannot be reached, the Company intends to
vigorously dispute the assessment and file an administrative appeal. There can
be no assurance, however, that a favorable settlement will be reached or that
any appeal will be successful.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
27. Financial Data Schedule for the quarterly period
ended April 30, 2000.
b) REPORTS ON FORM 8-K
During the quarter ended April 30, 2000, no Form 8-K reports
were filed by the Company.
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.
Windsor Capital Corp.
---------------------
(Registrant)
Date: June 14, 2000 by:/s/ Alan Cornell
-------------------
Chief Executive Officer
12
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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27 Financial Data Schedule
