SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended July 31, 1996
Commission file number 33-26798-D
RICHMOND CAPITAL CORPORATION
(exact name of registrant as specified in its' charter)
Colorado
(State or other jurisdiction of incorporation or organization)
84-1104385
(I.R.S. Employer Identification No.)
12139 Airline Highway
Baton Rouge, Louisiana 70817-4410
(Address of principal executive offices)
Registrant's telephone number, including area code: (504) 756-8989
Securities registered pursuant to Section 12(b) of Act:
Name of Each Exchange on
Title of Each Class Which Registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
None None
<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.[X]
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 aggregate market value of the Registrant's common stock held by
nonaffiliates of the Registrant as of September 30, 1996 was $296,750. On
such date, the average of the bid and asked prices of the common stock was
$1.00 per share. The registrant had 1,787,300 shares of common stock, $.001
par value, outstanding as of September 30, 1996.
<PAGE>
PART I
ITEM 1. BUSINESS
Introduction and History
Richmond Capital Corporation (the "Company") was incorporated under the laws
of the State of Colorado in 1988 for the purpose of raising capital and to
seek out business opportunities in which to acquire controlling interest. In
October 1989, the Company completed its initial public offering of its common
stock by issuing 305,750 common shares and related warrants of $.10 per share
for aggregate proceeds of $30,575. In connection therewith, deferred
offering costs of $16,298 were charged to paid-in capital. Each unit
consisted of one share of common stock, one Class A warrant and one Class B
warrant. Each Class A warrant entitled the holder to purchase one share of
the company's common stock at $.30 per share, and each Class B warrant
entitled the holder to purchase one share of the Company's common stock at
$.50 per share. Each Class A warrant was exercisable commencing six months
from the date of the final prospectus for a period of 12 months thereafter.
Each Class B warrant was exercisable commencing six months from the date of
the final prospectus for a period of 18 months thereafter. The Company has
the right to redeem the warrants upon 20 days written notice at $.001 per
warrant. The common stock and warrants were separately transferrable
immediately after the closing of the offering. In June 1990, the Company
redeemed all Class A and B warrants.
Halter Capital Corporation, a Texas corporation (HCC), acquired control of
the Company as of September 5, 1990 through the purchase of a majority of the
Company's common stock. HCC, in two separate transactions, acquired 935,250
shares of the Company's common stock, representing 71.6% of the then-
currently issued and outstanding voting securities of the Company.
PTR Capital Corporation, a Delaware corporation (PTR), acquired control of
the Company as of January 15, 1991 through the purchase of a majority of the
Company's common stock, representing 70.8% of the then-currently issued and
outstanding voting securities of the Company.
The Company remained a development-stage enterprise from inception through
July 31, 1990, as it identified and evaluated acquisition opportunities. No
acquisition was made by the Company prior to July 16, 1991.
All Systems Go, Inc. (ASG), a subsidiary of Richmond Capital Corporation, was
incorporated in 1989 under the laws of Georgia to engage in the business of
selling various types of computers and computer-related equipment and the
repair and rebuilding of computer disk drives. ASG was inactive until April
of 1991 when it actually began operations.
On July 16, 1991, the Company acquired all of the issued and outstanding
shares of common stock of ASG. At the closing of this acquisition, Jordan S.
Davies, the sole shareholder of ASG, was elected President and Chairman of
the Board of Directors of the Company.
<PAGE>
The Company decided during fiscal year ended July 31, 1992 not to pursue the
repair and remanufacturing of computer disk drives. This decision was based
on the additional capital requirements, shrinking window of opportunity for
sales, and accelerated competition. As a result, the Company president and
Chairman of the Board of Directors resigned and negotiated for the purchase
of ASG, the wholly-owned subsidiary of Richmond Capital Corporation. The
Company retained the telemarketing activities and began the telemarketing
operations under Richmond Capital Corporation. On May 28, 1992 the sale was
finalized whereby the Company sold all of its issued and outstanding shares
of common stock of ASG (2000 shares) to Jordan S. Davies. As consideration
for the sale, Richmond Capital Corporation received a note receivable for
$82,000, furniture and equipment valued at $20,000 and the cancellation of
Jordan S. Davies 1,000,000 shares of Richmond Capital Corporation common
stock, representing 43.4% of the then-currently issued and outstanding voting
securities of the Company. Mr. Davies filed for protection under the U.S.
Bankruptcy laws. The $82,000 note and accrued interest were written off as
bad debt in the year ended July 31, 1993.
On July 1, 1994, the Company acquired all of the issued and outstanding
shares of common stock of RCC of Louisiana, Inc. At the closing of this
acquisition, Edward W. Prater, the sole shareholder of RCL, was elected Vice-
President and Director of the Company.
RCC of Louisiana, Inc. (RCL), a subsidiary of Richmond Capital Corporation,
was incorporated in the State of Louisiana on August 10, 1993 to engage in
the acquisition, development, and lease of real estate. Leasing began on
July 8, 1994. The acquisition of RCL was accounted for on the purchase
method. The Company issued 300,000 common shares with a fair market value of
$230,000 for all of the outstanding shares of RCL which had a fair market
value approximating $230,000. There were no goodwill, contingent payments,
options or commitments specified in the acquisition agreement.
During the year ended July 31, 1995, the management of the Company decided
not to continue the real estate leasing operations which were included in
RCL. This decision was made because real estate leases were with truck stops
with video poker facilities, revenues were not as expected, and public
support of video poker operations were diminishing. On January 31, 1995, the
Company sold all of its issued and outstanding shares of RCL to the previous
sole shareholder of RCL in exchange for the cancellation of his 300,000
shares of Richmond Capital Corporation common stock. The transaction
represents a cancellation of 14.4% of the then currently issued and
outstanding voting securities of the Company. No assets or liabilities of
RCL were retained by the Company.
Description of Business
The Company purchases and resells various types of used computers, computer
parts and computer-related equipment for Harris, Digital Equipment
Corporation, Encore, Concurrent, Leeds & Northrupt, DCD-Cyber, Dydin
Controls, Landis and Gyr systems.
<PAGE>
Marketing and Customers
The Company utilizes mainly telephone solicitation, direct mail and
advertising to market itself and its services to its customer base. The
Company's customer base is comprised mainly of those entities which have a
computer installed base of Harris, Digital Equipment Corporation, Encore,
Concurrent, Leeds & Northrupt, CDC-Cyber, Aydin Controls, Landis and Gyr
computers. The Company uses purchased mailing lists and telephone lists to
derive its potential customer lists.
During the current year, the Company hired additional telephone sales staff
and committed significant resources toward the development and expansion of
a wide base international used computer market. These additional costs in
the current year are expected to significantly increase the sales and profits
in future periods.
Warranty and Customer Service
The Company provides a repair, replace or full refund warranty for one
hundred twenty (120) days from date of the sale. There were no warranty
claims pending at July 31, 1996.
Employees
As of July 31, 1996, the Company employed seven people full-time including
one executive officer. Employee relations are considered good and the
Company has no collective bargaining contracts covering any of its employees.
Competition
The Company is involved in a market where many different companies provide
the same basic services. There is no dominant company engaged in providing
the same basic services as that of the Company.
ITEM 2. PROPERTIES
The Company maintains its sales offices and warehouse in approximately 10,500
square feet of leased office and warehouse space in Baton Rouge, Louisiana
under a two-year lease which expires in 1997.
ITEM 3. LEGAL PROCEEDINGS
The Company has no pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Company's security holders
during the fourth quarter of fiscal year ending July 31, 1996.
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's common stock is traded in the general over-the-counter market
and listed in the "Pink Sheets". The following table sets forth the
quarterly high and low bid prices in the over-the counter market as reported
for the period indicated.
Fiscal Year ended
July 31, 1996 High(1) Low(1)
1st Quarter $1.00 $1.00
2nd Quarter $1.00 $1.00
3rd Quarter $1.00 $1.00
4th Quarter $1.00 $1.00
(1) The prices set forth in the table above were provided by the National
Quotation Bureau and reflect only the high and low bid prices on the
last day of each quarter (October 31, 1995, January 31, 1996, April 30,
1996, and July 31, 1996) rather than the high and low bid prices over
each entire quarter.
During 1996, the price range for the Company's common stock averaged a bid of
$1.00 per share.
These prices may represent inter-dealer quotations without retail markups,
markdowns, or commissions and may not necessarily represent actual
transactions.
As of July 31, 1996, the Company had 274 holders of record of its common
shares.
The Company has never paid cash dividends on its common stock and has no
plans to pay cash dividends in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
July 31,
1996 1995 1994 1993 1992
Balance Sheet Data
Total assets $269,359 $374,777 $621,281 $221,593 $297,173
Shareholders' equity 117,908 111,704 435,499 178,751 273,083
Income Statement Data
Total revenue 1,466,173 941,948 675,686 729,156 1,038,311
Operating expenses 1,457,267 1,021,630 649,938 814,263 1,013,402
Net income (loss)
from continuing
operations 6,204 (67,091) 25,748 (85,107) 24,909
Net income (loss)
from continuing
operations per
common share $0.00 ($.03) $.01 ($.06) $.07
Weighted average number of
common shares
outstanding 1,787,300 1,927,918 1,806,204 1,499,131 1,804,380
Common shares
outstanding 1,787,300 1,787,300 2,087,300 1,787,300 1,305,750
Preferred shares
outstanding - - - - 250,000
During 1988, 1989, and 1990, the Company was in the development stage, as
more fully defined in Financial Accounting Standards Board Statement No. 7.
There were no shares of the Company's sole class of preferred stock, $.01 par
value, outstanding as of July 31, 1996, 1995, 1994 and 1993.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity
The Company has $178,686 in current assets. This, along with revenue
generated from sales revenue is deemed sufficient to fund all required
expenditures for the next 12-month period.
Capital Resources
The Company's assets increased approximately $60,000 from the acquisition
and upgrade of computer equipment used for sales and marketing of the product
lines sold by the Company.
Results of Operations
From its inception on April 5, 1988, through July 31, 1990, the Company
reported its activity as a development stage company, as more fully defined
in Statement No. 7 of the Financial Accounting Standards Board. On July 16,
1991, the Company completed a merger in which ASG became a wholly owned
subsidiary.
The Company continued its telemarketing activity in ASG through November
1991. In December 1991, telemarketing activity was moved from ASG into
Richmond Capital Corporation and the wholly owned subsidiary (ASG), which had
the assets required for pursuing the repair and remanufacturing of computer
hard disk drives, was sold.
The Company's 1996 sales volume has increased over 1995 by approximately
$600,000. The increase of 1995 over 1994 was $200,000. This continued
increase was primarily due to the Company's increase in telephone sales
staff. The gross margin on the new sales generated were greater than the
gross margin in 1995. The gross margin in 1995 had declined from the prior
year. Management believes as the new personnel become more familiar with the
product lines, sales will continue to increase and profit margins will
improve.
<PAGE>
Company Revenue
The sales revenue reported in the financial statements reflects the total
sales of used computers and computer related equipment through July 31, 1996.
These sales through July 31, 1996 are approximately $600,000 greater than the
1995 and $800,000 greater than the year ended July 31, 1994. The increase
resulted primarily from new sales of a larger and more experienced sales
staff which negotiate the acquisition cost of the used computer equipment and
also negotiate the sales price with the customer.
Company Cost of Sales
The cost of sales is directly related to the cost of the equipment purchased.
Since the revenue is derived from the sale of used computers and computer
equipment, the cost of sales will fluctuate with the going price of used
computer equipment. There are no market price quotations for the equipment
and therefore no industry standards or long term prior history for
comparison. The cost of sales for the year ended July 31, 1996, 1995 and
1994 totaled 66%, 85% and 59%, respectively. It is management's belief that
cost of sales decreased in the current year primarily because of the increase
of experience in negotiating equipment acquisitions and sales by the new
sales staff. The increase in cost of sales in the year ended July 31, 1995
was primarily a result of inexperienced new staff in negotiating the used
equipment acquisitions. Management expects the results for future years to
continue to increase once a full crew of completely trained sales force is
established.
Other Operating Expenses
The other operating expenses are general in nature and are the basic expenses
required to maintain an office and staff for administration and sales related
functions and promote additional sales volume. While some of these expenses
have significantly increased in dollar amount, these expenses as a percentage
of sales have remained relatively constant over the last three years.
Advertising and print costs have increased annually as a result of targeting
new clients and increasing the advertising to generate new sales leads.
Auto expenses and travel and lodging increased from efforts to increase
marketing and sales by traveling to existing and potential customers and
increased attendance at computer trade shows.
Contributions significantly increased in the year end July 31, 1995 as a
result of giving non-saleable inventory to charity.
Salaries and contract labor increased as a result of adding additional sales
force to increase sales.
Office expenses have increased as a result of additional sales staff and a
larger facility.
Insurance increases have been primarily due to the increase in sales force
needed to increase sales volume.
<PAGE>
Telephone costs are directly related to increases in sales since the primary
source of sales is through telemarketing.
Depreciation and Amortization
Depreciation expense reflects the current period utility of the assets based
on their useful lives. Depreciation expense decreased in the current year as
a result of the reduction of depreciable assets in the sale of the wholly-
owned subsidiary in the year ended July 31, 1995. There is no amortization
for the current year.
Rent
Rent increased in the current year as a result of relocating to a larger
facility. Rent is being expensed on a straight line basis over the term of
the lease for office, warehouse and apartment space.
Interest and Dividend Income/Expense
There have been no material amounts of interest income earned or interest
expense paid during the current or prior years. Interest income for the year
totaled $800 and was from a loan to an officer of the Company. Dividends on
investments totalled $4,500. Interest expense is for cash advances on two
credit lines.
Liquidity
The Company believes its cash generated from operations, its ability to
secure short term working capital needs, and the prospects of increasing
sales of used computers and computer equipment will provide sufficient cash
to meet current working capital needs. Capital is typically provided
primarily through cash from operations and credit received from trade
creditors.
There were capital expenditures for property and equipment during the fiscal
year ended July 31, 1996 and 1995 totaling $75,000 and $20,000. The Company
relocated its offices in September 1995 and the capital expenditures were for
leasehold improvements, new furniture and equipment and computer upgrades.
No major capital expenditures are expected for fiscal 1997.
The Company had no long-term debt at July 31, 1996. The Company had $72,000
of advances against lines of credit at July 31, 1996. These funds were used
to fund the purchase of property and equipment. The Company does not
anticipate the need for long-term borrowing for fiscal year 1997.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this Item are included as part of Item
14 hereof.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There was no change in nor disagreements with the independent accountants on
any matters of accounting principles or practices, financial statement
disclosure or auditing scope or procedure for the fiscal year ended July 31,
1996.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and Executive Officers
All directors serve for a one-year period and until their respective
successors are elected and qualified. Officers serve at the discretion of
the Board of Directors.
Positions(s)
Name Age with the Company
J. Keith Henderson 30 President, Treasurer and
Director
Daniel S. Gould 33 Vice-President and Secretary
Michele L. Prater 33 Director
Information concerning the business experience of each of the directors and
executive officers of the Company is as follows:
J. Keith Henderson is President, Treasurer and a Director of the
Company. Since 1990, Mr. Henderson has been active in the day to day
operations of mainframe computer sales within specialized niche markets.
Daniel S. Gould is Vice-President and Secretary of the Company. Mr.
Gould was associated with the law firm of McFarland, Gould, Lyons and
Sullivan, P.A. for five (5) years.
Michele L. Prater is a Director of the Company. Ms. Prater held several
positions with the University of Tampa since 1985. She is a Director and
Vice-President of PTR Capital Corporation, a private investment company which
is a majority shareholder of the Company.
ITEM 11. EXECUTIVE COMPENSATION
None of the Officers or Directors have received cash compensation, bonuses,
or deferred compensation which exceeded $100,000. The Company has no stock
option, profit-sharing, bonus or similar remuneration plans or programs.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of October 28, 1995, the shares of the
Company beneficially owned by each person known to management to be the
beneficial owner of more than five percent (5%) of the outstanding shares by
each officer and director and by all officers and directors of the Company as
a group:
Amount and
Nature of Percent
Name and address of Title of Beneficial of
Beneficial Owner Class Ownership Class
PTR Capital Corporation Common 925,000 51.75%
12139 Airline Highway
Baton Rouge, Louisiana 70817
Larry K. Tuttle Common 461,550 14.07%
Route 4, Box 252
King, North Carolina 37021
Eddie W. Prater Common 180,000 10.07%
4315 Aegean Drive
Tampa, Florida 33611
Michele L. Prater Common 2,000 0.11%
12139 Airline Highway
Baton Rouge, Louisiana 70817
J. Keith Henderson Common 50,000 2.80%
12139 Airline Highway
Baton Rouge, Louisiana 70817
All Officers and Directors Common 52,000 2.91%
as a Group (2 Persons)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since the beginning of the Registrant's last fiscal year, no transactions
occurred which exceed $60,000:
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as parts of this Report starting on
page III-5:
1. Financial Statements
Independent Auditor's Report
Balance Sheets - July 31, 1996 and 1995
Statements of Income (Loss) for the years ended July 31, 1996 and 1995
Statements of Changes in Shareholders' Equity for the years ended July
31, 1996 and 1995
<PAGE>
Statements of Cash Flows for the years ended July 31, 1996 and 1995
Notes to Financial Statements
Independent Auditor's Report on Accompanying Information
Schedule of Other Operating Expenses for the years ended July 31, 1996
and 1995
Independent Auditor's Report
Balance Sheets - July 31, 1995 and 1994
Statements of Income (Loss) for the years ended July 31, 1995 and 1994
Statements of Changes in Shareholders' Equity for the years ended July
31,1995 and 1994
Statements of Cash Flows for the years ended July 31, 1995 and 1994
Notes to Financial Statements
Independent Auditor's Report on Accompanying Information
Schedule of Other Operating Expenses for the years ended July 31, 1995
and 1994
2. Schedules
NONE
3. The exhibits are listed in the Index of Exhibits required by Item 601 of
Regulation S-K at Item (c) below.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Company during the fiscal
year.
(c) Exhibits
Exhibits marked with an asterisk (*) have heretofore been filed with the
Commission and are incorporated herein by reference
Exhibit Consecutive
Number Exhibits Page No.
1.0 Underwriting Agreement *
1.2 Participating Dealer Agreement *
3.0 Registrant's Articles of Incorporation *
3.1 Bylaws *
4.0 Warrant Agreement *
4.2 A Warrant and B Warrant *
5.0 Opinion of R. Michael Sentel, Esquire, regarding
the legality of the securities being registered *
10.0 Escrow of Proceeds Agreement with TecNational
Bank,Denver, Colorado *
<PAGE>
10.2 Commercial Lease Agreement, between Prime
Investments, Inc. and Richmond Capital
Corporation relating to certain premises
leased to Richmond Capital Corporation located
in Woodstock, Georgia *
10.3 Lease Rental Agreement between Home Management
Associates,Inc. and Richmond Capital Corporation
relating to certain premises leased to Richmond
Capital Corporation located in Woodstock, Georgia *
10.4 Agreement of Lease between RCC of Louisiana, Inc
and Bubaco Enterprises, Inc. relating to certain
premises leased from RCC of Louisiana, Inc. for
a truck stop operation *
10.5 Lease of Commercial Property between RCC of
Louisiana, Inc. and Computer Technologies, Inc.
related to certain premises leased from RCC of
Louisiana, Inc. for a truck stop operation *
10.6 Commercial Lease Agreement between Bobbie B.
Crump, Sr.and Richmond Capital Corporation
relating to certain premises leased to Richmond
Capital Corporation located in Baton Rouge,
Louisiana *
16.0 Letter from Samson, Robbins & Associates
regarding change in certifying accountants *
24.1 Consent of R. Michael Sentel, Esquire (included
in Exhibit 5) *
24.2 Consent of Brenner & Ianne *
As to any security holder requesting a copy of this Form 10-K, the Company
will furnish any Exhibit indicated in the above list as filed with this Form
10-K upon payment to it of it expenses in furnishing such Exhibit.
<PAGE>
Independent Auditor's Report
To the Board of Directors and Stockholders
of Richmond Capital Corporation
Baton Rouge, Louisiana
We have audited the accompanying balance sheets of Richmond Capital
Corporation as of July 31, 1996 and 1995, and the related statements of
income (loss), changes in stockholders' equity and cash flows for the years
then ended. 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 audits.
We conducted our audits 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 audits provide 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 Richmond Capital Corporation
as of July 31, 1996 and 1995, and the results of operations and cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/ Laney, Boteler & Killinger
LANEY, BOTELER & KILLINGER
Atlanta, Georgia
September 6, 1996
<PAGE>
RICHMOND CAPITAL CORPORATION
Balance Sheets
Assets
July 31,
__________________
1996 1995
__________________
Current assets
Cash and equivalents $ 18,682 $ 6,687
Investments 6,500 6,500
Receivables
Accounts receivable - trade 83,202 241,921
Income tax refunds - 777
Deferred income taxes 20,414 22,507
__________________
103,616 265,205
__________________
Inventory 49,888 54,222
__________________
Total current assets 178,686 332,614
__________________
Property and equipment
Furniture, fixtures and equipment 103,520 52,514
Leasehold improvements 7,896 -
__________________
111,416 52,514
Less accumulated depreciation (38,145) (22,953)
__________________
73,271 29,561
Other Assets
Notes receivable - officers 13,402 12,602
Deposits 4,000 -
__________________
17,402 12,602
__________________
$269,359 $374,777
==================
See notes to financial statements.
<PAGE>
RICHMOND CAPITAL CORPORATION
Balance Sheets
Liabilities and Stockholders' Equity
July 31,
___________________
1996 1995
___________________
Current liabilities
Notes payable - credit lines $ 72,278 $ -
Accounts payable 39,872 164,871
Accounts payable-related party 37,155 98,202
Accrued payroll taxes 2,146 -
______________________
Total current liabilities 151,451 263,073
______________________
Commitments
Stockholders' equity
Preferred stock, 1,000,000 shares,
$.01 par authorized, no shares
issued and outstanding at July 31,
1996 and 1995 - -
Common stock, 100,000,000 shares,
$.001 par authorized, 1,787,300
shares issued and outstanding
at July 31, 1996 and 1995 1,787 1,787
Capital in excess of par value 262,635 262,635
Retained earnings (deficit) (146,514) (152,718)
___________________
Total stockholders' equity 117,908 111,704
___________________
$ 269,359 $ 374,777
====================
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Income (Loss)
Years Ended July 31,
_______________________
1996 1995
_______________________
Revenues
Sales $1,466,173 $ 866,797
Rental income - 75,151
_______________________
1,466,173 941,948
_______________________
Cost of sales
Purchases 910,237 699,376
Freight and mailings 8,589 35,265
_______________________
968,826 734,641
_______________________
Gross profit 497,347 207,307
_______________________
Other expenses
Other operating expenses 414,372 220,831
Depreciation 6,808 23,505
Rent 57,261 42,653
Bad debt - 1,802
_______________________
488,441 288,791
_______________________
Income (loss) from operations 8,906 (79,682)
_______________________
Other income (deductions)
Interest and dividend income 5,300 800
Interest expense (5,132) (3,751)
_______________________
168 (2,951)
_______________________
Income (loss) from
continuing operations 9,074 (84,435)
Loss on sale of subsidiary - (32,348)
_______________________
Income (loss) before taxes 9,074 (116,783)
Income tax (provision) benefit (2,870) 23,988
_______________________
Net income (loss) $ 6,204 $ (92,795)
=======================
Net income (loss) from continuing operations
per common share $ .00 $ (0.03)
Weighted average number of common
shares outstanding 1,787,300 1,927,918
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Changes in Stockholders' Equity
Years ended July 31, 1996 and 1995
Capital in Retained Total
Common stock issued Excess of Earnings Stockholders'
___________________
Shares Amount Par Value (Deficit) Equity
_____________________________________________________________
Balance
July 31, 1994 2,087,300 $2,087 $493,335 $ (59,923) $435,499
Net (loss) for
year ended
July 31, 1995 (92,795) (92,795)
Shares of
common stock
cancelled in
sale of
subsidiary (300,000) (300) (230,700) - (231,000)
______________________________________________________________
Balance,
July 31, 1995 1,787,300 1,787 262,635 (152,718) 111,704
Net income
for year
ended
July 31, 1996 6,204 6,204
_____________________________________________________________
1,787,300 $1,787 $262,635 $(146,514) $ 117,908
=============================================================
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Cash Flows
Years Ended July 31,
_____________________
1996 1995
_____________________
Cash flows from operating activities
Net income (loss) $ 6,204 $ (92,795)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities
Depreciation 16,808 23,505
Loss on sale of subsidiary - 32,348
Decrease (increase) in
accounts receivable 161,589 (82,861)
Less decrease in subsidiary sold - 3,008
Decrease (increase) in inventory 4,334 (26,386)
Increase (decrease) in accounts
payable and accrued expenses (183,900) 191,226
Less decrease in subsidiary sold - (46,035)
_____________________
Net cash provided by operating
activities 5,035 2,010
_____________________
Cash flows from investing activities
Purchases of property and equipment (75,060) (20,535)
Decrease (increase) in deposits (4,000) -
Proceeds on sale of equipment 14,542 -
Decrease (increase) in officer loans (800) 11,002
______________________
Net cash (used in) investing
activities (65,318) (9,533)
______________________
Cash flows from financing activities
Proceeds from credit lines 72,278 -
Payments on long-term debt - (3,530)
Net cash provided by (used in) ______________________
financing activities 72,278 (3,530)
______________________
Net increase (decrease) in cash 11,995 (11,053)
Cash and cash equivalents,
beginning of year 6,687 17,740
______________________
Cash and cash equivalents, end of year $ 18,682 $ 6,687
======================
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Cash Flows (continued)
SCHEDULE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS
On January 31, 1995, the Company sold RCC of Louisiana, Inc. (RCL) by
reacquiring 300,000 common shares in exchange for all of the issued and
outstanding stock of RCL. The fair market value of the 300,000 common shares
was $230,000. Assets totalling $3777,736 and related debt of $110,405
previously acquired in the merger were sold in this transaction. No assets
or liabilities of the subsidiary were retained by the Company.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest during the years ended July 31, 1996 and 1995 totalled
$5,132 and $3,751, respectively.
Income taxes paid during the years ended July 31, 1996 and 1995 totalled $0
and $10,267, respectively.
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1996 and 1995
Note 1 - Summary of significant accounting policies
Principles of consolidation
The accompanying financial statements include the accounts of Richmond
Capital Corporation (the Company) and its wholly-owned subsidiary, RCC of
Louisiana, Inc. (RCL). All significant inter-company balances and
transactions between the Company and the wholly-owned subsidiary were
eliminated.
On July 1, 1994, the Company acquired its interest in its wholly-owned
subsidiary, RCC of Louisiana, Inc. On January 31, 1995, the Company sold its
interest in the wholly-owned subsidiary. The financial statements for the
year ended July 31, 1995, includes the operating activity of RCL through the
date of the sale.
Property, equipment and depreciation
Property and equipment are stated at cost. Depreciation is provided using
both straight-line and accelerated methods over the estimated useful lives of
the assets, five to ten years for equipment and thirty-nine (39) years for
building and improvements.
Inventories
Inventories consist of used computers, computer parts and peripheral
equipment held for resale and are stated at the lower of cost (first-in,
first-out) or market.
Income taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to the use of accelerated methods of recording depreciation
for tax purposes and net operating loss carryforwards. The deferred tax
assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes also are recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.
Cash equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents.
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1996 and 1995
Note 1 - Summary of significant accounting policies (continued)
Investments
Investment assets consist of trading securities. The cost of the securities
totaled $6,500 at July 31, 1996 and 1995. The market value of the securities
as of July 31, 1996 and 1995 was $6,500.
Revenue recognition policy
The Company derives its income from the sale of used computers and computer-
related equipment. Income is recognized when a sale has occurred merchandise
delivered and the customer invoiced. The Company, through its wholly-owned
subsidiary, also derived income from the lease of real estate holdings.
Note 2 - Organization and description of the business
Richmond Capital Corporation (the "Company") was incorporated under the laws
of the State of Colorado on April 5, 1988, with the issuance of 1,000,000
shares of stock at $.01 per share. In October 1989, the Company completed a
public offering of its common stock by issuing 305,750 common shares and
related warrants at $.10 per unit for aggregate proceeds of $30,575. In June
1990, the Company called in all Class A and B warrants for redemption.
PTR Capital Corporation (PTR), a Delaware corporation, acquired control of
the Company as of January 15, 1991, through the purchase of a majority of the
Company's common stock.
The Company's primary business is acquisition and remarketing of used
computers and computer related equipment.
The Company evaluated, structured and completed a merger of a target company,
RCC of Louisiana, Inc.(RCL), in July 1994, by issuing 300,000 shares of its
common stock to the sole shareholder in exchange for all of the issued and
outstanding shares of RCL. The transaction represented 14.4% of the issued
and outstanding voting securities of the Company after the issuance of the
new shares.
RCL was incorporated in the State of Louisiana on August 10, 1993 to engage
primarily in the acquisition, development and lease of real estate. Leasing
began on July 8, 1995. The acquisition of RCL was accounted for by the
purchase method. The Company issued 300,000 common shares with a fair market
value of $230,000 for all of the outstanding shares of RCL which had a fair
market value approximating $230,000.
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1996 and 1995
Note 2 - Organization and description of the business (continued)
During the year ended July 31, 1995, the management of the Company decided
not to continue the real estate leasing operations which was included in RCL.
This decision was made because the real estate leases were with truck stops
with video poker facilities, revenues were not as expected, and public
support of video poker operations were diminishing. On January 31, 1995, the
Company sold all of its issued and outstanding shares of RCL to the previous
sole shareholder of RCL in exchange for the cancellation of his 300,000
shares of Richmond Capital Corporation common stock. The transaction
represents a cancellation of 14.4% of the then currently issued and
outstanding voting securities of the Company. The Company recorded a loss on
the sale of $32,348.
Note 3 - Notes payable-credit lines
Notes payable credit lines consist of the following at July 31, 1996 and
1995:
1996 1995
______________________
Draws against a $50,000 credit line payable in
monthly installments at a minimum of 3% of
outstanding balance with interest at prime rate
plus 2.0% (10.25% at July 31, 1996). Balance due
on March 19, 1997. The loan is secured by a
shareholder guarantee. $47,554 $ -
Draws against a $25,000 unsecured credit line
payable in monthly installment at a minimum of
2% of outstanding balance with interest at prime
rate plus 6.75% (15% at July 31, 1996). Renewable
in September 1997. 24,724 -
___________________
$72,278 $ -
===================
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1996 and 1995
Note 4 - Commitments and contingencies
The Company entered into an office and warehouse lease beginning September 1,
1995 and ending August 31, 1997. Monthly lease payments total $4,000.
Future minimum lease commitments are as follows:
For the year ended July 31, Amount
___________________________ ________
1997 $48,000
1998 4,000
_______
$52,000
=======
Note 5 - Income taxes
Income taxes are based on financial reporting income or loss. Differences
between income and loss for financial and income tax reporting relate
primarily to depreciation.
At July 31, 1996 and 1995, the Company had the following net operating loss
(NOL) carryforwards and resulting deferred income tax benefit based on
federal and state statutory rates:
NOL Tax
Carryforward Benefit
_____________________
Balance at July 31, 1995 $ 77,000 $ 23,988
Utilized at July 31, 1996 (15,000) (2,870)
_____________________
Balance at July 31, 1996 $ 62,900 $ 21,118
=====================
Income tax expense consists of the following components:
1996 1995
______________________
Current $ - $ -
Deferred 2,870 -
Tax benefit of net operating loss - (23,988)
______________________
Total tax expense (benefit) $2,870 $(23,988)
======================
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1996 and 1995
Note 6 - Related party transactions
At July 31, 1996 and 1995, the Company had a note receivable from an officer
of the Company of $10,000 plus accrued interest of $3,402 and $2,602 at July
31, 1996 and 1995, respectively. The principal and interest are due in full
on July 31, 19967. At July 31, 1996 and 1995, the Company owed $37,155 and
$98,202 for advances from an entity that is related through management
affiliation.
Note 7 - Warranties
During the fiscal year ended July 31, 1995, the company established a
warranty program that provides for repair, replacement or full refund for a
period of one hundred-twenty (120) days from the date of sale. No warranty
claims were filed during the year; and, at July 31, 1996 and 1995, no
warranty claims were pending.
Note 8 - Loss on sale of subsidiary
On January 31, 1995, the Company sold its interest in its wholly-owned
subsidiary. The Company recorded a loss on the sale, net of the income tax
benefit, of $25,704. This represents a net loss of $.01 per common share.
Note 9 - Advertising cost
The Company expenses advertising costs as incurred. Advertising consists
primarily of magazine and computer trade publication advertising for the
lines of computer equipment that the Company sales. At July 31, 1996 and
1995, advertising costs totalled $16,971 and $11,264, respectively.
<PAGE>
Independent Auditor's Report
on Accompanying Information
The Board of Directors and Stockholders
of Richmond Capital Corporation
Baton Rouge, Louisiana
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The information on the accompanying page is
presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
s/ Laney, Boteler & Killinger
LANEY, BOTELER & KILLINGER
Atlanta, Georgia
September 6, 1996
<PAGE>
RICHMOND CAPITAL CORPORATION
Schedule of Other Operating Expenses
Year Ended
July 31,
_____________________
1996 1995
_____________________
Accounting and legal $ 19,090 $ 22,466
Advertising and print 16,971 11,264
Auto expense 12,391 3,989
Bank charges 622 763
Contributions 32 29,280
Contract labor 30,332 36,926
Dues and subscriptions 47 259
Equipment rental 1,244 86
Insurance 10,966 3,964
Office expense 19,448 7,507
Other operating expense 2,834 5,098
Penalties - 325
Postage and delivery 7,419 3,004
Repairs and service 6,303 2,076
Salaries 178,562 48,506
Taxes and licenses 14,109 4,967
Telephone 34,788 23,741
Travel and lodging 45,339 10,107
Utilities 13,875 6,503
_____________________
$414,372 $220,831
=====================
<PAGE>
Independent Auditor's Report
To the Board of Directors and Stockholders
of Richmond Capital Corporation
Baton Rouge, Louisiana
We have audited the accompanying balance sheets of Richmond Capital
Corporation as of July 31, 1995 and 1994, and the related statements of
income (loss) and changes in stockholders' equity, and cash flows for the
years then ended. 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 audits.
We conducted our audits 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 audits provide 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 Richmond Capital Corporation
as of July 31, 1995 and 1994, and the results of operations and cash flows
for the years then ended in conformity with generally accepted accounting
principles.
s/Laney, Boteler & Killinger
LANEY, BOTELER & KILLINGER
Atlanta, Georgia
September 21, 1995
<PAGE>
RICHMOND CAPITAL CORPORATION
Balance Sheets
Assets
July 31,
_____________________
1995 1994
_____________________
Current assets
Cash and equivalents $ 6,687 $ 17,740
Investments 6,500 6,500
Receivables
Accounts receivable - trade 241,921 182,344
Income tax refunds 777 -
Deferred income taxes 22,507 -
___________________
265,205 182,344
___________________
Inventory 54,222 27,836
___________________
Total current assets 332,614 234,420
___________________
Property and equipment
Land - 175,000
Building - 94,000
Furniture, fixtures and equipment 52,514 112,979
____________________
52,514 381,979
Less accumulated depreciation (22,953) (18,722)
___________________
29,561 363,257
___________________
Other Assets
Notes receivable - officers 12,602 23,604
___________________
$374,777 $621,281
===================
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Balance Sheets
Liabilities and Stockholders' Equity
July 31,
_____________________
1995 1994
_____________________
Current liabilities
Current portion - long-term debt $ - $ 8,672
Accounts payable 164,871 34,257
Accounts payable-related party 98,202 23,485
Accrued payroll taxes - 2,532
Income taxes payable - 10,092
Deferred income taxes - 1,481
___________________
Total current liabilities 263,073 80,519
___________________
Long-term debt - 105,263
___________________
Commitments
Stockholders' equity
Preferred stock, 1,000,000 shares,
$.01 par authorized, no shares
issued and outstanding at July 31,
1995 and 1994, respectively - -
Common stock, 100,000,000 shares,
$.001 par authorized, 1,787,300
and 2,087,300 shares issued and
outstanding at July 31, 1995 and
1994, respectively 1,787 2,087
Capital in excess of par value 262,635 493,335
Retained earnings (deficit) (152,718) (59,923)
___________________
Total stockholders' equity 111,704 435,499
___________________
$374,777 $621,281
===================
See notes to financial
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Income (Loss)
Years Ended July 31,
______________________
1995 1994
______________________
Revenues
Sales $ 866,797 $ 660,105
Rental income 75,151 15,581
______________________
941,948 675,686
______________________
Cost of sales
Purchases 699,376 347,037
Freight and mailings 35,265 39,432
______________________
734,641 386,469
______________________
Gross profit 207,307 289,217
______________________
Other expenses
Other operating expenses 220,831 178,018
Depreciation 23,505 10,163
Rent 42,653 52,960
Bad debt 1,802 -
______________________
288,791 241,141
______________________
Income (loss) from operations (79,682) 48,076
______________________
Other income (deductions)
Interest income 800 1,600
Interest expense (3,751) (13,456)
Gain on sale of investments - 5,734
Market value decline on investments - (6,605)
______________________
(2,951) (12,727)
______________________
Income (loss) from
continuing operations (84,435) 35,349
Loss on sale of subsidiary 32,348 -
______________________
Income (loss) before taxes (116,783) 35,349
Income tax (provision) benefit 23,988 (9,601)
______________________
Net income (loss) $ (92,795) $ 25,748
Net income (loss) from continuing operations
per common share $ (0.03) $ 0.01
Weighted average number of common
shares outstanding 1,927,918 1,806,204
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Changes in Stockholders' Equity
Years ended July 31, 1995 and 1994
Capital in Retained Total
Common stock issued Excess of Earnings Stockholders'
___________________
Shares Amount Par Value (Deficit) Equity
_________________________________________________________
Balance,
July 31, 1993 1,787,300 $1,787 $262,635 $(85,671) $178,751
Net income
for year ended
July 31, 1994 25,748 25,748
Shares of common
stock issued
in merger of
subsidiary 300,000 300 230,700 - 231,000
___________________________________________________________
Balance,
July 31, 1994 2,087,300 2,087 493,335 (59,923) 435,499
Net (loss)
for year ended
July 31, 1995 (92,795) (92,795)
Shares of common
stock cancelled
in sale
of subsidiary (300,000) (300) (230,700) - (231,000)
Balance,
July 31, 1995 1,787,300 $1,787 $262,635 $(152,718) $ 111,704
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Cash Flows
Years Ended July 31,
____________________
1995 1994
____________________
Cash flows from operating activities
Net income (loss) $ (92,795) $ 25,748
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities
Depreciation 23,505 10,163
Gain on sale of investment - (5,734)
Market value decline on investments - 6,605
Loss on sale of subsidiary 32,348 -
Decrease (increase) in
accounts receivable (82,861) (113,310)
Less decrease in subsidiary sold 3,008 -
Decrease (increase) in inventory (26,386) 48,000
Increase in accounts payable
and accrued expenses 191,226 55,137
Less decrease in subsidiary sold (46,035) -
____________________
Net cash provided by operating
activities 2,010 26,609
____________________
Cash flows from investing activities
Purchases of property and equipment (20,535) (150,000)
Decrease in deposits - 3,382
Proceeds on sale of investments - 15,108
Decrease (increase) in officer loans 11,002 (1,600)
____________________
Net cash (used in) investing
activities (9,533) (133,110)
____________________
Cash flows from financing activities
Increase in capital in excess
of par value - 31,000
Proceeds from long term debt - 120,000
Payments on long term debt (3,530) (32,197)
____________________
Net cash provided by (used in)
financing activities (3,530) 118,803
____________________
Net increase (decrease) in cash (11,053) 12,302
Cash and cash equivalents, beginning of year 17,740 5,438
____________________
Cash and cash equivalents, end of year $ 6,687 $ 17,740
====================
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Statements of Cash Flows (continued)
SCHEDULE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS
On January 31, 1995, the Company sold RCC of Louisiana, Inc. (RCL) by
reacquiring 300,000 common shares in exchange for all of the issued and
outstanding stock of RCL. The fair market value of the 300,000 common shares
had a fair market value of approximately $230,000. Assets totalling $377,736
and related debt of $110,405 previously acquired in the merger were sold in
this transaction. No assets or liabilities of the subsidiary were retained
by the Company.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest during the years ended July 31, 1995 and 1994 totalled
$3,751 and $13,456, respectively.
Income taxes paid during the years ended July 31, 1995 and 1994 totalled
$10,267 and $0, respectively.
See notes to financial statements
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1995 and 1994
Note 1 - Summary of significant accounting policies
Principles of consolidation
The accompanying financial statements include the accounts of Richmond
Capital Corporation (the Company) and its wholly-owned subsidiary, RCC of
Louisiana, Inc. (RCL). All significant inter-company balances and
transactions between the Company and the wholly-owned subsidiary were
eliminated.
On July 1, 1994, the Company acquired its interest in its wholly-owned
subsidiary, RCC of Louisiana, Inc. On January 31, 1995, the Company sold its
interest in the wholly-owned subsidiary. The financial statements for the
year ended July 31, 1995, includes the operating activity of RCL through the
date of the sale.
Property, equipment and depreciation
Property and equipment are stated at cost. Depreciation is provided using
the both straight-line and accelerated methods over the estimated useful
lives of the assets (five to ten years) for equipment and thirty-nine (39)
years for buildings.
Inventories
Inventories consist of used computers, computer parts and peripheral
equipment held for resale and are stated at the lower of cost (first-in,
first-out) or market.
Income taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to the use of accelerated methods of recording depreciation
for tax purposes and net operating loss carryforwards. The deferred tax
assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes also are recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.
Cash equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents.
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1995 and 1994
Note 1 - Summary of significant accounting policies (continued)
Investments
Investment assets consist of trading securities. The cost of the securities
totaled $13,105 and $22,479 at July 31, 1995 and 1994, respectively.
Securities with a cost of $9,374 were sold and a gain recorded in the amount
of $5,734 during the year ended July 31, 1994. The market value of the
remaining securities as of July 31, 1995 and 1994 was $6,500. The market
decline from cost of $6,605 was also recorded in 1994.
Revenue recognition policy
The Company derives its income from the sale of used computers and computer-
related equipment. Income is recognized when a sale has occurred merchandise
delivered and the customer invoiced. The Company, through its wholly-owned
subsidiary, also derived income from the lease of real estate holdings.
Note 2 - Organization and description of the business
Richmond Capital Corporation (the "Company") was incorporated under the laws
of the State of Colorado on April 5, 1988, with the issuance of 1,000,000
shares of stock at $.01 per share. In October 1989, the Company completed a
public offering of its common stock by issuing 305,750 common shares and
related warrants at $.10 per unit for aggregate proceeds of $30,575. In June
1990, the Company called in all Class A and B warrants for redemption.
PTR Capital Corporation (PTR), a Delaware corporation, acquired control of
the Company as of January 15, 1991, through the purchase of a majority of the
Company's common stock.
The Company's primary business is acquisition and remarketing of used
computers and computer related equipment.
The Company evaluated, structured and completed a merger of a target company,
RCC of Louisiana, Inc.(RCL), in July 1994, by issuing 300,000 shares of its
common stock to the sole shareholder in exchange for all of the issued and
outstanding shares of RCL. The transaction represented 14.4% of the issued
and outstanding voting securities of the Company.
RCL was incorporated in the State of Louisiana on August 10, 1993 to engage
primarily in the acquisition, development and lease of real estate. Leasing
began on July 8, 1994. The acquisition of RCL was accounted for by the
purchase method. The Company issued 300,000 common shares with a fair market
value of $230,000 for all of the outstanding shares of RCL which had a fair
market value approximating $230,000.
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1995 and 1994
Note 2 - Organization and description of the business (continued)
Since RCL, the acquired company began operations on July 8, 1994, the full
period of operations were included in the income statement of the Company for
the year ended July 31, 1994.
There were no goodwill, contingent payments, options or commitments specified
in the acquisition agreement.
During the year ended July 31, 1995, the management of the Company decided
not to continue the real estate leasing operations which was included in RCL.
This decision was made because the real estate leases were with truck stops
with video poker facilities, revenues were not as expected, and public
support of video poker operations were diminishing. On January 31, 1995, the
Company sold all of its issued and outstanding shares of RCL to the previous
sole shareholder of RCL in exchange for the cancellation of his 300,000
shares of Richmond Capital Corporation common stock. The transaction
represents a cancellation of 14.4% of the then currently issued and
outstanding voting securities of the Company. The Company recorded a loss on
the sales of $32,348.
Note 3 - Long-term debt
Long-term debt consist of the following at July 31, 1995 and 1994:
1995 1994
____________________
Note payable to an individual, payable in monthly
installments of $1,456 including interest at 8%.
The note matures October 4, 2003 and is collateralized
by land. This note was related to assets owned by RCL
which was sold on January 31, 1995 (Note 2). $ - $113,935
____________________
113,935
Less current portion - 8,672
____________________
- $105,263
====================
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1995 and 1994
Note 4 - Commitments and contingencies
The Company entered into an office and warehouse lease beginning September 1,
1995 and ending August 31, 1997. Monthly lease payments total $4,000.
Future minimum lease commitments are as follows:
For the year ended July 31, Amount
_________________________________________
1996 $40,000
1997 48,000
1998 8,000
_______
$96,000
=======
Note 5 - Income taxes
Income taxes are based on financial reporting income or loss. Differences
between income and loss for financial and income tax reporting relate
primarily to depreciation.
At July 31, 1995, the Company had net operating loss carryforwards totalling
approximately $77,000 that expires in 2010 which may be offset against future
taxable income. A tax benefit of $23,988 has been reported in the July 31,
1995 financial statements based on the federal and state statutory rates.
Income tax expense consists of the following components:
1995 1994
-----------------------
Current $ - $10,092
Deferred - (491)
Tax benefit of net operating loss (23,988) -
-----------------------
Total tax expense (benefit) $(23,988) $ 9,601
=======================
Note 6 - Related party transactions
At July 31, 1995 and 1994, the Company had notes receivable from officers of
the Company totalling $10,000 and $20,000, respectively. Accrued interest at
8% per annum, totalled $2,602 and $3,604, respectively with the principal and
interest due in full on July 31, 1997.
At July 31, 1995 and 1994, the Company owed $98,202 and $23,485 for advances
from an entity that is related through management affiliation.
<PAGE>
RICHMOND CAPITAL CORPORATION
Notes to Financial Statements
July 31, 1995 and 1994
Note 7 - Warranties
During the fiscal year ended July 31, 1994, the company established a
warranty program that provides for repair, replacement or full refund for a
period of one hundred-twenty (120) days from the date of sale. No warranty
claims were filed during the year; and, at July 31, 1995, no warranty claims
were pending.
Note 8 - Loss on sale of subsidiary
On January 31, 1995, the Company sold its interest in its wholly-owned
subsidiary. The Company recorded a loss on the sale of $32,348. This
represents a net loss of $.01 per common share.
Note 9 - Advertising costs
The Company expenses advertising costs as incurred. Advertising consists
primarily of magazine and computer trade publication advertisements for the
lines of used computer equipment that the company sales. At July 31, 1995
and 1994, advertising costs totalled $11,264 and $5,903, respectively.
<PAGE>
Independent Auditor's Report
on Accompanying Information
The Board of Directors and Stockholders
of Richmond Capital Corporation
Baton Rouge, Louisiana
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The information on the accompanying page is
presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
s/ Laney, Boteler & Killinger
LANEY, BOTELER & KILLINGER
Atlanta, Georgia
September 21, 1995
<PAGE>
RICHMOND CAPITAL CORPORATION
Schedule of Other Operating Expenses
Year Ended
July 31,
___________________
1995 1994
___________________
Accounting and legal $ 22,466 $ 26,212
Advertising and print 11,264 5,903
Auto expense 3,989 5,625
Bank charges 763 275
Contributions 29,280 -
Contract labor 36,926 11,248
Dues and subscriptions 259 4,935
Equipment rental 86 210
Insurance 3,964 4,433
Office expense 7,507 2,958
Other operating expense 5,098 5,972
Penalties 325 12
Postage and delivery 3,004 2,693
Repairs and service 2,076 14,083
Salaries 48,506 56,719
Taxes and licenses 4,967 2,965
Telephone 23,741 15,565
Travel and lodging 10,107 15,618
Utilities 6,503 2,592
___________________
$220,831 $178,018
===================
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized on the 28th day of
October 1996.
RICHMOND CAPITAL CORPORATION
(Registrant)
By: J. Keith Henderson
_____________________________________
J. Keith Henderson, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 28th day of October, 1996.
Signature Title
signed J. Keith Henderson
J. Keith Henderson President, Treasurer
and Director
signed Daniel S. Gould Vice-President and
Daniel S. Gould Secretary
signed Michele L. Prater Director
Michele L. Prater
<PAGE>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- - ------- -----------------------------
27. Financial Data Schedule Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheets and statements of operations found on the Company's Form 10-K
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000846535
<NAME> RICHMOND CAPITAL CORPORATION
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> JUL-31-1996
<CASH> 18682
<SECURITIES> 6500
<RECEIVABLES> 103616
<ALLOWANCES> 0
<INVENTORY> 49888
<CURRENT-ASSETS> 178686
<PP&E> 73271
<DEPRECIATION> 0
<TOTAL-ASSETS> 269359
<CURRENT-LIABILITIES> 151451
<BONDS> 0
<COMMON> 1787
0
0
<OTHER-SE> 116121
<TOTAL-LIABILITY-AND-EQUITY> 269359
<SALES> 1466173
<TOTAL-REVENUES> 1466173
<CGS> 968826
<TOTAL-COSTS> 968826
<OTHER-EXPENSES> 488441
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5132
<INCOME-PRETAX> 9074
<INCOME-TAX> 2870
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6204
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
