<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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Commission File Number 33-37534-NY
WESTECH CAPITAL CORP.
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(Exact name of small business issuer as specified in its charter)
New York 13-3577716
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 West End Avenue, Apt. 23F, New York, New York 10023
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(Address of principal executive offices) (Zip Code)
(212) 873-1050
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(Issuer's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if changed since
last report)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
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The aggregate number of shares outstanding of the Issuer's Common Stock, its
sole class of common equity, was 62,500 as of May 9, 1997.
Transitional Small Business Issuer Disclosure Format: Yes No X
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Page 1 of 11; Exhibit Index is on Page 9
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PART I
ITEM 1. FINANCIAL STATEMENTS.
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31,
1997 JUNE 30,
(UNAUDITED) 1996
----------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash.............................................................. $ 1,451 $ 7,060
----------- ---------
----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses.................................................. 2,466 2,271
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TOTAL LIABILITIES................................................. 2,466 2,271
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STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000 shares authorized, 62,500
shares issued and outstanding....................................... 63 63
Capital in excess of par value....................................... 37,019 37,019
Deficit accumulated during development stage......................... (38,097) (32,293)
----------- ---------
TOTAL STOCKHOLDERS' EQUITY........................................ (1,015) 4,789
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................ $ 1,451 $ 7,060
----------- ---------
----------- ---------
</TABLE>
2
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE FROM INCEPTION
MONTHS ENDED (JULY 18,
MARCH 31, 1997 1990)
-------------------- TO
1997 1996 MARCH 31, 1997
--------- --------- --------------
<S> <C> <C> <C>
REVENUE...................................................................... NONE NONE NONE
--------- --------- --------------
EXPENSES
Professional............................................................. $ 4,352 $ 3,793 $ 26,115
Miscellaneous............................................................ 9 0 199
Office................................................................... 0 0 2,415
Filing fees.............................................................. 756 653 4,197
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TOTAL.................................................................... 5,117 4,446 32,926
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LOSS BEFORE INCOME TAXES..................................................... (5,117) (4,446) (32,926)
INCOME TAXES................................................................. 687 721 5,171
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NET LOSS..................................................................... $ (5,804) $ (5,167) $ (38,097)
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--------- --------- --------------
LOSS PER SHARE:
Net loss per share ......................................................... $(.09) $ (.08) $ (.78)
--------- --------- --------------
--------- --------- --------------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING......................... 62,500 62,500 48,780
--------- --------- --------------
--------- --------- --------------
</TABLE>
3
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK CAPITAL IN DURING TOTAL
------------------------------ EXCESS OF DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT PAR VALUE STAGE EQUITY
----------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance, July 18, 1990 (inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of shares to Officer and
Directors of the Company for cash
July 23, 1990........................ 12,500 13 2,487 2,500
Net loss from inception to June 30,
1991................................. ( 962) ( 962)
Proceeds of initial public offering.... 50,000 50 49,950 50,000
Offering costs......................... (14,627) (14,627)
Net loss for the year ended June 30,
1992................................. ( 5,123) ( 5,123)
--
Offering costs......................... ( 791) ( 791)
Net loss for the year ended June 30,
1993................................. ( 5,428) ( 5,428)
----------------- ----------- ----------- ------------ ------------
Balance, June 30, 1993................. 62,500 63 37,019 (11,513) 25,569
Net loss for the year ended June 30,
1994................................. ( 5,929) ( 5,929)
----------------- ----------- ----------- ------------ ------------
Balance, June 30, 1994................. 62,500 63 37,019 (17,442) 19,640
Net loss for the year ended June 30,
1995................................. ( 7,108) ( 7,108)
----------------- ----------- ----------- ------------ ------------
Balance, June 30, 1995................. 62,500 63 37,019 (24,550) 12,532
Net loss for the year ended June 30,
1996................................. ( 7,743) ( 7,743)
----------------- ----------- ----------- ------------ ------------
Balance, June 30, 1996................. 62,500 63 37,019 (32,293) 4,789
Net loss for the nine months ended
March 31, 1997 ........................ ( 5,804) ( 5,804)
----------------- ----------- ----------- ------------ ------------
Balance, March 31, 1997 (unaudited).... $ 62,500 $ 63 $ 37,019 $ (38,097) $ (1,015)
----------------- ----------- ----------- ------------ ------------
----------------- ----------- ----------- ------------ ------------
</TABLE>
4
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED
MARCH 31,
--------------------
1997 1996
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<S> <C> <C>
REVENUE.......................................................................... NONE NONE
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EXPENSES
Professional.................................................................... $ 1,722 $ 893
Miscellaneous................................................................... 0 0
Office.......................................................................... 0 0
Filing fees..................................................................... 455 417
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TOTAL........................................................................ 2,177 1,310
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LOSS BEFORE INCOME TAXES.......................................................... (2,177) (1,310)
INCOME TAXES...................................................................... 0 0
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NET LOSS.......................................................................... $ (2,177) $ (1,310)
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LOSS PER SHARE:
Net loss per share.............................................................. $( .03) $( .02)
--------- ---------
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING.............................. 62,500 62,500
--------- ---------
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</TABLE>
5
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE FROM INCEPTION
MONTHS ENDED (JULY 18,
MARCH 31, 1997 1990)
-------------------- TO
1997 1996 MARCH 31, 1997
--------- --------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss........................................................ $(5,804) $(5,167) $ (38,097)
Increase (decrease) in accrued expenses......................... 195 (977) 2,466
--------- --------- --------------
NET CASH USED BY OPERATING ACTIVITIES............................. $(5,609) (6,144) (35,631)
--------- --------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock........................................ 0 0 63
Paid in capital................................................. 0 0 52,437
Offering costs.................................................. 0 0 (15,418)
--------- --------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES......................... 0 0 37,082
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NET INCREASE (DECREASE) IN CASH................................... (5,609) (6,144) 1,451
BEGINNING CASH BALANCE............................................ 7,060 15,155 0
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ENDING CASH BALANCE............................................... $ 1,451 $ 9,011 $ 1,451
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</TABLE>
6
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION BUSINESS ACTIVITY AND DIVIDEND POLICY
The Company was incorporated under the laws of the State of New York on
July 18, 1990. The Company is in the development stage and has not commenced
planned principal operations. The Company is seeking the acquisition of, or
merger with an existing Company. The fiscal year of the corporation is June
30. The Company has, at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
and disclosures. Actual results could differ from those estimates and
assumptions.
GENERAL AND RELATED PARTY
The Company has entered into an oral arrangement with Mr. Neil Ragin,
President of the Company, providing for the use of a portion of his business
office as a temporary office until such time as the Company needs additional
facilities. The Company does not pay rent for the use of such facilities.
The financial data for the three and nine months ended March 31, 1997 and
1996 and for the period July 18, 1990 (commencement of development stage)
through March 31, 1997 is unaudited, but includes all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the results of operations
for such periods.
SUPPLEMENTAL CASH FLOW INFORMATION
The following were paid during the nine months ended March 31, 1997:
Income taxes $ 704
Interest -0-
INCOME TAXES
As of March 31, 1997, the Company had a $32,293 net operating loss
carryforward available to offset future taxable income through 2005.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) Plan of Operation
The Registrant was formed July 18, 1990 for the purpose of investing in
any and all types of assets, properties and businesses. In connection with
the initial capitalization of the Registrant a total of 12,500 shares of its
common stock were issued to its officers and directors for the aggregate sum
of $2,500. On November 12, 1991, the United States Securities and Exchange
Commission granted effectiveness to a Registration Statement on Form S-18 for
an offering of 50,000 Units of Common Stock and Warrants to purchase shares
of Common Stock at a price of $1.00 per Unit. The offering was closed in May
1992, and the Warrants included in the Units have expired.
The Registrant is implementing its plan of operation by seeking to locate
a suitable company which desires to go public through a "reverse acquisition"
with the Registrant. Although no assurance can be given, Registrant believes
its cash on hand will satisfy its cash requirements until it effects such an
acquisition, although it may raise additional funds in the next 12 months to
make itself more attractive as an acquisition vehicle, which capital would be
used for the benefit of any company acquired by the Registrant.
(b) Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations.
Since inception the Registrant has not any business operations, and its
activities have been limited to the sale of its securities and the search for
a company to acquire through a "reverse acquisition." The Registrant will not
have any business operations until, if ever, such time as it effects an
acquisition. Accordingly, no revenue has been generated by the Registrant
since its inception.
For the years ended June 30, 1996 and 1995, the Registrant had a net loss
of ($7,743) and ($7,108), respectively, or ($.12) and ($.11) per share. From
inception to March 31, 1997, the Registrant had a net loss of ($38,097), or
($.78) per share. For the nine months ended March 31, 1997, the Registrant
had a net loss of ($5,804), or ($.09) per share, compared to a net loss of
($5,167), or ($.08) per share, for the same period in the prior year. Such
net losses are attributable primarily to professional and filing fees
associated with the Registrant's status as a public company.
8
<PAGE>
Liquidity and Capital Resources.
As of June 30, 1996, the Registrant had assets of $7,060 (all in cash),
total liabilities of $2,271 and total shareholders equity of $4,789. As of
March 31, 1997 the Registrant had cash of $1,451 and no other assets, total
liabilities of $2,466 and total shareholders equity of ($1,015). The decrease
in cash and shareholders equity resulted primarily from professional and
filing fees associated with the Registrant's status as a public company.
Although no assurance can be given, Registrant believes its cash on hand
will satisfy its cash requirements until it effects an acquisition, although
it may raise additional funds in the next 12 months to make itself more
attractive as an acquisition vehicle, which capital would be used for the
benefit of any company acquired by the Registrant.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
THE FOLLOWING EXHIBIT IS FILED WITH THIS REPORT: PAGE
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<S> <C>
27 Financial Data Schedule...................... 11
</TABLE>
9
<PAGE>
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.
Dated: May 13, 1997 WESTECH CAPITAL CORP.
By: Neil Ragin
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Neil Ragin, President and
Principal Financial Officer
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Westech
Capital Corp. financial statements for the nine months ended March 31, 1997 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 1,451
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,451
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,451
<CURRENT-LIABILITIES> 2,466
<BONDS> 0
0
0
<COMMON> 63
<OTHER-SE> (1,078)
<TOTAL-LIABILITY-AND-EQUITY> 1,451
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,117
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,117)
<INCOME-TAX> 687
<INCOME-CONTINUING> (5,804)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,804)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
