Page 1 of 23
Exhibit Index
is on Page 20
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to _________
Commission file number 33-37534-NY
WESTECH CAPITAL CORP.
(Exact name of registrant as specified in its charter)
New York 13-3577716
(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
(Address of principal executive offices) Zip Code
Issuer's telephone number (212) 873-1050
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
N/A N/A
Securities registered under Section 12(g) of the Exchange Act:
None
(Title of class)
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 ____
<PAGE>
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. None.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. (See definition of an affiliate in Rule 12b-2 of the Exchange Act.) Zero.
(According to the National Quotation Bureau, Inc. there are no published
quotations for the issuer's Common Stock.)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 102,500 shares of Common Stock, $.001
par value, outstanding as of September 22, 1997.
DOCUMENTS INCORPORATED BY REFERENCE - None
2
<PAGE>
PART I
Item 1. Description of Business.
General
Westech Capital Corp. (the "Company" or the "Registrant") was organized as
a New York corporation on July 18, 1990 for the purpose of investing in any and
all types of assets, properties and businesses. It has not engaged in any
business operations. The Company, which is commonly known as a "blind pool" or
"blank check", will attempt to acquire a business in an industry as yet
undetermined. The Company presently has no specified type of business
contemplated to be acquired.
In connection with its initial capitalization, the Registrant issued 12,500
shares of its Common Stock to its officers and directors for the aggregate sum
of $2,500. In furtherance of its corporate purpose, on May 26, 1992, the
Registrant closed its initial public offering of 50,000 Units at a price of
$1.00 per Unit. Each Unit consisted of one share of Common Stock, one Class "A"
Common Stock Purchase Warrant, and one Class "B" Common Stock Purchase Warrant.
The Warrants, which entitled the holders to purchase additional Common Stock at
$5.00 and $10.00, respectively, have expired. In July 1997, the Company raised
$10,000 from the sale of 40,000 shares of its Common Stock in order to obtain
working capital.
The Registrant is seeking the acquisition of or merger with an existing
company ("Potential Business Acquisitions"). Given the limited assets of the
Registrant, it is likely to acquire or merge with a company which is not seeking
immediate substantial amounts of cash but one which desires to establish a
public trading market for its shares. However, within the next six months the
Company intends to seek to raise additional funds to augment its cash on hand,
which also could be used for the benefit of any Business Acquisition seeking an
immediate cash infusion. There can be no assurance that the Company's financing
efforts will be successful.
There are numerous reasons why an existing privately-held company would
seek to become a public company through a merger or acquisition rather than
doing its own public offering. Such reasons include avoiding the time delays
involved in a public offering; retaining a larger share of voting control of the
publicly-held company; reducing the cost factors incurred in becoming a public
company; and avoiding any dilution requirements set forth under various states'
blue sky laws.
The Registrant does not propose to restrict its search for Potential
Business Acquisitions to any particular industry or any
3
<PAGE>
particular geographic area and may, therefore, engage in essentially any
business to the extent of its limited resources.
It is anticipated that knowledge of Potential Business Acquisitions will be
made known to the Registrant by various sources, including its officers and
directors, shareholders, professional advisors such as attorneys and
accountants, securities broker-dealers, venture capitalists, members of the
financial community, and others who may present unsolicited proposals. In
certain circumstances, the Registrant may agree to pay a finder's fee or to
otherwise compensate such persons for services rendered in bringing about a
transaction. However, no cash finder's fee shall be paid to any officer or
director of the Registrant or their affiliates or associates. The amount of any
such finder's fee or other compensation which may be paid to such persons for
services rendered in bringing about a transaction is subject to future
negotiation between the Registrant, the entity to be acquired and the finder.
Selection of Opportunities
The analysis of new business opportunities has and will be undertaken by or
under the supervision of the officers and directors of the Registrant, none of
whom is a professional business analyst or has any previous training or
experience in business analysis or in selecting or hiring business analysts. The
Registrant has, since the date of the closing of its public offering, considered
potential acquisition transactions with several companies but as of this date
has not entered into any definitive agreement with any party. The Registrant has
unrestricted flexibility in seeking, analyzing and participating in Potential
Business Opportunities. In its efforts to analyze potential acquisition targets,
the Registrant will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated market
expansion or new products;
(b) Competitive position as compared to other firms of similar size and
experience within the industry segment as well as within the industry as a
whole;
(c) Strength and diversity of management, either in place or scheduled for
recruitment;
(d) Capital requirements and anticipated availability of required funds, to
be provided by the Registrant or from operations, through the sale of additional
securities, through joint ventures or similar arrangements or from other
sources;
(e) The cost of participation by the Registrant as compared to the
perceived tangible and intangible values and potentials;
4
<PAGE>
(f) The extent to which the business opportunity can be advanced;
(g) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items; and
(h) other relevant factors.
In applying the foregoing criteria, no one of which will be controlling,
management will attempt to analyze all factors in the circumstances and make a
determination based upon reasonable investigative measures and available data.
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Due to the Registrant's limited capital
available for investigation and management's limited experience in business
analysis, the Registrant may not discover or adequately evaluate adverse facts
about the opportunity to be acquired.
Form of Acquisition
The manner in which the Registrant participates in an opportunity will
depend upon the nature of the opportunity, the respective needs and desires of
the Registrant and the promoters of the opportunity, and the relative
negotiating strength of the Registrant and such promoters.
It is likely that the Registrant will acquire its participation in a
business opportunity through the issuance of common stock or other securities of
the Registrant. Although the terms of any such transaction cannot be predicted,
it should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, depends upon
the issuance to the shareholders of the acquired company of at least 80 percent
of the common stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code, all prior shareholders would in such circumstances retain 20%. or
less of the total issued and outstanding shares. This could result in
substantial additional dilution to the equity of those who were shareholders of
the Registrant prior to such reorganization.
The present shareholders of the Registrant will likely not have control of
a majority of the voting shares of the Registrant following a reorganization
transaction. As part of such a transaction, all or a majority of the
Registrant's directors may
5
<PAGE>
resign and new directors may be appointed without any vote by shareholders.
In the case of an acquisition, the transaction may be accomplished upon the
sole determination of management without any vote or approval by shareholders.
In the case of a statutory merger or consolidation, it will likely be necessary
to call a shareholders' meeting and obtain the approval of the holders of a
majority of the outstanding shares. The necessity to obtain such shareholder
approval may result in delay and additional expense in the consummation of any
proposed transaction and will also give rise to certain appraisal rights to
dissenting shareholders. Most likely, management will seek to structure any such
transaction so as not to require shareholder approval.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs theretofore incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the participation
in a specific business opportunity, the failure to consummate that transaction
may result in the loss to the Registrant of the related costs incurred.
Acquisition Restrictions
The Company does not intend to pursue any business opportunity or
transaction which would render it an "investment company" as the term is defined
in the Investment Company Act of 1940. In this regard, the Company has not
engaged and does not intend to engage in the business of (1) investing,
reinvesting, or trading in securities as its primary business, (2) issuing face
amount certificates of the installment type or (3) investing, reinvesting,
owning, holding, or trading in securities. Being deemed an "investment company"
under such Act, without registration as such, could result in certain instances
in civil liability and criminal penalties to controlling persons of, as well as
civil liabilities and unenforceability of contracts with regard to, the Company.
The Company has not engaged and does not intend nor have authority to
engage in the business of advising others, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities for compensation
nor as a part of its regular business to issue or promulgate analyses or reports
concerning securities. The Company does not intend, nor does it have any
authority, to pursue any course of business which would render it an "investment
advisor" as that term is defined in the Investment Advisors Act of 1940.
6
<PAGE>
Daily Operations and Employees
To date, the Company has had no, and until an active business is commenced
or acquired the Company will have no, employees or day-to-day operations.
Management is unable to make any estimate as to the future number of employees
which may be necessary, if any, to work for the Company. If an existing business
is acquired it is possible that its existing staff would be hired by the
Company. At the present time it is the intention of management to meet or be in
telephone contact as needed to review business opportunities, evaluate potential
acquisitions and otherwise operate the affairs of the Company. Management will
not be compensated for these services rendered on behalf of the Company.
Item 2. Description of Property.
The Company has entered into an oral arrangement with Neil Ragin,
President, Treasurer and Chairman of the Board of the Company, providing for him
to furnish the use of a portion of his business office as a temporary office for
the Company until such time it needs additional facilities. The Company will not
pay rent for the use of such temporary facilities.
Item 3. Legal Proceedings.
There are no material pending legal proceedings to which the Company is a
party or to which any of its property is subject and no such proceedings are
known to the Company to be threatened or contemplated by or against it.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fiscal
year covered by this Report.
7
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market Information
There is no public market for the Company's securities.
Holders
As of September 19, 1997, there were 39 record holders of the Company's
Common Stock.
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock, par
value $.001 each. As of September 22, 1997 there were 102,500 such shares issued
and outstanding, all of which were fully paid and non-assessable. Holders of
shares of Common Stock are entitled to one vote for each share held. There are
no preemptive, subscription, conversion or redemption rights pertaining to the
shares. Holders of the shares of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of assets legally
available therefor and to share ratably in the assets of the Company available
upon liquidation.
The holders of shares of Common Stock do not have the right to cumulate
their votes in the election of directors and, accordingly, the holders of more
than 50% of all such shares outstanding can elect all of the directors.
Remaining shareholders will not be able to elect any directors.
Dividends
The Company has not paid cash dividends to date and intends to retain
earnings, if any, for use in its activities. Payment of cash dividends in the
future will be wholly dependent upon the Board of Directors and upon the
Company's earnings, financial condition, capital requirements and other factors
deemed relevant by them. It is not likely that cash dividends will be paid in
the foreseeable future.
In the event of the acquisition of or merger with a business by the
Company, control of the Company and its Board of Directors may pass to others.
In that event, the payment of dividends would be wholly dependent upon such
persons.
8
<PAGE>
Item 6. 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 Company 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. In July 1997,
the Company raised $10,000 from the sale of 40,000 shares of its Common Stock in
order to obtain working capital.
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
it. Although no assurance can be given, the Company believes its cash on hand
will satisfy its cash requirements until it effects such an acquisition.
However, it may seek to raise additional funds in the next six months (in
addition to the $10,000 raised in July 1997) to augment its cash on hand, which
also could be used for the benefit of any company it acquires or with which it
merges. There can be no assurance that the Company's financing efforts will be
successful. The Company's Plan of Operation is further described in Item 1
hereof.
(b) Management's Discussion and Analysis of Financial Condition and
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 or with which to merge through a "reverse acquisition". The
Registrant will not have any business operations until, if ever, such time as it
effects an acquisition or merger. Accordingly, no operating income has been
generated by the Registrant since its inception.
For the years ended June 30, 1996 and 1997, the Company had a net loss of
($7,743) and ($12,949), respectively, or ($.12) and ($.21) per share,
respectively. From inception to June 30, 1997, the Company had a net loss of
$45,242, or ($.92) per share. Such losses are attributable primarily to costs
associated with the Company's attempts to identify and acquire a business.
9
<PAGE>
Item 7. Financial Statements.
Index to Financial Statement
Independent Accountants' Report
Balance Sheets
June 30, 1997 and 1996
Statement of Operations
Years ended June 30, 1997, 1996 and 1995
Statement of Changes in Stockholders' Equity
Years ended June 30, 1997, 1996 and 1995
Statement of Cash Flows
Years ended June 30, 1997, 1996 and 1995
Notes to Financial Statements
10
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Westech Capital Corp.
We have audited the accompanying balance sheets of Westech Capital Corp. (a
development stage company) as of June 30, 1997 and 1996, and the related
statements of operations, stockholders' equity and cash flows for the years
ended June 30, 1997, 1996 and 1995 and for the period July 18, 1990 (inception)
to June 30, 1997. 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 Westech Capital Corp. (a
development stage company) as of June 30, 1997 and 1996 and the results of its
operations and its cash flows for the years ended June 30, 1997, 1996, 1995 and
for the period July 18, 1990 (inception) to June 30, 1997 in conformity with
generally accepted accounting principles.
/s/ Scott & Guilfoyle
Lake Success, New York
August 11, 1997
11
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30
1997 1996
ASSETS
CURRENT ASSETS
Cash $ 164 $ 7,060
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses $ 8,324 $ 2,271
-------- --------
TOTAL LIABILITIES 8,324 2,271
-------- --------
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 (45,242) (32,293)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (8,160) 4,789
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 164 $ 7,060
======== ========
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FROM INCEPTION
JUNE 30 JULY 18, 1997 TO
1997 1996 1995 JUNE 30, 1997
<S> <C> <C> <C> <C>
REVENUE
Interest NONE NONE NONE NONE
-------- -------- -------- --------
EXPENSES
Miscellaneous 9 0 0 199
Office 0 0 165 2,415
Professional 8,364 6,220 5,503 30,127
Filing and transfer fees 3,905 802 719 7,346
-------- -------- -------- --------
TOTAL 12,278 7,022 6,387 40,087
-------- -------- -------- --------
LOSS BEFORE INCOME TAXES (12,278) (7,022) (6,387) (40,087)
INCOME TAXES 671 721 721 5,155
-------- -------- -------- --------
NET LOSS $(12,949) $ (7,743) $ (7,108) $(45,242)
======== ======== ======== ========
LOSS PER SHARE
Net loss per share $ (.21) $ (.12) $ (.11) $ (.92)
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 62,500 62,500 62,500 49,272
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit Total
Common Stock Capital in Excess Accumulated During Stockholders'
Shares Amount of Par Value Development 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)
Net loss for the year ended
June 30, 1994 (5,929) (5,929)
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 year ended
June 30, 1997 0 0 0 (12,949) (12,949)
------ ------- ---------- ---------- ---------
Balance, June 30, 1997 62,500 $ 63 $ 37,019 $ (45,242) $ (8,160)
====== ======= ========== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FROM INCEPTION
JUNE 30 JULY 18, 1997 TO
1997 1996 1995 JUNE 30, 1997
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(12,949) $ (7,743) $ (7,108) $(45,242)
Increase (decrease) in
accrued expenses 6,053 (352) 544 8,324
-------- -------- -------- --------
NET CASH USED BY OPERATING
ACTIVITIES (6,896) (8,095) (6,564) (36,918)
-------- -------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of common stock 0 0 0 63
Paid in capital 0 0 0 52,437
Offering costs 0 0 0 (15,418)
-------- -------- -------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 37,082
-------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH (6,896) (8,095) (6,564) 164
BEGINNING CASH BALANCE 7,060 15,155 21,719 0
-------- -------- -------- --------
ENDING CASH BALANCE $ 164 $ 7,060 $ 15,155 $ 164
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997, 1996, 1995
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.
Estimates
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates and
assumptions.
General and related party
The Company 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.
SUPPLEMENTAL CASH FLOWS INFORMATION
The following were paid during the year ended June 30, 1997:
Income taxes $704
INCOME TAXES
As of June 30, 1997, the Company had a $42,742 net operating loss carryforward
available to offset future taxable income through 2006.
NOTE 2: SUBSEQUENT EVENTS
During July 1997 the Company issued 40,000 common shares for a total of $10,000.
This sale was completed to enable the Company to meet its cash requirements for
at least the next year.
16
<PAGE>
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
N/A
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange
Act.
The following table sets forth certain information concerning the current
directors and executive officers of the Company, who have served since the
inception of the Company and will serve for one year or until their respective
successors are elected and have qualified:
NAME AGE POSITION
- ---- --- --------
Neil Ragin 55 Chairman of the Board,
President and Treasurer
Michael J. Tannenholtz 40 Secretary and Director
Dr. William Esh 47 Director
Neil Ragin has been Chairman of the Board, President and Treasurer of the
Company since July 1990. Mr. Ragin is, and has been since 1974, the President of
Gartner's Hardware, Inc., a retail hardware store located in New York City. From
1988 to June 1995, Mr. Ragin was the President of Ragar Corp., then a
publicly-held blind pool company which acquired Carpet Barn.
Michael J. Tannenholtz has been the Secretary and a Director of the Company
since July 1990. Mr. Tannenholtz is, and has been since 1979, the owner of
Michael J. Tannenholtz Consulting Corp., a New York city based accounting firm.
Dr. William Esh was appointed a director of the Company in August 1991. Dr.
Esh has been actively engaged in the private practice of dentistry since 1975.
From 1988 to June 1995, Dr. Esh was a director of Ragar Corp., then a
publicly-held blind pool company which acquired Carpet Barn.
The Company has no significant employees and no family relationships exist
between any of the executive officers and directors.
Item 10. Executive Compensation.
No officer or director of the Company has received remuneration from the
Company in fiscal 1996 or prior years, and it is not anticipated that
remuneration will be paid prior to the Company's acquisition of a business. The
Company has no current
17
<PAGE>
intent to issue shares of its common stock to management in connection with a
Business Acquisition. However, the Company may subsequently deem the issuance of
shares to management for services rendered in connection with such an
Acquisition to be fair and reasonable to the Company and its public shareholders
in light of the services rendered. In the event any shares are issued for
services rendered by management they shall be issued in such an amount as the
Board of Directors deems fair and reasonable to the Company and its public
shareholders and in compliance with management's fiduciary duties under state
law. Officers and directors will be reimbursed for actual out-of-pocket expenses
incurred on behalf of the Company as approved by the Board of Directors.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth certain information as to the number of
shares of the Company's Common Stock deemed to be owned beneficially by each
person known by the Registrant to be deemed to be the beneficial owner of more
than 5% of the outstanding Common Stock, each of its executive officers and
directors, and all of its executive officers and directors as a group, at
September 22, 1997. Except as indicated in the footnote to this table, the
Company believes that the named persons have sole voting and investment power
with respect to the shares indicated:
<TABLE>
<CAPTION>
Name and Address of Position With Number of Percentage
Beneficial Owner Company Shares of Class
- ------------------- ---------------- ----------- --------------
<S> <C> <C> <C>
Neil Ragin(1) President, 11,500 11%
180 West End Avenue Treasurer,
New York, NY 10023 Director
Michael J. Tannenholtz(1) Secretary, 1,000 1
250 West 54th Street Director
Suite 703
New York, NY 11706
Dr. William Esh(1) Director -0- -0-
243 West End Avenue
New York, NY 10023
Lawrence E. Kaplan(1) N/A 40,000 39
150 Vanderbilt Motor
Parkway
Hauppauge, NY 11788
Executive Officers and
Directors as a Group 12,500 12
(3 persons)
</TABLE>
- --------------------
(1) These individuals may be deemed "parents" and the promoters of the
Registrant as those terms are defined in the Rules and Regulations
promulgated under the Securities Act of 1933, as amended.
18
<PAGE>
Item 12. Certain Relationships and Related Transactions
No member of management nor controlling shareholder has had any
transactions with the Company during its past fiscal year, nor proposes any such
transactions, in which the amount involved exceeds $60,000.
In connection with its initial capitalization, the Company sold 12,500
shares of its Common Stock to its founding shareholders for an aggregate
consideration of $2,500 in cash.
Agreement for Clerical Services - Promoter. In fiscal 1994 the Company
retained Stanley Kaplan Management Consultants, Inc. ("SKMC") to provide
clerical and bookkeeping services to the Registrant for a fee of $50.00 per
month. The agreement between Mr. Kaplan and the Company was oral and was
terminable at will by either party. SKMC terminated such agreement effective
November 23, 1994. Stanley A. Kaplan, the president and sole shareholder of
SKMC, referred the Company to its legal counsel and auditor. Mr. Kaplan is not a
parent or control party of the Company. Inasmuch as Mr. Kaplan offered certain
advice to management in connection with the formation of the Company, he may be
deemed a "promoter" of the Company as that term is defined in Rule 405 of
Regulation C as promulgated by the Securities and Exchange Commission.
Mr. Kaplan has been the president and sole shareholder of SKMC, an
accounting firm, for at least the past ten years. Since January 1987, Mr. Kaplan
has also been an officer and director of Gro-Vest, Inc., a management consulting
firm.
On August 12, 1994, Mr. Kaplan settled, without admitting or denying any
allegations, a civil action brought against him by the Securities and Exchange
Commission relating to Atratech, Inc. The action charged Mr. Kaplan with certain
violations of the Securities Act of 1933 and the Securities Exchange Act of 1934
(the "Exchange Act"). As part of the settlement, Mr. Kaplan was permanently
restrained and enjoined from future violations of the securities laws and was
permanently barred from acting as an officer or director of any issuer that has
a class of securities registered under Section 12 of the Exchange Act or that is
required to file reports pursuant to Section 15(d) of the Exchange Act.
The Company neither has nor had any written or oral agreement or
understanding with Mr. Kaplan or SKMC regarding his services or participation in
connection with future mergers or acquisitions. Mr. Kaplan's firm had been
retained solely to provide clerical and bookkeeping services. If Mr. Kaplan
becomes aware of a merger or acquisition possibility he may or may not refer
such possibility to the Company's management for consideration. If Mr. Kaplan
becomes aware of a merger or acquisition possibility and refers it to the
Company, the Company's management will review such merger or
19
<PAGE>
acquisition possibility in the same manner and with the same efforts as it
reviews merger and acquisition possibilities referred to it by other persons.
The Company may agree to pay a finder's fee to any non-management "finder",
including Mr. Kaplan, in connection with an acquisition or merger. Although
there is no current intent, agreement, understanding or expectation to do so,
there exists the possibility that the Company may ultimately acquire or merge
with a business or property in which Mr. Kaplan or his affiliates or associates
have a beneficial interest. There is no business or property in which Mr. Kaplan
or his affiliates or associates have a beneficial interest which is under
consideration by the Company as a potential acquisition or merger candidate.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits.
3(i) Certificate of Incorporation -
incorporated by referenced to
Exhibit 3.1 of Registrant's
Registration Statement on
Form S-18
(SEC File No. 33-37534-NY)
3(ii) By-Laws - incorporated by
reference to Exhibit 3.2
of Registrant's Registration
Statement on Form S-18
(SEC File No. 33-37534-NY)
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
20
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTECH CAPITAL CORP.
----------------------------------
(Registrant)
By /s/ Neil Ragin
----------------------------------
Neil Ragin
Principal Executive Officer and
Principal Financial Officer
Date: September 22, 1997
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
/s/ Neil Ragin
----------------------------------
Neil Ragin
Director
Date: September 22, 1997
/s/ Michael J. Tannenholtz
----------------------------------
Michael J. Tannenholtz
Director
Date: September 22, 1997
/s/ William Esh
----------------------------------
William Esh
Director
Date: September 22, 1997
21
<PAGE>
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Exchange Act By Non-reporting Issuers
(1) No annual report to security holders covering the registrant's last
fiscal year; and
(2) No proxy statement, form of proxy or other proxy soliciting, material
has been sent to more than ten of the registrant's security holders with respect
to any annual or other meeting of security holders.
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Westech Capital Corp. financial statements for the year
ended June 30, 1997 and is qualified in its entirety be reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 164
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 164
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 164
<CURRENT-LIABILITIES> 8,324
<BONDS> 0
63
0
<COMMON> 0
<OTHER-SE> (8,223)
<TOTAL-LIABILITY-AND-EQUITY> 164
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,278
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,278)
<INCOME-TAX> 671
<INCOME-CONTINUING> (12,949)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,949)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
