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 December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 33-37534-NY
WESTECH CAPITAL CORP.
(Exact name of small business issuer 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)
(212) 873-1050
(Issuer's telephone number, including area code)
N/A
(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 _____
The aggregate number of shares outstanding of the Issuer's Common Stock, its
sole class of common equity, was 182,500 as of February 12, 1999.
Transitional Small Business Issuer Disclosure Format: Yes _____ No __X__
Page 1 of 11; Exhibit Index is on Page 9
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31 June 30
1998 1998
-------- --------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 9,529 $ 6,218
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses $ 1,580 $ 4,074
-------- --------
TOTAL LIABILITIES 1,580 4,074
-------- --------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
50,000,000 shares authorized 182,500
and 142,500 shares issued and outstanding 183 143
Capital in excess of par value 66,899 56,939
Deficit accumulated during development stage (59,133) (54,938)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 7,949 2,144
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,529 $ 6,218
======== ========
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Capital in During Total
Common Stock 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 0 2,500
Net loss from inception to June 30, 1991 0 0 0 (962) (962)
Proceeds of initial public offering 50,000 50 49,950 0 50,000
Offering costs 0 0 (14,627) 0 (14,627)
Net loss for the year ended June 30, 1992 0 0 0 (5,123) (5,123)
Offering costs 0 0 (791) 0 (791)
Net loss for the year ended June 30, 1993 0 0 0 (5,428) (5,428)
Net loss for the year ended June 30, 1994 0 0 0 (5,929) (5,929)
Net loss for the year ended June 30, 1995 0 0 0 (7,108) (7,108)
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)
Issuance of shares, private placement, July 9, 1997 40,000 40 9,960 0 10,000
Issuance of shares, private placement, March 2, 1998 40,000 40 9,960 0 10,000
Net loss for the year ended June 30, 1998 0 0 0 (9,696) (9,696)
-------- -------- -------- -------- --------
Balance, June 30, 1998 142,500 143 56,939 (54,938) 2,144
Issuance of shares, private placement, December 11, 1998 40,000 40 9,960 0 10,000
Net loss for the six months ended December 31, 1998 0 0 0 (4,195) (4,195)
-------- -------- -------- -------- --------
Balance, December 31, 1998 (unaudited) 182,500 $ 183 $ 66,899 $(59,133) $ 7,949
======== ======== ======== ======== ========
</TABLE>
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Six From Inception
Months Ended July 18, 1990
December 31, To
1998 1997 December 31, 1998
---- ---- -----------------
<S> <C> <C> <C>
REVENUE NONE NONE NONE
EXPENSES
Miscellaneous $ 0 $ 0 $ 216
Office 0 0 2,415
Professional 2,611 1,443 36,857
Filing and transfer fees 904 335 13,130
--------- --------- ---------
TOTAL 3,515 1,778 52,618
--------- --------- ---------
LOSS BEFORE INCOME TAXES (3,515) (1,778) (52,618)
INCOME TAXES 680 680 6,515
--------- --------- ---------
NET LOSS $ (4,195) $ (2,458) $ (59,133)
========= ========= =========
LOSS PER SHARE:
Net loss per share $ (.03) $(. 02) $ (.94)
========= ========= =========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 147,062 100,761 62,851
========= ========= =========
</TABLE>
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
For The Three
Months Ended
December 31,
1998 1997
--------- ---------
REVENUE NONE NONE
EXPENSES
Professional $ 856 $ 428
Filing and transfer fees 649 185
--------- ---------
TOTAL 1,505 613
--------- ---------
LOSS BEFORE INCOME TAXES (1,505) (613)
INCOME TAXES 0 0
--------- ---------
NET LOSS $ (1,505) $ (613)
========= =========
LOSS PER SHARE:
Net loss per share $ (.01) $ (NIL)
========= =========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 151,630 102,500
========= =========
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Six From Inception
Months Ended July 18, 1990
December 31, To
1998 1997 December 31, 1998
-------- -------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (4,195) $ (2,458) $(59,133)
Increase (decrease) in accrued expenses (2,494) (7,119) 1,580
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (6,689) (9,577) (57,553)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 40 40 183
Paid in capital 9,960 9,960 82,317
Offering costs 0 0 (15,418)
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 10,000 10,000 67,082
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 3,311 423 9,529
BEGINNING CASH BALANCE 6,218 164 0
-------- -------- --------
ENDING CASH BALANCE $ 9,529 $ 587 $ 9,529
======== ======== ========
</TABLE>
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(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.
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.
The financial data for the three and six months ended December 31, 1998 and 1997
and for the period July 18, 1990 (commencement of development stage) through
December 31, 1998 is unaudited, but includes all adjustments (consisting only of
normal recurring adjustments) which are, in the ipinion of management, necessary
for a fair presentation of the results of operations for such periods.
SUPPLEMENTAL CASH FLOWS INFORMATION
The following were paid during the period ended December 31, 1998:
Income taxes $680
Income taxes
As of December 31, 1998, the Company had a $54,938 net operating loss
carryforward available to offset future taxable income through 2007.
<PAGE>
WESTECH CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(UNAUDITED)
NOTE 2: CAPITAL STOCK
The Company, in order to satisfy cash requirements, consummated the sale of
40,000 shares of Common Stock, $.001 par value, on December 11, 1998, March 2,
1998 and July 9, 1997. Each sale was for total proceeds of $10,000.
<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.
However, 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 had 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, 1997 and 1998, the Registrant had a net loss
of $(12,949) and $(9,696), respectively, or $(.21) and $(.08) per share. From
inception to December 31, 1998, the Registrant had a net loss (unaudited) of
$(59,133), or $(.94) per share. For the six months ended December 31, 1998, the
Registrant had a net loss (unaudited) of $(4,195), or $(.03) per share, compared
to a net loss (unaudited) of $(2,458), or $(.02) per share, for the same period
in the prior year. Such net losses are attributable primarily to professional
and other fees associated with the Registrant's status as a reporting public
company.
8
<PAGE>
Liquidity and Capital Resources.
As of June 30, 1998, the Registrant had assets of $6,218 (all in cash),
total liabilities of $4,074 and total shareholders' equity of $2,144. As of
December 31, 1998 the Registrant had (unaudited) cash of $9,529 and no other
assets, total liabilities of $1,580 and total shareholders' equity of $7,949,
which was attributable to the December 1998 sale of 40,000 shares of Common
Stock for $10,000. The Company may seek to raise additional capital in order to
implement its plan of operations. There can be no assurance that any such
offering will be successful.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is filed with this report: Page
----
27 Financial Data Schedule. 11
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: February 12, 1999 WESTECH CAPITAL CORP.
By: /s/ Neil Ragin
---------------------------
Neil Ragin, President and
Principal Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Westech
Capital Corp. financial statements for the six months ended December 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 9,529
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,529
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,529
<CURRENT-LIABILITIES> 1,580
<BONDS> 0
0
0
<COMMON> 183
<OTHER-SE> 7,766
<TOTAL-LIABILITY-AND-EQUITY> 9,529
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,515
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,515)
<INCOME-TAX> 680
<INCOME-CONTINUING> (4,195)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,195)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
