U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-42408-NY
ROSECAP, INC.
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(Exact name of small business issuer as specified in its charter)
New York 11-3023099
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(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
236 Birchwood Road
Medford, NY 11763
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(Address of principal executive offices)
(516) 698-6914
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(Issuer's telephone number)
No change
-------------------------
(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 .
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 87,500 shares of Common
Stock, par value $.001 per share, outstanding as of February 5, 1998.
<PAGE>
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
ROSECAP, INC.
For the Quarter ended December 31, 1997
The following financial statements and schedules of the registrant and
its consolidated subsidiaries are submitted herewith:
PART I- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page of
Form 10-QSB
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<S> <C>
Item 1. Financial Statements:
Balance Sheets -- December 31, 1997 and June 30, 1997 3
Statement of Stockholders' Equity -- Inception to December 31, 1997 4
Statement of Operations for the six months ended December 31,
1997 and 1996 and from inception to December 31, 1997 5
Statement of Operations for the three months ended December 31,
1997 and 1996 6
Statement of Cash Flows for the six months ended December 31,
1997 and 1996 and from inception to December 31, 1997 7
Notes to Financial Statements 8,9
Item 2. Management's Discussion and Analysis or Plan of Operation 10
</TABLE>
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REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
2
<PAGE>
ROSECAP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
<TABLE>
<CAPTION>
December 31 June 30,
1997 1997
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,026 $ 7,502
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses $ 930 $ 1,938
---------- ---------
TOTAL LIABILITIES 930 1,938
---------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
50,000,000 shares authorized
87,500 shares issued and outstanding 88 88
Capital in excess of par value 42,241 42,241
Deficit accumulated during development stage ( 42,233) ( 36,765)
---------- ---------
TOTAL STOCKHOLDERS' EQUITY 96 5,564
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,026 $ 7,502
========== ========
</TABLE>
<PAGE>
ROSECAP, INC.
(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, August 24, 1990 (inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of shares to Officer and Directors of the
Company for cash August 24, 1990 12,500 13 2,487 0 2,500
Net loss from inception to June 30, 1991 0 0 0 ( 976) ( 976)
Proceeds of initial public offering 50,000 50 49,950 0 50,000
Offering costs 0 0 (14,394) 0 (14,394)
Net loss for the year ended June 30, 1992 0 0 0 ( 3,991) ( 3,991)
Offering costs 0 0 ( 777) 0 ( 777)
Net loss for the year ended June 30, 1993 0 0 0 ( 5,854) ( 5,854)
Net loss for the year ended June 30, 1994 0 0 0 ( 5,662) ( 5,662)
Net loss for the year ended June 30, 1995 0 0 0 ( 6,491) ( 6,491)
Net loss for the year ended June 30, 1996 0 0 0 ( 6,408) ( 6,408)
------- --- ------- --------- --------
Balance, June 30, 1996 62,500 63 37,266 (29,382) 7,947
Issuance of common shares, May 10, 1997 25,000 25 4,975 0 5,000
Net loss for the year ended June 30, 1997 0 0 0 ( 7,383) ( 7,383)
------- --- ------- --------- --------
Balance, June 30, 1997 87,500 88 42,241 (36,765) 5,564
Net loss for the six months ended December 31, 1997 0 0 0 ( 5,468) ( 5,468)
------- --- ------- --------- --------
Balance, December 31, 1997 (unaudited) 87,500 $88 $42,241 $(42,233) $ 96
======= === ======= ========= ========
</TABLE>
<PAGE>
ROSECAP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Six From Inception
Months Ended August 24, 1990
December 31, To
1997 1996 December 31, 1997
<S> <C> <C> <C>
REVENUE NONE NONE NONE
EXPENSES
Office $ 0 $ 0 $ 2,400
Professional 4,720 1,452 31,920
Filing and transfer fees 368 589 4,380
Miscellaneous 0 9 224
--------- --------- ---------
TOTAL 5,088 2,050 38,924
--------- --------- ---------
LOSS BEFORE INCOME TAXES ( 5,088) (2,050) (38,924)
INCOME TAXES 380 387 3,309
--------- --------- ---------
NET LOSS $( 5,468) $( 2,437) $(42,233)
========= ========= =========
LOSS PER SHARE:
Net loss per share $( .06) $( .04) $( .80)
========= ========= =========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 87,500 62,500 52,945
========= ========= =========
</TABLE>
<PAGE>
ROSECAP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three
Months Ended
December 31,
1997 1996
<S> <C> <C>
REVENUE NONE NONE
EXPENSES
Office $ 0 $ 0
Professional 1,917 475
Filing and transfer fees 150 439
Miscellaneous 0 0
--------- --------
TOTAL 2,067 914
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LOSS BEFORE INCOME TAXES ( 2,067) ( 914)
INCOME TAXES 0 0
--------- --------
NET LOSS $( 2,067) $( 914)
========= ========
LOSS PER SHARE:
Net loss per share $( .02) $( .01)
========= ========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 87,500 62,500
========= ========
</TABLE>
<PAGE>
ROSECAP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Six From Inception
Months Ended August 24, 1990
December 31, To
1997 1996 December 31, 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $( 5,468) $( 2,437) $(42,233)
Increase (decrease) in accrued expenses ( 1,008) ( 968) 930
--------- --------- ---------
NET CASH USED BY OPERATING ACTIVITIES ( 6,476) ( 3,405) (41,303)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 0 0 88
Paid in capital 0 0 57,412
Offering costs 0 0 (15,171)
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 0 0 42,329
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH ( 6,476) ( 3,405) 1,026
BEGINNING CASH BALANCE 7,502 10,683 0
--------- --------- ---------
ENDING CASH BALANCE $ 1,026 $ 7,278 $ 1,026
========= ========= =========
</TABLE>
<PAGE>
ROSECAP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 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 August
24, 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 is seeking the acquisition of, or merger with an existing company.
Mr. Charles Rose is primarily responsible for evaluating acquistions and
investigating prospects for the Company. The Company entered into an oral
arrangement with Mr. Charles Rose, 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 office is located at 236 Birchwood Road, Medford, NY
11763.
The financial data for the three and six months ended December 31, 1997 and 1996
and for the period August 24, 1990 (commencement of development stage) through
December 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 Flows Information
The following were paid during the period ended December 31, 1997:
Income taxes $688
Income Taxes
As of December 31, 1997, the Company had a $29,382 net operating loss
carryforward available to offset future taxable income through 2006.
<PAGE>
ROSECAP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(UNAUDITED)
NOTE 2: CAPITAL STOCK
The Company, in order to satisfy cash requirements, consummated the sale of
25,000 shares of Common Stock, $.001 par value, to Lawrence Kaplan on May 10,
1997 for total proceeds of $5,000. Lawrence Kaplan is the son-in-law of Charles
and Ida Rose, officers and directors of the Company.
NOTE 3: MERGER DISCUSSIONS
The Company is in the midst of attempting to consummate a merger with Westbury
Alloys, Inc. a privately held corporation engaged in the smelting business, and
a related private placement of up to 2,175,000 shares of the Company's Common
Stock. On January 29, 1998 Westbury Alloys, Inc. and the Company executed a
merger agreement. Pursuant to the Merger Agreement, the Company will declare a
1.057142-for-1 stock dividend on its outstanding shares and will issue
1,850,000 shares of Common stock to the current shareholders of Westbury. On
the same date the placement agent agreement was also executed by the Company and
G-V Capital Corp. G-V Capital Corp.'s president is Lawrence Kaplan, son-in-law
of Charles and Ida Rose, officers and directors of the Company Although both
agreements have been executed, certain conditions to the closing thereof remain,
and no asssurance can be given that an actual consummation of the Merger and
Private Placement will take place or that the final terms thereof will be as
described above.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
Rosecap, Inc. (the "Company") was formed August 24, 1990, for the
purpose of investing in any and all types of assets, properties and businesses.
In connection with its initial capitalization, the Company issued 12,500 shares
of its Common Stock 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, filed
by the Company in the New York Regional Office. The Registration Statement
related to an offering of 50,000 Units of Common Stock at $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 offering was
intended as a "blank check" offering. The Class "A" Warrants expired in January
1996 without being exercised. The Class "B" Warrants expired in June 1996
without being exercised. The offering was closed on May 20, 1992.
The Company, on May 10, 1997, consummated a sale of 25,000 shares of
Common Stock to Lawrence Kaplan, son-in-law of Charles Rose and Ida Rose,
officers and directors of the Company, at a price of $0.20 per share, or an
aggregate of $5,000. The Company believes these funds should be sufficient to
bear the expenses of filings with the Securities and Exchange Commission,
professional and other expenses for the 12 months following such investment,
although no assurance thereof can be given.
Plan of Operation. The Company has not yet realized any revenues from
operations, and its plan of operation for the next twelve months shall be to
continue its efforts to consummate a merger or acquisition. In accordance
therewith, the Company is in the midst of attempting to consummate a merger (the
"Merger"), pursuant to a certain Merger Agreement and Plan of Reorganization
(the "Merger Agreement") with Westbury Alloys, Inc. ("Westbury"), a privately
held corporation engaged in the smelting business, and a related private
placement (the "Private Placement") of up to 2,175,000 shares of the Company's
Common Stock, pursuant to a certain placement agent agreement (the "Placement
Agent Agreement") and a Confidential Private Offering Memorandum of the Company
dated January 28, 1998( the "Memorandum"). The Merger Agreement was executed as
of January 29, 1998 by Westbury, the Company and Westbury Acquisition Corp., a
wholly owned subsidiary of the Company recently incorporated in Delaware.
Pursuant to the Merger Agreement, (i) the Company will declare a 1.057142-for-1
stock dividend on its outstanding shares and (ii) the Compnay will issue
1,850,000 shares of Common Stock to the current shareholders of Westbury. The
Placement Agent Agreement was also executed as of January 29, 1998 by the
Company and G-V Capital Corp. ("G-V Capital"), the placement agent with respect
to the Private Placement. G-V Capital's president is Lawrence
10
<PAGE>
Kaplan, son-in-law of Charles Rose and Ida Rose. G-V Capital will receive
certain fees in connection with the Private Placement. Although both agreements
have been executed, certain conditions to the closing thereof remain, and no
assurance can be given that an actual consummation of the Merger and Private
Placement will take place or that the final terms thereof will be as described
above.
Liquidity and Capital Resources. As of December 31, 1997, the Company
had assets of $1,026 and liabilities of $930. This compares to assets of $7,502
and liabilities of $1,938 at June 30, 1997. The Company's assets consist of cash
as a result of the offering and the sale of stock to Mr. Kaplan. The Company
will likely continue to have limited assets until such time as an acquisition or
merger is effected.
Results of Operations. The Company has not commenced any active
operations as of the date hereof except for the registration and sale of its
securities and its efforts to locate suitable acquisition transactions and the
sale of stock to Mr. Kaplan. No revenue has been generated by the Company since
its inception. It is unlikely that the Company will have any revenues unless it
is able to obtain additional capital or effect an acquisition of an operating
company, of which there can be no assurance. For the six months ended December
31, 1997, the Company had no revenue and expenses of $5,088 as compared with no
revenue and expenses of $2,050 for the six months ended December 31, 1996. For
the three months ended December 31, 1997, the Company had no revenue and
expenses of $2,067 as compared with no revenue and expenses of $914 for the
three months ended December 31, 1996.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the officers and
directors, neither the Company nor any of its officers and
directors are party to any legal proceeding or litigation.
The officers and directors know of no such litigation being
threatened or contemplated.
Item 2. Changes in Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. (A) Exhibits
Exhibit No. Description
----------- ------------
27.1 Financial Data Schedule
(B) Reports on Form 8-K. None.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: February 9, 1998 ROSECAP, INC.
By: /s/ Charles Rose
----------------------------
Charles Rose, President and
Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX
27.1 Financial Data Schedule
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Rosecap,
Inc. financial statements for the six months ended December 31, 1997 and is
qualified in its entirety be reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 1,026
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,026
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,026
<CURRENT-LIABILITIES> 930
<BONDS> 0
0
0
<COMMON> 88
<OTHER-SE> 8
<TOTAL-LIABILITY-AND-EQUITY> 1,026
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,088
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,088)
<INCOME-TAX> 380
<INCOME-CONTINUING> (5,468)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,468)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
