U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q-SB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the six months ended Commission File Number
June 30, 1998 33-48017-A
EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
(a Florida corporation)
(Exact name of Registrant as specified in its Charter)
Florida 59-2087068
- ------------------------------ ----------------------------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number
2323 Stickney Point Road, Sarasota, Florida 34231
--------------------------------------------------
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (941) 921-9700
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(g) of the Act:
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 / / .
For the six months ended June 30, 1998, the Registrant had revenues of
$1,454,043.
As of June 30, 1998, the Registrant had 5,000,000 Shares authorized
and 2,615,485 Shares outstanding. The aggregate market value of the
outstanding shares held by non-affiliates, computed by reference to the
price at which the stock was sold is $1,457,992.
I - FINANCIAL INFORMATION
Item 1. Financial Statements
Set forth below are the unaudited financial statements reflecting the
Company's financial condition as of June 30, 1998, and the related
statements of operations and shareholders' equity for the six months ended
June 30, 1998 and 1997.
EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
BALANCE SHEET
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS
Cash $ 29,740
Accounts receivable from
correspondent brokers 193,762
Accounts receivable from others 38,105
----------
TOTAL CURRENT ASSETS 261,607
INVESTMENTS
Furniture, Fixtures and Equipment -
at cost net of accumulated
depreciation 23,127
OTHER ASSETS
Deposits with clearing organizations 40,093
Other deposits 1,934
----------
TOTAL ASSETS $ 326,761
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts Payable $ 20,875
Commissions Payable 217,875
----------
TOTAL CURRENT LIABILITIES 238,750
STOCKHOLDERS EQUITY
Preferred Stock - authorized 750,000
shares of $.01 par value; no shares
issued or outstanding -
Common Stock - authorized 5,000,000
shares of $.002 par value; issued and
outstanding 2,615,485 shares 5,231
Additional paid-in capital 1,130,639
Additional paid-in capital, warrants 4,410
Retained earnings (1,052,269)
-----------
TOTAL STOCKHOLDERS EQUITY 88,011
-----------
TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 326,761
===========
</TABLE>
EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
STATEMENTS OF OPERATION
For The Three and Six Months Ended June 30 (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30 Three Months Ended June 30
1998 1997 1998 1997
---------- ---------- --------- --------
<S> <C> <C> <C> <C>
REVENUE
Commissions $1,340,112 $1,772,081 $ 754,479 $ 946,152
Underwriting fees 90,970 73,600 16,160 63,100
Other Income 22,961 70,400 10,924 39,421
---------- ---------- --------- -----------
TOTAL REVENUE 1,454,043 1,916,081 781,563 1,048,673
---------- ---------- --------- -----------
EXPENSES
Advertising 1,920 1,613 1,763 813
Board of
Directors fees 12,000 8,000 6,000 4,000
Clearing charges 79,447 136,724 34,752 79,045
Commissions 1,122,940 1,451,188 622,521 781,569
Consulting fees 28,653 23,190 13,482 10,790
Dues and
Subscriptions 4,789 4,290 2,441 3,428
Depreciation 5,168 6,061 2,584 3,031
Insurance 1,341 3,203 (696) 2,598
Meetings and seminars (750) 29 (750) ---
Miscellaneous 1,475 17,292 (451) 13,568
Occupancy costs 49,654 43,411 24,837 21,983
Office expenses 15,565 13,129 8,792 6,940
Regulatory 12,739 11,850 3,252 9,188
Rental Equipment 3,010 4,286 2,187 1,645
Salaries and wages 171,446 178,649 87,005 91,788
Taxes 19,580 19,773 9,435 9,504
Travel and lodging 16,500 15,767 10,038 6,040
Utilities 14,491 12,796 6,903 6,564
---------- ---------- --------- ---------
TOTAL
OPERATING EXPENSES 1,559,968 1,951,251 834,095 1,052,494
---------- ---------- --------- ---------
OPERATING
INCOME/(LOSS) (105,925) (35,170) (52,532) (3,821)
---------- ---------- --------- ---------
NET INCOME/(LOSS) $(105,925) $(35,170) $(52,532) $ (3,821)
========== ========== ========= =========
NET INCOME/(LOSS)
PER SHARE $ (.04) $ (.02) $ (.02) $ (.01)
========== ========== ========= =========
</TABLE>
EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For The Six Months Ended June 30 (Unaudited)
<TABLE>
<CAPTION>
Additional
Additional Paid-In Retained
Preferred Common Paid-In Capital Earnings
Stock Stock Capital Warrants (Deficit) Total
--------- ------ ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1997 - $ 4,983 $ 913,687 $ 4,410 $ (841,105) $ 81,975
Issuance of common
stock 85 50,915 51,000
Net loss for the Six
months ended
June 30, 1997 (35,170) (35,170)
--------- ------- ---------- ---------- ---------- --------
Balance at
June 30, 1997 $ - $ 5,068 $ 964,602 $ 4,410 $ (876,275) $ 97,805
========= ======= ========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Additional Retained
Preferred Common Paid-In Earnings Stock
Stock Stock Capital (Deficit) Warrants Total
--------- ------ ---------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1998 $ - $ 5,231 $1,105,639 $ (946,344) $ 4,410 $ 168,936
Common Stock Subscribed 25,000 25,000
Net loss for six
months ended
June 30, 1998 (105,925) (105,925)
--------- ------- ----------- ----------- -------- ----------
Balance at
June 30, 1998 $ - $ 5,231 $1,130,639 $(1,052,269) $ 4,410 $ 88,011
========= ======= =========== =========== ======== ==========
</TABLE>
EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
STATEMENT OF CASH FLOWS
For The Six Months Ended June 30 (Unaudited)
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $(105,925) $(35,170)
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation 4,215 6,062
(Increase) decrease in operating assets:
Receivable from correspondent brokers (79,590) (97,206)
Receivable - other 8,210 1,280
Deposits 5,065 (671)
Prepaid expense --- (5,885)
Increase (decrease) in
operating liabilities:
Accounts payable (85,998) 23,980
Commissions payable 116,584 63,244
---------- ---------
Net cash provided by (used in)
operating activities (137,439) (44,366)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase Equipment --- ---
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock --- 51,000
Subscription of Common Stock 25,000 ---
Cash paid for syndication costs 15,000 (5,500)
--------- ---------
Net cash provided by (used in)
financing activities 40,000 45,500
--------- ---------
NET INCREASE (DECREASE) IN CASH (97,439) 1,134
CASH AT BEGINNING OF PERIOD 127,179 ---
--------- ---------
CASH AT END OF PERIOD $29,740 $1,134
========= =========
</TABLE>
EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
For The Six Months Ended June 30, 1998 and 1997
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Executive Wealth Management Services, Inc., (the Company) is a securities
broker/dealer that transacts business through correspondent brokers and does
not handle any customer securities or funds. Customer security transactions
and related commission revenue and expenses are recorded on the trade date.
The Company also acts as a broker/dealer in selling both public and private
securities offerings on a best efforts basis. In addition, the Company
receives commissions, investment banking and underwriting fees for its
services.
Receivable from Correspondent Brokers
The receivable from correspondent brokers and broker/dealers represent
commissions earned which had not been received at June 30, 1998. Management
has determined that these amounts are fully collectible.
Furniture, Fixtures and Equipment
Furniture, fixtures and equipment are recorded at cost. Depreciation is
provided for in amounts sufficient to relate the cost of assets to operations
over their estimated useful lives using the straight-line method.
Investments
The Company was issued 55,263 shares of common stock of Flight Sciences, Inc.
This stock was issued to the Company in relation to a private offering of
Flight Sciences' promissory notes. These shares represented 5% of Flight
Sciences, Inc.'s outstanding common stock at the time. The Company has
assigned no value to the stock due to the fact that there is no ready market
and its value is not determinable.
Warrants Outlet Mall Network
The Company was issued 24,167 warrants of the Outlet Mall Network, Inc. (
OMNI ). These warrants are being issued in relation to a private offering of
OMNI stock. The warrants have an exercise price of $2.00 and expire June 10,
2002. The Company has assigned no value to the warrants due to the fact that
there is no ready market and its value is not determined.
Loss Per Share
Loss per share is computed based upon 2,615,485 and 2,533,985 shares
outstanding during the periods ended June 30, 1998 and 1997, respectively.
Note 2 - DEPOSIT WITH CLEARING ORGANIZATION
Deposits with clearing organizations represent investments in money markets.
The investments are required by the Company's clearing brokers and are in
accordance with the correspondent broker agreement between the parties.
Deposits are reflected at fair market value.
Note 3 - FURNITURE, FIXTURES AND EQUIPMENT
A summary of furniture, fixtures and equipment follows:
June 30, 1998
-------------
Furniture and fixtures $ 37,951
Equipment 34,202
Leasehold improvements 6,622
-------------
78,775
Less: Accumulated Depreciation 55,648
-------------
$23,127
=============
Note 4 - Operating Leases
Rent expense for the six months ended June 30, 1998 and 1997 was $49,654 and
$43,411, respectively.
Note 5 - NET CAPITAL REQUIREMENT
Pursuant to the net capital provisions of Rule 15c3-1 of the Securities and
Exchange Act of 1934, the Company is required to maintain a minimum net
capital of $5,000. In December of 1991, the National Association of
Securities Dealers, Inc. approved the Company as a fully disclosed
broker/dealer. The Company has a restrictive agreement to maintain a net
capital of 130% of the minimum requirement or 6 2/3% of aggregate
indebtedness for each of the six month periods ended June 30, 1998 and 1997.
The Company had net capital of $54,042 or 340% and $37,864 or 213% of the
minimum requirement at June 30, 1998 and 1997, respectively. The net capital
rules may effectively restrict the payment of dividends to the Company s
stockholders. The Company operates pursuant to the (K) (2) (ii) exemptive
provisions of the Securities and Exchange Commission s Rule 15c3-3 and does
not hold customers funds or securities.
NOTE 6 - INCOME TAXES
At December 31, 1996, the Company had a net operating loss carry forward of
approximately $657,000 that will begin to expire in the year 2009. Due to
the lack of historical operations, management has elected to record a
valuation allowance equal to the deferred tax asset of $240,000, calculated
using an effective income tax rate of 37% for the Company.
.
NOTE 7 - RELATED PARTY TRANSACTIONS
During the six months ended June 30, 1998 and 1997, companies affiliated with
the Company's majority stockholder shared office space with the Company and
paid rent of $5,724 and $11,448, respectively, for the use of the space.
During the six months ended June 30, 1998, the Company paid rent of
approximately $18,000 to the Company's majority stockholder for the use of
office space.
NOTE 8 - COMMON STOCK TRANSACTIONS
In November, 1995, the Company approved a plan to grant options to certain
employees to purchase the Company's common stock. The plan provided for the
granting of options to purchase a maximum of 500,000 shares of the Company's
stock at a price to be determined at the time of grant. The price, however,
is not greater than $.60 per share. The plan required a participant to be
employed by the Company for a number of years before exercise. Granted
options expire 10 years from the grant date. At June 30, 1998, none of the
options have been exercised.
During the first quarter of 1997, the majority shareholder purchased 42,500
shares of common stock at $1.20 per share.
In May, 1996, the Board of Directors passed a resolution to split the
outstanding common stock shares of Executive Wealth Management Services, Inc.
on a five for one basis effective September 20, 1996. Common stockholders of
record as of September 20, 1996, were entitled to the five for one forward
common stock split.
On June 9, 1997, the Company initiated a private placement of 250,000 shares
of the Company s Common Stock at a price of $2.00 per share. Net proceeds
from the sale of stock were used for general working capital and expansion of
operations.
On March 1, 1998, the Company initiated a private placement of 150,000 shares
of the Company s Common Stock at a price of $2.00 per share. Net proceeds
are to be used for costs of the proposed merger, affinity group marketing
programs, work capital and general corporate purposes. At June 30, 1998
subscriptions receivable from the offering was $25,000.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation.
Current Operations
The table set forth below reflects the source of revenue earned by the
Company during the six months ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>
Increase/
1998 1997 (Decrease)
---- ---- ----------
<S> <C> <C> <C>
Source of Revenue Earned
Commission:
Proprietary Products $ 90,970 $ 73,600 $ 17,370
Transactional 525,202 963,740 (438,538)
Mutual Fund Sales 316,519 293,144 23,375
Insurance/Annuity 296,441 383,761 (87,320)
RIA Income 67,805 20,435 47,370
Sale of non-proprietary
limited partnerships 134,144 131,436 2,708
---------- --------- -----------
Total Commissions 1,431,081 1,866,116 (435,035)
Other:
Miscellaneous 22,962 49,965 (27,003)
----------- ---------- -----------
Total $ 1,454,043 $1,916,081 $ (462,038)
=========== ========== ===========
</TABLE>
The Company received commissions and underwriting fees of $90,970 and
$73,600 from the sale of proprietary products or commissions which were "in
house" in character for the six months ended June 30, 1998 and 1997,
respectively. The increase of $17,370 is attributable to the fact that the
Company began a best efforts public offering of $5,000,000 in promissory
notes in Federal Mortgage Management II, Inc. in July of fiscal 1997. As
of June 30, 1998, the Company had placed $2,368,500 principal balance of
the notes. Of that amount, during the six months ended June 30, 1998, the
Company placed $836,000 principal balance of the notes. The offering
closed in April 1998.
Transactional revenues, decreased by $438,538 or 46% for the six months
ended June 30, 1998, as compared to the same period in 1997. This decrease
is due to the fact that during the fourth quarter of 1997, one of the
Altamonte Springs branch offices moved to become their own broker/dealer.
Also contributing to this decrease were general market and seasonal
conditions. However, the Company believes that with the Delray Beach,
Florida office, the New York office and several prospective registered
persons and other NASD broker/dealer branch offices with which the Company
is in negotiations, this decrease in transactional revenue will be offset.
Management believes that this decrease will level off toward the end of the
third quarter of 1998.
Mutual fund revenue increased approximately $23,375 or 8% for the six
months ended June 30, 1998 as compared to the same period ended 1997.
Limited partnership revenue increased $2,708 or 2% from the six months
ended June 30, 1998 compared to the same period ended 1997.
The decrease in insurance/annuity revenue of $87,320 or 23% is offset in
part by the increases in mutual fund, limited partnership and RIA fees.
Overall, total revenue decreased $462,038 or 25% for the six months ended
June 30, 1998, as compared to the same period ended 1997.
The Company has a diverse base of registered representatives ranging from
transaction oriented brokers to primarily insurance and mutual fund
salespersons. Transactional revenue was approximately 37% of total
revenue, compared to 47% as of June 30, 1997. This decrease is
attributable to, among other things, the loss of an Altamonte Springs
office as well as to the Company's focused effort in the insurance
marketing, proprietary products, education and recruiting and the Affinity
Group marketing efforts of the business.
As a result of a decrease in overall revenue, expenses overall decreased as
well. The table set fourth below reflects the expense categories of the
Company in which there was a significant increase or decrease for the six
months ended June 30, 1998, as compared to the same period in 1997:
<TABLE>
<CAPTION>
Increase/
Expense Category 1998 1997 (decrease)
----------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Board of directors fee $ 12,000 $ 8,000 $ 4,000
Commissions 1,122,940 1,451,188 (328,248)
Clearing Charges 79,447 136,724 (57,277)
Consulting 28,653 23,190 5,463
Occupancy 49,654 43,411 6,243
Office Expense 15,565 13,129 2,436
Salaries & Wages 171,446 178,649 (7,203)
Utilities 14,491 12,796 1,695
</TABLE>
Board of directors fee increased $4,000 for the six months ended June 30,
1998, compared to the same period ended 1997. This increase is due to an
additional board member.
Commission expense decreased from $1,451,188 for the six months ended June
30, 1997, to $1,122,940 for the six months ended June 30, 1998. The
decrease in commissions expense is directly related to the aforementioned
decrease in revenues.
Clearing charges decreased $57,277 or 42% for the period ended June 30,
1998, as compared to the same period ended 1997. Clearing charges directly
and proportionately relate to the level of transactional revenues, hence,
generally an increase or decrease in transactional revenues will have the
same effect on charges.
Consulting fees increased $5,463 for the six months ended June 30, 1998, as
compared to the same period in 1997. This increase relates to the fact
that during 1997, the Company entered into a contract with a board member,
Dr. Robert E. Windom. Dr. Windom is compensated $2,000 per month to expand
the marketing and servicing of medical Affinity Groups.
Occupancy costs increased $6,243 for the six month period ended June 30,
1998, as compared to the same period ended 1997. Such increase is
consistent with the annual adjustment of rent based on the consumer price
index with a cap of 4% in any 12 month period.
Office expense increased $2,436 or 19% for the six months ended June 30,
1998, as compared to the six months ended June 30, 1997. Such increase is
within the normal course of business.
Salaries and wages decreased for the six month period ended June 30, 1998,
as compared to the same period in 1997 by $7,203. This decrease relates to
a decrease in the number of employees and the overall limit on salary and
wage increases for employees of the Company.
Future Operations
As of June 30, 1998, Executive had approximately 70 registered
representatives and is in the process of recruiting several new office
locations.
In 1998 management will continue to focus on several growth and expansion
related initiatives. These initiatives will include, but are not limited
to the following:
- Expanded service and marketing to "Affinity Groups",
- Possible secondary public offering and capitalization,
- Continued branch development and expansion,
- Registered investment advisory activities
- Increased investment banking activities,
The Company and its management continue to pursue the addition of new
offices and new registered representatives to existing offices. Management
is currently in negotiations with a prospective office in Florida, as well
as several representatives for its home office location.
In addition, on October 6, 1997, Executive entered into an agreement with
Sun Insurance Marketing Network, Inc. /Sun/ whereby Sun, which is the
national marketing agent for AIG Life Companies, Inc. /AIG/ Long Term Care
Insurance Marketing Program, has agreed to refer and recruit Series 6 and
Series 7 securities licensed insurance agents to Executive and to encourage
said agents to contract with the Company to place their variable life,
variable annuity and mutual fund business. Management believes it can
recruit a significant number of these agent/brokers during fiscal 1998.
For approximately two and one half years, the Company has aggressively
engaged in, and committed significant financial and personnel resources to
an extensive market study and analysis of the viability of marketing, on an
exclusive and endorsed basis, various insurance, financial and securities-
related products, and other services to members of large medical affinity
groups and associations. In this regard, Executive has established
contacts and relationships with various medical associations and affinity
groups and has presented comprehensive marketing proposals to specific
groups. The Company will continue to develop these relationships along
with attempting to establish additional relationships with new groups
throughout 1998.
As of March 13, 1997, the Company had entered into a Letter of Intent with
American Healthcare Alliance /AHA/, the largest nationwide network of
Preferred Provider Managed Healthcare Systems and Organizations, whereby
the parties agreed to undertake a formal contractual relationship in which
Executive will engage in the marketing, on an endorsed basis, of designated
financial services and products as well as other services to physician and
healthcare providers who are members of AHA's Preferred Provider
Organizations. In this regard, Executive has obtained an exclusive
marketing agreement with the nation's largest provider of a pre-paid tax
audit defense program to offer their services to AHA's 180,000 plus
physician members on an endorsed basis. The marketing of this program,
conducted on a direct mail basis, commenced on February 4, 1997. Pursuant
to the terms of the exclusive marketing agreement, the Company receives
first year and renewal commissions on the fees paid by the physician
members for the service.
In August 1997, Executive entered into a Letter of Intent with FLAMEDCO,
Inc. /FLAMEDCO/, a wholly owned subsidiary of The Florida Medical
Association /FMA/ concerning Executive marketing a Business Owners Policy
/BOP/ to FMA physician members. Executive is presently working with
Berkley Risk Services of Colorado, Inc. to develop a customized BOP policy
for FLAMEDCO.
In June, 1998 the American Medical Association /AMA/ approved TaxResources,
Inc. s pre-paid tax audit defense service for sale and solicitation to its
physician members through AMA Solutions, Inc., a wholly owned subsidiary of
the AMA. Executive acted as a broker in the transaction and will receive
first year and renewal commissions on the sale of the service. Solicitation
of AMA physician members for the sale of TaxResources, Inc.'s services
should commence during the end of the third quarter or beginning of the
fourth quarter of 1998.
On March 7, 1998, Executive signed an Agreement and Plan of Merger
/Agreement/ with FAS Group, Inc. whereby Executive will merge with a
subsidiary of FAS Group, Inc. with Executive to be the surviving
corporation. The name of the surviving corporation will be FAS Wealth
Management Services, Inc. Pursuant to the terms of the Agreement, FAS
Group, Inc., the parent corporation, is proposing to provide
capitalization up tp an amount of $4,500,000 in marketable securities and
$500,000 cash. EWMS shareholders are anticipated to receive as a group 37
percent ownership interest in FAS Group, Inc. In addition, FAS Group, Inc.
shall also seek, pursuant to the terms of the Agreement, to obtain a
listing of its Common Stock on the NASDAQ Small Cap Exchange.
The effective date of the merger has been set for August 31, 1998, which
date can be extended to December 31, 1998 if certain conditions of the
merger have not been satisfied by the July 31, 1998 date.
Regulatory Net Capital
As a securities broker-dealer, the Company is subject to the net capital
rules of the United States Securities and Exchange Commission and similar
rules in force in the states where the Company is registered as a
securities broker-dealer. The aggregate indebtedness of a securities
broker-dealer in relation to its net capital is also subject to Commission
rules. Such rules are somewhat complex in the manner that regulatory net
capital is computed. In summary, however, the computation of regulatory
net capital relates to the stockholder's equity of the Company taking into
account deductions from such stockholder's equity which relate to non-
allowable assets which are a non-liquid type and reductions in the market
value of investment securities owned by the Company in accordance with rule-
prescribed "haircuts". Under the rules, the aggregate indebtedness of the
Company in relation to its net capital may not exceed a ration of 15 to 1.
The table set forth below, with respect to the Company, the amount of
regulatory net capital and the amount of aggregate indebtedness and the
ratio thereof to such regulatory net capital as of March 31, 1998 and 1997:
1998 1997
---------- ----------
Net Capital $ 54,042 $ 40,721
Aggregate Indebtedness 238,750 162,297
Ratio of aggregate indebtedness
to net capital 4.42 to 1 3.99 to 1
The National Association of Securities Dealers, Inc. (the "NASD") requires
certain members, such as the Company, to maintain net capital equal to the
greater of 130% of the Commission's net capital requirement or 6 2/3% of
aggregate indebtedness.
Year 2000
The challenge of the year 2000, is fast approaching for every organization
world wide. The regulatory bodies of the securities industry began their
response by mandating that all member firms assess its information
technology environments and make the necessary changes to insure that
automated processes with date-sensitive components will correctly identify
/00/ as the year 2000, when processing dates on and after January 1, 2000.
The firm has adopted a plan of action which will ensure that not only are
the firm s automated systems year 2000 compliance ready, but also those of
the third party vendors upon whom the firm relies. The capital costs
associated with the assessment and implementation of the firm s plan has
been estimated at approximately $15,000 for 1998, $10,000 for 1999, and
$10,000 for 2000. These figures are based upon current operating
facilities and are not reflective of potential growth areas that management
is considering.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
Not Applicable
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
Not Applicable
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
In accordance with the requirements of the Exchange Act, the
registrant causes this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EXECUTIVE WEALTH MANAGEMENT
SERVICES, INC.
August 1998
BY Guy S. Della Penna
------------------
Guy S. Della Penna, President and
Chief Executive Officer
August 1998 BY Bonnie S. Gilmore
------------------
Bonnie S. Gilmore, Senior Vice
President Chief Financial Officer
and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 29,740
<SECURITIES> 40,093
<RECEIVABLES> 233,801
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 303,634
<PP&E> 78,775
<DEPRECIATION> (55,648)
<TOTAL-ASSETS> 326,761
<CURRENT-LIABILITIES> 238,750
<BONDS> 0
0
0
<COMMON> 5,231
<OTHER-SE> 82,780
<TOTAL-LIABILITY-AND-EQUITY> 326,761
<SALES> 0
<TOTAL-REVENUES> 1,454,043
<CGS> 0
<TOTAL-COSTS> 1,559,968
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (105,925)
<INCOME-TAX> 0
<INCOME-CONTINUING> (105,925)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (105,925)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
