U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ X ] ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended January 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-23410
M. H. MEYERSON & CO., INC.
(Name of Small Business Issuer in its charter)
NEW JERSEY 13-1924455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Newport Tower, 525 Washington Blvd., Jersey City, New Jersey 07310
(Address of principal executive offices) (Zip Code)
(201) 459-9500
Issuer's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $0.01 per share
(Title of Class)
Redeemable Warrants
(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 .
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: $ 27,457,564
At April 17, 1998: (a) 5,055,335 shares of Common Stock, $0.01 par
value, of the registrant (the "Common Stock") were outstanding; (b) 2,290,760
shares of Common Stock were held by non-affiliates; and (c) the aggregate
market value of the Common Stock held by non-affiliates was $4,724,692.50
based on the closing average price of $2.0625 per share on April 17, 1998.
Certain statements set forth in the Company's Annual Report on Form
10-KSB for the year ended January 31, 1998 constitute forward looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and are subject to the safe harbor created by such section. Certain factors
that could cause results to differ materially from those described in the
forward looking statements are described in Item 7 - Management Discussion and
Analysis of Financial Condition and Results of Operations - Viability of
Operating Results and elsewhere as appropriate. This Annual Report on Form
10-KSB, including the Statements of Financial Condition and the notes thereto,
should be read in its entirety for a complete understanding.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
M. H. Meyerson & Co., Inc., a securities firm originally founded in
1960, conducts its business in seven (7) separate divisions. These are
Wholesale Trading, Investment Banking, Retail Services, Institutional Sales,
Syndicate, Fixed Income, and Correspondent Service. These seven (7) divisions
are functionally supported by the Compliance Department and the Back Office
Department (operations).
As of March 31, 1998, the Company had one hundred sixty nine employees
(169), one hundred five (105) of which were registered representatives,
including forty-seven (47) registered principals, licensed by the National
Association of Securities Dealers ("NASD") and various state securities
commissions. The balance of the Company's employees, which number sixty-four
(64), are support staff.
The Company's largest division (in revenue contribution) is wholesale
market making, which means engaging in principal transactions on behalf of
its proprietary trading accounts in what are usually dealer to dealer
transactions. The Company employs forty (40) securities traders and twenty-six
(26) assistant traders who, with management supervision, conduct the
Company's high volume trading operations. The Company's traders are
compensated by receiving a fixed percentage of the profits from trading after
deduction of general expenses. The traders are party to employment contracts
which provide for individual liability for any funds owed the Company
relating to losses, if any, incurred from trading activities. Pursuant to
these employment contracts, the individual traders are restricted to Company
imposed limits as to the extent of the trading positions they are permitted
by the Company to maintain. Traders are also required by the Company to maintain
a reserve, the size of which is a factor by which the trading position limit
is determined. This reserve is also available to offset trading losses, if
any, suffered by the individual trader in his trading account. The Company
endeavors to observe high standards of commercial honor and just and
equitable principles of trade in conducting its business.
In its market making function, the Company carries long or short trading
positions in various securities. The Company currently trades over one
hundred million shares of common stock, preferred stocks and warrants per
month. The Company's clearing agent for market making and trading activities
is Spear, Leeds & Kellogg, Inc., members of the New York and other principle
stock exchanges, of New York City, New York. The Company has contracted with
an information services provider to supply trading information regarding
securities in which the Company has an investment interest. The Company
obtains daily printouts that inform the traders regarding financial and market
information on a current basis. As of March 1998, the Company was a market
maker in approximately three thousand one hundred (3,100) securities.
The Company's trading activities have substantially increased with the
addition of several automated trading systems such as Instinet, ACT, Selectnet,
BNET, and the automated ticketless Brass trading program. The Brass system,
which, in effect, makes trading "paperless", enhances the ability of the
traders to focus on market conditions by eliminating the prior administrative
burden incumbent in trading. The Selectnet and Instinet networks link the
Company with trading partners throughout the United States, including other
brokerage firms, block trading desks and specialists on the regional exchanges.
These systems provide the Company with access into every major securities
exchange on a worldwide basis. The Company also employs the Autex electronic
volume monitoring system. Through Autex, the Company can determine the
percentage of the Company's relative trading volume in a specific security.
The Company's Correspondent Services division provides competitive
execution services primarily to retail securities firms who utilize the Company
to fill buy or sell orders in over-the-counter and listed securities for their
respective retail customers. The Company's Correspondent Service facilitates
large retail firms, including discount brokers and banks, in obtaining instant
execution of their respective customers' orders.
<PAGE>
The Company's Retail Sales division consists of forty-nine (49)
registered representatives, including twenty-one (21) registered principals,
who collectively maintain the majority of the Company's retail securities
accounts. The Company's retail customer accounts are carried on a "fully
disclosed" basis by Bear, Stearns Securities Corp., members of the New York
and other principle stock exchanges, pursuant to a clearing agreement. This
agreement provides that customer securities positions and credit balances are
insured up to $100,000,000, $500,000 by Securities Investors Protection Corp.
("SIPC"), which includes $100,000 coverage for cash, and the remainder by
supplementary private insurance coverage. All customer credit balances are
subject to immediate withdrawal from Bear, Stearns Securities Corp., at the
discretion of the customer.
The Company's Investment Banking division consists of seven (7)
professionals. The primary function of this department is to conceptualize,
plan and execute capital formation for small, growing companies which have the
potential, in the Company's judgement, to become successful public companies.
The Department is engaged in the structuring, management and participation in
public offerings and private placements of primarily equity securities. It
also advises its clients in connection with mergers, acquisitions and
divestitures.
The Company also serves as the managing underwriter or co-underwriter in
initial public offerings and private placements of primarily equity
securities. Since 1990, the Company has been the managing or co-managing
underwriter of twenty-six (26) initial public offerings and eleven (11) private
placements which raised in excess of two hundred sixty million dollars
($260,000,000). The Company generally underwrites small capitalization
growth companies in their relatively fast growth stage. These companies are
generally in information technologies, such as software, medical products and
pharmaceuticals. The Company has also been a syndicate or selling group member
in approximately one hundred eighty-three (183) underwritings.
M. H. Meyerson & Co., Inc. is currently registered for retail
distribution in the following jurisdictions:
Alabama Louisiana Ohio
Alaska Maine Oklahoma
Arizona Maryland Oregon
California Massachusetts Pennsylvania
Colorado Michigan Rhode Island
Connecticut Minnesota South Carolina
Delaware Mississippi South Dakota
District of Columbia Missouri Tennessee
Florida Montana Texas
Georgia Nebraska Utah
Hawaii Nevada Vermont
Illinois New Hampshire Virginia
Indiana New Jersey Washington
Iowa New York West Virginia
Kansas North Carolina Wisconsin
Kentucky North Dakota Wyoming
Government Regulation
The securities industry in the United States is subject to extensive
regulation under both federal and state laws. The Securities and Exchange
Commission ("SEC") is the federal agency responsible for the administration
of the federal securities laws. The Company is registered as a broker/dealer
with the SEC. Much of the regulation of broker/dealers has been delegated to
self-regulated organizations, principally the NASD and national securities
exchanges such as NASDAQ. These self-regulatory organizations adopt rules
(subject to approval by the SEC) that govern the industry and conduct
periodic examinations of the Company's operations. Securities firms are also
subject to regulation by state securities administrators in those states in
which they conduct business. The Company is currently registered as a
broker/dealer in 47 states and the District of Columbia.
<PAGE>
Broker/dealers are subject to regulation covering all aspects of the
securities business, including sales method, trade practices among
broker/dealers, use and safekeeping of customers' funds and securities,
capital structure of securities firms, record-keeping and the conduct of
directors, officers and employees. Additional legislation, changes in rules
promulgated by the SEC and self-regulatory organizations, or changes in the
interpretation or enforcement of existing laws and rules may directly affect
the mode of operation and profitability of broker/dealers. The SEC,
self-regulatory organizations and state securities commissions may conduct
administrative proceedings which can result in censure, fine, the issuance of
cease-and-desist orders or the suspension or expulsion of a broker/dealer,
its officers or employees. The principal purpose of regulation and
discipline of broker/dealers is the protection of customers and the
securities markets, rather than protection of creditors and stockholders of
broker/dealers.
Competition
The Company encounters intense competition in all aspects of the
securities business and competes directly with other securities firms, a
significant number of which have substantially greater capital and other
resources and many of which offer a wider range of financial services. In
addition to competition from firms currently in the securities business there
has recently been increasing competition from other sources such as
commercial banks and insurance companies offering financial services and from
other investment alternatives. The Company believes that the principal
competitive factors in the securities industry are the quality and ability of
professional personnel and relative prices of services and products offered.
The Company and its competitors also employ direct solicitation of potential
customers as methods of increasing business. The Company and its competitors
also furnish investment research publications in an effort to hold and
attract existing and potential clients.
ITEM 2. DESCRIPTION OF PROPERTIES
Facilities
The Company currently leases approximately 30,000 sq. ft. of space in an
office building known as the Newport Office Tower located at 525 Washington
Blvd., Jersey City, New Jersey. The lease is in effect through July 31,
2011. Rent charges on this office for the years ended January 31, 1998 and
January 31, 1997 were $912,321 and $429,459, respectively.
In addition, the Company also pays maintenance charges for additional
space in Aventura, Florida, under an agreement with Martin H. Meyerson, who
owns the property in question. This space is primarily used for entertainment
and investment banking purposes. The total maintenance charges for the
years ending January 31, 1998 and 1997 were $10,440 and $17,977,
respectively. The Company also pays rent for space in New York City, New
York which is leased in the name of Martin H. Meyerson. This property is
also used primarily for entertainment and investment banking purposes. The
total rent paid on this space for the years ended January 31, 1998 and 1997
were $31,310 and $31,310, respectively. The maintenance charges paid on the
Florida property are the actual maintenance charges billed each month, and
the rent paid on the New York property is the actual rent specified in the
lease between Martin H. Meyerson and the building's landlord. The Company
believes that it is similar to what would be paid for a comparable property
leased on an arm's length basis by the Company. Neither of these properties
is the permanent residence of Martin H. Meyerson.
It is the opinion of management that all these properties are adequately
covered by the Company's insurance policies.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any litigation which would have a material
adverse impact on the Company or its operations.
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of the
Company during the fourth quarter of fiscal 1998.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
In connection with its initial public offering consummated January 18,
1994, the Company sold an aggregate of 2,300,000 units of securities for
$4.00 per unit, each unit consisting of one share of Common Stock and one
Redeemable Common Stock Purchase Warrant (the "Warrants") exercisable at
$4.50, and received net proceeds of $7,580,948 therefrom. As of April 17,
1998, none of the Warrants have been exercised.
From January 19, 1994 to March 17, 1994, the Company's securities were
traded on the "Small Capitalization" market of NASDAQ. Since March 18, 1994,
the Company's Common Stock has been traded on the NASDAQ - National Market
System (NMS). The Company's Warrants remain on the Small Capitalization market.
The following sets forth for the fiscal quarters as indicated the high
and low bid closing quotations for the Company's Common Stock on the NMS from
February 1, 1996 through January 31, 1998, and the high and low bid closing
quotations for the Company's Warrants on the NASDAQ Small Capitalization
market for the period February 1, 1996 through January 31, 1998. Such
information reflects interdealer quotations, without retail mark-up, mark-down
or commissions, and may not necessarily represent actual transactions.
Common Stock Warrants
High Low High Low
Fiscal Year 1997
1st Quarter $2.53 $1.78 $0.53 $0.28
2nd Quarter $4.31 $2.47 $1.50 $0.58
3rd Quarter $3.75 $2.88 $1.31 $0.75
4th Quarter $4.06 $2.38 $1.63 $0.78
Fiscal Year 1998
1st Quarter $6.31 $4.13 $2.69 $1.63
2nd Quarter $6.38 $4.88 $2.50 $1.25
3rd Quarter $6.38 $4.94 $2.50 $1.94
4th Quarter $5.38 $3.69 $2.03 $1.00
The number of shareholders of record of the Company's Common
Stock on March 31, 1998 was approximately 50, and the number of beneficial
holders of the Company's Common Stock is estimated by management to be an
additional 900 holders, not including publicly traded warrant holders.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The historical selected financial data set forth below for the three years
ended January 31, 1998 are derived from the Company's Financial Statements
included elsewhere in this Annual Report on Form 10-KSB and should be read in
conjunction with those financial statements and notes thereto. Those
financial statements have been audited by Vincent R. Vassallo, independent
certified public accounts, whose report with respect thereto appears
elsewhere in this report.
January 31,
1998 1997 1996
Balance Sheet Data:
Assets $24,526,907 $ 23,702,300 $19,379,985
Liabilities 10,249,271 9,759,700 7,324,848
Subordinated Liability 2,000,000 0 0
Shareholders' Equity 12,277,636 13,942,600 12,055,137
Statement of Operations Data:
Year Ended January 31,
1998 1997 1996
Revenues
Net gain on securities transactions $ 20,637,323 $ 34,214,505 $21,088,570
Underwriting 3,254,395 4,811,399 1,262,448
Commissions 2,025,672 2,396,754 2,263,490
Interest and other revenue 1,540,174 463,937 330,613
Total Revenues 27,457,564 41,886,595 24,945,121
Expenses
Compensation and benefits 14,383,715 22,226,110 13,466,583
Clearance charges 6,233,720 6,467,259 4,536,060
Communications 3,411,166 3,260,963 2,244,565
Professional fees 973,902 1,416,519 537,443
Occupancy and equipment costs 954,071 461,874 630,145
Other operating expenses 4,180,770 4,788,042 2,390,849
Total Expenses 30,137,344 38,620,767 23,805,645
Income (Loss) Before Taxes (2,679,780) 3,265,828 1,139,476
Provision For Income Taxes (960,316) 1,445,865 464,689
Net Income $ (1,719,464) $ 1,819,963 $ 674,787
<PAGE>
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The following discussion of the Company's financial condition and
results of operations should be read in conjunction with the Financial
Statements and Notes thereto appearing elsewhere in this Annual Report on
Form 10-KSB
Results of Operations
The following table sets forth for the periods indicated the percentage
of total revenue represented by certain line items in the Company's Statement of
Operations:
Percent of Total Revenues
Year Ended January 31,
1998 1997
Net gain on securities transactions. . . . . 75 82
Underwriting . . . . . . . . . . . . . . . . 12 11
Commissions. . . . . . . . . . . . . . . . . 7 6
Interest and other . . . . . . . . . . . . . 6 1
100 100
Compensation and benefits. . . . . . . . . . 52 53
Clearance charges . . . . . . . . . . . . . 23 16
Communications . . . . . . . . . . . . . . . 12 8
Professional fees . . . . . . . . . . . . . 4 3
Occupancy and equipment costs. . . . . . . . 4 1
Other operating expenses . . . . . . . . . . 15 11
Total expenses . . . . . . . . . . . . 110 92
Income before income taxes . . . . . . (10) 8
Provision for income taxes . . . . . . (4) 3
Net income . . . . . . . . . . . . . . (6) 4
Calculation of Earnings Per Share
The calculation of earnings per share on the financial statements
included in this report are based on the weighted average number of shares
outstanding, as calculated.
<PAGE>
Fiscal Year 1998 Compared with Fiscal Year 1997
Total revenues in fiscal year 1998 decreased to $27,457,564 from
$41,886,595, or 34.4%. This is attributable mainly to a 39.7% decrease in
trading revenues and a 32.4% decrease in underwriting revenue, along with a
smaller decrease in commissions, offset partially by an increase of 232.0%
in interest and other revenue.
Management believes that a significant portion of the decrease was due to
the new order handling rules which took effect during the fiscal year. Trading
volume was lower, but not to the extent of the drop in revenues. A not
insignificant percentage of the Company's trades last year were done at little
or no gross profit to the firm, due to the new rules' mechanisms. The Company
is increasing its push into the fixed income and investment banking areas, to
replace the lost revenue caused by the change in the equity marketplace. The
fixed income group is beginning to underwrite municipal issues, and to
generate increased revenue, which trend we expect to continue.
Compensation and benefits decreased from $22,226,110 to
$14,383,715, a change of 35.3%. This resulted primarily from lower draws and
commissions to retail representatives and brokers due to the lower revenue.
Clearing charges decreased from $6,467,259 to $6,233,720,
representing a decrease of approximately 3.6%.
Communications charges increased from $3,260,963 to 3,411,166.
This represented an increase of 4.6%.
Other operating expenses, comprising professional fees,
research fees, occupancy, and various other operating costs decreased from
$6,666,435 to $6,233,720, a decrease of 8.4%. Components of this decrease were
expenses for professional fees, and miscellaneous other expenses, partially
offset by an increase in occupancy costs.
Viability of Operating Results
The Company, like other securities firms, is directly affected by general
economic conditions and market conditions, including fluctuations in volume and
price levels of securities, changes in levels of interest rates and demand for
the Company's investment banking services. All of these factors have an impact
on the Company's net gain from securities transactions, underwriting, and
commission revenues. In periods of reduced market activity, profitability can
be adversely affected because certain expenses, consisting primarily
of non-officer compensation and benefits, communications and occupancy and
equipment remain relatively fixed.
Liquidity and Capital Resources
The Company's statements of financial position reflect a liquid financial
position as cash and assets readily convertible to cash represent 81% and 83% of
total assets at January 31, 1998 and January 31, 1997 respectively.
The Company finances its operations primarily with existing capital and
funds generated from operations.
The Company believes that existing capital and cash flow from
operations will be sufficient to meet its cash requirements.
Year 2000
The Company's internal accounting systems and the computers that run
these systems have been audited and it has been confirmed that we do not
expect them to be affected by the year 2000 bug'. The Company's trading and
customer transaction systems are supplied and managed by our clearing
brokers and outside independent vendors. The Company is in the process of
assessing what steps it must take to avoid being indirectly affected by
potential year 2000 problems occurring in the systems of clearing brokers
and other outside vendors. The Company does not expect to incur any
significant expenditures related to year 2000 problems with its primary
information systems. However, any failure by the Company's clearing
organization or other outside vendors to adequately address the date change
could have material adverse effect on the Company's financial condition
and operations.
<PAGE>
ITEM 8 FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Public Accountants . . . . . . . . . . 9
Statements of Financial Condition
at January 31, 1998 and 1997 . . . . . . . . . . . . . . 10
Statements of Operations for the years
ended January 31, 1998 and 1997 . . . . . . . . . . . . . 11
Statements of Stockholders' Equity for the years
ended January 31, 1998 and 1997 . . . . . . . . . . . . . 12
Statements of Cash Flows for the years
ended January 31, 1998 and 1997 . . . . . . . . . . . . . 13
Notes to Financial Statements. . . . . . . . . . . . . . . . . 14
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
M. H. Meyerson & Co., Inc.
We have audited the accompanying statements of financial condition of
M. H. Meyerson & Co., Inc. as of January 31, 1998 and 1997, and the related
statements of operations, changes in shareholders' equity and cash flows
for the years then ended. 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 M. H. Meyerson & Co., Inc.,
as of January 31, 1998 and 1997, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
VINCENT R. VASSALLO, CPA
Sea Cliff, New York
March 20, 1998
<PAGE>
<TABLE>
<CAPTION>
M. H. MEYERSON & CO., INC.
STATEMENT OF FINANCIAL CONDITION
JANUARY 31,
ASSETS 1998 1997
<S> <C> <C>
Cash and cash equivalents $ 1,433,126 $ 2,184,301
Receivable from clearing brokers (Note 3) 4,106,384 3,019,947
Securities owned - at market value
(Notes 2 and 3) 13,539,455 13,536,044
Income tax refunds receivable (Notes 2 and 5) 759,758 939,566
Investments - not readily marketable (Note 2) 2,348,421 1,699,084
Property and equipment, net (Notes 2 and 3) 1,635,600 1,760,588
Other assets 704,163 562,770
TOTAL ASSETS $ 24,526,907 $ 23,702,300
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Securities sold, but not yet purchased
- at market value (Notes 2 and 3) $ 3,474,601 $ 3,493,713
Payable to trading representatives 2,756,111 4,671,539
Payable to clearing brokers (Note 3) 2,868,462 -
Other liabilities and accrued expenses (Note 3) 1,150,097 1,594,448
TOTAL LIABILITIES 10,249,271 9,759,700
COMMITMENTS (Note 6)
SUBORDINATED LOAN (Note 7) 2,000,000 -
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value, 25,000,000 shares
authorized, 5,047,835 and 4,993,335 shares
issued and 5,047,835 and 4,993,335 shares
outstanding at January 31, 1998 and 1997 50,478 49,933
Additional paid-in capital 7,807,752 7,753,797
Retained earnings 4,419,406 6,138,870
TOTAL SHAREHOLDERS' EQUITY 12,277,636 13,942,600
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 24,526,907 $23,702,300
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
M. H. MEYERSON & CO., INC.
STATEMENT OF OPERATIONS
YEAR ENDED JANUARY 31,
<S> <C> <C>
REVENUES 1998 1997
Net gain on securities transactions $ 20,627,323 $ 34,214,505
Underwriting 3,254,395 4,811,399
Commissions 2,025,672 2,396,754
Interest 217,294 380,752
Net gain on investments and disposal
of assets 1,322,880 83,185
TOTAL REVENUES 27,457,564 41,886,595
EXPENSES
Compensation and benefits 14,383,715 22,226,110
Clearance charges 6,233,720 6,467,259
Communications 3,411,166 3,260,963
Professional fees 973,902 1,416,519
Occupancy and equipment costs
(Notes 4 and 6) 954,071 461,874
Other operating expenses 4,180,770 4,788,042
TOTAL EXPENSES 30,137,344 38,620,767
INCOME (LOSS) BEFORE INCOME TAXES
AND TAX BENEFITS (2,679,780) 3,265,828
Provision for income taxes and (tax benefits)
(Notes 2 and 5) (960,316) 1,445,865
NET INCOME (LOSS) $ (1,719,464) $ 1,819,963
BASIC EARNINGS (LOSS) PER SHARE OF
COMMON STOCK (Note 2) $ (0.34) $ 0.36
DILUTED EARNINGS (LOSS) PER SHARE OF
COMMON STOCK (Note 2) $ (0.34) $ 0.33
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 5,032,262 4,990,685
DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 5,032,262 5,521,016
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
M. H. MEYERSON & CO., INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
YEAR ENDED JANUARY 31, 1998 AND 1997
LOANS TO
COMMON OFFICERS FOR
STOCK ADDITIONAL PURCHASE OF
$.01 PAR PAID-IN RETAINED COMPANY
VALUE CAPITAL EARNINGS STOCK
<S> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY
FEBRUARY 1, 1996 $ 49,833 $ 7,743,897 $ 4,318,907 $ (57,500)
Officer loan repayment 57,500
Options exercised 100 9,900
Net income for year 1,819,963
SHAREHOLDERS' EQUITY
JANUARY 31, 1997 49,933 7,753,797 6,138,870 0
Options exercised 545 53,955
Net income for year (1,719,464)
SHAREHOLDERS' EQUITY
JANUARY 31, 1998 $ 50,478 $ 7,807,752 $ 4,419,406 $ 0
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
M. H. MEYERSON & CO., INC.
STATEMENT OF CASH FLOWS
YEAR ENDED JANUARY 31,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ (1,719,463) $ 1,819,963
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation 373,256 535,592
Change in assets and liabilities:
(Increase) decrease in:
Receivable from clearing brokers (1,086,437) 5,312,639
Securities owned (3,411) (4,768,219)
Income taxes receivable 179,808 (939,566)
Other assets (141,393) (118,897)
Increase (decrease) in:
Securities sold, but not
yet purchased (19,112) 623,496
Payable to trading representatives (1,915,428) 1,105,186
Payable to clearing brokers 2,868,462 -
Income taxes payable - (501,869)
Other liabilities and
accrued expenses (444,351) 1,208,038
Net cash provided by (used in)
operating activities (1,908,069) 4,276,363
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments (649,337) (1,368,863)
Purchase of property and equipment (248,269) (1,609,296)
Net cash used in investing
activities (897,606) (2,978,159)
CASH FLOW FROM FINANCING ACTIVITIES:
Subordinated loan 2,000,000 -
Options exercised 54,500 10,000
Loans to officers repayment - 57,500
Net cash provided by (used in)
financing activities 2,054,500 67,500
NET INCREASE(DECREASE) IN CASH (751,175) 1,365,704
CASH, BEGINNING OF YEAR 2,184,301 818,597
CASH, END OF YEAR $ 1,433,126 $ 2,184,301
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ - $ 2,887,300
Interest paid $ 67,556 $ -
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
M. H. MEYERSON & CO., INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1998 AND 1997
1. ORGANIZATION
The Company is a registered broker-dealer under the Securities and Exchange Act
of 1934 which provides securities trading, underwriting, investment banking and
brokerage services for individuals, institutions and corporations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Security Transactions
Customers' securities transactions are recorded on a settlement date basis,
which is generally three business days after trade date with related revenues
and expenses recorded on a trade date basis. The Company's securities
transactions are recorded on a trade date basis. Securities traded on a
national securities exchange are valued at the last sales price on January 31,
1998 and 1997. Securities traded on the over-the-counter market are valued at
the bid price for securities owned and at the ask price for securities sold but
not yet purchased. Unrealized gains and losses on security transactions are
reflected in income.
Underwriting Revenues
Underwriting fees are recorded at the time the underwriting is completed.
Investments - Not Readily Marketable
Investments not readily marketable are valued at estimated fair value as
determined by management. Investments not readily marketable include restricted
securities which cannot be publicly offered or sold unless registration has been
effected under the Securities Act of 1933 or unless the applicable provisions of
Rule 144 of the Securities Act are met.
Property and Equipment
Property and equipment is stated at cost. Office furniture, equipment and
vehicles are depreciated over the estimated useful lives, ranging from 3 to 7
years using accelerated methods. Leasehold improvements are amortized over the
shorter of the remaining life of the lease or the estimated economic life of
the improvements.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards ("SFAS")
No. 109 "Accounting for Income Taxes". There are no temporary differences
between tax and financial reporting.
Earnings Per Common Share
Earnings per common share is calculated using the weighted average number of
common shares outstanding during the period. Shares issuable upon the exercise
of stock options and warrants, that are dilutive, have been included in the
computation of earnings per share based on the modified treasury stock method.
<PAGE>
3. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS
Cash and Cash Equivalents
Cash and cash equivalents represent funds on deposit in interest bearing and
non-interest bearing checking accounts and certificates of deposit with a
maturity of three months or less.
Receivable and Payables From/To Clearing Brokers
Receivables and payables from/to clearing brokers are from trading activity and
funds deposited and are unsecured. The funds are available for immediate
withdrawal and are drawn upon as needed. Interest is paid on these funds at
fluctuating rates.
Securities Owned
Approximately ninety-one percent of securities owned consist of over-the-counter
stocks and approximately nine percent consist of fixed income securities.
Property and Equipment
Property and equipment consists of the following:
January 31,
1998 1997
Office furniture and equipment $ 1,426,232 $ 1,244,733
Leasehold improvements 838,375 734,035
Vehicles 34,994 128,797
2,299,601 2,107,565
Less accumulated depreciation and
amortization 664,001 346,977
$ 1,635,600 $ 1,760,588
Securities Sold, but not yet Purchased
Securities sold but not yet purchased represent obligations of the Company to
deliver the specified securities at some point in the future, thereby creating
a liability to purchase these securities at prevailing market prices in effect
at that time. Approximately ninety-six percent of securities sold, but not yet
purchased consist of over-the-counter stocks and approximately four percent is
fixed income securities.
There is a market risk associated with these securities if the security price
increases and the securities have to be purchased at a higher price to cover the
positions. There is no margin requirement for these transactions.
The Company seeks to control the risks associated with these positions by
closely monitoring the market fluctuations of the prices for these securities.
<PAGE>
Payable to Trading Representatives
Payable to trading representatives represents commissions earned by market
makers and retail representatives. Market makers are required to maintain a
balance with the Company equivalent to approximately twenty-five percent of
their net trading positions. The remaining balance of commissions is available
for immediate withdrawal.
Other Liabilities and Accrued Expenses
Other liabilities and accrued expenses consist of:
January 31,
1998 1997
Accrued salaries, taxes and fringe benefits $ 141,530 $ 116,145
Other accrued liabilities 3,764,678 1,478,302
$ 3,906,208 $ 1,594,447
4. RELATED PARTY TRANSACTIONS
Transactions with related parties are summarized as follows:
Year ended January 31,
1998 1997
Maintenance charges paid on space owned
by the principal shareholder (included
in rent expense) 10,440 17,977
Rent for space which is leased in the
name of the principal shareholder 31,310 31,310
5. INCOME TAXES
The provision for income taxes is as follows:
Year ended January 31,
1998 1997
Current tax expense(benefit)
Federal $ (960,316) $ 1,120,057
State - 325,808
$ (960,316) $ 1,445,865
<PAGE>
A reconciliation from the statutory federal income tax rate to the
effective tax rate is as follows:
Year ended January 31,
1998 1997
U.S. statutory rate (34.0)% 34.0%
State taxes, net of federal benefit - 6.6
Other (1.8) 3.7
(35.8)% 44.3%
6. COMMITMENTS
Lease Commitments
The Company signed a 15 year lease for new office space, effective August 1,
1996, and added additional space effective March 15, 1997. In addition the
Company also pays rent for additional space under agreements with the principal
shareholder.
Minimum annual rental and lease commitments for all office space with a
remaining term of one year or more at January 31, 1998 are as follows:
Year ending January 31,
1999 $ 793,040
2000 793,040
2001 793,040
2002 824,725
2003 824,725
Remainder through July 31, 2011 7,495,750
Net minimum lease payments $ 11,420,228
Rent expense for the years ended January 31, 1998 and 1997 was
$954,071 and $429,459 respectively.
Employment Agreements
The Company has employment agreements with Martin H. Meyerson, Chairman and
Chief Executive Officer, and Michael Silvestri, President and Chief Operations
Officer. The agreements provide for base annual compensation of $600,000 and
$200,000 respectively. The agreements were for a three (3) year period from
October, 1993 and were renewed automatically for succeeding periods of one
year. In the event the Company terminates, without cause, the
<PAGE>
employees, the employee shall receive an amount equal to one year's base salary
plus accrued benefits and incentive compensation.
7. SUBORDINATED LOANS
The Company entered into a NASD approved subordinated loan agreement with Spear,
Leeds & Kellogg, dated June 3, 1997 and effective August 1, 1997. The amount is
$2,000,000 and matures on August 31, 1999. It is subject to monthly interest
payments at the rate of half a percent below the Prime Rate and is unsecured.
8. NET CAPITAL REQUIREMENT
As a registered broker-dealer, the Company is subject to the requirements of
Rule 15c3-1 (the net capital rule) under the Securities Act of 1934. The basic
concept of the rule of liquidity is to require the broker-dealer to have at all
times sufficient liquid assets to cover its current indebtedness. Specifically,
the rule prohibits a broker-dealer from permitting its "aggregate indebtedness"
from exceeding fifteen times its net capital as those terms are defined.
The Company's aggregate indebtedness and net capital were $ 6,774,670 and
$6,952,975 on January 31, 1998 and $ 6,265,987 and $ 6,908,273 on January 31,
1997 respectively, with ratios of .97 and .91 to 1.00.
9. STOCK OPTIONS AND WARRANTS
The Company established an employee stock option plan administered by the Board
of Directors. Under the plan, options may be granted to employees of the
Company and other qualified individuals up to an aggregate of 2,500,000 shares
of Common stock. As of January 31, 1998, 1,445,500 options have been granted
under this plan, 1,231,000 of which became exercisable as of January 31, 1998
and the balance will become exercisable at varying times through June, 1999. The
outstanding options have exercise prices of $1.00 to $6.12 per share. 64,500
options were exercised and 1,381,000 are outstanding.
The Underwriter was granted an option to purchase 200,000 Units at $6.60 per
Unit in connection with the Company's initial public offering. Each Unit
consists of one share of the Company's Common Stock and one Redeemable Common
Stock Purchase Warrant exercisable at $4.50. The options are exercisable
during a three year period commencing January 18, 1996.
In connection with the initial public offering, the Company issued 2,300,000
Redeemable Common Stock Purchase Warrants. Each Warrant entitles the holder to
purchase one share of Common Stock at a price of $4.50. The Warrants are
exercisable any time through January 17, 1999 unless redeemed by the Company.
The Warrants are redeemable by the Company, upon 30 days prior written notice,
provided the closing bid price for the Company's Common Stock exceeds $9.60 per
share for ten consecutive business days ending within five days of the
redemption period.
10. STOCK-BASED COMPENSATION
The Company uses the intrinsic value method to account for stock-based employee
compensation plans. Under this method, compensation cost is recognized for
stock option awards only if the quoted market price (or estimated fair market
value of the stock prior to the stock becoming publicly traded) is greater than
the amount the employee must pay to acquire the stock.
The Company has adopted the disclosure-only provisions of SFAS 123. Accordingly,
no compensation cost has been recognized for stock options granted under the
plan. Had compensation cost been determined based on the fair value at the grant
dates for stock option awards consistent with the method of SFAS 123, there
would have been no material effect on the company's net income and earnings per
share.
The exercise price of each option granted under the plan is determined by the
Company's Board of Directors at the time of grant. The exercise price of
incentive stock options must be at least equal to the fair market value of the
Company's stock on the date of the grant.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers, directors and key employees of the
Company are as follows:
Name Age Position with Company
Martin H. Meyerson 67 Chairman, Chief Executive Officer,
Chief Financial Officer and Director
Michael Silvestri 50 President, Chief Operating Officer and
Director
Kenneth J. Koock 55 Vice Chairman and Director
Jeffrey E. Meyerson 32 Vice President, Foreign Trading, and
Director(1)
Joelle A. Meyerson 59 Treasurer and Director(2)
Eugene M. Whitehouse 39 Vice President, Controller, Secretary,
and Director
Bertram Siegel, Esq. 60 Director
Martin Leventhal, CPA 61 Director
Alfred T. Duncan 54 Director
(1) Jeffrey E. Meyerson is the son of Martin H. Meyerson
(2) Joelle A. Meyerson is the spouse of Martin H. Meyerson
<PAGE>
Biographical Information
Martin H. Meyerson, Chairman, Chief Executive Officer and Chief
Financial Officer
Martin H. Meyerson is the Chairman, Chief Executive Officer, Chief
Financial Officer and a director of the Company and was its President until
1984. Mr. Meyerson was also the President and a director of Bio Recovery
Technology, Inc., a research and development company involved in microbiological
and pollution control products, from 1984 through 1986. He was also the
chairman of the board of Bio Metallics, Inc., also involved in pollution control
products, from 1987 through 1990. Mr. Meyerson graduated from Packard College
in 1952, majoring in Business Administration.
Michael Silvestri, President, Chief Operating Officer and Director
Michael Silvestri joined the Company in 1978 as Manager and Cashier and
has been President and Chief Operating Officer of the Company since 1984. He
has been actively involved in the securities business for twenty-nine (29)
years. His previous experience at Fahnstock & Company enabled him to expand his
operational expertise in all trading areas. He has established new compliance
and accounting procedures for the Company. Mr. Silvestri received a sociology
and business degree from Brooklyn College in 1974. Mr. Silvestri became a
Director in 1993.
Kenneth J. Koock, Vice Chairman and Director
Kenneth Koock has been with the Company since 1977. In 1993, Mr. Koock
became a Director of the Company. Mr. Koock received his B.A. degree from Duke
University in 1963 and a law degree in 1966 from St. John's University. He was
president of Bio Metallics, Inc. from 1987 through 1990 and is a member of the
New York State Bar Association.
Jeffrey E. Meyerson, Vice President, Foreign Trading and Director
Jeffrey E. Meyerson has been with the Company since 1987. He became Vice
President of the Foreign Trading Department in 1989. He received an
Economics/Management degree from Ithaca College in 1987. Mr. Meyerson became a
Director of the Company in 1993.
Joelle A. Meyerson, Treasurer and Director
Joelle A. Meyerson actively joined the Company in 1979 as a Financial
Principal and became a Director in 1994. She received a B.A. degree in
Economics from Brooklyn College in 1960, and a Masters degree in Economics
from Brooklyn College in 1962.
Eugene M. Whitehouse, Vice President, Controller, Secretary, and Director
Eugene M. Whitehouse has been associated with the firm since 1983, became
a Vice President and the Company's Controller in 1994, and became a Director in
1996. He received a B.B.A. degree from Pace University in 1982, and an M.B.A.
from St. Peter's College with a concentration in MIS in 1994, and a
concentration in International Business in 1997.
<PAGE>
Bertram Siegel, Esq., Director
Bertram Siegel became a Director of the Company in 1994. Mr. Siegel is a
partner in the law firm of Siegel and Siegel, and was a member of the Board
of Directors of Bio Metallics, Inc., from 1987 through 1990. He is a member of
the New Jersey and Bergen County Bar Associations, and received his Juris Doctor
degree from Rutgers, the State University of New Jersey in 1963.
Martin Leventhal, CPA, Director
Martin Leventhal graduated from Brooklyn College in 1958 and became a
Certified Public Accountant in 1963. With the exception of time spent in
military service, he has been actively involved in public accounting since
his graduation. In 1971, he founded the firm most recently known as Martin
Leventhal & Company, a CPA firm with approximately 25 employees. In 1997,
Martin Leventhal & Company merged with Weinick, Sanders & Co. to form Weinick,
Sanders, Leventhal & Co., LLP, with approximately 100 employees, of which Mr.
Leventhal is the executive partner. He is a member of the American Institute of
Certified Public Accountants and the New York Society of Certified Public
Accountants, for which he served on numerous committees. He has also held a
principal's license in the securities industry.
Alfred T. Duncan, Director
Alfred T. Duncan has been an independent management consultant since 1992,
specializing in financial management for small growth firms. Prior to 1992, he
held numerous senior positions with Commodore International, Ltd. including
General Manager of Latin America and Eastern Europe (1990-1991) and General
Manager of U. S. operations (1987-1990). He was President and Chief Executive
Officer of Victor Technologies (1986-1987) and has held financial management
positions with A. M. International, Abbott Laboratories, First National Bank
of Chicago, and Ford Motor Company. He is currently Vice President, Finance
of the New Jersey Devils, an NHL team. He received an M.B.A. degree from
Harvard University in 1972 and a B.S.C.E. degree from Duke University in 1965.
Section 16(A) Beneficial Ownership Reporting Compliance
To the best of the Company's knowledge and belief, based solely on a
review of the copies of the required filings and written representations
furnished to the Company, no director, officer or beneficial owner of more
than ten percent of any class of equity securities of the registrant failed
to file on a timely basis reports required by Section 16(A) of the Exchange
Act during fiscal year 1998.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid by the
Company for services rendered in all capacities with respect to salary earned
during the fiscal year ended January 31, 1998 to the executive officers whose
compensation exceeded $100,000 and to all executive officers as a group.
Name of Individual Total
or Number of Fiscal Cash
Persons in Group Year Salary Bonus(4) Compensation(1)
Martin H. Meyerson, Chairman(5) 1998 $ 600,000 $ 0 $ 600,000
1997 600,000 200,000 800,000
1996 600,000 0 600,000
Kenneth J. Koock, Vice
Chairman(2)(5) 1998 574,800 0 574,800
1997 1,448,800 0 1,448,800
1996 1,049,800 0 1,049,800
Michael Silvestri, President and
Chief Operating Officer(3)(5) 1998 215,018 0 215,018
1997 270,111 100,000 370,111
1996 200,000 119,248 319,248
All Executive Officers as a group
(3 persons) 1998 1,389,818 0 1,389,818
1997 2,318,911 300,000 2,618,911
1996 1,849,800 119,248 1,969,048
(1) Does not include personal benefits which do not exceed 10% of the cash
compensation for all executive officers as a group.
(2) Mr. Koock does not receive a base salary. His compensation is based on
commissions earned.
(3) Mr. Silvestri earns compensation based on commissions earned in addition to
his contracted salary and incentive amounts.
(4) Martin H. Meyerson received a grant of an option for 200,000 shares from the
employee stock option plan in lieu of a cash bonus in fiscal 1996.
(5) Mr. Meyerson, Mr. Koock, and Mr. Silvestri received grants of options for
15,000, 10,000, and 5,000 shares respectively during fiscal 1998 for serving
as members of the Company's Board of Directors.
<PAGE>
DIRECTOR COMPENSATION
As of January 31, 1998, no director was given cash compensation for their
services as directors. Outside directors are given $300.00 as reimbursement for
travel expenses. Outside directors have received grants under the stock option
plan as an incentive to become directors of the Company, and all directors
receive a grant of 5,000 options per year for their service as directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of certain beneficial owners known to the issuer to be
the beneficial owner of more than five percent of any class of the issuer's
voting securities, as of April 17, 1998.
Title of Name and Address of Amount and Percent of Total
Class Beneficial Owner Nature of Class Options
Beneficial Granted
Owner
Common Martin H. Meyerson 2,668,190(2) 48.709% 430,000
c/o M. H. Meyerson & Co., Inc.
525 Washington Blvd.
Jersey City, NJ 07310
Common Kenneth J. Koock 579,625(3) 10.889% 275,000
c/o M. H. Meyerson & Co., Inc.
525 Washington Blvd.
Jersey City, NJ 07310
Common The Meyerson Family as a Group(1) 2,982,815(4) 52.954% 585,000
(1) The Meyerson Family as a group includes Martin H. Meyerson, Joelle A.
Meyerson, Jeffrey E. Meyerson, Jill E. Meyerson and Douglas J. Meyerson
(2) Includes 430,000 shares issuable upon exercise of stock options.
(3) Includes 275,000 shares issuable upon exercise of stock options.
(4) Includes 585,000 shares issuable upon exercise of stock options.
<PAGE>
(b) Security ownership of management, as of April 17, 1998.
Title of Name and Address of Amount and Percent of Total
Class Beneficial Owner Nature of Class Options
Beneficial Granted
Owner(1)
Common Martin H. Meyerson
c/o M. H. Meyerson & Co., Inc. 2,668,190 48.709% 430,000
Common Michael Silvestri
c/o M. H. Meyerson & Co., Inc. 72,135 1.425% 15,000
Common Kenneth J. Koock
c/o M. H. Meyerson & Co., Inc. 579,625 10.890% 275,000
Common Jeffrey E. Meyerson
c/o M. H. Meyerson & Co., Inc. 164,625 3.179% 130,000
Common Joelle A. Meyerson
c/o M. H. Meyerson & Co., Inc. 125,000 2.464% 25,000
Common Eugene M. Whitehouse
c/o M. H. Meyerson & Co., Inc. 40,000 0.791% 10,000
Common Bertram Siegel, Esq.
c/o M. H. Meyerson & Co., Inc. 80,000 1.560% 80,000
Common Martin Leventhal, CPA
c/o M. H. Meyerson & Co., Inc. 75,000 1.464% 75,000
Common Alfred T. Duncan
c/o M. H. Meyerson & Co., Inc. 15,000 0.296% 15,000
Common All Officers and Directors as
a group (9 people) 3,819,575 62.587% 1,055,000
(1) Amounts and percentages include shares issuable upon exercise of options
granted.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding relationships and related transactions is disclosed
in the notes to financial statements included in Item 7 of this report.
<PAGE>
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Index of Exhibits as required by Item 601 of Regulations S-B.
Exhibit Number Description of Exhibit
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
4.1 Common Stock Specimen (1)
4.2 Warrant Specimen (1)
4.3 Unit Specimen (1)
4.4 Warrant Agreement (1)
10.1 Employment Agreement between the
Company and Martin H. Meyerson (1)
10.2 Employment Agreement between the
Company and Michael Silvestri (1)
11 Calculation of Earnings Per Share
of the Company pg. 28
27 Financial Data Schedule (2)
(1) Incorporated herein by reference from the Registration Statement
number 33-70566 filed by the Company on Form SB-2
(2) Filed with EDGAR filing of this report on Form 10-KSB.
(b) Reports on Form 8-K:
A report on Form 8-K, dated June 13, 1997, was filed reporting the
resignation of Linda Antosiewicz from the Board of Directors.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
M. H. MEYERSON & CO., INC.
(Registrant)
By: /s/ Michael Silvestri
Michael Silvestri
President and Chief Operating Officer
Date: 4/27/98
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Martin H. Meyerson and Michael Silvestri, or any
one of them, his attorney-in-fact and agent, with full power of substitution,
for him in any and all capacities, to sign any amendments to this Annual Report,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange commission, hereby ratifying and
confirming that all said attorneys-in-fact, or their substitutes, may do or
cause to be done by virtue hereof.
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
indicated and on the dates indicated.
Signature Title Date
Chairman, Chief Executive
Officer, Chief Financial
/s/ Martin H. Meyerson Officer and Director 4/27/98
Martin H. Meyerson
President, Chief Operating
/s/ Michael Silvestri Officer and Director 4/27/98
Michael Silvestri
/s/ Kenneth J. Koock Vice Chairman and Director 4/27/98
Kenneth J. Koock
Vice President, Foreign Trading,
/s/ Jeffrey E. Meyerson and Director 4/27/98
Jeffrey E. Meyerson
/s/ Joelle A. Meyerson Treasurer and Director 4/27/98
Joelle A. Meyerson
<PAGE>
Vice President, Controller,
/s/ Eugene M. Whitehouse Secretary, and Director 4/27/98
Eugene M. Whitehouse
/s/ Bertram Siegel Director 4/27/98
Bertram Siegel, Esq.
/s/ Martin Leventhal Director 4/27/98
Martin Leventhal, CPA
/s/ Alfred T. Duncan Director 4/27/98
Alfred T. Duncan
EXHIBIT 11
M. H. MEYERSON & CO., INC.
STATEMENT OF EARNINGS PER SHARE
Year ended January 31, 1997
Shares outstanding during the year ended January 31, 1997:
4,983,335 shares from February 1 to May 7 1996 97 days 483,383,495
4,993,335 shares from May 8, 1996 to January 31, 1997 269 days 1,343,207,115
366 1,826,590,610
1,826,590,610 shares divided by 366 days = 4,990,685 average shares outstanding.
Earnings year ended January 31, 1997 = $1,819,963
Basic earnings per share = $1,819,963/4,990,685 = $0.36
Equivalent shares using the modified treasury stock method:
268,000 options, exercise price $1.00 268,000 1.00 $ 268,000
205,000 options, exercise price $1.10 205,000 1.10 $ 225,500
90,000 options, exercise price $2.25 90,000 2.25 $ 202,500
200,000 options, exercise price $2.1875 200,000 2.1875 $ 437,500
12,500 options, exercise price $2.50 12,500 2.50 $ 31,250
300,000 options, exercise price $3.50 300,000 3.50 $ 1,050,000
Less: shares assumed to be purchased (545,169) $ (2,214,750)
530,331 $ 0
Total weighted average outstanding shares: 4,990,685 + 530,331 = 5,521,016
Earnings - year ended January 31, 1997 = $1,819,963
Diluted earnings per share = $1,819,963 / 5,521,016 = $0.33 earnings per share.
<PAGE>
M. H. MEYERSON & CO., INC.
STATEMENT OF EARNINGS PER SHARE (CONT.)
Year ended January 31, 1998
Shares outstanding during the year ended January 31, 1998:
4,993,335 shares from February 1 to February 12, 1997 12 days 59,920,020
4,995,335 shares from February 13 to February 24, 1997 12 days 59,944,020
5,000,335 shares from February 25 to April 1, 1997 36 days 180,012,060
5,030,335 shares from April 2 to May 22, 1997 51 days 256,547,085
5,035,335 shares from May 23 to August 13, 1997 83 days 417,932,805
5,042,835 shares from August 14, 1997 to January 12, 1998 152 days 766,510,920
5,047,835 shares from January 13 to January 31, 1998 19 days 95,908,865
365 1,836,775,775
1,836,775,775 shares divided by 365 days = 5,032,262 average shares outstanding.
Loss year ended January 31, 1998 = $(1,719,464)
Basic and diluted loss per share = $(1,719,464)/5,032,262 = $(0.34)
Calculation of equivalent shares was not included as it would be anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
This schedule contains summary financial information extracted from SEC
Form 10-KSB and is qualified in its entirety by reference to such
financial statemnts.
</LEGEND>
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<PERIOD-END> JAN-31-1998
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