<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
X EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED 09/30/96
- -----
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
- -----
FOR THE TRANSITION PERIOD FROM TO
-------- --------
Commission file number 000-22996
GILMAN & CIOCIA, INC.
(Name of small business issuer in its charter)
Delaware 11-2587324
(State of jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
475 Northern Boulevard, Great Neck, NY 11021
(Address of principal executive offices) (Zip Code)
(516) 482-4860
(Issuer's Telephone Number, Including Area Code)
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 past 90 days.
Yes X No
----- -----
State the number of shares outstanding of each class of the issuer's
classes of common equity, as of the latest practicable date. As of November 12,
1996, 5,560,582 shares of the issuer's common equity were outstanding.
<PAGE> 2
PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.
Page
----
Consolidated Balance Sheets as of September 30, 1996 and
June 30, 1996 F-1 - F-2
Consolidated Statements of Operations for the three-months
ended September 30, 1996 and 1995 F-3
Consolidated Statements of Stockholders' Equity for the three months
ended September 30, 1996 and 1995 F-4
Consolidated Statements of Cash Flows for the three months ended
September 30, 1996 and 1995 F-5 - F-6
Notes to Consolidated Financial Statements F-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
PLAN OF OPERATION
Over the past two fiscal years, the Company opened 66 new offices which
represents 56% of all offices at June 30, 1996. The Company plans to continue
its expansion and open new offices during the next year (although no specific
target has been set), recruit successful financial planners and acquire existing
tax preparation practices. The Company anticipates funding this growth through
operating profits and use of its short-term line of credit but anticipates the
availability of additional funds through the exercise of outstanding options and
warrants because the sale and/or resale of the common stock underlying such
securities is currently being registered pursuant to this registration. However,
there can be no assurance that the offering will be consummated or that any of
such options or warrants will be exercised.
The Company anticipates that opening new offices will increase its
revenues, but will involve a substantial increase in costs. The Company has no
basis to predict whether its new offices will have a material effect on its net
income. The Company believes that its new offices can ultimately be operated
profitably, but expansion may initially reduce the Company's profits or result
in an overall loss in future years.
During the Company's 1996 fiscal year, the Company commenced
operations of a direct mail division in order to control the substantial costs
of advertising its many offices. The Company believes that the direct mail
division will eventually result in lower advertising costs on per-office basis,
as the Company takes
2
<PAGE> 3
advantage of economies of scale. The Company intends for its direct mail
division to operate as an independent division and solicit its own customers for
its direct mail services.
No events or transactions have occurred subsequent to September 30,
1996, and the Company is not aware of any material trend, that would materially
affect an investor's understanding of the Company's financial condition or its
results of operations.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 COMPARED.
The Company's revenues for the three months ended September 30, 1996
were $2,159,800 as compared to revenues of $1,828,404 for the comparable period
of the prior year. The increase in revenues of 18.1% for the quarter ended
September 30, 1996 from the comparable period of the prior year is attributable
to the opening of forty-four new offices (the "1996 New Offices") in January
1996 (which generated tax preparation revenues that contributed approximately
$43,000 of the increase in tax preparation revenues in the quarter ended
September 30, 1996) and to the existing offices (which accounted for $14,500 of
additional tax preparation revenues), increased financial planning revenues of
approximately $204,000 (which was primarily generated in the pre-1996 offices),
and increased revenues of approximately $70,000 from the direct mail division.
The Company's total revenues for the quarter ended September 30, 1996
consist of $233,943 for tax preparation services, $1,368,421 for financial
planning services, and $557,386 for direct mail services. The Company's total
revenues for its quarter ended September 30, 1995 consist of $176,943 for tax
preparation services, $1,164,226 for financial planning services and $487,235
for direct mail division.
The increase in the Company's financial planning revenues for the
quarter ended September 30, 1996 compared to the prior year's first quarter of
approximately 17.5% was substantially the same as the Company's overall 18.1%
growth in revenues between the two periods. The increase in such financial
planning revenues is attributable to the integration of 15 additional financial
planners, a $50,000 increase in revenues attributable to Gilbert Financial in
the quarter ended September 30, 1996 over revenues attributable to Gilbert
Financial in the comparable quarter of the prior year, and ordinary growth in
the Company's operations.
Despite an increase of only 18.1% in revenues, the Company's operating
expenses primarily increased by approximately $1,121,000 or 58.4% as a result of
the 1996 New Offices and the seasonality of the Company's business. Offices
opened in January generally do not generate significant financial planning
revenues during the
3
<PAGE> 4
same calendar year. The 44 1996 New Offices represented approximately a 50%
increase in offices, however, these offices, while contributing comparatively
little to the Company's financial planning revenues (the source of the vast
majority of revenues for the quarter ended September 30th), contributed
significantly to operating expenses. Other reasons for such a large percentage
increase in expenses as compared to such percentage increase in revenues are:
the expansion of the Company's direct mail services, which resulted in increased
costs of approximately $108,000; the absence of a one-time $125,000 cost
reimbursement by a financial planner; and other increases in general and
administrative expenses related to efforts to expand office practices such as
telemarketing.
The Company's operating expenses for the quarter ended September 30,
1996 were $3,041,294 as compared to operating expenses of $1,919,842 for the
comparable period of the prior year. The 58.4% increase in the Company's
operating expenses for its quarter ended September 30, 1996 from the comparable
period of the prior year was attributable to $464,848 in salaries and
commissions; $197,733 in general and administrative expenses; $40,504 for direct
mail costs; $187,000 for rent; $99,000 for depreciation and amortization and
$125,000 as a result of the Company having not received a reimbursement of
financial planning expenses in the three months ended September 30, 1996.
The increase in operating expenses of approximately $1,121,000 is
attributed as follows: $325,000 to the 1996 New Offices; $108,000 to Progressive
(includes overall costs, most of which is due to costs incurred for Progressive
services to third parties); $563,000 to pre-1996 Offices and $125,000 increase
as a result of the Company having not received a reimbursement of financial
planning expenses in the three months ended September 30, 1996.
The increase in salaries and commissions is due to increased salaries
and commissions for the personnel working at the 1996 New Offices of
approximately $47,000, increased salaries and commissions for personnel working
at existing offices of approximately $361,000 (the increase in salaries and
commissions at existing offices being the result primarily of increased
financial planning activities because of increased investments by clients that
resulted in increased commissions and approximately $30,000 related to the
amortization of advances to financial planners made when they joined the
Company), and approximately $57,000 in salaries for increased personnel working
in the direct mailing division (which expanded its operations from the quarter
ended September 30, 1995, the first quarter in which the Company operated a
direct mail division).
The increase of approximately $198,000 in general and administrative
expenses is primarily due to increases of approximately: $56,000 in telephone,
$32,000 in repairs and maintenance, $17,000 in utilities, $13,000 in insurance,
$32,000 in professional fees incurred in connection with the Company's
registration related to this prospectus, and
4
<PAGE> 5
$25,000 recorded as a general provision for bad debts. Approximately $106,000 of
the increase is directly attributable to the 1996 New Offices, $80,000 to the
pre-existing offices related to normal cost increases required to support
expanded operations at existing offices and $10,000 to the Company's direct mail
division.
The 134% increase in depreciation and amortization (approximately
$38,000 for the 1996 New Offices and $61,000 for existing offices) is due
primarily to acquisitions of fixed assets and intangibles made during the
Company's last two fiscal years plus the $270,000 made in the first quarter of
the Company's 1997 fiscal year. The increase in rent is due to the 1996 New
Offices in the amount of approximately $132,000 and to normal increases of
approximately $55,000 in rent for existing offices.
The increase in direct mail costs is primarily the result of costs
incurred for Progressive services to third parties. The Company plans to
continue utilizing Progressive to meet its mailing demands for its own offices,
but at the same time, expand its clientele of independent third parties.
The decrease in other income of $232,165 or 156.4% is primarily due to
the decrease of approximately $136,000 in income from the Company's investment
in partnership (such partnership, a private investment partnership that invests
in fluctuating marketable securities, and in which the Company has invested
certain available funds, experienced a decline in its portfolio value during the
quarter ended September 30, 1996 as compared to appreciation in the comparable
quarter of the prior year) and a decrease of approximately $65,000 in realized
gains on the sale of marketable securities.
The Company's loss before credit for income taxes for the three months
ended September 30, 1996 is $965,183 as compared to income before provision for
income taxes of $57,038 for the three months ended September 30, 1995. The
increased loss is attributable to three factors. First, the opening of the 1996
New Offices in January primarily generates revenues from tax preparation
services because the Company typically needs six to twelve months from the time
a new office begins operations before the office begins to generate revenues
from financial planning services. Consequently, the 1996 New Offices will not
show any significant financial planning revenue in the quarter ended in
September 30. Therefore, the 1996 New Offices opened in January 1996 aggravated
the Company's seasonal revenue trough for the quarter ended September 30.
Second, the Company's operating costs of existing offices increased due to
normal cost increases. Third, the decrease of other income of approximately
$232,000 (as discussed above) accounts for 23% of the decrease in income before
provision for income taxes from the prior quarter.
5
<PAGE> 6
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows used in operating activities increased
approximately $2,415,000 to $433,780 for the three months ended September 30,
1996 from the $1,980,826 provided by operations for the three months ended
September 30, 1995. The increase is primarily due to an increase in net loss
plus non-cash adjustments of approximately $282,000, the proceeds from the sale
of marketable securities of $2,160,000 (which occurred during the quarter ended
September 30, 1995 as the Company liquidated its portfolio to finance its 1996
expansion), and a decrease in the increase in accounts receivable, prepaid
expenses and other current assets of approximately $86,000. The increase in net
loss plus non-cash adjustments is primarily comprised of increased depreciation
and amortization expense of approximately $96,000 and an increase in net loss of
approximately $632,000, both resulting from the Company's expansion.
Net cash used in investing activities was $246,921 and $535,099 for the
three months ended September 30, 1996 and 1995, respectively. The decrease of
approximately $288,000 is primarily due to increases in capital expenditures of
approximately $233,000 (due to the purchase of a building), offset by increased
proceeds from the repayment of related party loans of approximately $216,000 and
no additional investment in the limited partnership in the first quarter of the
Company's 1997 fiscal year.
Net cash used in financing activities increased by $227,019 to $278,547
from $1,528 due to increased payments of bank loan transactions of approximately
$514,000 offset by proceeds from bank loan transactions and notes payable of
approximately $250,000.
The Company has two credit facilities with a bank. The first facility
is a line of credit for up to $2,500,000 which expires on October 31, 1997.
Borrowings under this line are in the form of short-term notes with interest
charged monthly at the bank's prime lending rate plus 1 1/2%. At September 30,
1996, the Company had an outstanding principal balance of $150,000.
The second credit facility is an installment note in the principal
amount of $1,000,000. The note is payable in 36 equal monthly installments of
approximately $28,000, plus interest at the bank's prime lending rate plus
1 3/4%. The final installment is due December, 1999. At September 30, 1996, the
note had an outstanding principal balance amounting to $138,887.
In July 1996, the Company acquired a building to house one of its
offices in Babylon, NY for approximately $221,000.
6
<PAGE> 7
The Company believes that it could continue to operate without any
additional financing (other than its seasonal bank loans) during the next 12
months. The Company anticipates that it will not pay dividends on its Common
Stock in the foreseeable future, but will apply any profits to fund the
Company's expansion.
RECENT ACCOUNTING PRONOUNCEMENTS
In March, 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No. 121, "Accounting
For the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed
Of", which is effective for fiscal years beginning after December 15, 1995. The
Company's adoption of SFAS No. 121 as of July 1, 1996, did not have a material
impact on its results of operations, financial position or cash flows.
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation", which is effective for transactions entered into for fiscal years
that begin after December 15, 1995. SFAS No. 123 establishes a fair value method
for accounting for stock-based compensation plans either through recognition or
disclosure. The Company's adoption of the employee stock-based compensation
provisions of SFAS No. 123 as of July 1, 1996 will require disclosure of the pro
forma net income and pro forma net income per share amounts assuming the fair
value method was adopted July 1, 1995. The adoption of this standard will not
impact the Company's consolidated results of operations, financial position or
cash flows.
7
<PAGE> 8
PART II
ITEM 6. EXHIBITS; LISTS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Registrant's Articles of Incorporation, as amended,
incorporated by reference to the like-numbered exhibit in the
Registrant's Registration Statement on Form SB-2 under the
Securities Act of 1933, as amended, File No. 33-70640-NY
3.2 Registrant's by-laws, incorporated by reference to the
like-numbered exhibit in the Registrant's Registration
Statement on Form SB-2 under the Securities Act of 1933, as
amended, File No. 33-70640-NY
4.1 Form of Class A Warrant delivered to Bridge Loan lenders,
incorporated by reference to the like numbered exhibit in the
Registrant's Registration Statement on Form SB-2 under the
Securities Act of 1933, as amended, File No. 33-70640-NY
4.2 Form of Class B Warrant delivered to Bridge Loan lenders,
incorporated by reference to the like numbered exhibit in the
Registrant's Registration Statement on Form SB-2 under the
Securities Act of 1933, as amended, File No. 33-70640-NY
4.3 Form of Redeemable Warrant included in Units, incorporated by
reference to the like-numbered exhibit in the Registrant's
Registration Statement on Form SB-2 under the Securities Act
of 1933, as amended, File No. 33-70604-NY
4.4 Form of Purchase Option for Underwriter's Warrants,
incorporated by reference to the like-numbered exhibit in the
Registrant's Registration Statement on Form SB-2 under the
Securities Act of 1933, as amended, File No. 33-70604-NY
(b) Reports on Form 8-K
The Company filed a current report on Form 8-K dated July 2, 1996
disclosing a change in its accountants.
8
<PAGE> 9
SIGNATURE
In accordance with Section 13 or 15 (d) of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: February 11, 1997
GILMAN & CIOCIA, INC.
By /s/ Thomas Povinelli
- -----------------------
Thomas Povinelli
Chief Financial Officer
9
<PAGE> 10
GILMAN + CIOCIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1996 1996
---- ----
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
CASH & CASH EQUIVALENTS $1,262,547 $2,221,795
ACCOUNTS RECEIVABLE, NET 773,091 976,686
RECEIVABLE FROM RELATED PARTIES, CURRENT PORTION 274,752 403,545
PREPAID EXPENSES AND OTHER CURRENT ASSETS 359,746 100,866
---------- ----------
TOTAL CURRENT ASSETS 2,670,136 3,702,892
---------- ----------
PROPERTY & EQUIPMENT, NET 1,672,528 1,501,701
---------- ----------
OTHER ASSETS:
INTANGIBLE ASSETS, NET 1,126,910 1,030,820
INVESTMENT IN PARTNERSHIP 553,938 646,525
ADVANCES AND NOTES RECEIVABLE FROM FINANCIAL
PLANNERS 438,310 501,531
SECURITY DEPOSITS 217,400 209,852
RECEIVABLES FROM RELATED PARTIES, NET OF CURRENT
PORTION 77,928 139,595
DEFERRED TAX ASSETS 191,002 133,585
---------- ----------
TOTAL OTHER ASSETS 2,605,488 2,661,908
---------- ----------
TOTAL ASSETS $6,948,152 $7,866,501
========== ==========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
<PAGE> 11
GILMAN + CIOCIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1996 1996
---- ----
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES:
SHORT-TERM BORROWINGS $ 288,887 $ 680,556
ACCOUNTS PAYABLE 49,223 291,554
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 537,454 395,450
NOTE PAYABLE-OTHER 121,928 0
----------- -----------
TOTAL CURRENT LIABILITIES 997,492 1,367,560
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
PREFERRED STOCK - $.001 PAR VALUE
AUTHORIZED - 100,000 SHARES
ISSUED - NONE
COMMON STOCK - $.01 PAR VALUE
AUTHORIZED - 9,000,000 SHARES
ISSUED AND OUTSTANDING -5,550,582 and
5,550,582 SHARES RESPECTIVELY 55,505 55,505
PAID IN CAPITAL 6,213,810 6,184,075
RETAINED EARNINGS 130,277 717,375
----------- -----------
6,399,592 6,956,955
STOCK SUBSCRIPTIONS AND ACCRUED INTEREST
RECEIVABLE (448,932) (458,014)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 5,950,660 6,498,941
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,948,152 $ 7,866,501
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-2
<PAGE> 12
GILMAN + CIOCIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months
Ended
SEPTEMBER 30,
1996 1995
----------- -----------
<S> <C> <C>
REVENUES:
TAX PREPARATION FEES $ 233,993 $ 176,943
FINANCIAL PLANNING SERVICES 1,368,421 1,164,226
DIRECT MAIL SERVICES 557,386 487,235
----------- -----------
TOTAL REVENUES 2,159,800 1,828,404
----------- -----------
OPERATING EXPENSES:
SALARIES & COMMISSIONS 1,301,430 836,582
GENERAL AND ADMINISTRATIVE EXPENSES 697,151 499,418
ADVERTISING 22,694 15,306
DIRECT MAIL COSTS 379,210 338,706
RENT 468,333 281,267
DEPRECIATION & AMORTIZATION 172,476 73,563
REIMBURSEMENT OF FINANCIAL PLANNING EXPENSE 0 (125,000)
----------- -----------
TOTAL OPERATING EXPENSES 3,041,294 1,919,842
----------- -----------
OPERATING LOSS (881,494) (91,438)
----------- -----------
OTHER INCOME (EXPENSES):
INCOME (LOSS) FROM INVESTMENT IN PARTNERSHIP (92,587) 43,334
INTEREST INCOME 20,915 39,038
INTEREST EXPENSE (16,937) (5,138)
RENT INCOME 4,920 6,579
UNREALIZED GAIN ON SALE OF MARKETABLE SECURITIES 0 64,663
----------- -----------
OTHER INCOME (EXPENSES) (83,689) 148,476
----------- -----------
INCOME (LOSS) BEFORE PROVISION (CREDIT) FOR INCOME TAXES (965,183) 57,038
PROVISION (CREDIT) FOR INCOME TAXES (378,085) 12,252
----------- -----------
NET INCOME (LOSS) $ (587,098) $ 44,786
=========== ===========
NET INCOME (LOSS) PER SHARE $ (.11) $ .01
=========== ===========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES:
Primary 5,550,582 5,635,213
=========== ===========
Fully Diluted 5,550,582 5,635,213
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-3
<PAGE> 13
GILMAN + CIOCIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
STOCK
SUBSCRIPTIONS TOTAL STOCK-
COMMON STOCK PAID-IN RETAINED AND ACCRUED TREASURY STOCK HOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INTEREST SHARES AMOUNT EQUITY
RECEIVABLE
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1996
BALANCE AT JULY 1, 1996 5,550,582 $ 55,505 $6,184,075 $ 717,375 $(458,014) 0 $ 0 $6,498,941
REPAYMENTS OF STOCK
SUBSCRIPTIONS 19,387 19,387
COMPENSATION RECOGNIZED IN
CONNECTION WITH THE
ISSUANCE OF STOCK OPTIONS 29,735 29,735
ACCRUED INTEREST INCOME (10,305) (10,305)
NET LOSS (587,098) (587,098)
----------------------------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1996 5,550,582 $ 55,505 $6,213,810 $ 130,277 $(448,932) 0 $ 0 $5,950,660
==============================================================================================
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1995
BALANCE AT JULY 1, 1995 5,634,864 $ 56,348 $5,815,194 $ 805,403 $(773,980) 116,964 $(411,875) $5,491,090
COLLECTION OF COMMON STOCK
SUBSCRIPTIONS AND ACCRUED
INTEREST RECEIVABLE 36,684 36,684
ISSUANCE OF COMMON STOCK 1,429 14 5,523 5,537
ACCRUED INTEREST INCOME (14,006) (14,006)
NET INCOME 44,786 44,786
----------------------------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1995 5,636,293 $ 56,362 $5,820,717 $ 850,189 $(751,302) 116,964 $(411,875) $5,564,091
==============================================================================================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-4
<PAGE> 14
GILMAN + CIOCIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------------
1996 1995
----------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ (587,098) $ 44,786
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES:
COMPENSATION EXPENSE RECOGNIZED IN CONNECTION WITH THE
ISSUANCE OF STOCK OPTIONS 27,735 5,537
DEPRECIATION AND AMORTIZATION 172,464 73,563
(INCOME) LOSS FROM INVESTMENT IN PARTNERSHIP 92,587 (43,334)
INCREASE IN DEFERRED TAX ASSETS (57,417) 0
UNREALIZED GAIN ON MARKETABLE SECURITIES 0 (16,216)
COMPENSATION EXPENSE RECOGNIZED IN CONNECTION WITH AMORTIZATION
OF ADVANCES TO FINANCIAL PLANNERS 115,210 0
PROVISIONS FOR DOUBTFUL ACCOUNTS 25,000 0
INTEREST ON STOCK SUBSCRIPTIONS (10,305) (3,572)
(INCREASE) DECREASE IN:
PROCEEDS FROM SALE OF MARKETABLE SECURITIES 0 2,160,413
ACCOUNTS RECEIVABLE 178,595 (134,032)
ADVANCES TO FINANCIAL PLANNERS (51,989) (125,000)
SECURITY DEPOSITS (7,548) (29,938)
PREPAID EXPENSES AND OTHER CURRENT ASSETS (258,880) (57,102)
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (72,134) 105,721
----------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (433,780) 1,980,826
----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
CAPITAL EXPENDITURES (270,516) (37,431)
ACQUISITION OF INTANGIBLE ASSETS (166,865) (146,500)
INVESTMENT IN PARTNERSHIP 0 (305,026)
PROCEEDS FROM RELATED PARTY TRANSACTIONS 219,460 2,561
PAYMENT TO RELATED PARTIES (29,000) (48,703)
----------------------------
NET CASH USED IN INVESTING ACTIVITIES (246,921) (535,099)
----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM BANK LOAN TRANSACTIONS 150,000 0
PAYMENTS OF BANK LOAN TRANSACTIONS (541,669) (27,778)
PAYMENT OF NOTE PAYABLE (6,265) 0
PROCEEDS FROM NOTE PAYABLE 100,000 0
PROCEEDS FROM STOCK SUBSCRIPTIONS 19,387 26,250
----------------------------
NET CASH USED IN FINANCING ACTIVITIES (278,547) (1,528)
----------------------------
NET INCREASE (DECREASE) IN CASH (959,248) 1,444,199
CASH AT BEGINNING OF PERIOD 2,221,795 1,335,762
----------------------------
CASH AT END OF PERIOD $ 1,262,547 $ 2,779,961
============================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-5
<PAGE> 15
GILMAN + CIOCIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------
1996 1995
------------------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAYMENTS FOR THE PERIOD:
INTEREST $16,937 $ 5,138
========================
INCOME TAXES $22,515 $122,034
========================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-6
<PAGE> 16
GILMAN + CIOCIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE 1 - BASIS OF FINANCIAL STATEMENTS
The consolidated financial statements include the accounts of Gilman +
Ciocia, Inc. and its three wholly-owned subsidiaries, JT Securities, BT
Telemarketing, Inc. Gilbert Financial Services, Inc., and a 50% owned
subsidiary, Suffolk Service Bureau Corp. ("Suffolk") and have been prepared as
if the entities had operated as a single consolidated group since their
respective dates of incorporation. All intercompany balances and transactions
have been eliminated.
The Company acquired Suffolk effective July 1, 1996 over which it
exercises control. Suffolk is a provider of income tax preparation and financial
planning services to individuals and businesses.
The consolidated financial statements and related notes thereto as of
September 30, 1996 and for the three months ended September 30, 1996 and 1995
are presented as unaudited but in the opinion of management include all
adjustments necessary to present fairly the information set forth therein. These
adjustments consists solely of normal recurring accruals. The consolidated
balance sheet information for June 30, 1996 was derived from the audited
financial statements included in the Company's Form 10-KSB/A. These interim
financial statements are not necessarily indicative of the results for any
future periods.
In preparing financial statements in conformity with generally accepted
accounting principles, Management is required to make estimates and assumptions
that effect the reported amounts of assets and liabilities and the disclosures
of contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
F-7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000914142
<NAME> GILMAN & CIOCIA, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,262,547
<SECURITIES> 0
<RECEIVABLES> 773,091
<ALLOWANCES> 70,974
<INVENTORY> 0
<CURRENT-ASSETS> 2,670,136
<PP&E> 2,678,415
<DEPRECIATION> 1,005,887
<TOTAL-ASSETS> 694,852
<CURRENT-LIABILITIES> 997,492
<BONDS> 0
0
0
<COMMON> 55,505
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<TOTAL-LIABILITY-AND-EQUITY> 6,948,152
<SALES> 0
<TOTAL-REVENUES> 2,159,800
<CGS> 0
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<INTEREST-EXPENSE> 16,937
<INCOME-PRETAX> (965,183)
<INCOME-TAX> (378,085)
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<CHANGES> 0
<NET-INCOME> (587,098)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
