UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to __________________
Commission File Number 33-94322
WINFIELD CAPITAL CORP.
Incorporated in the IRS Employer Identification
State of New York Number 13-2704241
237 Mamaroneck Avenue
White Plains, New York 10605
(914) 949-2600
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.
--- ---
Registrant had 5,023,361 shares of common stock outstanding as of June 30, 1996.
- --------------------------------------------------------------------------------
This report consists of 11 pages
<PAGE>
Form 10-Q Quarterly Report
INDEX
Part I - Financial Information Page No.
--------
Condensed Statements of Operations -
Three Months ended June 30, 1996 and 1995 3
Condensed Balance Sheets - as of
June 30, 1996 and March 31, 1996 4-5
Condensed Statements of Cash Flows -
Three Months Ended June 30, 1996
and 1995 6
Notes to Condensed Financial Statements 7
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8-9
Part II - Other Information 10-11
-2-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
June 30,
- - - - - - - - - - -
1996 1995
-------- ------
<S> <C> <C>
Operations realized
Investment income
Interest from small business concerns $ 79,533 $ 54,808
Interest from temporarily invested funds 135,055 24,691
Other 61,461 4,640
--------- ---------
Total investment income 276,049 84,139
--------- ---------
Expenses
(Income) loss on assets acquired
in liquidation ( 3,941) -
Interest 134,513 89,795
Salaries 98,009 41,152
Travel and entertainment 12,582 3,235
Professional fees 22,765 18,393
Rent and office expenses 11,160 10,339
Insurance 32,914 7,349
Telephone 3,298 1,633
Payroll taxes 3,956 3,701
Depreciation and amortization 3,265 925
Directors' costs 2,231 1,856
Advertising and promotion 3,516 86
Other taxes 11,185 -
Other 1,474 4,095
--------- ---------
Total investment and
operating expenses 336,927 182,559
--------- ---------
(Loss) from investments ( 60,878) ( 98,420)
Realized gains on disposition of investments - 69,416
Unrealized appreciation in value of investments - 26,694
-------- --------
Net loss ($ 60,878) ($ 2,310)
======== ========
Loss per share of common stock ($ .01) ($ - )
======== ========
</TABLE>
-3-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, March 31,
- - - - - - - - - - - - - -
1996 1996
----------- -----------
<S> <C> <C>
Loans and investments
Loans and debt securities $ 4,419,510 $ 3,456,794
Equity interests in small business
concerns 42,806 42,806
Assets acquired in liquidation 794,687 794,687
----------- -----------
5,257,003 4,294,287
Less unrealized depreciation on loans
and investments 316,696 316,695
----------- -----------
Loans and investments 4,940,307 3,977,592
Cash 2,825,354 3,410,572
Treasury bills at cost 12,627,612 8,131,149
Accrued interest receivable 74,298 76,724
Furniture and equipment (net of
accumulated depreciation of
$58,986 at June 30, 1996
and $58,146 at March 31, 1996) 8,481 9,321
Other assets 355,680 246,726
----------- -----------
Total assets $20,831,732 $15,852,084
=========== ===========
</TABLE>
-4-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, March 31,
- - - - - - - - - - - - - -
1996 1996
----------- -----------
<S> <C> <C>
Indebtedness to Small Business
Administration $ 9,500,000 $ 4,500,000
6.5% subordinated debenture payable 912,037 901,828
Notes payable - bank 5,000 5,000
Accrued liabilities 203,880 155,336
Funds in escrow 6,224 24,450
----------- -----------
10,627,141 5,586,614
Commitments and contingent liabilities
Shareholders' equity
Preferred stock - .001 par value;
Authorized 1,000,000 shares
Issued and outstanding - none
Common stock - $.01 par value;
Authorized - 10,000,000 shares;
Issued and outstanding - 5,023,361
at June 30, 1996 and March 31, 1996 50,234 50,234
Additional paid-in capital 10,850,829 10,850,829
Realized (deficit) ( 379,776) ( 318,898)
Net unrealized depreciation on
loans and investments ( 316,696) ( 316,695)
----------- -----------
Total shareholders' equity 10,204,591 10,265,470
----------- -----------
Total liabilities and
shareholders' equity $20,831,732 $15,852,084
=========== ===========
</TABLE>
-5-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
June 30,
- - - - - - - - - - - - -
1996 1995
----------- ----------
<S> <C> <C>
Operating activities
Net (loss) ($ 60,878) ($ 2,310)
Adjustments to reconcile net loss to net
cash used in operating activities
Amortization of bond discount 10,209 -
Gains on sale of equity interests - ( 69,416)
Change in unrealized depreciation on
loans and investments - ( 26,694)
Capitalized interest 2,911 -
Depreciation and amortization of
fixed assets 3,265 925
Amortization of bond expenses 7,205 -
(Increase) decrease in
Accrued interest receivable 2,426 15,771
Other assets ( 121,495) 45,155
Increase in accrued liabilities 48,544 71,930
---------- ----------
Net cash (used in) provided by
operating activities ( 107,813) 35,361
---------- ----------
Investing activities
Treasury bills acquired net ( 4,496,463) -
Sale of capital stock - 2,878,682
Proceeds from sale of equity interests - 69,416
Loans receivable originated ( 1,050,000) ( 17,046)
Proceeds from collection of loans 87,284 241,516
Proceeds on sale of assets acquired in
liquidation - 2,250
(Decrease) increase in funds held in
escrow ( 18,226) 8,893
---------- ----------
Net cash (used in) provided by
investing activities ( 5,477,405) 3,183,711
---------- ----------
Financing activities
Repayment of borrowings - ( 450,000)
Proceeds from borrowings 5,000,000 -
---------- ----------
Net cash provided by (used in)
financing activities 5,000,000 ( 450,000)
---------- ----------
(Decrease) increase in cash ( 585,218) 2,769,072
Cash - beginning 3,410,572 441,699
---------- ----------
Cash - end $2,825,354 $3,210,771
========== ==========
</TABLE>
-6-
<PAGE>
WINFIELD CAPITAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note - 1 In the opinion of the Company, the accompanying
unaudited condensed financial statements contain all
adjustments necessary to present fairly the
financial position of the Company as of June 30,
1996 and the results of operations for the three
months ended June 30, 1996 and 1995 and the cash
flows for the three months ended June 30, 1996 and
1995. The operating results of the Company on a
quarterly basis may not be indicative of operating
results for the full year.
Note - 2 The Company sold to the Small Business Administration
$5,000,000 of subordinated debentures due June 1, 2006
with an interest rate of 7.71%.
-7-
<PAGE>
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months Ended June 30, 1996 and June 30, 1995
Investment Income
Investment income increased to $276,049 for the three months ended June 30, 1996
from $84,139 for the three months ended June 30, 1995, an increase of $191,910.
Income from loans to small business increased by $24,725, principally due to the
increase in the loan portfolio. Interest from temporarily invested funds
increased by $110,364 as a result of the proceeds received from the November
1995 public offering. Other investment income increased by $56,821, primarily
from processing and commitment fees generated by new loans.
Interest Expense
Interest expense increased from $89,795 for the three months ended June 30, 1995
to $134,513 for the three months ended June 30, 1996. This increase is due to
the issuance of 6.5% subordinated debentures in conjunction with the public
offering of equity securities and an increase in indebtedness to the Small
Business Administration.
Operating Expenses
The Company's operating expenses increased from $92,764 for the three months
ended June 30, 1995 to $202,414 for the three months ended June 30, 1996.
Salaries increased by $56,857 as a result of a salary increase and the hiring of
a new employee. Insurance expense increased by $25,565, which includes a new
policy covering officers and directors liability. Travel, advertising and other
taxes also increased.
Unrealized Appreciation or Depreciation of Loans and Investments
There was no increase or decrease in unrealized appreciation or depreciation of
loans and investments for the three months ended June 30, 1996.
-8-
<PAGE>
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At June 30, 1996 the Company had cash and treasury bills, totaling $15,452,966.
The cash of $2,825,354 is principally invested with a major national bank. The
Company has a $500,000 line of credit with a bank of which $5,000 is
outstanding.
During the period the Company sold to the Small Business Administration
$5,000,000 of debentures due June 1, 2006 with an interest rate of 7.71%.
The Company believes that its cash and short term investments at June 30, 1996
will be adequate to meet both its working capital needs and the long term
investment opportunities that it seeks through June 30, 1997.
-9-
<PAGE>
WINFIELD CAPITAL CORP.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibit Index
Exhibit II - Computation of Loss Per Share
b. Reports on Form 8-K
There were no reports on Form 8-K filed for the three months
ended June 30, 1996.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WINFIELD CAPITAL CORP.
(Registrant)
By:s/Paul A. Perlin
-----------------------
Paul A. Perlin
Chief Executive Officer
Dated: August 13, 1996
-10-
WINFIELD CAPITAL CORP.
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT II
Three Months Ended
June 30,
- - - - - - - - - - - -
1996 1995
--------- ---------
Primary and Fully Diluted Loss Per Share
Weighted average number of
shares outstanding 5,023,361 1,882,485
--------- ---------
Net loss ($ 60,878) ($ 2,310)
--------- ---------
Net loss per share ($ .01) ($ - )
========= =========
-11-
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 20,709,969
<INVESTMENTS-AT-VALUE> 20,393,273
<RECEIVABLES> 0
<ASSETS-OTHER> 438,459
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20,831,732
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 10,417,037
<OTHER-ITEMS-LIABILITIES> 210,104
<TOTAL-LIABILITIES> 10,627,141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,901,063
<SHARES-COMMON-STOCK> 5,023,361
<SHARES-COMMON-PRIOR> 5,023,361
<ACCUMULATED-NII-CURRENT> (379,776)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (316,696)
<NET-ASSETS> 10,204,591
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 214,588
<OTHER-INCOME> 61,461
<EXPENSES-NET> 336,927
<NET-INVESTMENT-INCOME> (60,878)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> (60,878)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (60,878)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 134,513
<GROSS-EXPENSE> 336,927
<AVERAGE-NET-ASSETS> 10,235,031
<PER-SHARE-NAV-BEGIN> 2.04
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.03
<EXPENSE-RATIO> 3.29
<AVG-DEBT-OUTSTANDING> 6,661,630
<AVG-DEBT-PER-SHARE> 1.33
</TABLE>
