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, 1997
-------------
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, 1997.
- - -------------------------------------------------------------------------------
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, 1997 and 1996 3
Condensed Balance Sheets - as of
June 30, 1997 and March 31, 1997 4-5
Condensed Statements of Cash Flows -
Three Months Ended June 30, 1997
and 1996 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
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
June 30,
1997 1996
-------- --------
Investment income
Interest from small business concerns $108,155 $ 79,533
Interest from invested idle funds 155,045 135,055
Other income 4,524 61,461
-------- --------
Total investment income 267,724 276,049
-------- --------
Expenses
Interest 211,918 134,513
Payroll and payroll related expenses 128,818 101,965
General and administrative expenses 67,738 65,701
Professional fees 14,947 22,765
Depreciation and amortization 5,884 3,265
Other taxes -- 11,185
Other operating costs 3,098 ( 2,467)
-------- --------
Total investment expenses 432,403 336,927
-------- --------
Investment loss - net ( 164,679) ( 60,878)
Change in unrealized appreciation of
investments ( 27,830) --
-------- --------
Net decrease in shareholders' equity
resulting from operations ($192,509) ($ 60,878)
======== ========
Per share net decrease in shareholders' equity
resulting from operations ($ .04) ($ .01)
======== ========
The accompanying notes are an integral part of this statement.
-3-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
ASSETS
------
June 30, March 31,
1997 1997
----------- -----------
Loans and investments
Loans and notes receivable $ 4,120,072 $ 2,552,030
Equity interests in small business
concerns 1,746,475 1,549,304
Assets acquired in liquidation 1,139,357 807,571
----------- -----------
Total investments 7,005,904 4,908,905
Cash 2,180,040 3,314,875
Short term marketable securities 10,927,745 12,108,274
Accrued interest receivable 80,873 72,088
Furniture and equipment (net of
accumulated depreciation of
$63,182 at June 30, 1997
and $61,817 at March 31, 1997) 14,878 11,849
Other assets 310,473 332,691
----------- -----------
Total assets $20,519,913 $20,748,682
=========== ===========
The accompanying notes are an integral part of this statement.
-4-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
June 30, March 31,
1997 1997
----------- -----------
Liabilities
Debentures payable to the U.S. Small
Business Administration $ 8,900,000 $ 8,900,000
Subordinated debentures payable 952,874 942,665
Accrued expenses 249,526 295,995
----------- -----------
Total liabilities 10,102,400 10,138,660
----------- -----------
Commitments and contingencies
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, 1997 and March 31, 1997 50,234 50,234
Additional paid-in capital 10,850,829 10,850,829
Accumulated deficit ( 720,770) ( 556,091)
Unrealized appreciation on investments,
net 237,220 265,050
----------- -----------
Total shareholders' equity 10,417,513 10,610,022
----------- -----------
Total liabilities and
shareholders' equity $20,519,913 $20,748,682
=========== ===========
The accompanying notes are an integral part of this statement.
-5-
<PAGE>
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
June 30,
1997 1996
----------- ------------
Operating activities
Net decrease in shareholders' equity
resulting from operations ($ 192,509) ($ 60,878)
Adjustments to reconcile net decrease
in shareholders' equity resulting
from operations to net cash used in
operating activities
Amortization of debenture costs 10,209 10,209
Change in unrealized appreciation on
investments 27,830 -
Capitalized interest - 2,911
Depreciation and amortization of
fixed assets 1,365 3,265
Amortization of bond expenses 7,182 7,205
(Increase) decrease in
Accrued interest receivable ( 8,785) 2,426
Other assets 15,036 ( 121,495)
(Decrease) Increase in accrued expenses ( 46,469) 48,544
---------- ----------
Net cash (used in) operating activities ( 186,141) ( 107,813)
---------- ----------
Investing activities
Short term marketable securities - net 1,180,529 ( 4,496,463)
Investments originated ( 2,231,785) ( 1,050,000)
Proceeds from collection of loans 106,956 87,284
Purchase of furniture and equipment ( 4,394) -
(Decrease) in funds held in escrow - ( 18,226)
---------- ----------
Net cash (used in) investing activities ( 948,694) ( 5,477,405)
---------- ----------
Financing activities
Proceeds from debentures payable to
the SBA - 5,000,000
---------- ----------
Net cash provided by financing activities - 5,000,000
---------- ----------
(Decrease) in cash ( 1,134,835) ( 585,218)
Cash - beginning of period 3,314,875 3,410,572
---------- -----------
Cash - end of period $2,180,040 $2,825,354
========== ==========
The accompanying notes are an integral part of this statement.
-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,
1997 and the results of operations for the three
months ended June 30, 1997 and 1996 and the cash
flows for the three months ended June 30, 1997 and
1996. The operating results of the Company on a
quarterly basis may not be indicative of operating
results for the full year.
Note - 2 In June 1997, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial
Accounting Standard ("SFAS") No. 130, "Reporting
Comprehensive Income." It establishes a standard
for reporting and display of comprehensive income
and its components in a full set of general-purpose
financial statements which is effective for
financial statements issued for periods beginning
after December 15, 1997. Management does not
believe that the future adoption of SFAS No. 130
will have a material effect on the Company's
financial position and results of operations.
-7-
<PAGE>
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- - ---------------------
Three Months Ended June 30, 1997 and June 30, 1996
- - --------------------------------------------------
Investment Income
- - -----------------
Investment income decreased from $276,049 for the three month period ended June
30, 1996 to $267,724 for the same period ended June 30, 1997. This reflects
$19,990 in increased earnings from invested idle funds. There was also an
increase of $28,622 in interest earned from the Company's investment portfolio
due to new loans generated in 1996 and 1997. Other investment income,
principally processing and commitment fees, decreased by $56,937.
Interest Expense
- - ----------------
Interest expense increased from $134,513 for the three months ended June 30,
1996 to $211,918 for the three months ended June 30, 1997 due to an increase in
indebtedness to the Small Business Administration of $5,000,000 with interest at
7.71% per annum.
Operating Expenses
- - ------------------
The Company's operating expenses increased from $202,414 for the three months
ended June 30, 1996 to $220,485 for the three months ended June 30, 1997.
Payroll and payroll related expenses increased by $26,853 as a result of hiring
a new employee. Professional fees decreased by $7,818 while rent and office
expenses increased by $9,143.
Unrealized Appreciation or Depreciation of Investments
- - ------------------------------------------------------
There was unrealized depreciation of investments of $27,830 for the three months
ended June 30, 1997 compared to a $-0- depreciation in value of 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, 1997 the Company had cash and short term marketable securities,
totaling $13,107,785 invested with banks which meet the Federal Deposit
Insurance Corporation's definition of well capitalized financial institutions.
The Company believes that its cash and short term investments at June 30, 1997
will be adequate to meet both its working capital needs and the long term
investment opportunities that it seeks through June 30, 1998.
-9-
<PAGE>
WINFIELD CAPITAL CORP.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
- - -----------------------------------------
a. Exhibit Index
-------------
Exhibit II - Computation of Loss Per Share
b. Reports on Form 8-K
-------------------
Form 8-K dated June 5, 1997 was filed during the three
months ended June 30, 1997 in connection with the
retention of Coopers & Lybrand L.L.P. as the Company's
independent Certified Public Accountants.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WINFIELD CAPITAL CORP.
(Registrant)
By: /s/ PAUL A. PERLIN
--------------------------
Paul A. Perlin
Chief Executive Officer
Dated: August 13, 1997
-10-
<PAGE>
WINFIELD CAPITAL CORP.
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT II
Three Months Ended
June 30,
1997 1996
--------- ---------
Primary and Fully Diluted Loss Per Share
Weighted average number of
shares outstanding 5,023,361 5,023,361
--------- ---------
Net decrease in shareholders' equity
resulting from operations ($ 192,509) ($ 60,878)
--------- ---------
Per share net decrease in shareholders'
equity resulting from operations ($ .04) ($ .01)
========= =========
-11-
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