SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Commission File No. 33-0773-A
The Rothchild Companies, Inc.
(Exact name of Registrant as specified in its charter)
Florida 65-0110447
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
102 N.E. 2nd Street, Suite 193, Boca Raton, FL 33432
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 393-7251
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange
on which registered
None None
Securities registered pursuant to Section 12(g) of the Act
None
(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
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-K or any amendment to this Form 10-K. (x)
The aggregate market value of voting stock of the Registrant held
by non-affiliates of the Registrant, as of March 15, 1996, was
approximately $323,988.
The number of issued and outstanding shares of Registrant's Common
Stock on March 15, 1996 was 20,000,000 shares.
<PAGE>
THE ROTHCHILD COMPANIES, INC.
INDEX
Item Page
Part I 1. Business 3
2. Properties 6
3. Legal Proceedings 6
4. Submission of Matters to a Vote of
Security Holders 6
Part II 5. Market for Registrant's Common Equity
and Related Stockholder Matters 6
6. Selected Financial Data 7
7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
8. Financial Statements and Supplemental
Data 8
9. Changes in and Disagreements with
Accountant on Accounting and Financial
Disclosure 8
Part III 10. Directors and Executive Officers of the
Registrant 9
11. Executive Compensation 10
12. Security Ownership of Certain Beneficial
Owners and Management 10
13. Certain Relationships and Related
Transactions 11
Part IV 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 12
<PAGE>
PART I
Item 1. Business
The Rothchild Companies, Inc. (the "Company or the
"Registrant") was incorporated under the laws of the State of
Florida as Tri-Way Industries, Inc. on June 27, 1986 for the
purpose of seeking, investigating and acquiring business
opportunities. The Company did not engage in any meaningful
operations until on or about November 22, 1989, at which time the
Company acquired The Rothchild Group, Inc.
Until mid-1993, the Company, through its wholly-owned
subsidiary, The Rothchild Group, Inc., operated as a full service
advertising agency engaged in the advertising, marketing and public
relations agency business. On October 20, 1993, however, the
Company's subsidiary, The Rothchild Group, Inc., filed for
bankruptcy protection under Chapter 7 of the U.S. Bankruptcy Code
in the Bankruptcy Court for the Southern District of Florida
following a long, virtually unbroken sequence of adverse
developments reflected in prior periodic reports filed by the
Company pursuant to the Securities Exchange Act of 1934. Other
than the business operations of The Rothchild Group, Inc., the
Company was not engaged in any other meaningful commercial
activities. With the bankruptcy filing, the Company's subsidiary
was liquidated, and the Company's investment in the subsidiary was
rendered valueless. As a result, the Company ceased operations and
became virtually inactive.
On July 12, 1994 (the "Closing Date"), new investors,
including the Company's current management (the "Buyers"),
completed the purchase of an aggregate of 6,311,975 shares of the
Company's Common Stock (the "Purchased Shares"), representing
approximately 60% of the Company's issued and outstanding Common
Stock as of the Closing Date. The Purchased Shares were acquired
from Howard Rothchild, formerly the President and a director of the
Company. As part of the aggregate purchase price of the Purchased
Shares, the Buyers agreed to pay certain obligations of the
Company, including past due and then current accounting and legal
fees, stock transfer agent fees, and other expenses, including
legal fees, incurred in connection with bringing the Company
current with respect to filing periodic reports under the
Securities Act of 1934. As a result, the Company has filed with
the Securities and Exchange Commission various disclosure
documents, including Annual Reports on Form 10-K for the years
ended December 31, 1993 and December 31, 1994. See "Financial
Statements".
In addition, since the Closing Date, the Buyers have provided
sufficient funds in the form of loans to ensure the Company's
viability and permit the Company to continue operations and pursue
business opportunities, including a possible business combination,
merger or similar transaction. Some of such loans have been
converted into shares of the Company's Common Stock. The Company
continues to engage in no commercial operations at this time. See
<PAGE>
"Financial Statements".
Management has determined that the Company's business plan is
primarily to seek one or more potential businesses which may, in
the opinion of management, warrant the Company's involvement. The
Company recognizes that as a result of its limited financial,
managerial or other resources, the number of suitable potential
businesses which may be available to it will be extremely limited.
In seeking to attain its business objective, the Company will not
restrict its search to any particular industry. Rather, the
Company may investigate businesses of essentially any kind or
nature, including but not limited to, finance, high technology,
manufacturing, service, sports, research and development,
communications, insurance, brokerage, transportation and others.
Notwithstanding the foregoing, management does not intend to become
involved with a company which is an "investment company" under the
Investment Company Act of 1940, or with a company which may be
deemed an "investment advisor" under the Investment Advisors Act of
1940. Nor does the Company intend to become an investment company
or an investment advisor. Management's discretion is otherwise
unrestricted and it may participate in any business whatsoever
which may in the opinion of management, meet the business
objectives discussed herein. It is emphasized that the business
objectives discussed herein are extremely general and are not
intended to be restrictive upon the discretion of management. As
of the date of this report, the Company has not chosen the
particular area of business in which its proposes to engage and has
not conducted any market studies with respect to any business or
industry, although management of the Company has had preliminary
discussions with a variety of enterprises.
The Company will not restrict its search to any specific
industry (except as set forth above), but may acquire any entity or
position in a company which is (i) in its preliminary or
development stage; or (ii) is a going concern. At this time, it is
impossible to determine the needs of the business in which the
Company may seek to participate, and whether such business may
require additional capital, management, or may be seeking other
advantages which the Company may offer. In other instances,
possible business endeavors may involve the acquisition of or a
merger with a company which does not need additional equity, but
seeks to establish a public trading market for its securities.
Businesses which seek the Company's participation in their
operations may desire to do so to avoid what such businesses deem
to be adverse factors related to undertaking a public offering.
Such factors include substantial time requirements and legal costs,
along with other conditions or requirements imposed by Federal and
state securities laws.
The analysis of potential business endeavors will be
undertaken by or under the supervision of the Company's management.
Management is comprised of individuals of varying business
experiences, and management will rely on their own business
judgment in formulating decisions as to the types of businesses
<PAGE>
which the Company may acquire or in which the Company may
participate. It is quite possible that management will not have
any business experience or expertise in the type of businesses
engaged in by a company which may be investigated by the Company.
In analyzing prospective businesses, management anticipates
considering such factors as available technical, financial and
managerial resources; working capital and other financial
requirements; such businesses' history of operations, if any, and
prospects for the future; the nature of present and expected
competition; the quality and experience of management services
which may be available and the depth of that management; the
potential for further research and development; risk factors;
the potential for growth and expansion; the potential for profit;
the perceived public recognition or acceptance of such businesses;
products, services, trade or service marks; its name
identification; and other relevant factors.
While it is anticipated that these factors will be considered,
to a large extent a decision to participate in a specific business
will be difficult, if not impossible, to analyze through the
application of objective criteria. In many instances, the
achievements of a specific business to date may not necessarily be
indicative of its potential for the future because of various
changing requirements in the marketplace, such as the ability to
substantially shift marketing approaches, expand significantly or
change product emphasis, change or substantially alter management,
or other factors. On the other hand, the management of such
companies may not have proven their abilities or effectiveness, or
established the viability of the market, or the products or
services which they propose to market. As such, the profitability
of such a business may be unpredictable and might therefore subject
the Company and its assets to substantial risks.
It is anticipated that any number of prospective businesses
will be available to the Company from various sources, including
its management, its professional advisors, securities broker-
dealers, venture capitalists, members of the financial community,
and others who may present unsolicited proposals. In some
instances, the Company may publish notices or advertisements in
financial or trade publications seeking potential business
acquisitions. In certain circumstances, the Company may agree, in
connection with an acquisition, to pay a finder's fee or other
compensation to an investment banking firm or other person (who may
or may not be affiliated with the Company) who submits to the
Company a business in which the Company participates.
It is anticipated that locating and investigating specific
proposals will take a substantial period of time, although the time
such process will take can by no means be assured. Further, even
after a business is located, the negotiation, drafting and
execution of relevant agreements, disclosure documents and other
instruments will require substantial additional time, effort and
attention on the part of management, as well as substantial costs
for attorneys, accountants and others. If a decision is made not
<PAGE>
to participate in a specific business endeavor, the costs
theretofore incurred in the related investigation might not be
recoverable. Furthermore, even if an agreement were reached for
the participation in a specific business, the failure to consummate
that transaction might result in the loss to the Company of the
related costs incurred.
Item 2. Properties
At present, the Company does not own or lease any property.
The Company maintains its business address at a minimal cost.
Administrative services, including the use of fixtures, furniture
and equipment, and the use of employees to provide reception,
secretarial and bookkeeping services, are provided to the Company
at no cost by the Company's current officers and directors.
Item 3. Legal Proceedings
No legal proceedings are currently pending or, to the
knowledge of management, threatened against the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders,
through a solicitation of proxies or otherwise, during the fourth
quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity And Related
Stockholder Matters
The Company's Common Stock is traded in the over-the-counter
market on the National Association of Securities Dealers, Inc.'s
OTC Bulletin Board under the symbol "ROCH". Set forth below is the
range of high and low bid information for the Company's Common
Stock for the two most recent fiscal years. This information
represents prices between dealers and does not reflect retail mark-
up or mark-down or commissions, and may not necessarily represent
actual market transactions.
<TABLE>
<CAPTION>
High Bid Low Bid
<S> <C> <C>
First Quarter - 1994 $.02 $.005
Second Quarter - 1994 $.02 $.01
Third Quarter - 1994 $.03 $.02
Fourth Quarter - Ending
December 31, 1994 $.03 $.01
First Quarter - 1995 $.05 $.03
Second Quarter - 1995 $.0625 $.05
Third Quarter - 1995 $.0625 $.05
Fourth Quarter - Ending
December 31, 1995 $.05 $.05
</TABLE>
<PAGE>
As of March 15, 1996, there were approximately 323 record
holders of the Registrant's outstanding Common Stock. Moreover,
additional shares of the Company's Common Stock are held for
stockholders at brokerage firms and/or clearing houses. The
Company, therefore, was unable to determine the precise number of
beneficial owners of its Common Stock as of March 15, 1996.
The Registrant has not paid any cash dividends on its Common
Stock since April 1990, and does not anticipate paying cash
dividends in the foreseeable future, but rather intends to retain
earnings, if any, for future growth and expansion opportunities.
Payment of cash dividends in the future will be dependent upon the
Company's earnings, financial condition, capital requirements and
other factors determined to be relevant by the Board of Directors.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Balance Sheet Data
Total Assets $ 1,035 $ 5,897 $ -0- $ 64,796 $ 843,150
Total Liabilities $ 5,000 $ -0- $ 12,850 $ -0- $ 773,337
Total Shareholders'
Equity (deficit) $(3,965) $ 5,897 $ (12,850) $ 64,976 $ 109,813
Operating Data
Total Revenues $ -0- $ 10 $ 290 $ -0- $ -0-
Operating Expenses $ 9,862 $ 7,580 $ 118,781 $ 471 $ 471
Net Loss $ 9,862 $ 7,570 $ 118,491 $ 471 $ 471
Loss Per Share $ -0- $ -0- $ 0.01 $ -0- $ -0-
Dividends None None None None None
</TABLE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements including
the notes thereto.
Financial Condition
At December 31, 1995, the Company had current assets and total
assets of $1,035 as compared to current assets and total assets of
$5,897 at December 31, 1994; current liabilities and total
liabilities of $5,000, as compared to current liabilities and total
liabilities of $-0- at December 31, 1994; and a deficit net worth
of $3,965, as compared to a net worth of $5,897 at December 31,
1994. The decrease in assets and net worth and the increase in
liabilities was the result of adminstrative costs incurred during
the fiscal year. See "Business" and notes to "Financial
Statements".
<PAGE>
Liquidity
The Company has cash and cash equivalents of $1,035 at
December 31, 1995. Since the Company's operating expenses, in
management's opinion, will be minimal during the Company's 1996
fiscal year or until the Company is able to engage in meaningful
operations, the Company does not anticipate a liquidity deficiency.
It is anticipated that the Company's current management and others
will fund the Company's operations, if required, by loans and/or
contributions of capital. The Company has no present commitment
that is likely to result in its liquidity increasing or decreasing
in any material way. In addition, the Company knows of no trend,
additional demand, event or uncertainty that will result in, or
that are reasonably likely to result in, the Company's liquidity
increasing or decreasing in any material way.
Capital Resources
The Company has no material commitments for capital
expenditures. The Company knows of no material trends, favorable
or unfavorable, in the Registrant's capital resources. The Company
has no outstanding credit lines or credit commitments in place and
has no current need for financial credit.
Results of Operations
The Company did not report any significant revenues for the
fiscal year ended December 31, 1995. During the fiscal year ended
December 31, 1995, the Company reported expenses of $9,862.
Expenses for the fiscal year ended December 31, 1995 consisted
primarily of general administrative, accounting and related
miscellaneous fees and expenses. During such period, the Company
did not engage in any meaningful operations.
Registrant knows of no trends or uncertainties that had, or
that the Company reasonably expects will have, a materially
favorable or unfavorable impact on net sales, revenues or income
from continuing operations. Moreover, Registrant knows of no
events that will cause a material change in the relationship
between its costs and revenues. The Company's income has been
unaffected by inflation. See "Business".
Item 8. Financial Statements and Supplemental Data
Financial information pursuant to this Item appears elsewhere
in this Report. See Item 14.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
In connection with the change of control of the Registrant
during July 1994, the Registrant changed accountants beginning with
the audit of the financial statements included herewith for the
fiscal year ended December 31, 1994, from Douglas N. Rice, C.P.A.
("Rice"), to Thomas W. Klash, Certified Public Accountant. The
<PAGE>
report of Rice on the Registrant's financial statements for the
fiscal year ended December 31, 1993, did not contain an adverse
opinion or disclaimer of opinion and was not qualified or modified
as to uncertainty, audit scope, or accounting principles, except
for a going concern uncertainty.
In connection with the audit of the Registrant's financial
statements for the fiscal year ended December 31, 1993, and in the
subsequent interim periods, there were no disagreements, disputes,
or differences of opinion with Rice on any matters of accounting
principles or practices, financial statement disclosure, or
auditing scope and procedures, which, if not resolved to the
satisfaction of Rice would have caused Rice to make reference to
the matter in its report.
PART III
Item 10. Directors and Executive Officers of the Registrant
The directors and executive officers of the Company as of
March 15, 1996, were as follows:
Name Age Position
Norman H. Becker 58 President and Director
David A. Carter 45 Secretary/Treasurer and Director
Norman H. Becker has been President and a Director of the
Company since July 12, 1994. In addition, since February, 1987,
Mr. Becker has been President and Chief Executive Officer of
Vanderbilt Square Corporation, a public company primarily engaged
in equipment leasing and office management services. Since
January, 1993, Mr. Becker has also been President of Corrections
Services, Inc, a public company engaged in electronic monitoring.
Additionally, since January, 1985, Mr. Becker has been self-
employed in the practice of public accounting. Mr. Becker is a
graduate of City College of New York (Bernard Baruch School of
Business) and is a member of a number of professional accounting
associations including the American Institute of Certified Public
Accountants, the Florida Institute of Certified Public Accountants,
and the Dade County Chapter of the Florida Institute of Certified
Public Accountants.
David A. Carter has been Secretary, Treasurer and a Director
of the Company since July 12, 1994. Since October 1990, Mr. Carter
has been the sole shareholder of David A. Carter, P.A., a law firm
specializing in bankruptcy, commercial litigation and general
corporate law. Mr. Carter is also Chief Executive Officer and a
Director of Innovation Computers & Cameras, Inc., a full-service
computer product and service company.
<PAGE>
Item 11. Executive Compensation
The following table sets forth summary compensation
information with respect to compensation paid by the Company to the
Chief Executive Officer of the Company ("CEO") and the Registrant's
four most highly compensated executive officers other than the CEO,
who were serving as executive officers at December 31, 1995:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payments
Restricted Securities
Name of Individual Other Annual Stock Underlying/ LTIP All Other
and Principal Position Year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Norman H. Becker 1995 -0- -0- -0- -0- -0- -0- -0-
President
David A. Carter 1995 -0- -0- -0- -0- -0- -0- -0-
Secretary/Treasurer
</TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, as of March 15, 1996, certain
information concerning beneficial ownership of the Company's Common
Stock by (i) each person known to the Company to own 5% or more of
the Company's outstanding Common Stock, (ii) all directors of the
Company, naming them and (iii) all directors and officers of the
Company as a group, without naming them.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address Beneficial Ownership (1) of Class (1)
<S> <C> <C>
Norman H. Becker(2) 1,565,509 7.8%
David A. Carter(2) 2,881,019 14.4%
Corporate Investment
Associates(3) 1,878,592 9.4%
Ronald A. Martini(3) 1,033,076 5.2%
Diane Martini(3) 1,300,000 6.5%
LaSala & Company, Inc. 1,981,019(4) 9.9%
433 Plaza Real, Suite 355
Boca Raton, Florida 33432
Bert L. Gusrae 2,881,019(5) 14.4%
6622 Serena Lane
Boca Raton, Florida 33433
All Officers and Directors
as a group (2 persons) 4,446,528 22.2%
</TABLE>
(1) As used herein, the term beneficial ownership with respect
to a security is defined by Rule 13d-3 under the Securities
Exchange Act of 1934 as consisting of sole or shared voting power
(including the power to vote or direct the vote) and/or sole or
shared investment power (including the power to dispose or direct
the disposition of) with respect to the security through any
contract, arrangement, understanding, relationship or otherwise,
including a right to acquire such power(s) during the next 60 days.
Unless otherwise noted, beneficial ownership consists of sole
ownership, voting and investment rights.
(2) The address for each person is c/o The Rothchild Companies,
Inc., 102 N.E. 2nd Street, Suite 193, Boca Raton, FL 33432.
(3) The address for each person and entity is 3040 East
Commercial Blvd., Ft. Lauderdale, Florida 33308. Corporate
Investment Associates is controlled by Diane Martini and Ronald A.
Martini, her husband. While they each disclaim any beneficial
ownership interest in the shares of the Company's Common Stock
owned by each other, they may be deemed to control such shares and
beneficial ownership thereof is attributable to them. When
aggregated, their personal holdings in the Company may be deemed to
be mutual control of approximately 21.1% of the Common Stock of the
Company. On April 24, 1990, Mr. Martini entered a guilty plea in
the United States District Court for the District of New Jersey to
violations of federal conspiracy, mail fraud and securities laws in
connection with transactions in securities of public companies
unrelated to the Company during a fifteen (15) month period in 1988
and 1989.
(4) Includes 250,000 shares registered in the name of Alicia M.
LaSala, President and sole stockholder of LaSala & Company, Inc.,
and 510,019 shares registered in the name of Alicia M. LaSala,
Custodian for Nicholas F. LaSala, UGMA/Florida.
(5) Does not include 187,000 shares owned by Wendy Tand Gusrae,
wife of Bert L. Gusrae. Mr. Gusrae disclaims any beneficial
ownership over such shares.
Item 13. Certain Relationships and Related Transactions
During the fiscal year ended December 31, 1995, there were no
material transactions between the Company and any of its officers
and/or Directors which involved $60,000 or more.
During the current fiscal year, the Company's management and
other stockholders provided sufficient funds in the form of loans
to ensure the Company's viability and permit the Company to
continue operations and pursue business opportunities, including a
possible business combination, merger or similar transaction. See
"Financial Statements".
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
10-K
(a)(1) The following financial statements are filed as part of
this Report:
(i) Report of independent public accountant for the years ended
December 31, 1995 and 1994;
(ii) Report of independent public accountant for the year ended
December 31, 1993;
(iii) Balance Sheets as of December 31, 1995 and 1994;
(iv) Statements of Operations for the Years Ended December 31,
1995, 1994 and 1993;
(v) Statement of Shareholders' Equity (Deficiency) for the Years
Ended December 31, 1995, 1994 and 1993;
(vi) Statement of Cash Flows for the Years Ended December 31, 1995,
1994 and 1993; and
(vii) Notes to Financial Statements.
(a)(2) Financial Statement Schedules:
Schedule IV - Indebtedness of and to Related Parties - Not
Current - December 31, 1995
(a)(3) The following Exhibits are filed as part of this Report:
3.1 Articles of Incorporation (1)
3.2 Articles of Incorporation, as amended(2)
3.3 Amended By-laws(3)
16.1 Letter re: change in certifying accountant (4)
(1) Reference is made to Exhibit 3.1 to the Registrant's Form S-18
Registration Statement (File No. 33-0773-A), which is hereby
incorporated by reference.
(2) Reference is made to Exhibit 3.2 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, which is
hereby incorporated by reference.
(3) Reference is made to Exhibit 3.3 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, which is
hereby incorporated by reference.
(4) Reference is made to the Exhibit filed with the Company's Report
on Form 8-K dated November 30, 1994, and amended on Amendment No. 1 to
Form 8-K/A dated January 12, 1995, which is hereby incorporated by
reference.
(b) No Report on Form 8-K was filed during the last quarter of
the period covered by this Report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
THE ROTHCHILD COMPANIES, INC.
By:/s/ Norman H. Becker
Norman H. Becker, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
NAME TITLE DATE
/s/ Norman H Becker President and March 15, 1996
Norman H. Becker Director
/s/ David A. Carter Secretary/Treasurer March 15, 1996
David A. Carter and Director
The Registrant has not furnished an annual report or proxy material
to security holders. The Registrant intends to furnish such information
to security holders and will furnish copies thereof to the Commission in
accordance with applicable rules and regulations.
<PAGE>
THE ROTHCHILD COMPANIES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
F-1
<PAGE>
THE ROTHCHILD COMPANIES, INC.
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
PAGE
Independent Auditor's Report........................................F-3
Balance Sheets......................................................F-6
Statements of Operations............................................F-6
Statements of Changes in Shareholders' Equity.......................F-8
Statements of Cash Flows............................................F-9
Notes to Financial Statements......................................F-10
F-2
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
The Rothchild Companies, Inc.
Boca Raton, Florida
I have audited the balance sheets of The Rothchild Companies, Inc.
as of December 31, 1995 and 1994, and the related statements of
operations, shareholders' equity and cash flows for each of the years
then ended. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on
these financial statements based on my audits. The financial statements
of The Rothchild Companies, Inc. as of December 31, 1993, were audited
by other auditors whose report, dated May 27, 1994, expresses a
qualified opinion on those statements.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I 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. I believe that my audits provide a reasonable basis for
my opinion.
In my opinion, the 1995 and 1994 financial statements referred to
above present fairly, in all material respects, the financial position
of The Rothchild Companies, Inc. as of December 31, 1995 and 1994, and
the results of operations and its cash flows for each of the years then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note
E to the financial statements, the Company has experienced operating
losses since inception, resulting in an accumulated deficit position.
The Company's financial position and operating results raise substantial
doubt about its ability to continue as a going concern. Management's
plans in regard to these
F-3
<PAGE>
The Rothchild Companies, Inc.
Boca Raton, Florida
Page Two
matters are discussed in Note E. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
February 20, 1996
F-4
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors
The Rothchild Companies, Inc.
I have audited the accompanying balance sheets of The Rothchild
Companies, Inc. as of December 31, 1993 and 1992 and the related
statements of operations, changes in stockholders' equity and cash flows
for the three years ended December 31, 1993. These financial statements
are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my
audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I 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. I believe that my audits
provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of The
Rothchild Companies, Inc. as of December 31, 1993, and 1992, and the
results of its operations and its cash flows for the three years then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Notes 1
and 5 to the financial statements, the Company's subsidiary entered into
Chapter 7 bankruptcy leaving the Company with no operations or sources
of revenue which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regards to these matters are
also described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Douglas N. Rice, C.P.A., P.A.
Miami, Florida
May 27, 1994
F-5
<PAGE>
THE ROTHCHILD COMPANIES, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31, December 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,035 $ 5,897
TOTAL ASSETS $ 1,035 $ 5,897
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
NON-CURRENT LIABILITIES:
Loans payable - related parties $ 5,000 $ -
TOTAL LIABILITIES 5,000 -
CONTINGENCIES:
SHAREHOLDERS' EQUITY (DEFICIENCY)
Common stock; $.001 par value,
20,000,000 shares authorized;
20,000,000 shares issued and
outstanding at December 31,
1995 and 1994 20,000 20,000
Additional paid-in capital 471,100 471,100
Accumulated deficit (495,065) (485,203)
TOTAL SHAREHOLDERS'
EQUITY (DEFICIENCY) (3,965) 5,897
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,035 $ 5,897
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-6
<PAGE>
THE ROTHCHILD COMPANIES, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenue $ - $ 10 $ 290
Operating Expenses 9,862 7,580 118,781
Net Loss $ (9,862) $ (7,570) $ (118,491)
Net loss per Common Share $ - $ - $ (.01)
Weighted average number
of common shares outstanding 20,000,000 11,304,089 11,105,434
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
THE ROTHCHILD COMPANIES, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Common Stock Additional
$.0001 Par Value Paid-In Accumulated
Shares Amount Capital (Deficit) Total
<S> <C> <C> <C> <C> <C>
Balance December 31, 1992 10,647,931 $ 10,648 $ 413,470 $ (359,142) $ 64,976
December 1993, additional
stock issued 740,005 740 39,925 - 40,665
Net loss - - - (118,491) (118,491)
Balance December 31, 1993 11,387,936 11,388 453,395 (477,633) (12,850)
Cancellation of shares
previously issued (381,055) (381) 381 - -
Issuance of common shares as
repayment of notes payable 8,393,119 8,393 16,166 - 24,559
Issuance of common shares for
services rendered 600,000 600 1,158 - 1,758
Net loss - - - (7,570) (7,570)
Balance December 31, 1994 20,000,000 20,000 471,100 (485,203) 5,897
Net loss - - - (9,862) (9,862)
Balance December 31, 1995 20,000,000 $ 20,000 $ 471,100 $ 495,065 $ (3,965)
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
THE ROTHCHILD COMPANIES, INC.
STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (9,862) $ (7,570) $ (118,491)
Adjustments to reconcile net loss
to net cash used by operating
activities
Goodwill written off upon
bankruptcy of subsidiary - - 17,426
Amortization - - -
Provision for bad debts - - 47,550
Effect of non-monetary
transactions on net loss - 2,667 -
Increase (decrease) in
accounts payable - (12,850) 12,850
NET CASH USED BY OPERATING
ACTIVITIES (9,862) (17,753) (40,665)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Common stock issued - - 40,665
Cash advances from shareholders 5,000 23,650 -
NET CASH PROVIDED BY
FINANCING ACTIVITIES 5,000 23,650 40,665
NET INCREASE (DECREASE) IN CASH (4,862) 5,897 -
CASH AT BEGINNING OF YEAR 5,897 - -
CASH AT END OF YEAR $ 1,035 $ 5,897 $ -
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-9
<PAGE>
THE ROTHCHILD COMPANIES, INC.
STATEMENTS OF CASH FLOWS
SUPPLEMENTAL INFORMATION
DECEMBER 31, 1995
1. Interest expense amounted to $909 in 1994.
2. Advances from shareholders ($23,650) and accrued interest
($909) were repaid by the issuance of 8,393,119 shares of
Common Stock.
3. Professional fees ($1,758) were paid by the issuance of
600,000 shares of Common Stock.
F-9(a)
<PAGE>
THE ROTHCHILD COMPANIES, INC.
NOTES TO FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1995
NOTE A - THE COMPANY AND BASIS OF PRESENTATION
Business - The Rothchild Companies, Inc. (the "Company")
was incorporated on June 27, 1986 as Tri-Way Industries,
Inc. On April 7, 1989, the Company name was changed to
Tri-Way Media and Communications, Inc. The Company
changed its fiscal year-end from May 30 to April 30 and
then to December 31. The Company, from inception until
April 7, 1989, operated in the business of seeking merger
and/or acquisition opportunities. On April 3, 1989, the
Company acquired Federal Medical Holdings Corp., which had
acquired the assets of M.C. Media, a media buying agency.
On September 16, 1989, Federal Medical Holdings Corp. was
merged into Tri-Way Media and Communications, Inc.
As part of the acquisition agreement, the assets of Tri-
Way Media and Communications, Inc. were distributed to
creditors to satisfy part of its outstanding obligations.
The operations of the Company as a media buying agency
were also discontinued.
On November 22, 1989, the Company acquired The Rothchild
Group, Inc., a full service advertising agency engaged in
the public relations agency business. At that time, the
name of the Company was changed to The Rothchild
Companies, Inc. On October 20, 1993, The Rothchild Group,
Inc. entered into Chapter 7 bankruptcy proceedings at
which time control of the subsidiary was transferred to a
court appointed trustee. As a result, the financial
statements include the assets, liabilities and operations
of The Rothchild Companies, Inc. only.
During 1995 and 1994, and through the date of this
financial statement, the Company was inactive.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income and loss per share - Income and loss per share is
computed by dividing the net income or loss by the
weighted average number of common shares outstanding
during the applicable year.
Goodwill - Goodwill of $17,426 representing the excess of
cost over value of net assets acquired, was written off
during 1993 as a result of the bankruptcy of the
subsidiary.
NOTE C - INCOME TAXES
At December 31, 1995, the Company has net operating tax
loss carryforwards amounting to $405,771. The losses
expire at various intervals through the year 2010.
F-10
<PAGE>
THE ROTHCHILD COMPANIES, INC.
NOTES TO FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1995
NOTE C - INCOME TAXES (Cont'd)
Deferred tax benefit, as described in Financial Accounting
Standard No. 109 has not been recorded in the accompanying
financial statements because of a valuation allowance.
The realizability of the related tax benefit is contingent
upon the Company's ability to generate profitable
operations in the future.
NOTE D - COMMON STOCK TRANSACTIONS
The Company issued 600,000 common shares to its former
president as compensation for professional services
rendered during 1994.
On July 5, 1994, an adjusted net total of 381,055 common
shares were cancelled resulting from non-payment by
subscribers.
On December 30, 1994, the Company issued 8,393,119 common
shares to certain shareholders in payment of 8% notes
payable ($23,650) and accrued interest ($909).
NOTE E - CONTINGENCIES
As discussed in Note A, the Company's wholly-owned
subsidiary, The Rothchild Group, Inc. entered into Chapter
7 bankruptcy proceedings on October 20, 1993. Control of
the subsidiary was transferred to the bankruptcy trustee
resulting in the loss of the Company's only operations and
source of revenues. As a result, the financial statements
have been presented on a deconsolidated basis and include
the assets, liabilities, and operations of The Rothchild
Companies, Inc. only.
The Company has incurred operating losses amounting to
$495,065 since its inception on June 27, 1986. During
1995, the only source of working capital resulted from
non-interest bearing shareholder advances. These factors
raise certain questions regarding the Company's continued
ability to exist. The accompanying financial statements
do not include any adjustments which might relate to this
uncertainty.
Management's plans are to seek business combination
opportunities whereby the Company would receive an
infusion of working capital sufficient to meets costs and
expenses resulting from the commencement of business
operations. The Company's continued existence may be
dependent on management's ability to execute its plans.
F-11
<PAGE>
THE ROTHCHILD COMPANIES, INC.
NOTES TO FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1995
NOTE F - RELATED PARTY TRANSACTIONS
At the present time, the Company's administrative costs
are being paid by certain shareholders and other
affiliated entities. The financial statements do not
include these costs. No estimate has been made as to the
effect these costs would have on reported results of
operations.
F-12
<PAGE>
REPORT OF INDEPENDENT AUDITOR OF
FINANCIAL STATEMENTS SCHEDULES
Board of Directors and Shareholders
The Rothchild Companies, Inc.
Boca Raton, Florida
I have audited the financial statements of The Rothchild Companies,
Inc. as of December 31, 1995 and 1994 and for each of the years
then ended and have issued my report thereon dated February 20,
1996. In connection with my examination, I also examined the
financial statement schedule listed in Item 14(a)(2). In my
opinion, this schedule, when considered in relation to the basis
financial statements, present fairly in all material respects the
information set forth therein.
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
February 20, 1996
<PAGE>
THE ROTHCHILD COMPANIES, INC.
SCHEDULE IV
INDEBTEDNESS OF AND TO RELATED PARTIES - NOT CURRENT
DECEMBER 31, 1994
<TABLE>
<CAPTION>
INDEBTEDNESS OF INDEBTEDNESS TO
Column A Column B Column C Column D Column E Column F Column G Column H Column I
Name of Balance at Balance Balance at Balance
Person Beginning Additions Deductions at End Beginning Additions Deductions at End
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Corporate
Investment
Associates(a)$ - $ - $ - $ - $ - $ 7,095 $ 7,095(a) $ -
LaSala &
Company,
Inc.(b) $ - $ - $ - $ - $ - $ 4,730 $ 4,730(b) $ -
Bert L.
Gusrae(c) $ - $ - $ - $ - $ - $ 4,730 $ 4,730(c) $ -
David A.
Carter(d) $ - $ - $ - $ - $ - $ 4,730 $ 4,730(d) $ -
Norman H.
Becker(e) $ - $ - $ - $ - $ - $ 2,365 $ 2,365(e) $ -
$ - $ - $ - $ - $ - $23,650 $23,650 $ -
</TABLE>
Notes:
(a) Settled with issuance of 2,517,936 common shares
(b) Settled with issuance of 1,678,624 common shares
(c) Settled with issuance of 1,678,624 common shares
(d) Settled with issuance of 1,678,624 common shares
(e) Settled with issuance of 839,311 common shares
8,393,119
<PAGE>
THE ROTHCHILD COMPANIES, INC.
SCHEDULE IV
INDEBTEDNESS OF AND TO RELATED PARTIES - NOT CURRENT
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INDEBTEDNESS OF INDEBTEDNESS TO
Column A Column B Column C Column D Column E Column F Column G Column H Column I
Name of Balance at Balance Balance at Balance
Person Beginning Additions Deductions at End Beginning Additions Deductions at End
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald A.
Martini $ - $ - $ - $ - $ - $ 1,500 $ - $ 1,500
LaSala &
Company,
Inc. $ - $ - $ - $ - $ - $ 1,000 $ - $ 1,000
Bert L.
Gusrae $ - $ - $ - $ - $ - $ 1,000 $ - $ 1,000
David A.
Carter $ - $ - $ - $ - $ - $ 1,000 $ - $ 1,000
Norman H.
Becker $ - $ - $ - $ - $ - $ 500 $ - $ 5,000
$ - $ - $ - $ - $ - $ 5,000 $ - $ 5,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheets, Statement of Operations, Statement of Changes in Shareholders' Equity,
Statement of Cash Flows and Notes thereto incorporated in Part IV., Item 14. of
t incorporated in Part IV., Item 14. of this Form 10-K and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000099680
<NAME> ROTHCHILD COMPANIES, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,035
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,035
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,035
<CURRENT-LIABILITIES> 5,000
<BONDS> 0
<COMMON> 20,000,000
0
0
<OTHER-SE> (3,965)
<TOTAL-LIABILITY-AND-EQUITY> 1,035
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,862
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
