SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended October 31, 1995 Commission File No. 0-5653
BALA CYNWYD CORPORATION
_________________________________________________________________
(Exact name of registrant as specified in its charter)
New Jersey 22-1436237
_____________________________________ _________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 City Avenue
Bala Cynwyd, Pennsylvania 19004
_____________________________________ _________________________
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code: (610) 667-8225
________________
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,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
____ ____
Indicate the number of shares outstanding of each of the
Registrant's classes on common stock, as of the latest
practicable date.
Common Stock: 1,021,314 shares
Part 1. Financial Information
_____________________
Item 1. Financial Statements
BALA CYNWYD CORPORATION
BALANCE SHEETS
October 31, January 31,
1995 1995
___________ ___________
(Unaudited)
ASSETS
Cash $2,376 $21,508
Receivables (Note 2):
Litigation Settlement, net 66,010
Other 4,921 4,416
Due from officer/shareholder (Note 3) 459,798 349,529
Prepaid and refundable income taxes 1,182 1,182
________ _______
$468,276 $442,645
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliate (Note 4) $3,000 $3,000
Accrued expenses 15,810 19,913
________ ________
18,810 22,913
________ ________
Shareholders' equity:
Preferred stock, cumulative
convertible, $.05 par; authorized
500,000 shares, issued 2,600 shares 130 130
Common stock, $.05 par; authorized
2,000,000 shares; issued 1,054,419
shares 52,721 52,721
Additional paid-in capital 462,327 462,327
Deficit (46,146) (75,880)
_________ ________
469,033 439,298
Less treasury stock at cost:
Preferred (2,600 shares) (5,000) (5,000)
Common (33,105 shares) (14,566) (14,566)
_________ ________
449,467 419,732
_________ ________
$468,276 $442,645
========= ========
See notes to financial statements.
BALA CYNWYD CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
NINE MONTHS ENDED OCTOBER 31, 1995 AND 1994
(Unaudited)
Nine months Three months
ended October 31, ended October 31,
_________________ ___________________
1995 1994 1995 1994
_____ _____ _____ _____
Revenue, interest
income (Note 3) $28,551 $22,826 $10,078 $ 7,279
Other (Note 2) 31,990
________ ________ ________ ________
60,541 22,826 10,078 7,279
General and
administrative
expenses (Note 5) 30,806 28,955 7,627 7,942
________ ________ ________ ________
Income (loss)
before income
taxes 29,734 (6,129) 2,450 (663)
Income taxes
(Note 6) - - - -
________ ________ ________ ________
Net income (loss) 29,734 (6,129) 2,450 (663)
Retained earnings
(deficit), begin-
ning of period (75,880) (24,981) (48,596) (30,447)
________ ________ ________ ________
Retained earnings
(deficit), end
of period $(46,146) $(31,110) $(46,146) $(31,110)
======== ======== ======== ========
Income per
common share $.03 $(.01) $-0- $-0-
======== ======== ======== ========
Weighted average
number of shares
outstanding 1,021,314 1,021,314 1,021,314 1,021,314
========= ========= ========= =========
See notes to financial statements.
BALA CYNWYD CORPORATION
STATEMENT OF CASH FLOWS
NINE MONTHS ENDED OCTOBER 31, 1995 AND 1994
(Unaudited)
Increase (decrease) in cash
1995 1994
_________ ________
Cash flows from operating activities:
Net income (loss) $29,734 $(6,129)
Adjustments to reconcile net
loss to net cash used in
operating activities:
(Increase) decrease in
receivables (505) (27,152)
Prepaid and refundable income taxes 34
Increase (decrease) in
accrued expenses (4,103) (24,456)
________ ________
Net cash provided by (used in)
operating activities 25,126 (57,703)
________ ________
Cash flows from investing
activities:
Payments on notes receivable 66,010 145,000
Advances to/from officer/
shareholder, net (110,269) (111,343)
________ ________
Net cash provided by (used in)
investing activities (44,259) 33,657
________ ________
Net increase (decrease) in cash
and cash equivalents (19,132) (24,046)
Cash and cash equivalents,
beginning of period 21,508 46,040
________ ________
Cash and cash equivalents,
end of period $ 2,376 $21,994
======== ========
Supplemental disclosure of cash
flow information, cash paid for
income taxes $-0- $250
======== ========
See notes to financial statements.
BALA CYNWYD CORPORATION
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED OCTOBER 31, 1995 AND 1994
(Unaudited)
1. Business activity and summary of significant accounting
policies:
The Company presently conducts no business but is searching
for appropriate investment and acquisition opportunities.
Its only income consists of interest from notes receivable.
Cash Equivalents:
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with
maturities of three months or less to be cash equivalents.
Earnings per share:
Earnings per share are computed based on the weighted
average number of common shares outstanding during each year
(1,021,314 shares in 1995 and 1994).
Presentation of financial statements:
Except for the balance sheet as of January 31, 1995, the
financial information furnished herein has not been audited
by independent accountants; it reflects, however, all
adjustments (consisting principally of normal, recurring
accruals) which, in the opinion of management, are necessary
for a fair presentation of financial position and results of
operations and cash flows for the dates and periods noted.
2. Notes receivable:
On October 30, 1991, the Company agreed to extend credit
facilities up to an initial principal amount of $350,000 to
Antiquities of Nevada, Inc. ("Antiquities"), and on Janu-
ary 29, 1992 entered into an amendment increasing the
maximum credit availability by $150,000 through June 15,
1992. On May 15, 1992 the loan agreement was amended,
whereby the principal amount of $431,724 due as of that date
was to be repaid in installments from June to August, 1992,
with the balance of principal, accrued interest and related
costs due on September 1, 1992. The notes bear interest at
10% per annum and are collateralized by all of the assets of
Antiquities, along with the guarantees of the shareholders.
On September 1, 1992, Antiquities defaulted on its obliga-
tions under the loan agreements, and filed for protection
under Chapter 11 of the Federal Bankruptcy Code on Septem-
ber 14, 1992. Under court order, Antiquities was required
to pay the Company $10,000 per month towards this obligation
plus interest of $3,000 per month, pending the filing and
confirmation of a plan of reorganization. On February 24,
1993 the plan of reorganization was confirmed by the Court.
The plan requires monthly payments of principal of $10,000
to July, 1993, $15,000 to June, 1994 and $20,000 to
November, 1994, plus interest payable monthly at 10% per
annum. Through July 1993, the principal payments were
received. Subsequent to that point in time, monthly
principal payments in amounts less than the required amounts
were received.
As of October 31, 1995, the Company has incurred legal and
other costs in excess of $192,000 in connection with
exercising its rights under the notes, which pursuant to the
loan agreements is reimbursable to the Company by
Antiquities, of which approximately $90,000 was collected.
The Bankruptcy Court has ordered Antiquities to pay during
the 23rd through 26th months of the confirmed plan, $86,500
of the Company's legal fees and expenses incurred during the
Antiquities bankruptcy proceeding. The Company has provided
an allowance in the amount of $88,000 for any potentially
uncollectible reimbursements. Antiquities has completed
payments in accordance with the loan agreements $31,990 in
excess of the Company's allowance.
3. Due from officer/shareholder:
There are no formal repayment terms and the advance bears
interest at the prime rate (8.75% at October 31, 1995).
Interest income relating to this advance was $25,744 and
$12,743 for the nine months ended October 31, 1995 and 1994,
respectively.
4. Due to affiliate:
There are no formal repayment terms and the advance bears
interest at the prime rate. Interest expense relating to
this advance was $195 and $165 for the nine months ended
October 31, 1995 and 1994, respectively.
5. Management fees:
The Company has agreed to compensate its president and
principal shareholder for his services in maintaining the
corporate books and records and in investigating possible
merger and acquisition candidates for the Company, and to
reimburse him for expenses incurred. Management fees of
$22,500 and $22,500 are included in general and administra-
tive expenses for the nine months ended October 31, 1995 and
1994, respectively.
6. Income taxes:
The Company is classified as a personal holding company for
each of the periods presented. The Company is subject to a
Federal tax equal to 28% of its undistributed earnings, in
addition to any other income taxes payable.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
_____________________________________________
The following discussion addresses the financial
condition and results of operations of the Company for the third
quarter and nine months ended October 31, 1995 compared with the
same periods in the prior year. This discussion should be read
in conjunction with the Management's Discussion and Analysis
Section included in the Company's Annual Report on Form 10-K for
the fiscal year ended January 31, 1995, to which the reader is
directed for additional information.
The Company has recorded an increase in income of
$37,715 and $2,799 for the nine and three month periods ended
October 31, 1995, respectively, as compared to the same periods
in the prior year due to an increase in interest income and
payments by Antiquities of Nevada pursuant to order of the
Bankruptcy Court. See Note 2 to Financial Statements. General
and administrative expenses decreased by $315 for the third
quarter and increased by $1,851 for the first nine months of this
year as compared to the same periods in the prior year due
primarily to increased costs associated with the Company's
restructuring and enforcement actions against an unrelated debtor
and its affiliates (see Note 2 to Financial Statements). The
increase in interest income and court ordered payments resulted
in net income of $2,450 and $29,734 for this year's third quarter
and nine months, respectively, compared with net losses of $663
and $6,129 for the same periods in the prior year.
The Company is pursuing its rights against a
shareholder guarantor for reimbursable legal fees and expenses.
See Note 2 to Financial Statements. The Company's only income
consists of interest income.
PART 2. OTHER INFORMATION
___________________________
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
________________________________
(a) Exhibits: None
(b) Reports on Form 8-K: None
SIGNATURES
__________
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.
BALA CYNWYD CORPORATION
Dated: December 14, 1995 By:/s/ Albert M. Zlotnick
___________________________
Albert M. Zlotnick
President
Chairman of the Board
Chief Financial Officer
and Chief Executive
Officer
BALA CYNWYD CORPORATION
NINE MONTHS ENDED OCTOBER 31, 1995
Appendix A to Item 601(c) of Regulations S-K
(Article 5 of Regulation S-X
Commercial and Industrial Companies)
Item Number: Item Description:
____________ _________________
5-02(1) Cash and cash items 2,376
5-02(2) Marketable securities
5-02(3)(a)(1) Notes and accounts receivable -
trade
5-02(4) Allowances for doubtful accounts
5-02(6) Inventory
5-02(9) Total current assets 8,479
5-02(13) Property, plant and equipment
5-02(14) Accumulated depreciation
5-02(18) Total assets 468,276
5-02(21) Total current liabilities 18,810
5-02(22) Bonds, mortgages and similar debt
5-02(28) Preferred stock - mandatory
redemption
5-02(29) Preferred stock - no mandatory
redemption 130
5-02(30) Common stock 52,721
5-02(31) Other stockholders' equity 396,616
5-02(32) Total liabilities and
stockholders' equity 468,276
5-03(b)1(a) Net sales of tangible products
5-03(b)1 Total revenues 60,541
5-03(b)2(a) Cost of tangible goods sold
5-03(b)2 Total costs and expenses applicable
to sales and revenues
5-03(b)3 Other costs and expenses 30,806
5-03(b)5 Provision for doubtful accounts
and notes
5-03(b)(8) Interest and amortization of
debt discount
5-03(b)(10) Income before taxes and other items 29,734
5-03(b)(11) Income tax expense
5-03(b)(14) Income/loss continuing operations 29,734
5-03(b)(15) Discontinued operations
5-03(b)(17) Extraordinary items
5-03(b)(18) Cumulative effect - changes in
accounting principles
5-03(b)(19) Net income or loss 29,734
5-03(b)(20) Earnings per share - primary 0.03
5-03(b)(20) Earnings per share - fully diluted