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, 1996 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,
1996 1996
___________ ___________
(Unaudited)
ASSETS
Cash $435,051 $1,681
Receivables 4,921 4,920
Due from officer/shareholder
(Notes 2 and 6) 451,005
Prepaid and refundable income taxes 1,182 1,182
________ _______
$441,154 $458,788
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliate (Note 3) $3,000 $3,000
Accrued expenses 5,914 19,742
Due to officer/shareholder 4,166
________ ________
13,080 27,742
________ ________
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 (67,538) (59,566)
_________ ________
447,640 455,612
Less treasury stock at cost:
Preferred (2,600 shares) (5,000) (5,000)
Common (33,105 shares) (14,566) (14,566)
_________ ________
428,074 436,046
_________ ________
$441,154 $458,788
========= ========
See notes to financial statements.
BALA CYNWYD CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
SIX MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)
Nine months Three months
ended October 31, ended October 31,
_________________ _______________
1996 1995 1996 1995
_____ _____ _____ _____
Revenue:
Interest income
(Note 3) $15,223 $28,551 $ 4,789 $10,078
Other (Note 2) 20,638 31,990 20,638
________ ________ _________ ________
35,861 60,541 25,427 10,078
General and
administrative
expenses (Note 5) 43,834 30,806 27,350 7,627
________ ________ ________ ________
Income (loss) before
income taxes (7,972) 29,734 (1,923) 2,450
Income taxes (Note 6) - - - -
________ ________ ________ ________
Net income (loss) (7,972) 29,734 (1,922) 2,450
Retained earnings
(deficit), beginning
of period (59,566) (75,880) (65,616) (48,596)
________ ________ ________ ________
Retained earnings
(deficit), end
of period $(67,538) $(46,146) $(67,538) $(46,146)
======== ======== ======== ========
Income (loss) per
common share $(.01) $(.03) $(.01) $(.03)
======== ======== ======== ========
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
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)
1996 1995
_________ ________
Cash flows from operating activities:
Net income (loss) $(7,972) $29,734
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
(Increase) decrease in
receivables (505)
Increase (decrease) in
accrued expenses (13,828) (4,103)
______ ________
Net cash provided by (used in)
operating activities (21,800) 25,126
________ ________
Cash flows from investing
activities:
Payments on notes receivable 66,010
Advances to/from officer/
shareholder, net 455,169 (110,269)
________ ________
Net cash provided by (used in)
investing activities 455,169 (44,259)
________ ________
Net increase (decrease) in cash
and cash equivalents 433,370 (19,132)
Cash and cash equivalents,
beginning of period 1,681 21,508
________ ________
Cash and cash equivalents,
end of period $435,051 $2,376
======== ========
See notes to financial statements.
BALA CYNWYD CORPORATION
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(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 1996 and 1995).
Presentation of financial statements:
Except for the balance sheet as of January 31, 1996, 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. In 1991, the Company agreed to extend credit facilities of
$500,000 to an unrelated third party. The debtor has
completed payments in accordance with the loan agreements of
$31,990 in excess of an allowance of $88,000 previously
provided by the Company for any potentially uncollectible
reimbursements. On August 16, 1996, the company received
$20,638 in payment for legal fees and expenses incurred
during the collection process. No further payments are due
from the debtor.
3. Due from officer/shareholder:
There are no formal repayment terms and the advance bears
interest at the prime rate (8.25% at October 31, 1996).
Interest income relating to this advance was $10,434 and
$25,744 for the nine months ended October 31, 1996 and 1995,
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 $186 and $195 for the nine months ended
October 31, 1996 and 1995, 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 are included in general and administrative expenses
for each of the nine months ended October 31, 1996 and 1995.
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.
At October 31, 1996, the Company has accumulated, for
federal and state income tax purposes, net operating loss
carryforwards. The utilization of these losses to reduce
future income taxes will depend upon the generation of
sufficient taxable income prior to the expiration of the net
operating loss carryforwards. These carryforwards,
amounting to approximately $23,700, have expiration dates of
2008 through 2010.
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 second
quarter and nine months ended October 31, 1996 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, 1996, to which the reader is
directed for additional information.
The Company has recorded a decrease in interest income
of $5,289 and $13,328 for the three and nine month periods ended
October 31, 1996, respectively, as compared to the same periods
in the prior year due to the repayment on May 13, 1996 of
$451,005 on the amount due from an officer/stockholder. General
and administrative expenses increased by $19,723 and $13,028 for
the first three and nine months of this year, respectively, as
compared to the same periods in the prior year due primarily to
increased costs associated with the Company's efforts to locate
appropriate investment opportunities. The decrease in interest
income together with the increase in expenses resulted in net
losses of $1,922 and $7,972 for this year's third quarter and
nine months, respectively, compared with net income of $2,450 and
$29,734 for the same periods in the prior year.
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 12, 1996 By:/s/ Albert M. Zlotnick
___________________________
Albert M. Zlotnick
President
Chairman of the Board
Chief Financial Officer
and Chief Executive
Officer