10-Q 1 march-10q.txt 2001 FIRST QUARTER 10Q As filed with the Securities and Exchange Commission on May 15, 2001 -------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the _____ Securities Exchange Act of 1934 For the quarterly period ended March 31, 2001 or _____ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From _____________ to ____________ For Quarter Ended March 31, 2001 Commission File Number 0-9667 WINMILL & CO. INCORPORATED ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-1897916 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11 Hanover Square, New York, New York 10005 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 212-785-0900 -------------------------------------------------------------------------------- (Company's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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_____ The number of shares outstanding of each of the registrant's classes of common stock, as of April 30, 2001, were as follows: Class A Common Stock non-voting, par value $.01 per share - 1,635,017 shares Class B Common Stock voting, par value $.01 per share - 20,000 shares WINMILL & CO. INCORPORATED FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 2001 INDEX Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheet - (Unaudited) March 31, 2001 3 Condensed Consolidated Statements of Income (Loss) - (Unaudited) Three Months Ended March 31, 2001 and March 31, 2000 4 Condensed Consolidated Statements of Cash Flows - (Unaudited) Three Months Ended March 31, 2001 and March 31, 2000 5 Notes to Consolidated Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders During First Quarter of the Year Ended December 31, 2001 15 Item 6. Exhibits and Reports on From 8-K 15 Management's Representation and Signatures 16 WINMILL & CO. INCORPORATED CONSOLIDATED BALANCE SHEET March 31, 2001 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $3,040,287 Marketable securities (Note 2) 3,583,747 Other Receivables 253,696 Prepaid expenses and other assets 270,606 -------------- Total Current Assets 7,148,336 Equipment, furniture and fixtures, net 50,393 Excess of cost over net book value of subsidiaries, net 274,766 Deferred income taxes (Note (8) 128,000 Other 359,568 ------------ 812,727 Total Assets $7,961,063 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accrued Liabilities $ 143,835 Other current liabilities 9,836 ------- Total Current Liabilities 153,671 Shareholders' Equity: (Notes 2, 5, 6 and 7) Common Stock, $.01 par value Class A, 10,000,000 shares authorized; 1,635,017 shares issued and outstanding 16,351 Class B, 20,000 shares authorized; 20,000 shares issued and outstanding 200 Additional paid-in capital 6,872,454 Retained earnings 1,615,722 Notes receivable for common stock issued (603,675) Accumulated other comprehensive income (93,660) ------------- Total Shareholders' Equity 7,807,392 Total Liabilities and Shareholders' Equity $ 7,961,063 ============ See accompanying notes to consolidated financial statements. 3 WINMILL & CO. INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) Three Months Ended March 31, 2001 2000 Revenues: Management, distribution, service and administrative fees $ 479,056 $ 657,703 Real estate rental income - 68,883 Consulting fee 50,000 50,000 Net realized and unrealized gains from investments (108,974) 270,362 Dividends, interest and other 105,380 106,942 -------------------- 525,462 1,153,890 Expenses: General and administrative 447,535 508,737 Marketing 43,299 73,734 Expense reimbursements to the Funds (Note 9) 83,851 76,789 Professional fees 88,793 31,476 Amortization and depreciation 13,624 37,677 ---------------------- 677,102 728,413 Income (loss) before income taxes (151,640) 425,477 Income taxes (benefit) provision (Note 8) (55,745) 123,454 ---------------------- Net Income (loss) $ (95,895) $ 302,023 ====================== Per share data: Basic Net Income (loss) $ (0.06) $ 0.18 Diluted Net Income (loss) $ (0.06) $ 0.18 Average shares outstanding: Basic 1,655,017 1,655,017 Diluted 1,655,017 1,661,473 See accompanying notes to the consolidated financial statements. 4 WINMILL & CO. INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, 2001 2000 ---- ---- Cash Flows from Operating Activities: Net (loss) income $ (95,895) $ 302,023 Adjustments to reconcile net income to net cash provided by (used in) Operating Activities: Depreciation and amortization 13,624 37,677 Net realized and unrealized gains from investments 108,974 (270,362) Cash value of life insurance (8,250) (8,250) Other 2,603 2,550 (Increase) decrease in: Management, distribution and shareholder administration fees receivable (37,562) 53,285 Interest, dividends and other receivables 129,456 (40,428) Prepaid expenses and other assets (80,096) (159,707) Deferred tax credits 10,000 20,000 Increase (decrease) in: Accrued income taxes (231,000) (1,810,477) Accounts payable 6,021 (32,133) Accrued professional fees 17,150 (500) Accrued payroll and other related costs (53,976) (66,739) Accrued other expenses - (20,928) ----------- ------------ Total adjustments (123,056) (2,296,012) ----------- ------------ Net cash used in Operating Activities (218,951) (1,993,989) ----------- ------------ Cash Flows from Investing Activities: Proceeds from sales of investments 409,525 2,066,338 Purchases of investments (234,530) (1,008,653) Capital expenditures (1,844) _ (34,046) ------------ ----------- Net cash provided by Investing Activities 173,151 _1,023,639_ ------------ ------------ Net increase (decrease) in cash and cash equivalents (45,800) (970,350) ============ ============ Cash and cash equivalents: At beginning of period 3,086,087 2,560,093 At end of period $ 3,040,287 $ 1,589,743
Supplemental disclosure: The Company paid $172,000 and $1,321,000 in Federal income taxes during the three months ended March 31, 2001 and 2000 respectively. See accompanying notes to the consolidated financial statements. 5 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 and 2000 (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Winmill & Co. Incorporated("Company")is a holding company. Its Subsidiaries' business consists of providing investment management and distribution services for the Midas Funds (open-end funds) and three closed-end funds, proprietary securities trading, and real estate investment and operations. BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. Substantially all intercompany accounts and ransactions have been eliminated. ACCOUNTING ESTIMATES In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other liabilities approximate fair value because of the short maturity of these items. Marketable securities are recorded at market value which represents the fair value of the securities. CASH AND CASH EQUIVALENTS Investments in money market funds are considered to be cash equivalents. At March 31, 2001, the Company and subsidiaries had invested approximately $2,858,000 in an affiliated money market fund. MARKETABLE SECURITIES The Company and its non-broker/dealer subsidiaries' marketable securities are considered to be "available-for-sale" and are marked to market, with the unrealized gain or loss included in stockholders' equity. Marketable securities for the broker/dealer subsidiary are marked to market with unrealized gains and losses included in earnings. 6 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 and 2000 (Unaudited) INCOME TAXES The Company and its wholly-owned subsidiaries file consolidated income tax returns. The Company's method of accounting for income taxes conforms to Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. EQUIPMENT, FURNITURE AND FIXTURES Equipment, furniture and fixtures are recorded at cost and are depreciated on the straight-line basis over their estimated lives, 3 to 10 years. At March 31, 2001 accumulated depreciation amounted to approximately $600,800. EXCESS OF COST OVER NET BOOK VALUE OF SUBSIDIARIES The excess of cost over net book value of subsidiaries is capitalized and amortized over fifteen and forty years using the straight-line method. At March 31, 2001, accumulated amortization amounted to approximately $601,000. Periodically, the Company reviews its intangible assets for events or changes in circumstances that may indicate that the carrying amounts of the assets are not recoverable. COMPREHENSIVE INCOME The Company discloses comprehensive income in the financial statements. Total comprehensive income includes net income and unrealized gains and losses on marketable securities, which is reported as other comprehensive income in shareholders' equity. SEGMENT INFORMATION The Company's operating segments were organized around services provided and are classified into two groups - investment management and real estate. 7 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 and 2000 (Unaudited) EARNINGS PER SHARE Basic earnings per share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock. The following table sets forth the computation of basic and diluted earnings per share: March 31, ---------------------- 2001 2000 ---- ---- Numerator for basic and diluted earnings per share: Net (loss) income $ (95,895) $ 302,023 =========== ========== Denominator: Denominator for basic earnings per share weighted-average shares 1,655,017 1,655,017 Effect of dilutive securities: Employee Stock Options - 6,456 ----------- ---------- Denominator for diluted earnings per share adjusted weighted-average shares and assumed conversions 1,655,017 1,661,473 =========== ========== 2. MARKETABLE SECURITIES At March 31, 2001, marketable securities consisted of: Securities held by broker/dealer subsidiary - marked to market Affiliated mutual funds $ 2,497,196 Equity securities 700,122 ---------- Total broker/dealer securities (cost $3,356,357) 3,197,318 ------------ Available-for-sale securities held by non broker/dealer subsidiaries - marked to market Affiliated mutal funds 353,481 Equity securities 29,569 Unaffiliated mutual funds 3,379 ---------- Total available-for-sale securities (cost-$543,088) 386,429 ----------- $ 3,583,747 =========== 3. LEASE COMMITMENTS The Company leases office space under a lease which expires December 31, 2001. The rent is approximately $103,000 per annum including electricity. 4. SHAREHOLDERS' EQUITY The Class A and Class B Common Stock are identical in all respects except for voting rights, which are vested solely in the Class B Common Stock. The Company also has 1,000,000 shares of Preferred Stock, $.01 par value, authorized. As of March 31, 2001, none of the Preferred Stock was issued. 8 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 and 2000 (Unaudited) 5. NET CAPITAL REQUIREMENTS The Company's broker/dealer subsidiary is a member firm of the National Association of Securities Dealers, Inc. and is registered with the Securities and Exchange Commission as a broker/dealer. Under the Uniform Net Capital Rule (Rule 15c3-1 under the Securities Exchange Act of 1934), a broker/dealer must maintain minimum net capital, as defined, of not less than $250,000, when engaged in the sale of redeemable shares of registered investment companies, or 6-2/3% of aggregate indebtedness, whichever is greater; and a ratio of aggregate indebtedness to net capital, as defined, of not more than 15 to 1. At March 31, 2001, the subsidiary had net capital of approximately $942,900; net capital requirement of approximately $260,200; excess net capital of approximately $682,700; and the ratio of aggregate indebtedness to net capital was approximately 4.14 to 1. 6. STOCK OPTIONS On December 6, 1995, the Company adopted a Long-Term Incentive Plan which provides for the granting of a maximum of 300,000 options to purchase Class A Common Stock to directors, officers and key employees of the Company or its subsidiaries. The plan was amended on February 5, 1996, on October 29, 1997 increasing the maximum number of options to 450,000, and in March 1999 increasing the maximum number of options to 600,000. With respect to non-employee directors, only grants of non-qualified stock options and awards of restricted shares are available. The three non-employee directors were granted 15,000 options each on December 12, 2000 and all previously issued options were cancelled. The option price per share may not be less than the fair value of such shares on the date the option is granted, and the maximum term of an option may not exceed ten years except as to non-employee directors for which the maximum term is five years. The Company applied APB Opinion 25 and related interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized for its stock option plans. Proforma compensation cost for the Company's plans is required by Financial Accounting Standards No.123 "Accounting for Stock-Based Compensation (SFAS 123)" and has been determined based on the fair value at the grant dates for awards under these plans consistent with the method of SFAS 123. For purposes of proforma disclosure, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows: Three Months Ended March 31, 2001 2000 ---------------------------- Net income (loss) As Reported $(95,895) $302,023 Proforma $(99,225) $300,853 Earnings per share Basic As Reported $(.06) $0.18 Proforma $(.06) $0.18 Diluted As Reported $(.06) $0.18 Proforma $(.06) $0.18 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. 9 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 and 2000 (Unaudited) A summary of the status of the Company's stock option plans as of March 31,2001 and changes during the period ending on that date is presented below: Weighted Number Average of Exercise Stock Options Shares Price ------------- -------- -------- Outstanding at December 31, 2000 226,000 $ 1.61 Canceled (20,000) $ 1.94 -------- Outstanding at March 31, 2001 206,000 $ 1.58 -------- There were 174,000 options exercisable at March 31, 2001 with a weighted-average exercise price of $1.59. There were no options granted during the three months ended March 31, 2001. The following table summarizes information about stock options outstanding at March 31, 2001: Options Outstanding --------------------------------------------------------- Weighted-Average Range of Number Remaining Weighted-Average Exercise Prices Outstanding Contractual Life Exercise Price --------------- ----------- ----------------- ---------------- $1.50 - $1.65 206,000 4.7 years $1.58 In connection with the exercise of the options, the Company received from certain officers notes with an interest rate of 4.47% per annum payable December 15, 2003. The balance of the notes at March 31, 2001 was $603,675, which was classified as "notes receivable for common stock issued." 7. PENSION PLAN The Company has a 401(k) retirement plan for substantially all of its qualified employees. Contributions to this are based upon a percentage of salaries of eligible employees and are accrued and funded on a current basis. Total pension expense for the three months ended March 31, 2001 and March 31, 2000 were $11,766 and $18,625, respectively. 8. INCOME TAXES The (benefit) provision for income taxes for the three months ended March 31, 2001 and 2000 are as follows: 2001 2000 Current State and local $ (14,745) $ 23,454 Federal (51,000) 80,000 --------- --------- (65,745) 103,454 Deferred 10,000 20,000 --------- --------- $ (55,745) $ 123,454 ========== ========= Deferred tax assets are comprised of unrealized loss on investments of $128,000 at March 31, 2001. 10 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (Unaudited) 9. RELATED PARTIES All management and distribution fees are a result of services provided to the Funds. All such services are provided pursuant to agreements that set forth the fees to be charged for these services. These agreements are subject to annual review and approval by each Fund's Board of Directors and a majority of the Fund's non-interested directors. During the quarter ended March 31, 2001 and 2000, the Funds paid approximately $24,200 and $43,300 respectively, for recordkeeping services to ISC, which paid such amounts to certain brokers for performing such services. These reimbursements for recordkeeping services are included in management, distribution, service and administrative fees on the income statement. In connection with investment management services, the Company's investment managers and distributor waived management and distribution fees and reimbursed expenses to the Funds in the amount of $83,851 and $76,789 for the quarter ended March 31, 2001 and 2000, respectively. Certain officers of the Company also serve as officers and/or directors of the Funds. Commencing August 1992, the Company obtained a key man life insurance policy on the life of the Company's Chairman, which provides for the payment of $1,000,000 to the Company upon his death. As of March 31, 2001, the policy had a cash surrender value of approximately $271,800 and is included in other assets in the balance sheet. 10. FINANCIAL INFORMATION BY BUSINESS SEGMENT The following details selected financial information by business segment. Investment Real Estate Management Operations Total March 31, 2001 ------------- ------------- ------------ Revenues $ 500,290 $ 28,766 $ 529,056 Investment income (3,594) - (3,594) Income (loss) from operations (146,855) (4,785) (151,640) Depreciation and amortization 13,624 - 13,624 Capital expenditures 1,844 - 1,844 Gross identifiable assets 5,832,815 2,128,248 7,961,063 March 31, 2000 Revenues $ 707,703 $ 68,883 $ 776,586 Investment income 377,048 256 377,304 Income (loss) from operations 430,568 (5,091) 425,477 Depreciation and amortization 19,677 18,000 37,677 Capital expenditures -- 34,046 34,046 Gross identifiable assets 6,622,794 1,489,754 8,112,548 11 WINMILL & CO. INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (Unaudited) 11. CONTINGENCIES From time to time, the Company and/or its subsidiaries are threatened or named as defendants in litigation arising in the normal course of business. As of March 31, 2001, neither the Company nor any of its subsidiaries was involved in any litigation that, in the opinion of management, would have a material adverse impact on the consolidated financial statements. In July 1994, the Company entered into a Death Benefit Agreement ("Agreement") with the Company's Chairman. Following his death, the Agreement provides for annual payments equal to 80% of his average annual salary for the three year period prior to his death subject to certain adjustments to his wife until her death. The Company's obligations under the Agreement are not secured and will terminate if he leaves the Company's employ under certain conditions. 12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three Months Ended March 31, 2001 compared to Three Months Ended March 31, 2000 ------------------------------------------------------------------------------- Drastic declines in the securities markets can have a significant effect on the Company's business. Volatile stock markets may affect management and distribution fees earned by the Company's subsidiaries. If the market value of securities owned by the Funds declines, shareholder redemptions may occur, either by transfer out of the equity Funds and into the money market fund, which has lower management and distribution fee rates than the quity Funds, or by transfer out of the Funds entirely. Lower net asset levels in the Funds may also cause or increase reimbursements to the Funds pursuant to expense limitations as described in Note 9 of the financial statements. Total revenues decreased $628,428 or 54% which was primarily due to a decrease in net realized and unrealized gains on investments and dividends, interest and other. The Company had net realized and unrealized losses of $108,974 on the Company's investments. Dividends, interest and other decreased $1,562 due to lower earnings on the Company's investments. Management, distribution, service and administrative fees decreased $178,647 or 27% due to lower net assets in the Funds. Net assets under management were approximately $222 million at March 31, 2001, $198 million at June 30, 2000, $189 million at September 30, 2000, $181 million at December 31, 2000, and $172 million at March 31, 2001. Rental income was $0 as compared to $68,883. The real estate held for investment was sold in December 2000. In the first quarter of 2000, the Company earned $50,000 in consulting fees from BBSI. Total expenses decreased $51,311 or 9% as a result of decreases in marketing expenses of $30,435 or 41%, general and administrative expense of $61,202 or 12%, and amortization and depreciation expense of $24,053 or 64%. Offsetting this was an increase in professional fees of $57,317. Marketing expenses decreased due to lower fulfillment and printing expenses. General and administrative expenses and professional fee expenses increased $3,885 or 1%. Expense reimbursements to the Funds increased $7,062 or 9%. Professional fees increased $57,317 or 182% primarily due to costs associated with new business. Net loss for the period was $95,895 or $.06 per share on a diluted basis as compared to net profit of $302,023 or $.18 per share on a diluted basis for March 31, 2000. Liquidity and Capital Resources The following table reflects the Company's consolidated working capital, total assets, long term debt and shareholders' equity as of the dates indicated: March 31, 2001 December 31, 2000 -------------- ----------------- Working Capital $6,994,665 $7,132,886 Total Assets $7,961,063 $8,377,222 Shareholders' Equity $7,807,392 $7,961,746 Working capital, total assets and shareholders' equity decreased $138,221, $416,159 and $154,354, respectively for the three months ended March 31, 2001. Total assets, working capital and shareholders' equity decreased primarily due to the Net loss in the first quarter of 2001. As discussed previously, significant changes in the securities markets can have a dramatic effect on the Company's results of operations. Based on current information available, management believes that current resources are sufficient to meet its liquidity needs. 13 Effects of Inflation and Changing Prices Since the Company derives most of its revenues from acting as the manager and distributor of investment companies, it is not possible for it to discuss or predict with accuracy the impact of inflation and changing prices on its revenue from continuing operations. Forward Looking Information Information or statements provided by or on behalf of the Company from time to time, including those within this Form 10-QSB Quarterly Report, may contain certain "forward-looking information," including information relating to anticipated growth in revenues or earnings per share, anticipated changes in the amount and composition of assets under management, anticipated expense levels, and expectations regarding financial market conditions. The Company cautions readers that any forward-looking information provided by or on behalf of the Company is not a guarantee of future performance and that actual results may differ materially from those in forward-looking information as a result of various factors, including but not limited to those discussed below. Further, such forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. The Company's future revenues may fluctuate due to factors such as: the total value and composition of assets under management and related cash inflows or outflows in its mutual funds; fluctuations in the financial markets resulting in appreciation or depreciation of assets under management; the relative investment performance of the Company's sponsored investment products as compared to competing products and market indices; the expense ratios and fees of the Company's sponsored products and services; investor sentiment and investor confidence in mutual funds; the ability of the Company to maintain investment management fees at current levels; competitive conditions in the mutual funds industry; the introduction of new mutual funds and investment products; the ability of the Company to contract with the Funds for payment for administrative services offered to the Funds and Fund shareholders; the continuation of trends in the retirement plan marketplace favoring defined contribution plans and participant-directed investments; and the amount and timing of income from the Company's investment portfolio. The Company's future operating results are also dependent upon the level of operating expenses, which are subject to fluctuation for the following or other reasons: changes in the level of advertising expenses in response to market conditions or other factors; variations in the level of compensation expense incurred by the Company, including performance-based compensation based on the Company's financial results, as well as changes in response to the size of the total employee population, competitive factors, or other reasons; expenses and capital costs, including depreciation, amortization and other non-cash charges, incurred by the Company to maintain its administrative and service infrastructure; and unanticipated costs that may be incurred by the Company from time to time to protect investor accounts and client goodwill. The Company's revenues are substantially dependent on revenues from the Funds, which could be adversely affected if the independent directors of one or more of the Funds determined to terminate or renegotiate the terms of one or more investment management agreements. The Company's business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on the Company's business and results of operations, including but not limited to effects on the level of costs incurred by the Company and effects on investor interest in mutual funds in general or in particular classes of mutual funds. 14 Part II. Other Information Items 4. Submission of Matters to a Vote of Security Holders During First Quarter of the Year Ended December 31, 2001. At the annual meeting of Class B shareholder held March 13, 2001, the following matters were unanimously approved: the ratification of Tait, Weller & Baker as the independent accountants of the Company and the election of Robert D. Anderson, Bassett S. Winmill, Charles A. Carroll, Mark C. Winmill, Edward G. Webb, Jr. and Thomas B. Winmill as directors of the Company. Item 6. Exhibits and Reports on Form 8-K No reports on Form 8-K were filed during the quarter covered by this report. 15 MANAGEMENT'S REPRESENTATION The information furnished in this report reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results of the period. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WINMILL & CO. INCORPORATED Dated: May 15, 2001 By:/s/ William G. Vohrer ------------------------ William G. Vohrer Treasurer, Chief Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated. Dated: May 15, 2001 /s/ Bassett S. Winmill ---------------------- Bassett S. Winmill Chairman of the Board, Director Dated: May 15, 2001 /s/ Robert D. Anderson ---------------------- Robert D. Anderson Vice Chairman, Director Dated: May 15, 2001 /s/ Thomas B. Winmill --------------------- Thomas B. Winmill, Esq. President, General Counsel, Director Dated: May 15, 2001 /s/ Charles A. Carroll ---------------------- Charles A. Carroll, Director Dated: May 15, 2001 /s/ Edward G. Webb, Jr. ----------------------- Edward G. Webb, Jr., Director Dated: May 15, 2001 /s/ Mark C. Winmill ------------------- Mark C. Winmill, Director 16 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors and Shareholders of Winmill & Co. Incorporated We have reviewed the accompanying balance sheet and statements of income (loss) of Winmill & Co. Incorporated and consolidated subsidiaries as of March 31, 2001 and for the three-month period ended. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion . Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. Tait, Weller & Baker Philadelphia, Pennsylvania May 15, 2001 17