-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H+SF8KfRe6PBC60qRzyETYG/6CK8Nq9ABfggtoPcpDd+mAg3vMtv3V3+vNnnff/F F6uAk1Yp1KSkROXq6/obLw== 0001042910-98-000298.txt : 19980420 0001042910-98-000298.hdr.sgml : 19980420 ACCESSION NUMBER: 0001042910-98-000298 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980417 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALDANE BERNARD ASSOCIATES INC CENTRAL INDEX KEY: 0000801557 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 592720407 STATE OF INCORPORATION: FL FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-18097 FILM NUMBER: 98596175 BUSINESS ADDRESS: STREET 1: 192 LEXINGTON AVENUE STREET 2: 15TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126793360 MAIL ADDRESS: STREET 1: 2600 N MILIARY TRAIL STREET 2: SUITE 270 CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: QUANTUM VENTURES GROUP INC DATE OF NAME CHANGE: 19920703 10QSB 1 Securities and Exchange Commission Washington D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _________ to ________________ Commission file number 000-18097 -------------------------------- BERNARD HALDANE ASSOCIATES, INC. - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Florida 59-2720407 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 192 Lexington Avenue, 15th Floor, New York, New York 10016 - -------------------------------------------------------------------------------- (address of principal executive offices) (212) 679-3360 ------------------------------------------------------------------------------- (Issuer's telephone number) Not Applicable ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: February 28, 1998 Class Outstanding at February 28, 1998 ------------------------------- -------------------------------- Common Stock, $.00001 Par Value 1,148,865 shares BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES INDEX PAGE ---- PART I. FINANCIAL INFORMATION Consolidated Balance Sheets as of February 28, 1998 (Unaudited) and May 31, 1997 3 - 4 Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended February 28, 1998 and 1997 5 Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended February 28, 1998 and 1997 6 Notes to Consolidated Financial Statements (Unaudited) as of February 28, 1998 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION AND SIGNATURES Signatures 9 -2- BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
FEBRUARY 28, MAY 31, 1998 1997* ----------------- ------------- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 1,973,924 $ 1,698,099 Short-term investments 107,226 55,426 Accounts receivable - net of allowance for doubtful accounts of $215,000 and $290,000, respectively 314,658 419,470 Notes receivable 171,381 149,080 Due from related parties - 11,001 Prepaid expenses and miscellaneous receivables 124,490 60,158 Deferred taxes 113,000 145,000 ------------ ------------ Total current assets 2,804,679 2,538,234 ------------ ------------ OTHER ASSETS: Licenses - net of accumulated amortization of $1,806,073 and $1,657,917, respectively 716,455 864,611 Equipment, fixtures and leasehold improvements - net of accumulated depreciation of $41,207 and $28,871, respectively 48,102 50,831 Security deposits and other 83,100 79,103 Notes receivable 407,361 451,309 ------------ ------------ Total other assets 1,255,018 1,445,854 ------------ ------------ TOTAL ASSETS $ 4,059,697 $ 3,984,088 ============ ============
* The balance sheet at May 31, 1997 is derived from the audited consolidated financial statements of that date. -3-
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY FEBRUARY 28, MAY 31, 1998 1997* ----------------- ------------- (Unaudited) CURRENT LIABILITIES: Current maturities of long-term debt $ 251,870 $ 235,240 Accounts payable 160,410 207,316 Accrued expenses and other current liabilities 17,857 8,147 Income taxes payable 41,155 141,510 Due to related parties 23,795 - ------------ ------------ Total current liabilities 495,087 592,213 ------------ ------------ OTHER LIABILITIES: Long-term debt 454,729 498,839 Deferred rent payable 13,679 13,679 ------------ ------------ 468,408 512,518 ------------ ------------ Total liabilities 963,495 1,104,731 ------------ ------------ STOCKHOLDERS' EQUITY: Common stock ($.00001 par value; 950,000,000 shares authorized, 1,148,865 shares issued and outstanding) 12 12 Additional paid-in capital 2,761,727 2,761,727 Retained earnings 840,901 624,056 ------------ ------------ 3,602,640 3,385,795 Less: Treasury stock (199,500 shares at cost) 506,438 506,438 ------------ ------------ Total stockholders' equity 3,096,202 2,879,357 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,059,697 $ 3,984,088 ============ ============
* The balance sheet at May 31, 1997 is derived from the audited consolidated financial statements of that date. -4-
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) NINE MONTHS ENDED THREE MONTHS ENDED ------------------------------ ------------------------------- FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, 1998 1997 1998 1997 ----------- ----------- ----------- ----------- REVENUES: Royalty income $ 1,832,983 $ 1,775,923 $ 496,537 $ 578,590 Consulting income 69,275 - 54,216 - Interest, dividends and other income 121,163 79,516 35,894 29,024 Sub-license income 99,402 131,140 19,248 41,428 ------------ ------------ ---------- --------- Total revenues 2,122,823 1,986,579 605,895 649,042 ------------ ------------ ---------- --------- EXPENSES: Payroll and related costs 486,284 313,004 161,474 124,994 Other general and administrative 1,084,608 820,273 475,313 313,146 Amortization 148,156 148,156 49,385 49,385 Interest 43,406 45,779 14,508 15,260 ------------ ------------ ---------- --------- Total expenses 1,762,454 1,327,212 700,680 502,785 ------------ ------------ ---------- --------- INCOME (LOSS) BEFORE PROVISION (CREDIT) FOR INCOME TAXES 360,369 659,367 (94,785) 146,257 PROVISION (CREDIT) FOR INCOME TAXES 143,524 248,368 (43,276) 43,368 ------------ ------------ ---------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS 216,845 410,999 (51,509) 102,889 DISCONTINUED OPERATIONS: Income (loss) from operations of travel agency to be disposed of (net of income taxes of $-0-, $10,000, $-0-, and $10,000, respectively) - 17,942 - (21) ------------ ------------ ---------- --------- NET INCOME (LOSS) $ 216,845 $ 428,941 $ (51,509) $ 102,868 ============ ============ ========== ========= NET EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: Continuing operations $.21 $.40 $(.05) $.10 Discontinued operations - .02 - - ------- ----- -------- ---- $.21 $.42 $(.05) $.10 ======= ===== ======== ==== WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES 1,047,783 1,014,347 1,044,492 1,014,686 ========= ========= ========= ========= DIVIDENDS NONE NONE NONE NONE ==== ==== ==== ====
-5-
BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) NINE MONTHS ENDED ----------------------------------- FEBRUARY 28, FEBRUARY 28, 1998 1997 -------------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 216,845 $ 428,941 Income from discontinued operations - (17,942) Adjustments to reconcile net income to net cash provided by operating activities: Expenses (income) not requiring the use of cash: Provision for losses on accounts and notes receivable 206,929 120,000 Depreciation 12,336 3,928 Amortization of licenses 148,156 148,156 Interest expense - imputed 31,320 33,782 Interest income - imputed (28,690) (5,458) Deferred income taxes 32,000 (35,000) Changes in assets and liabilities: Accounts receivable (64,741) (149,526) Prepaid expenses and miscellaneous receivables (64,332) (18,600) Cash overdraft - (10,898) Accounts payable and other current liabilities (37,196) 167,624 Income taxes payable (100,355) 40,128 Net assets of discontinued operations - net - (3,580) ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 352,272 701,555 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of short-term investments (51,800) (1,710) Increase in security deposits (3,997) - Decrease in due from related parties 34,796 1,199 Acquisition of fixed assets (9,607) (18,360) Additions to notes receivable (104,465) (580,935) Payments of notes receivable 117,426 128,475 Net assets of discontinued operations - net - 2,200 ------------- ------------- NET CASH USED IN INVESTING ACTIVITIES (17,647) (469,131) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments of debt (58,800) (70,000) Repurchase of common stock - (55,115) ------------- ------------- NET CASH USED IN FINANCING ACTIVITIES (58,800) (125,115) ------------- ------------- NET CHANGE IN CASH AND CASH EQUIVALENTS 275,825 107,309 CASH AND CASH EQUIVALENTS - beginning 1,698,099 1,615,073 ------------- ------------- CASH AND CASH EQUIVALENTS - ending (includes cash of discontinued operations of $-0- and $49,292, respectively) $ 1,973,924 $ 1,722,382 ============= ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 45,406 $ 45,779 Income taxes 207,302 263,413
-6- BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) FEBRUARY 28, 1998 The accompanying interim consolidated financial statements are unaudited and include the accounts of Bernard Haldane Associates, Inc. ("Haldane") and its subsidiaries. NOTE 1 In the opinion of management, the accompanying interim consolidated financial statements contain all material and significant adjusting and eliminating entries consisting only of normal recurring adjustments and eliminations necessary to present fairly the financial condition as of February 28, 1998 and the results of operations and cash flows for the nine months then ended. The results of operations for the nine month period ended February 28, 1998 are not necessarily indicative of the results of operations for the year ending May 31, 1998. NOTE 2 The Company utilizes Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," to record income taxes. The major temporary difference which gives rise to deferred taxes is the allowance for doubtful accounts. NOTE 3 The calculation of earnings per share for the nine and three months ended February 28, 1998 and 1997 is based on the modified treasury stock method. NOTE 4 On May 31, 1996, the Company adopted a plan to terminate its travel agency operations. The operations were disposed of in December 1996. The operating results of the travel agency segment for the nine and three months ended February 28, 1997 are shown separately in the accompanying consolidated statement of operations. Revenues of the travel agency segment, net of direct expenses amounted to $67,027 and $-0- for the nine and three months ended February 28, 1997, respectively, and are not included in consolidated revenues. -7- BERNARD HALDANE ASSOCIATES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION NINE MONTHS ENDED FEBRUARY 28, 1998 VS. SIX MONTHS ENDED FEBRUARY 28, 1998 Royalty revenues from licensee offices for the nine month period ended February 28, 1998 as compared to February 28, 1997 increased from $1,775,923 to $1,832,983, an increase of approximately 3.2%. However revenues for the three month period ended February 28, 1998 as compared to February 28, 1997 declined from $649,042 to $605,895, a decline of approximately 7%. This decline in royalty revenues is primarily attributable to two factors: 1. DRB LTD placed a licensee, owning four offices, in default and as a result, the Company took over operations of the offices. The Company will continue to own and operate these offices through wholly owned subsidiaries until such time as qualified licensees can be identified. 2. A licensee owning six offices left the organization owing DRB approximately $150,000 in royalties and territorial fees. Management intends to file suit against this licensee and once a qualified licensee is identified, reopen the Haldnae offices in those markets. As a result of operating the four offices, Haldane recognized consulting fee revenues of $54,216 for the three months ended February 28, 1998. Interest and dividend income increased from $79,516 to $121,163 for the nine months ended February 28, 1998 and from $29,024 to $35,894 for the three months ended February 28, 1998. The Company recognized a total of $99,402 and $19,248 in revenues from the sale of territorial licenses as compared to $131,140 and $41,428 in the prior periods. This overall decline of approximately 24% reflects the fact that the Haldane system has expanded into most major metropolitan areas throughout the United States and except for reopening offices in those areas occupied by former licensees, there are few metropolitan areas available for expansion in the continental United States. -8- Total revenues for the nine month period ended February 28, 1998 as compared to the same period in the prior year were $2,122,823 as compared to $1,986,579 an increase of nearly 7% However, total revenues for the three month period declined from $649,092 to $605,895, a decline of nearly 7%. This decline in revenues is attributable primarily to the problems experienced by the Company with two prior licensees. Net income for the nine month period ended February 28, 1998 was $360,369 as compared to $659,,367 for the same period in 1997 and for the three months ended February 28, 1998 the Company incurred a loss of $94,785 as compared to a gain of $145,257 for the prior period. This loss during the Company's most recent fiscal quarter is attributable primarily to an increase in general and administrative expenses from $820,273 to $1,084,608. Most of this increase can be attributable to costs incurred by the Company in operating Haldane offices in those territories where the licensee was in default and DRB assumed operational responsibilities for the offices. Income per share for the nine month period ended February 28, 1998 declined from $.40 to $.21 as compared to 1997, a decline of 50%, and declined from a profit of $.10 per share to a loss of $.05 per share for the three months ended February 28, 1998 as compared to the three months ended February 28, 1997, a decline of 150%. Management remains dissatisfied with the results of operations of First Career. Since inception, the Company has committed over $600,000 to launch a career consulting program directed at college students and recent college graduates. These expenditures have had a significant adverse impact on the overall operations of the Company. While management believes that the program is an excellent product, the Company has not been able to market the product successfully and has entered into a joint marketing agreement with Kaplan Education Centers to market and promote the program. Results to date have been inconclusive. LIQUIDITY AND CAPITAL RESOURCES FEBRUARY 28, 1998 AS COMPARED TO MAY 31, 1997 Total current assets as of February 28, 1998 were $2,804,679 as compared to $2,538,234; an increase of 10%. Cash holdings and short term investments increased from $1,753,525 to $2,081,150, an increase of 18%. A portion of this increase is attributable to the Company's ability to reduce by 33% the -9- outstanding accounts receivable from $419,470 to $314,658. The Company's total assets increased by 2%, increasing from $3,984,088 to $4,059,697. Total current liabilities declined nearly 20%, declining from $592,213 to $495,087 while total liabilities declined from $1,104,731 to $963,495 a decline of approximately 13%. This decline in the liabilities is almost exclusively attributable to a decline of approximately $100,000 in income taxes payable from $141,510 to $41,155. Total stockholders equity increased from $2,879,357 to $3,096,202 an increase of 7.5%. Management believes that the Company has sufficient revenues to finance ongoing business activities including a proposed purchase at a cost of $3.00 per share of the Company's shares of stock owned by non management and nonaffilated shareholders. -10- BERNARD HALDANE ASSOCIATES, INC. SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 or 15(d) OF THE SECURITIES ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THIS REGISTRANT IN THE CAPACITIES INDICATED. BERNARD HALDANE ASSOCIATES, INC. (Registrant) ___________________________ DATED:_______________ JEROLD WEINGER, president/ treasurer/director ___________________________ DATED:_______________ Jeffrey G. Klein, secretary/ director 11 EX-27 2 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S UNAUDITED BALANCE SHEET AS OF FEBRUARY 28, 1998 AND UNAUDITED STATEMENT OF OPERATIONS FOR THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 9-MOS MAY-31-1998 JUN-1-1997 FEB-28-1998 1,973,924 0 529,658 215,000 0 2,804,679 89,309 41,207 4,059,697 495,087 0 12 0 0 3,096,190 4,059,697 0 2,122,823 0 0 1,719,048 0 43,406 360,369 143,524 216,845 0 0 0 216,845 .21 .21
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