UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2002
_________________________________________________
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
_____________________ ___________________________
Commission File Number 33-94322
WINFIELD CAPITAL CORP.
Incorporated in the IRS Employer Identification
State of New York Number 13-2704241
_____________________
237 Mamaroneck Avenue
White Plains, New York 10605
(914) 949-2600
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
______ ______
Registrant had 5,346,084 shares of common stock outstanding as of September 30,
2002.
- --------------------------------------------------------------------------------
This report consists of 21 pages
Form 10-Q Quarterly Report
INDEX
Page No.
--------
PART I - FINANCIAL INFORMATION
Item 1. Condensed Statements of Operations - Six and Three Months
ended September 30, 2002 and 2001 3-4
Condensed Balance Sheets - as of September 30, 2002 and
March 31, 2002 5-6
Condensed Statements of Cash Flows - Six Months Ended
September 30, 2002 and 2001 7
Notes to Condensed Financial Statements 8-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-16
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16-17
Item 4. Controls and Procedures 17-19
PART II - OTHER INFORMATION
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Exhibit 99.1 - Officer Certification 21
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
Six Months Ended
September 30,
2002 2001
----------- -----------
Investment income
Interest from small business concerns ...... $ 30,608 $ 147,392
Interest from invested idle funds .......... 256,217 521,388
Other income ............................... 5,053 6,578
----------- -----------
Total investment income ............... 291,878 675,358
----------- -----------
Expenses
Interest ................................... 944,849 976,661
Payroll and payroll related expenses ....... 439,089 406,049
General and administrative expenses ........ 177,249 172,346
Other operating expenses ................... 188,083 247,395
----------- -----------
Total investment expenses ............. 1,749,270 1,802,451
----------- -----------
Investment loss - net ................. (1,457,392) (1,127,093)
Realized (loss) gain on investments .......... (45,512) 1,369,429
Change in unrealized (depreciation)
appreciation of investments ................ (1,867,056) (7,141,069)
----------- -----------
Net (decrease) in shareholders'
equity resulting from operations .... ($3,369,960) ($6,898,733)
=========== ===========
Per share net (decrease) in shareholders'
equity resulting from operations
Basic ........................................ ($ 0.63) ($ 1.29)
=========== ===========
Diluted ...................................... ($ 0.63) ($ 1.29)
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
-3-
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
September 30,
2002 2001
----------- -----------
Investment income
Interest from small business concerns ........... $ 13,665 $ 72,593
Interest from invested idle funds ............... 135,674 217,716
Other income .................................... 2,828 3,426
----------- -----------
Total investment income .................... 152,167 293,735
----------- -----------
Expenses
Interest ........................................ 505,894 491,845
Payroll and payroll related expenses ............ 223,528 206,548
General and administrative expenses ............. 94,316 74,163
Other operating expenses ........................ 114,090 119,613
----------- -----------
Total investment expenses .................. 937,828 892,169
----------- -----------
Investment loss - net ...................... ( 785,661) ( 598,434)
Realized (loss) gain on investments ............... ( 89) 1,006,176
Change in unrealized (depreciation)
appreciation of investments ..................... ( 676,081) ( 5,057,549)
----------- -----------
Net (decrease) in shareholders'
equity resulting from operations ......... ($1,461,831) ($4,649,807)
=========== ===========
Per share net (decrease) in shareholders'
equity resulting from operations
Basic ............................................. ($ 0.27) ($ 0.87)
=========== ===========
Diluted ........................................... ($ 0.27) ($ 0.87)
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
-4-
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
ASSETS
September 30, March 31,
2002 2002
----------- -----------
Investments at value
Loans and notes receivable ................. $ 3,104,648 $ 1,176,887
Equity interests in small business
concerns ................................. 11,041,245 12,784,997
Assets acquired in liquidation ............. 77,063 167,350
----------- -----------
Total investments ..................... 14,222,956 14,129,234
Cash and cash equivalents .................... 3,070,054 4,416,989
Short-term marketable securities ............. 10,899,042 12,753,178
Accrued interest receivable .................. 330,565 341,806
Receivable from escrow account ............... -- 197,369
Furniture and equipment (net of
accumulated depreciation of
$39,037 at September 30, 2002
and $36,195 at March 31, 2002) ............. 16,089 18,931
Other assets ................................. 548,666 640,579
----------- -----------
Total assets .......................... $29,087,372 $32,498,086
=========== ===========
-5-
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, March 31,
2002 2002
------------ ------------
Liabilities
Debentures payable to the U.S. Small
Business Administration .................... $ 24,650,000 $ 24,650,000
Accrued expenses ............................. 321,666 362,420
------------ ------------
Total liabilities .................. 24,971,666 25,012,420
------------ ------------
Commitments and contingencies (Notes 4 and 5)
Shareholders' equity
Preferred stock - $.001 par value;
Authorized 1,000,000 shares
Issued and outstanding - none
Common stock - $.01 par value;
Authorized - 30,000,000 shares
Issued and outstanding - 5,346,084
shares at September 30, 2002 and
March 31, 2002 ........................... 53,461 53,461
Additional paid-in capital ................... 22,982,698 22,982,698
Accumulated deficit .......................... (5,530,289) (4,027,385)
Unrealized depreciation on investments -
net ........................................ (13,390,164) (11,523,108)
------------ ------------
Total shareholders' equity ......... 4,115,706 7,485,666
------------ ------------
Total liabilities and
shareholders' equity ............. $ 29,087,372 $ 32,498,086
============ ============
The accompanying notes are an integral part of these condensed financial
statements.
-6-
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
September 30,
2002 2001
----------- -----------
Cash flows from operating activities
Net decrease in shareholders'
equity resulting from operations ........... ($3,369,960) ($6,898,733)
Adjustments to reconcile net decrease
in shareholders' equity
resulting from operations to net cash
(used in) operating activities
Amortization of deferred income .............. -- (927)
Change in unrealized depreciation
on investments ............................. 1,867,056 7,148,716
Realized loss (gain) on investments .......... 45,423 (1,369,429)
Depreciation and amortization ................ 2,842 3,050
Amortization of debenture costs .............. 39,106 39,248
Amortization (accretion) of interest on
treasury bills ............................. 39,028 (7,647)
Changes in assets and liabilities
Due from broker ............................ -- 46,599
Accrued interest receivable ................ 11,241 (187,654)
Other assets ............................... 52,807 41,027
Accrued expenses ........................... (40,754) (20,202)
Income taxes payable ....................... -- (23,404)
----------- -----------
Net cash (used in) operating activities ........ (1,353,211) (1,229,356)
----------- -----------
Cash flows from investing activities
Purchases of short-term marketable
securities ................................. (4,584,754) (7,991,330)
Proceeds from short-term marketable
securities ................................. 6,334,000 8,568,957
Proceeds from sale of investments/return
of capital ................................. 358,705 3,968,473
Investments originated ....................... (2,157,208) (36,320)
Proceeds from collection of loans ............ 55,533 89,902
Purchase of furniture and equipment .......... -- (4,124)
----------- -----------
Net cash provided by investing activities .... 6,276 4,595,558
----------- -----------
Cash flows from financing activities
Repayment of debentures payable to the
U.S. Small Business Administration ......... -- (900,000)
----------- -----------
Net cash (used in) financing activities ........ -- (900,000)
----------- -----------
(Decrease) increase in cash and cash
equivalents .................................. (1,346,935) 2,466,202
Cash and cash equivalents - beginning
of period .................................... 4,416,989 1,993,337
----------- -----------
Cash and cash equivalents - end of period ...... $ 3,070,054 $ 4,459,539
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
-7-
WINFIELD CAPITAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note - 1 Interim Financial Statements
The interim financial statements of Winfield Capital Corp. (the
"Company") have been prepared in accordance with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all information and disclosures necessary for a presentation
of the Company's financial position, results of operations and cash
flows in conformity with generally accepted accounting principles in
the United States of America. In the opinion of management, these
financial statements reflect all adjustments, consisting only of
normal recurring accruals, necessary for a fair presentation of the
Company's financial position, results of operations and cash flows for
such periods. The results of operations for any interim period are not
necessarily indicative of the results for the full year. These
financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the fiscal year ended March 31, 2002.
Note - 2 (Loss) per Common Share:
The computation of basic and diluted loss per common share is as
follows:
Six Months Ended
September 30,
-----------------------------
2002 2001
------------ ------------
Net (loss) available for common
stock equivalent shares deemed
to have a dilutive effect ........... ($ 3,369,960) ($ 6,898,733)
============ ============
(Loss) per common share
Basic ............................... ($ 0.63) ($ 1.29)
============ ============
Diluted ............................. ($ 0.63) ($ 1.29)
============ ============
Shares used in computation:
Basic:
Weighted average common shares ... 5,346,084 5,346,084
============ ============
Diluted:
Weighted average common shares ... 5,346,084 5,346,084
Common stock equivalents ......... A A
------------ ------------
5,346,084 5,346,084
============ ============
(A) For the six months ended September 30, 2002 and September 30, 2001 the
effect of exercising the outstanding stock options would have been
anti-dilutive and therefore, the use of common stock equivalent shares was
not considered.
-8-
WINFIELD CAPITAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 2 - (Loss) per Common Share: (Cont'd)
The computation of basic and diluted loss per common share is as
follows:
Three Months Ended
September 30,
-----------------------------
2002 2001
------------ ------------
Net (loss) available for common
stock equivalent shares deemed
to have a dilutive effect ........... ($ 1,461,831) ($ 4,649,807)
============ ============
(Loss) per common share
Basic ............................... ($ 0.27) ($ 0.87)
============ ============
Diluted ............................. ($ 0.27) ($ 0.87)
============ ============
Shares used in computation:
Basic:
Weighted average common shares ... 5,346,084 5,346,084
============ ============
Diluted:
Weighted average common shares ... 5,346,084 5,346,084
Common stock equivalents ......... B B
------------ ------------
5,346,084 5,346,084
============ ============
(B) For the three months ended September 30, 2002 and September 30, 2001 the
effect of exercising the outstanding stock options would have been
anti-dilutive and therefore, the use of common stock equivalent shares was
not considered.
Note 3 - Income Taxes
In accordance with Subchapter M of the Internal Revenue Code, no
provision for income taxes is necessary with respect to net investment
income and/or net realized short-term capital gains if the Company
elects to distribute not less than 90% of such income and/or gains to
shareholders. However, to the extent the Company elects to either
retain net realized long-term capital gains or net realized short-term
capital gains, the Company will pay all applicable Federal income
taxes on behalf of its shareholders.
-9-
WINFIELD CAPITAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 4 - Commitments and Contingencies
The Company is required to be in compliance with the capital
impairment rules, as defined by Regulation 107.1830 of the SBA
Regulations. As of September 30, 2002, the Company had an impairment
of its capital. As such, the SBA could declare the entire indebtedness
including accrued interest immediately due and payable. In addition,
the SBA could avail itself of any remedy available to the SBA to
effect the repayment of the Debentures, including transferring the
Company to the SBA's Office of Liquidation. If the SBA were to require
the Company to immediately pay back the entire indebtedness including
accrued interest, certain private security investments would need to
be disposed of in a forced sale which may result in proceeds less than
their carrying value. As such, this impairment could have a material
adverse effect on the Company's financial position, results of
operations and cash flows. The Company is in discussions with the SBA
to cure this impairment.
Note 5 - The Nasdaq Stock Market, Inc. (the "Nasdaq") Letters
On June 17, 2002, the Company received notice from the Nasdaq Stock
Market, Inc. ("Nasdaq") that for the preceding 30 consecutive trading
days, the Company's common stock had not maintained the minimum Market
Value of Publicly Held Shares of $5,000,000 as required for continued
inclusion by Marketplace Rule 4450(a)(2) (the "Rule") on the Nasdaq
National Market. Therefore, in accordance with Marketplace Rule
4450(e)(1), subject to appeal, the Company had 90 calendar days, or
until September 16, 2002, to regain compliance.
On July 23, 2002, the Company received notice from Nasdaq that for the
preceding 10 consecutive trading days, the Company's common stock had
not closed at the minimum $1.00 per share as required for continued
inclusion by Marketplace Rule 4450 (a) (5) ( the "Rule") on the Nasdaq
National Market. Therefore, in accordance with Marketplace Rule 4450
(e) (2), subject to appeal, the Company had 90 calendar days, or until
October 21, 2002, to regain compliance. If compliance with the Rule
had not been demonstrated by October 21, 2002, the Company's
securities would have been delisted from the Nasdaq National Market.
The Company cannot predict what effect, if any, such delisting from
the Nasdaq National Market would have on the trading of its
securities.
-10-
WINFIELD CAPITAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 5 - The Nasdaq Letters (Cont'd)
On September 25, 2002, the Company was notified that the staff of the
NASDAQ Listing Qualifications Department had approved the Company's
application to transfer the listing of its common stock $.01 par
value, from the NASDAQ National Market to the NASDAQ SmallCap Market.
Trading on the NASDAQ SmallCap Market commenced on September 26, 2002
under the symbol "WCAP". Winfield Capital's common stock will no
longer be traded on the NASDAQ National Market. The Company currently
meets all of the continued inclusion criteria for the NASDAQ SmallCap
Market, except for the minimum $1.00 bid price per share requirement
which must be complied with by January 21, 2003 unless the Company is
granted an additional grace period.
-11-
Item 2.
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Six Months Ended September 30, 2002 and September 30, 2001
Investment Income
Investment income decreased by $383,480 to $291,878 for the six month period
ended September 30, 2002 from $675,358 for the same period ended September 30,
2001. This primarily reflected a decrease in earnings from temporarily invested
funds of $265,171 as a result of a decrease in interest rates and a decrease in
the idle funds that were invested. Interest from Small Business concerns
decreased by $116,784 due mainly to the financial difficulties of a portfolio
company that generated quarterly interest of $60,000 in 2001 and $ 0 in 2002.
Interest Expense
Interest expense decreased from $976,661 for the six months ended September 30,
2001 to $944,849 for the same period ended September 30, 2002 due to a repayment
of $900,000 to the U.S. Small Business Administration (the "SBA") on September
1, 2001.
Operating Expenses
The Company's operating expenses decreased from $825,790 for the six months
ended September 30, 2001 to $804,421 for the six months ended September 30,
2002. Payroll and payroll related expenses increased by $33,040 principally due
to a matching 401 (K) expense, (the 401 (K) Plan was first implemented in
October 2001). Professional fees decreased by $49,108 due to the decrease in
legal and accounting fees. Insurance expense increased by $20,265 and there were
miscellaneous decreases of $25,566.
Realized (Loss) Gain on Investments
The Company realized a $45,512 loss on the sale of its entire equity position in
one portfolio company in fiscal 2003. In fiscal 2002, the Company realized a
$1,369,429 gain on the sale of a portion of its equity position in three
portfolio companies and its entire equity position in two portfolio companies
and the expiration of calls sold in two portfolio companies.
-12-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Changes in Unrealized Depreciation of Investments
There was an increase in unrealized depreciation of investments (excluding
short-term marketable securities) of $1,801,194 for the six months ended
September 30, 2002 compared to an increase in unrealized depreciation of
$7,148,716 (excluding short-term marketable securities) for the six months ended
September 30, 2001, principally related to the decline in market price of
publicly-traded portfolio securities.
-13-
Item 2.
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended September 30, 2002 and September 30, 2001
Investment Income
Investment income decreased by $141,568 to $152,167 for the three month period
ended September 30, 2002 from $293,735 for the same period ended September 30,
2001. This primarily reflected a decrease in earnings from temporarily invested
funds of $82,042 as a result of a decrease in interest rates and a decrease in
the idle funds that were invested. Interest from small business concerns
decreased by $58,928 due mainly to the financial difficulties of a portfolio
company that generated quarterly interest of $60,000 in 2001 and $ 0 in 2002.
Interest Expense
Interest expense increased from $491,845 for the three months ended September
30, 2001 to $505,894 for the same period ended September 30, 2002 due to an
adjustment of an interim interest rate by the U.S. Small Business Administration
(the "SBA").
Operating Expenses
The Company's operating expenses increased from $400,324 for the three months
ended September 30, 2001 to $431,934 for the three months ended September 30,
2002. Payroll and payroll related expenses increased by $16,980 principally due
to a matching 401 (K) expense (the 401 (K) Plan was implemented in October
2001). Insurance expense increased by $18,229. Professional fees decreased by
$12,589 due to a decrease in accounting fees. There were miscellaneous increases
of $8,990.
Realized (Loss) Gain on Disposition of Investments
The Company had a $89 loss on final disposition of one of its portfolio
investments for the three months ended September 30, 2002. There was a
$1,006,176 realized gain for the three months ended September 30, 2001 comprised
of a $842,846 gain on the expiration of calls sold in two portfolio companies
and a realized gain of $163,330 on the sale of a portion of its equity position
in one portfolio company.
-14-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Changes in Unrealized Depreciation of Investments
There was an increase in unrealized depreciation of investments (excluding
short-term marketable securities) of $617,496 for the three months ended
September 30, 2002 principally related to the decline in fair market value and
market prices of portfolio securities compared to a net decrease of $5,065,196
in unrealized appreciation (excluding short term marketable securities) for the
same period ended September 30, 2001 principally related to the decline in fair
market value and market prices of portfolio securities.
Liquidity and Capital Resources
The Company is required to be in compliance with the capital impairment rules,
as defined by Regulation 107.1830 of the SBA Regulations. As of September 30,
2002, the Company had an impairment of its capital. As such, the SBA could
declare the entire indebtedness including accrued interest immediately due and
payable. In addition, the SBA could avail itself of any remedy available to the
SBA to effect the repayment of the Debentures, including transferring the
Company to the SBA's Office of Liquidation. If the SBA were to require the
Company to immediately pay back the entire indebtedness including accrued
interest, certain private security investments would need to be disposed of in a
forced sale which may result in proceeds less than their carrying value. As
such, this impairment could have a material adverse effect on the Company's
financial position, results of operations and cash flows. The Company is in
discussions with the SBA to cure this impairment.
At September 30, 2002, the Company had cash and cash equivalents and short-term
marketable securities totaling $13,969,096. The Company believes that its cash
and its short-term investments, along with its ability to sell certain of its
publicly-traded portfolio investments will be adequate to meet both the
investment opportunities that the Company anticipates and its working capital
needs through September 30, 2003. However, if the SBA declares the entire
indebtedness including accrued interest immediately due and payable, certain
public and private security investments may need to be disposed of in a forced
sale which may result in proceeds less than their current fair value; as such,
by selling its public and private security investments, the Company may not
generate sufficient cash flows to repay the SBA Debentures as well as fund
operations in the ordinary course of business through September 30, 2003.
-15-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
& QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Forward-Looking Statements
This report and accompanying notes to the financial statements may contain
forward-looking statements. For this purpose, any statements contained in this
report and accompanying notes to the financial statements that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, words such as "may," "will," "could," "would,"
"should", "expect," "believe," "anticipate," "estimate," or "continue" or
comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
and actual results may differ materially depending on a variety of factors.
Reporting on Disposition of Investments
From time to time, in the ordinary course of business, the Company may liquidate
all or a portion of its portfolio investments. In this regard, the Company may
sell a portion of a single investment or sell portions of various investments it
has made. The Company's policy is to publicly report the results of such
transactions in its Form 10-K and Form 10-Q Reports filed with the Securities
and Exchange Commission under the Securities Exchange Act and as otherwise
required by applicable regulations and laws.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
The Company's earnings and cash flows are subject to fluctuations due to changes
in interest rates primarily from its investment of available cash balances in
bank money market funds with portfolios of investment grade corporate and U.S.
government securities, in individual bank certificates of deposit and U.S.
treasuries. Under its current policies, the Company does not use interest rate
derivative instruments to manage exposure to interest rate changes.
A portion of the Company's investment portfolio consists of fixed-rate debt
securities. Since these debt securities usually have relatively high fixed rates
of interest, minor changes in market yields of publicly-traded debt securities
have little or no effect on the values of debt securities in the Company's
portfolio and no effect on interest income. On the other hand, significant
changes in the market yields of publicly-traded debt securities may have a
material effect on the values of debt securities in the Company's portfolio. The
Company's investments in debt securities are generally held to maturity and
their fair values are determined on the basis of the terms of the debt security
and the financial condition of the issuer. As of September 30, 2002, the Company
had no publicly-traded debt securities in its portfolio.
-16-
WINFIELD CAPITAL CORP.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
CONTINUED & CONTROLS AND PROCEDURES
A portion of the Company's investment portfolio consists of debt and equity
securities of private companies. The Company anticipates little or no effect on
the value of these investments from modest changes in public market equity
valuations. Should significant changes in market valuations of comparable
publicly-owned companies occur, there may be a corresponding effect on
valuations of private companies, which would affect the value and the amount and
timing of proceeds eventually realized from these investments. A portion of the
Company's investment portfolio also consists of restricted common stocks and
warrants to purchase common stocks of publicly-owned companies. The fair values
of these restricted securities are influenced by the nature of applicable resale
restrictions, the underlying earnings and financial condition of the issuer, and
the market valuations of comparable publicly-owned companies. A portion of the
Company's investment portfolio also consists of unrestricted, freely marketable
common stocks of publicly-owned companies. These freely marketable investments
are directly exposed to equity price fluctuations, in that a change in an
issuer's public market equity price would result in an identical change in the
fair value of the Company's investment in such security. The Company may utilize
put and call option contracts to attempt to minimize the market risk of its
investments in publicly-owned companies. As of September 30, 2002, the Company
had no option contracts outstanding as part of its portfolio.
Item 4.
Controls and Procedures
a. Evaluation of Disclosure Controls and Procedures
Based on their evaluation of the Company's disclosure controls and
procedures conducted within 90 days of the date of filing this report on
Form 10-Q the Company's Chief Executive Officer and the Chief Financial
Officer have concluded that the Company's disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) promulgated under
the Securities Exchange Act of 1934) are effective to ensure that
information required to be disclosed by the Company in reports that it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in
Securities Exchange Commission rules and forms.
b. Changes in Internal Controls
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to
the date of their evaluation. There were no deficiencies or material
weaknesses, and therefore, there were no corrective actions taken.
-17-
CERTIFICATION PURSUANT TO
18 U.S.C.
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
We, Paul A. Perlin, Chief Executive Officer and R. Scot Perlin, Chief Financial
Officer of Winfield Capital Corp. (the "Company"), certify, that:
1. We have reviewed this quarterly report on Form 10-Q of Winfield Capital
Corp.
2. Based on our knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report.
3. Based on our knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this
quarterly report.
4. We are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Company and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Company, is made known to us by
others within the Company particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the Company's disclosure controls and
procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. We have disclosed, based on our most recent evaluation, to the Company's
auditors and the Audit Committee of the Company's Board of Directors (or
persons performing the equivalent function):
a) all significant deficiencies in the design of internal controls which
could adversely affect the Company's ability to record, process,
summarize and report financial data and have identified for the
Company's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls.
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6. We have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
/s/ Paul A. Perlin
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Paul A. Perlin
Chief Executive Officer
/s/ R. Scot Perlin
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R. Scot Perlin
Chief Financial Officer
November 13, 2002
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WINFIELD CAPITAL CORP.
PART II - OTHER INFORMATION
Item 5. - Other Information
Mr. David Greenberg has informed the Company of his intention to resign as an
executive officer and employee of the Company effective at the close of business
on December 31, 2002 in order to pursue other interests. He will continue to
serve as a member of Winfield Capital's Board of Directors. Present management
will assume his responsibilities and the Company does not currently intend to
hire a replacement.
Item 6. - Exhibits and Reports on Form 8-K
a. Exhibit Index
The following Exhibit is filed as part of this Quarterly Report on
Form 10-Q.
Exhibit No. Description
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99.1 Certification Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
b. Reports on Form 8-K
No reports on Form 8-K were filed during the second quarter of the
Registrant's fiscal year ending March 31, 2003.
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.
WINFIELD CAPITAL CORP.
(Registrant)
By: /s/ R. Scot Perlin
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R. Scot Perlin
Chief Financial Officer
Dated: November 13, 2002
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