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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, 2003
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 |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12-b-2 of the Exchange Act).
Yes |_| No |X|
Registrant had 5,346,084 shares of common stock outstanding as of September 30,
2003.
- --------------------------------------------------------------------------------
This report consists of 26 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, 2003
and 2002 3 - 4
Condensed Balance Sheets - as of
September 30, 2003 and March 31, 2003 5 - 6
Condensed Statements of Cash Flows -
Six Months Ended September 30, 2003
and 2002 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 - 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security
Holders 18 - 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 20
Exhibit 31.1 - Section 302 Officer Certification 21 - 22
Exhibit 31.2 - Section 302 Officer Certification 23 - 24
Exhibit 32.1 - Section 906 Officer Certification 25
Exhibit 32.2 - Section 906 Officer Certification 26
Item 1.
WINFIELD CAPITAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
Six Months Ended
September 30,
2003 2002
----------- -----------
Investment income
Interest from small business concerns $ 699,619 $ 30,608
Interest from invested idle funds 47,281 256,217
Other income 4,851 5,053
----------- -----------
Total investment income 751,751 291,878
----------- -----------
Expenses
Interest 921,089 944,849
Payroll and payroll-related expenses 303,642 439,089
General and administrative expenses 168,820 177,249
Other operating expenses 179,414 188,083
----------- -----------
Total investment expenses 1,572,965 1,749,270
----------- -----------
Investment loss - net (821,214) (1,457,392)
Realized loss on investments (35,877) (45,512)
Change in unrealized depreciation of investments 1,310,036 (1,867,056)
----------- -----------
Net increase (decrease) in shareholders'
equity resulting from operations $ 452,945 ($3,369,960)
=========== ===========
Per share net increase (decrease) in
shareholders equity resulting from operations
Basic $ 0.08 ($ 0.63)
=========== ===========
Diluted $ 0.08 ($ 0.63)
=========== ===========
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,
2003 2002
----------- -----------
Investment income
Interest from small business concerns $ 356,442 $ 13,665
Interest from invested idle funds 23,956 135,674
Other income 2,226 2,828
----------- -----------
Total investment income 382,624 152,167
----------- -----------
Expenses
Interest 482,134 505,894
Payroll and payroll-related expenses 151,212 223,528
General and administrative expenses 74,260 94,316
Other operating expenses 96,106 114,090
----------- -----------
Total investment expenses 803,712 937,828
----------- -----------
Investment loss - net (421,088) (785,661)
Realized loss on investments (126,914) (89)
Change in unrealized depreciation of investments 824,189 (676,081)
----------- -----------
Net increase (decrease) in shareholders'
equity resulting from operations $ 276,187 ($1,461,831)
=========== ===========
Per share net increase (decrease) in
shareholders equity resulting from operations
Basic $ 0.05 ($ 0.27)
=========== ===========
Diluted $ 0.05 ($ 0.27)
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
-4-
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
ASSETS
Sept. 30, March 31,
2003 2003
----------- -----------
Investments at value:
Loans and notes receivable $ 8,220,703 $ 8,371,521
Equity interests in small business
concerns 10,972,297 10,220,109
----------- -----------
Total investments 19,193,000 18,591,630
Cash and cash equivalents 3,360,422 4,396,206
Short-term marketable securities 1,788,602 3,454,226
Accrued interest receivable 72,573 85,276
Due from broker 122,878 --
Furniture and equipment (net of
accumulated depreciation of
$44,434 at September 30, 2003
and $41,880 at March 31, 2003) 10,692 13,246
Other assets 32,279 115,670
----------- -----------
Total assets $24,580,446 $26,656,254
=========== ===========
-5-
WINFIELD CAPITAL CORP.
CONDENSED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
Sept. 30, March 31,
2003 2003
------------ ------------
Liabilities
Debentures payable to the U.S. Small
Business Administration $ 21,350,000 $ 24,650,000
Deferred income 115,512 129,102
Accrued expenses 1,170,894 386,057
------------ ------------
Total liabilities 22,636,406 25,165,159
------------ ------------
Commitments and contingencies
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, 2003 and
at March 31, 2003 53,461 53,461
Additional paid-in capital 19,709,170 19,709,170
Accumulated deficit (4,950,829) (4,093,738)
Unrealized depreciation on investments -
net (12,867,762) (14,177,798)
------------ ------------
Total shareholders' equity 1,944,040 1,491,095
------------ ------------
Total liabilities and
shareholders' equity $ 24,580,446 $ 26,656,254
============ ============
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,
2003 2002
----------- -----------
Cash flows from operating activities
Net increase (decrease) in shareholders'
equity resulting from operations $ 452,945 ($3,369,960)
Adjustments to reconcile net increase
(decrease) in shareholders' equity
resulting from operations to net cash
used in operating activities
Amortization of deferred income (13,590) --
Change in unrealized depreciation
on investments (1,310,036) 1,867,056
Realized loss on investments 36,689 45,423
Depreciation and amortization 2,554 2,842
Amortization of debenture costs -- 39,106
(Accretion) amortization of interest to
face value of notes and treasury bills (199,646) 39,028
Changes in assets and liabilities
Due from broker (122,878) --
Accrued interest receivable 12,703 11,241
Other assets 83,391 52,807
Accrued expenses 784,837 (40,754)
----------- -----------
Net cash used in operating activities (273,031) (1,353,211)
----------- -----------
Cash flows from investing activities
Purchases of short-term marketable
securities -- (4,584,754)
Proceeds from short-term marketable
securities 1,650,000 6,334,000
Proceeds from sale of investments/return
of capital 512,693 358,705
Investments originated (19,924) (2,157,208)
Proceeds from collection of loans 394,478 55,533
----------- -----------
Net cash provided by investing
activities 2,537,247 6,276
------------ ------------
Cash flows from financing activities
Repayment of debentures payable to the SBA (3,300,000) --
----------- -----------
Net cash used in financing
activities (3,300,000) --
----------- -----------
Decrease in cash and cash equivalents (1,035,784) (1,346,935)
Cash and cash equivalents - beginning
of period 4,396,206 4,416,989
----------- -----------
Cash and cash equivalents - end of period $ 3,360,422 $ 3,070,054
=========== ===========
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, 2003.
Note 2 - Earnings (Loss) per Common Share:
The computation of basic and diluted income (loss) per common share
is as follows:
Six Months Ended
September 30,
--------------------------
2003 2002
----------- -----------
Net income (loss) available for
common stock equivalent shares
deemed to have a dilutive effect $ 452,945 ($3,369,960)
=========== ===========
Income (loss) per common share
Basic $ 0.08 ($ 0.63)
=========== ===========
Diluted $ 0.08 ($ 0.63)
=========== ===========
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, 2003 and September 30, 2002 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 - Earnings (Loss) per Common Share: (Cont'd)
The computation of basic and diluted income (loss) per common share
is as follows:
Three Months Ended
September 30,
--------------------------
2003 2002
----------- -----------
Net income (loss) available for
common stock equivalent shares
deemed to have a dilutive effect $ 276,187 ($1,461,831)
=========== ===========
Income (loss) per common share
Basic $ 0.05 ($ 0.27)
=========== ===========
Diluted $ 0.05 ($ 0.27)
=========== ===========
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, 2003 and September 30, 2002 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
since the Company has elected 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
On April 30, 2003, the SBA notified the Company that it is no longer
in compliance with the SBA's capital impairment rules, as defined by
regulation 107.1830 of the SBA Regulations. Based on this
non-compliance, the SBA has accelerated the maturity date of the
Company's debentures to a single demand note including accrued
interest. Interest payments are no longer due on a semiannual basis,
but interest continues to accrue. In addition, the SBA has
transferred the Company to the SBA's Office of Liquidation where any
new investments and material expenses are subject to prior SBA
approval. The SBA has the right to institute proceedings for the
appointment of the SBA or its designee as receiver.
These matters raise substantial doubt about the Company's ability to
continue as a going concern. Management has submitted a plan to the
SBA providing for the liquidation of the Company over a three-year
period; however, to date, the SBA has not indicated whether it will
approve of the proposed plan. In addition, the Company continues to
pursue alternatives to cure its impairment under the SBA regulations
such as raising additional financing. The financial statements do
not include any adjustments relating to the recoverability of the
carrying amount of the recorded assets or the amount of liabilities
that might result from the outcome of these uncertainties. The
Company cannot be certain that additional equity financing will be
available when required or, if available, that it can secure it on
terms satisfactory to the Company. As such, no assurance can be made
that the Company will be successful in its ability to consummate or
implement these or any other strategic alternatives.
Note - 5 The Nasdaq Stock Market, Inc.
On April 11, 2003, the Company received notice from the Nasdaq Stock
Market, Inc. that effective April 15, 2003 the Company's securities
were delisted from the Nasdaq Smallcap Market. The Company's
securities are quoted on the OTC Bulletin Board effective April 15,
2003 with the assigned symbol "WCAP".
-10-
WINFIELD CAPITAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note - 6 Stock-Based Employee Compensation Plan
At September 30, 2003, the Company had one stock-based employee
compensation plan. The Company accounts for the plan under the
recognition and measurement principles of APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related
Interpretations. No stock-based employee compensation cost is
reflected in net income, as all options granted under those plans
had an exercise price equal to the market value of the underlying
common stock on the date of the grant. For the six months and three
months ended September 30, 2003 and 2002, there would be no effect
on net income and earnings per share if the Company had applied the
fair value recognition provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee
compensation, as no options were granted nor vested during those
periods.
On April 22, 2003, the FASB determined that stock-based compensation
should be recognized as a cost in the financial statements and that
such cost be measured according to the fair value of the stock
options. The FASB has not as yet determined the methodology for
calculating fair value and plans to issue an exposure draft letter
this year that could become effective in 2004. The Company will
continue to monitor communications on this subject from the FASB in
order to determine the impact on the Company's financial statements.
-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, 2003 and September 30, 2002
Investment Income
Investment income increased by $459,873 to $751,751 for the six month
period ended September 30, 2003 from $291,878 for the same period ended
September 30, 2002. This primarily reflected an increase in interest from
small business concerns of $669,011 as a result of the Company's increased
investments in loans. Interest from idle funds decreased $208,936 during
this period as a result of a decrease in interest rates and a decrease in
idle funds that were invested and other income decreased $202.
Interest Expense
Interest expense decreased by $23,760 to $921,089 for the six months ended
September 30, 2003 from $944,849 for the same period ended September 30,
2002. This decrease resulted from a repayment of a debenture to the U.S.
Small Business Administration.
Operating Expenses
The Company's operating expenses decreased from $804,421 for the six
months ended September 30, 2002 to $651,876 for the six months ended
September 30, 2003. Payroll and payroll-related expenses decreased by
$135,447 due to the resignation of an executive officer effective December
31, 2002, professional fees increased by $33,818 and amortization of
debenture costs decreased by $39,107. There were miscellaneous net
decreases of $11,809.
Realized Loss on Disposition of Investments
The Company realized a $35,877 loss on the sales of its entire positions
in four portfolio companies and a portion of its position in another
portfolio company through the second quarter of fiscal 2004. Through the
second quarter of fiscal 2003, the Company realized a $45,512 loss on the
sale of its entire equity position in one portfolio company.
-12-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Changes in Unrealized Depreciation of Investments
There was a decrease in unrealized depreciation of investments of
$1,310,036 (or $1,317,415 excluding short-term marketable securities) for
the six months ended September 30, 2003, compared to an increase in
unrealized depreciation of $1,867,056 (or $1,801,194 excluding short-term
marketable securities) for the six months ended September 30, 2002,
principally related to the increase in fair value of two portfolio
securities in the first quarter of fiscal 2004 and the decline in market
price of publicly traded portfolio securities in the second quarter of
fiscal 2003.
Results of Operations
Three Months Ended September 30, 2003 and September 30, 2002
Investment Income
Investment income increased by $230,457 to $382,624 for the three month
period ended September 30, 2003 from $152,167 for the same period ended
September 30, 2002. This primarily reflected an increase in interest from
small business concerns of $342,777 as a result of the Company's increased
investments in loans. Interest from idle funds decreased $111,718 during
this period as a result of a decrease in interest rates and a decrease in
idle funds that were invested and other income decreased $602.
Interest Expense
Interest expense decreased by $23,760 to $482,134 for the three months
ended September 30, 2003 from $505,894 for the same period ended September
30, 2002. This decrease resulted from a repayment of a debenture to the
U.S. Small Business Administration.
Operating Expenses
The Company's operating expenses decreased from $431,934 for the three
months ended September 30, 2002 to $321,578 for the three months ended
September 30, 2003. Payroll and payroll-related expenses decreased by
$72,316 due to the resignation of an executive officer effective December
31, 2002, professional fees increased by $16,753, insurance expense
decreased by $12,029 and stockholder relations costs decreased by $15,268.
There were miscellaneous net decreases of $27,496.
-13-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Realized Loss on Disposition of Investments
The Company realized a $126,914 loss on the sales of its entire positions
in three portfolio companies and a portion of its position in another
portfolio company in the second quarter of fiscal 2004. In the second
quarter of fiscal 2003, the Company realized an additional $89 loss on the
sale of its entire equity position in one portfolio company.
Changes in Unrealized Depreciation of Investments
There was a decrease in unrealized depreciation of investments of $824,189
(or $832,352 excluding short-term marketable securities) for the three
months ended September 30, 2003, compared to an increase in unrealized
depreciation of $676,081 for the three months ended September 30, 2002,
principally related to the increase in fair value of two portfolio
securities in the second quarter of fiscal 2004 and the decline in market
price and fair value of portfolio securities in the second quarter of
fiscal 2003.
Liquidity and Capital Resources
At September 30, 2003, the Company held cash and short-term marketable
securities totaling $5,149,024.
-14-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
According to the SBA Regulations, the Company is required to be in
compliance with the capital impairment rules, as defined by regulation
107.1830 of the SBA Regulations. The Company has been notified by the SBA
that the Company is no longer in compliance with the SBA's capital
impairment requirements and that the SBA has accelerated the maturity date
of Winfield Capital's debentures. The aggregate principal, interest and
fees due under the debentures totaled approximately $22.3 million as of
September 30, 2003, including interest and fees due through the next
semi-annual payment date. The Company repaid $3,300,000 of the amounts due
under the debentures in August 2003. The SBA has transferred Winfield
Capital's account to liquidation status where any new investments and
material expenses are subject to prior SBA approval. Although it has not
done so as of the date of this filing, and may not do so, the SBA has the
right to institute proceedings for the appointment of the SBA or its
designee as receiver. If the SBA were to require the Company to
immediately pay back the entire indebtedness including accrued interest,
certain private security investments may need to be disposed of in a
forced sale which may result in proceeds less than their carrying value at
September 30, 2003. As such, this impairment could have a material adverse
effect on the Company's financial position, results of operations and cash
flows which raises substantial doubt about the Company's ability to
continue as a going concern. Management has submitted a plan to the SBA
providing for the liquidation of the Company over a three-year period;
however, to date, the SBA has not indicated whether it will approve of the
proposed plan. The Company continues to explore various strategic
alternatives, including a third party equity infusion, although there can
be no assurance that it will be successful in its ability to consummate or
implement these or any other strategic alternatives.
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,"
"continue," "provided," 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.
-15-
WINFIELD CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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, 2003, 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 traded
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, 2003, 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 Chief
Financial Officer have concluded that the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e)and 15d-15(e)
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.
-17-
WINFIELD CAPITAL CORP.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
CONTINUED & CONTROLS AND PROCEDURES
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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On September 9, 2003, the Company held its annual meeting of
shareholders in New York, New York. The holders of 5,055,426 shares
of Common Stock were present or represented by proxy and,
accordingly, a quorum was present. The following matters were voted
upon and received the votes set forth.
1. All of the following persons nominated were elected as
directors and received the number of votes set opposite their
respective names.
VOTES FOR VOTES WITHHELD
Joel I. Barad 4,917,408 138,018
Barry J. Gordon 4,917.408 138,018
David Greenberg 4,913,108 142,316
Bruce A. Kaufman 4,913,708 141,718
Paul A. Perlin 4,913,193 142,233
R. Scot Perlin 4,912,693 142,733
Allen L. Weingarten 4,915,696 139,730
-18-
WINFIELD CAPITAL CORP.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
CONTINUED & CONTROLS AND PROCEDURES
Item 4. Submission of Matters to a Vote of Security Holders (Cont'd)
2. The Company's proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent
accounts for the fiscal year ending March 31, 2004 received
5,020,711 votes FOR and 34,715 votes AGAINST, with 0
ABSTENTIONS.
Item 5. Other Information
None.
-19-
WINFIELD CAPITAL CORP.
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
a. Exhibit Index
The following Exhibits are filed as part of this Quarterly
Report on Form 10-Q.
Exhibit No. Description
----------- -----------
31.1 and 31.2 Section 302 Certifica-
tions
32.1 and 32.2 Certifications 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
On October 18, 2003 a Form 8-K was filed by the Company in
connection with a change in the Company's certifying
accountant. PricewaterhouseCoopers LLP resigned as the
independent public accountants of the Company on October 8,
2003. On October 14, 2003 with the approval of the Company's
Board of Directors, the Company engaged the accounting firm of
Lazar Levine & Felix LLP as its independent public accountants
beginning with the fiscal year ending March 31, 2004 and to
review the Company's interim financial statements beginning
with the fiscal quarter ended September 30, 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
----------------------------
R. Scot Perlin
Chief Financial Officer
Dated: November 13, 2003
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