As filed with the Securities and Exchange Commission on May 15, 2003
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, 2003
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, 2003 Commission File Number 0-9667
WINMILL & CO. INCORPORATED
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1897916
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(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, 2003, were as follows:
Class A Common Stock non-voting, par value $.01 per share - 1,588,520
shares
Class B Common Stock voting, par value $.01 per share - 20,000 shares
1
WINMILL & CO. INCORPORATED
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2003
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
- (Unaudited) March 31, 2003 3
Condensed Consolidated Statements of Income (Loss)
- (Unaudited) Three Months Ended March 31, 2003
and March 31, 2002 4
Condensed Consolidated Statements of Cash Flows
- (Unaudited) Three Months Ended
March 31, 2003 and March 31, 2002 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12
Item 3. Controls and Procedures 14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders During
First Quarter of the Year Ended December 31, 2003 15
Item 6. Exhibits and Reports on Form 8-K 15
CERTIFICATION SIGNATURE 18
2
WINMILL & CO. INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2003
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 1,270,350
Marketable securities (Note 2) 5,097,077
Other receivables 119,898
Prepaid expenses and other assets 91,384
-------
Refundable income tax 173,294
------------
Total Current Assets 6,752,003
------------
Equipment, furniture and fixtures, net 58,262
Intangible assets, net 622,294
Deferred income taxes (Note (8) 116,500
Other 413,002
------------
1,210,058
Total Assets $ 7,962,061
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities 179,835
-----------
Total Current Liabilities 179,835
-----------
Shareholders' Equity: (Notes 2,4,5,and 6)
Common Stock, $.01 par value
Class A, 10,000,000 shares authorized;
1,628,320 shares issued 16,283
Class B, 20,000 shares authorized;
20,000 shares issued and outstanding 200
Additional paid-in capital 6,807,986
Retained earnings 1,537,808
Notes receivable for common stock issued (521,610)
Accumulated other comprehensive (Loss) (333)
------------
7,840,334
Less treasury stock (58,108)
-----------
Total Shareholders' Equity 7,782,226
------------
Total Liabilities and Shareholders' Equity $ 7,962,061
============
See accompanying notes to consolidated financial statements.
3
WINMILL & CO. INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended March 31,
2003 2002
---- ----
Revenues:
Management, distribution and other fees $ 336,882 $ 343,616
Dividends, interest and other 38,647 63,972
----------- ----------
Revenue before net realized and unrealized
(losses)gains from proprietary securities trading 375,529 407,588
Net realized and unrealized (losses) gains
from proprietary securities trading (223,406) 317,184
----------- ----------
152,123 724,772
Expenses:
General and administrative 181,763 230,463
Marketing 99,633 124,652
Expense reimbursements to the Funds (Note 9) 38,538 49,450
Professional fees 17,000 38,440
Amortization and depreciation 17,059 8,919
----------- ----------
353,993 451,924
----------- ----------
Income (loss) before income taxes (201,870) 272,848
Income taxes (Credit) provision (Note 8) (89,800) 104,750
----------- ----------
Net Income (loss) $ (112,070) $ 168,098
=========== ==========
Per share data:
Basic
Net income (loss) $ (0.07) $ 0.10
Diluted
Net income (loss) $ (0.07) $ 0.10
Average Shares Outstanding:
Basic 1,588,820 1,628,320
Diluted 1,588,820 1,628,925
See accompanying notes to the consolidated financial statements.
4
WINMILL & CO. INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2003 2002
---- ----
Cash Flows from Operating Activities:
(Loss)net income $ (112,070) $ 168,098
----------- ----------
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 16,690 8,918
Unrealized (gain) on proprietary securities trading 223,743 (266,134)
Cash value of life insurance (8,234) (8,250)
Other (493) 1,465
(Increase) decrease in:
Management, distribution and other fees receivable 51,372 (13,705)
Interest, dividends, and other receivables (579) 56,540
Prepaid expenses and other assets 8,731 18,374
Deferred tax asset (credit) (94,500) 127,300
Increase (decrease) in:
Accounts payable (10,987) 1,955
Accrued professional fees (3,550) (10,672)
Accrued payroll and other related costs (25,000) (25,104)
Accrued other expenses 1,956 (39,604)
---------- ----------
Total adjustments 159,149 (148,917)
---------- ----------
Net cash from operating activities 47,079 19,181
---------- ----------
Cash Flows from Investing Activities:
Proprietary securities trading sales 864 -
Proprietary securities trading purchases (34,603) (92,092)
Capital expenditures (2,949) -
---------- ----------
Net cash from investing activities (36,688) 92,092
---------- ----------
Cash Flows from Financing Activities:
Repayment of notes receivable 5,431 -
---------- ---------
Net cash from financing activities 5,431 -
---------- ---------
Net increase (decrease) in cash and cash equivalents 15,822 (72,911)
Cash and Cash Equivalents:
At beginning of period 1,254,528 2,443,693
---------- ----------
At end of period $1,270,350 $2,370,782
========== ==========
Supplemental disclosure: The Company paid no Federal income taxes during the
three months ended March 31, 2003 and 2002.
See accompanying notes to the consolidated financial statements.
5
WINMILL & CO. INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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 (three open-end funds), two
closed-end funds, and proprietary securities trading.
BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of the
Company and all of its subsidiaries. Substantially all inter-company
accounts and transactions 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, 2003, the Company and subsidiaries had invested approximately
$975,000 in an affiliated money market fund.
MARKETABLE SECURITIES
Marketable securities held by the Company and its non-broker/dealer
subsidiaries are considered to be "available-for-sale" and are marked to
market with the unrealized gain or loss included in stockholders' equity.
Marketable securities held by the broker/dealer subsidiary are marked to
market with unrealized gains and losses included in earnings.
6
INCOME TAXES
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.
The Company and its wholly owned subsidiaries file consolidated income tax
returns.
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, 2003 accumulated depreciation amounted to approximately $826,900.
INTANGIBLE ASSETS
The Company adopted Statements of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142") in 2002. In accordance
with SFAS 142, intangible assets with a finite useful life are amortized
over the useful life. In addition, intangible assets are reviewed for
impairment and the remaining useful life evaluated at least annually to
determine whether events and circumstances warrant a revision to the
remaining period of amortization. As such, the Company has amortized its
intangible assets over fifteen years using the straight-line method. At
March 31, 2003, accumulated amortization on intangible assets amounted to
approximately $188,400.
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 activities and are
classified into two groups - fund services and proprietary trading. 7
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,
---------------------------
2003 2002
---- ----
Numerator for basic and diluted earnings per share:
Net (loss) income $ (112,070) $ 168,098
Denominator:
Denominator for basic earnings per share
weighted-average shares 1,588,820 1,628,320
Effect of dilutive securities:
Employee Stock Options - 605
----------- ----------
Denominator for diluted earnings per share
adjusted weighted-average shares and
assumed conversions 1,588,820 1,628,925
========== ==========
2. MARKETABLE SECURITIES
At March 31, 2003, marketable securities, at market, consisted of
Broker/dealer subsidiary
Affiliated investment companies $4,257,870
Equity securities 836,888
----------
Total broker/dealer's securities (cost $5,306,078) 5,094,758
----------
Other companies' available-for-sale securities
Unaffiliated investment companies 2,319
----------
Total available-for-sale securities (cost $2,652) 2,319
---------
$5,097,077
==========
At March 31, 2003, the Company had $333, net of deferred income taxes, of
unrealized losses on "available-for-sale securities" which is reported as a
separate component of consolidated shareholders' equity. Included in the
broker/dealer's holding of affiliated investment companies are $2,360,257
of (approximately 25% of outstanding) shares of Bexil Corporation and
$1,627,397 of (approximately 20% of outstanding) shares of Tuxis
Corporation, both of which have received shareholder approval to change
from registered investment companies to operating companies.
3. LEASE COMMITMENTS
The Company leases office space under a lease that expires December 31,
2003. The rent is approximately $109,000 per annum including electricity.
8
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, 2003, none of the Preferred Stock was issued.
5. NET CAPITAL REQUIREMENTS
The Company's broker/dealer subsidiary is a member firm of the National
Association of Securities Dealers, Inc. ("NASD") and is registered with the
Securities and Exchange Commission as a broker/dealer. Under its membership
agreement with the NASD, the broker/dealer must maintain minimum net
capital, as defined, of not less than $100,000, 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, 2003,
the subsidiary had: net capital of approximately $4,610,800; net capital
requirements of $100,000; excess net capital of approximately $4,510,800;
and the ratio of aggregate indebtedness to net capital was approximately
0.03 to 1.
6. STOCK OPTIONS
On December 6, 1995, the Company adopted a Long-Term Incentive Plan which,
as amended, provides for the granting of a maximum of 600,000 options to
purchase Class A Common Stock to directors, officers and key employees of
the Company or its subsidiaries. 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 2,500 options
each on December 10, 2002. 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 applies APB Opinion 25 and related interpretations in according
for its stock option plans. Accordingly, no compensation cost has been
recognized for its stock option plans. Pro forma compensation cost for the
Company's plan 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 pro
forma 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,
2003 2002
------- --------
Net(loss) income As Reported $ (112,070) $ 168,098
Pro forma $ (112,070) $ 164,002
Earning per share
Basic As Reported $ (0.07) $ 0.10
Pro forma (0.07) $ 0.10
Diluted As Reported $ (0.07) $ 0.10
Pro forma (0.07) $ 0.10
The fair value of each option grant is estimated as of the date of grant
using the Black-Scholes option-pricing model.
9
A summary of the status of the Company's stock option plan as of March 31,
2003 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, 2002 281,500 $1.59
Outstanding at March 31, 2003 281,500 $1.59
There were 281,500 options exercisable at March 31, 2003 with a
weighted-average exercise price of $1.59. There were no options granted
during the three months ended March 31, 2003.
The following table summarizes information about stock options outstanding
at March 31, 2003:
Options Outstanding
-----------------------------------------------------------
Range of Number Remaining Weighted-Average
Exercise Prices Outstanding Contractual Life Exercise Price
$1.50 - $1.60 121,500 3.15 years $1.50
$1.60 - $1.66 160,000 3.32 years $1.65
In connection with the exercise of the options, the Company received from
certain officers notes with an interest rates ranging from 2.45% to 2.48%
per annum payable December 15, 2004. The balance of the notes at March 31,
2003 was $521,610, 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 plan 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, 2003 and
March 31, 2002 were $11,565 and $12,420, respectively.
8. INCOME TAXES
The provision (benefit) for income taxes for the three months ended March
31, 2003 and 2002 are as follows:
2003 2002
Current ---- ----
Federal $ 4,000 $ (19,350)
State and local 700 (3,200)
------ ---------
4,700 (22,550)
Deferred (94,500) 127,300
-------- ---------
$ (89,800) $ 104,750
========= =========
Deferred tax assets of $116,500 are comprised primarily of unrealized
losses on investments at March 31, 2003.
10
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, 2003 and 2002, the Funds paid approximately $9,900 and $12,500
respectively, for record keeping services to ISC, which paid such amounts
to certain brokers for performing such services. These reimbursements for
record keeping services are included in management, distribution and other
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 $38,538 and $49,450 for
the quarter ended March 31, 2003 and 2002, 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, 2003,
the policy had a cash surrender value of approximately $282,400 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.
Fund Proprietary
March 31, 2003 Services Trading Total
---------------------------------------------
Revenues $ 350,599 $ (198,476) $ 152,123
Income (loss) from operations 126,013 (327,883) (201,870)
Depreciation and amortization 1,283 2,276 3,559
Capital expenditures 2,949 - 2,949
Gross Identifiable Assets 2,874,936 5,101,625 7,976,561
Fund Proprietary
March 31, 2002 Services Trading Total
---------------------------------------------
Revenues $ 309,231 $ 415,541 $ 724,772
Income (loss) from operations 57,790 215,058 272,848
Depreciation and amortization 6,760 2,159 8,919
Capital expenditures - - -
Gross Identifiable Assets 3,397,878 4,804,114 8,201,992
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, 2003, 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.
The Company has a Death Benefits Agreement ("Agreement") with the Company's
Chairman, which was entered into in 1994 and amended in 2002. Following his
death, the Agreement provides for annual payments, equal to 80% of his
11
average annual compensation received from the Company, its affiliates,
subsidiaries and other related entities 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, 2003 Compared to Three Months Ended March 31, 2002
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 equity 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 $572,649 or 79%, which was primarily due to a decrease
in net realized and unrealized gains on investments, management, distribution
and other fees and dividends, interest and other. In the three months ended
March 31, 2003 the Company had net realized and unrealized losses of $223,406
from proprietary securities trading as compared to a gain of $317,104 in the
three months ended March 31, 2002. Management, distribution and other fees
decreased $6,734 or 2% due to lower net assets in the Funds. Net assets under
management were less in the three months ended March 31, 2003 versus March 31,
2002. Net assets were approximately $125 million at March 31, 2002, $123 million
at June 30, 2002, $129 million at September 30, 2002, $129 million at December
31, 2002, and $115 million at March 31, 2003.
Total expenses decreased $97,931 or 22% over this period of last year. General
and administrative expenses decreased $48,700 or 21% due to lower employee
costs. Amortization and depreciation expense increased $8,140. Marketing expense
decreased $25,019 or 20% due to lower fulfillment and printing costs. Expense
reimbursement to the Funds decreased $10,912 or 22%. Professional fees decreased
$21,440 or 56%.
Net loss for the period was $112,070 or $.07 per share on a diluted basis as
compared to net income of $168,096 or $.10 per share on a diluted basis for
March 31, 2002.
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, 2003 December 31, 2002
-------------- -----------------
Working Capital $6,572,168 $6,768,292
Total Assets $7,962,061 $8,106,436
Long-Term Debt - -
Shareholders' Equity $7,782,226 $7,889,020
Working capital, total assets and shareholders' equity decreased $196,124,
$144,375 and $106,794, respectively, for the three months ended March 31, 2003.
Working capital, total assets and shareholders' equity decreased primarily due
to net loss in the first quarter of 2003.
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 fund services and
proprietary securities trading, 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 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 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 proprietary securities trading 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;
the level of expenses assumed by the Company for the Funds as a result of
expense reimbursement plan or waiver of expenses to increase a Fund's
performance; 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 operating results will also depend on the results of Bexil and
Tuxis held by the Company's broker/dealer subsidiary. Fluctuations in the values
of these holdings, resulting in unrealized gains and losses, will be included in
earnings.
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
Item 3. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. The Company's chief
executive officer and chief financial officer, after evaluating the
effectiveness of the Company's "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934 Rules 13a-14(c)) as of a date (the
"Evaluation Date") within 90 days before the filing date of this quarterly
report, have concluded that, as of the Evaluation Date, the Company's disclosure
controls and procedures were effective.
(b) Changes in internal controls. There were no significant changes in the
Company's internal controls or to the Company's knowledge, in other factors that
could significantly affect the Company's disclosure controls and procedures
subsequent to the Evaluation Date.
15
Part II. Other Information
Items 4. Submission of Matters to a Vote of Security Holders During First
Quarter of the Year Ended December 31, 2003.
At the annual meeting of Class B shareholder held March 11, 2003, 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 report on Form 8-K was filed during the quarter covered by this report.
16
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, 2003 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, 2003 /s/ Bassett S. Winmill
----------------------
Bassett S. Winmill
Chairman of the Board, Director
Dated: May 15, 2003 /s/ Robert D. Anderson
----------------------
Robert D. Anderson
Vice Chairman, Director
Dated: May 15, 2003 /s/ Thomas B. Winmill
---------------------
Thomas B. Winmill, Esq.
President, General Counsel,
Director
Dated: May 15, 2003 /s/ Charles A. Carroll
----------------------
Charles A. Carroll
Director
Dated: May 15, 2003 /s/ Edward G. Webb, Jr.
-----------------------
Edward G. Webb, Jr.
Director
Dated: May 15, 2003 /s/ Mark C. Winmill
-------------------
Mark C. Winmill
Director
17
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, 2003 and for the three-month period there 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, 2003
18
Certification- Exchange act rules 13a-14 and 15d-14
I, Thomas B. Winmill, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Winmill & Co.
Incorporated;
2. Based on my 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 my 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
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant'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. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant'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 registrant's internal controls; and
6. The registrant's other certifying officers and I 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.
Date: May 15, 2003
/s/ Thomas B. Winmill
Chief Executive Officer
19
Certification- Exchange act rules 13a-14 and 15d-14
I, William G. Vohrer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Winmill & Co.
Incorporated;
2. Based on my 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 my 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
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant'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. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant'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 registrant's internal controls; and
6. The registrant's other certifying officers and I 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.
Date: May 15, 2003
/s/ William G. Vohrer
Chief Financial Officer
21
CEO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Winmill & Co. Incorporated (the
"Company") on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas
B. Winmill, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ Thomas B. Winmill
Thomas B. Winmill
Chief Executive Officer
May 15, 2003
CFO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Winmill & Co. Incorporated (the
"Company") on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, William
G. Vohrer, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/William G. Vohrer
William G. Vohrer
Chief Financial Officer
May 15, 2003