Item 1. Business.
Spectrum Equities, Inc. (the "Company") is currently inactive, having emerged from reorganization under Chapter 11 of the Bankruptcy Code on October 5, 1995. The Company is currently searching for an operating company seeking to establish itself as a publicly reporting company through a reorganization transaction with the Company.
The Company believes that it has the potential for assisting such an operating company in entering the public marketplace on an expeditious and financially beneficial basis. However, there can be no assurance that any such reorganization transaction will take place or if it does take place, that a meaningful market for the Company's common stock will be established or maintained.
The Company was organized as a Delaware corporation in 1987 under the name Vision Capital, Inc. On March 31, 1989, it completed a public offering of 10,000 units at a price of $5.00 each which units were included in a registration statement filed with the Securities and Exchange Commission. On May 31, 1990, Vision entered into an agreement of merger with Wilmoth's Color Lab, Inc., ("Wilmoth"), a Tennessee Corporation, to acquire all of the issued and outstanding shares of common stock of Wilmoth in exchange for a total of 15,340,000 newly issued shares of Vision common stock, which merger resulted in a change in the voting control, principal business, and management of Vision. By September 1, 1990, the merger of Wilmoth into Vision was consummated and Vision changed its name to Diversified Photographic Industries, Inc. and continued the operations of Wilmouth, a photo finishing laboratory in Memphis, Tennessee. Wilmoth conducted operations in that location through the date of the merger. The Company continued its operations as a photo finishing laboratory, processing and printing film for commercial photographers and photographic studios and, including portrait studio operations, up until the time that the Company ceased operations on March 15, 1992. At that time, the secured creditors foreclosed the principal assets of the Company and the remaining unsecured assets were sold to United Color Lab, Inc. on August 21, 1992 for the sum of $85,000.00. From that time the Company has been dormant. The Company filed for reorganization under Chapter 11 of the Bankruptcy Code in U.S. Bankruptcy Court for the Northern District of Texas and its Plan of Reorganization was approved in 1995 and the Company emerged as a corporate shell with no liabilities relating to its prior business ventures. It changed its name to Spectrum Equities Inc. on February 26, 1996.
Its offices are currently located at 9942 N.W. 6th Place, Plantation, Florida 33324 and its telephone number at that address is (954) 967-4916.
Employees
At the date hereof the Company had one employee, its President.
Item 2.
Item 2. Properties
The Company's executive offices are provided as needed by its President.
Item 3.
Item 3. Legal Proceedings.
The Company filed a voluntary petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code on January 5, 1994 with the U.S. Bankruptcy Court for the Northern District of Texas. Its Plan of Reorganization was approved by the Court on October 5, 1995.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters.
There is no known market for the Company's common stock at the present time. As of November 7, 1996, there were 65 holders of record of the Company's common stock.
The Company has not paid any dividends.
Item 6.
Item 6. Selected Financial Data.
The following data have been derived from financial statements that have been audited by Grant-Schwartz Associates, CPAs, independent accountants, and should be read in conjunction with such statements appearing herein:
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation.
The Company is still in the developmental stage since emerging from Chapter 11 in October 1995. The Company anticipates that it will require minimal working capital in order to continue the search for an operating company to acquire. Since emerging from bankruptcy all of its minimal working capital needs were met by its shareholders. There can be no assurance that the Company will be able to successfully complete the transition from a development stage company to an operating company.
Item 8.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is listed in Part IV, Item 14(a)1 and Item (a)2 and such information is filed as part of this report.
Item 9.
Item 9. Changes in and Disagreements with Accounting and Financial Disclosures.
In 1996 the Company engaged Grant Schwartz Associates, CPAs as independent auditor to audit the financial reports for the five years ended September 30, 1995. This engagement arose out of the current managements intention to bring the Company into compliance with the current reporting requirements of the Securities Exchange Act of 1934 and not due to any disagreement with the Company's prior auditors.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
The directors and executive offices of the Company are as follows:
Robert Harris has been President, Secretary/Treasurer and sole Director of the Company since February 1996. From November 1994 to the present, Mr. Harris has been Director and Secretary of DGL, Inc. in the food/beverage industry. From July 1991 to the present, he has been a marketing representative for Sam's Club, a division of Wal-Mart Stores, Inc., in the retailing industry. Concurrently, for more than the last five years, Mr. Harris has been an independent financial analyst.
Item 11.
Item 11. Executive Compensation.
The Company was inactive during the three years ended September 30, 1996 and accordingly paid no compensation to its executive officers and directors during such period. There is no stock option plans, pension plans, profit sharing plans or other such plans.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of November 7, 1996, the beneficial ownership of the Company's Common Stock by (i) the only persons who own of record or are known to own, beneficially, more than 5% of the Company's Common Stock; (ii) each director of the Company; and (iii) all directors and officers as a group.
Item 13.
Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. The following financial statements are filed as part of this report:
Report of Independent Auditors
Balance Sheets, as of September 30, 1996, 1995
Statements of Income (Loss) for the two years ended September 30, 1996
Statements of Shareholders' Equity for the Period from September 30, 1995 to September 30, 1996
Statements of Cash Flows for the two years ended September 30, 1996.
Notes to the Financial Statements.
2. Financial schedules are omitted.
The following Exhibits are incorporated by reference to the Company's Registration Statement on Form S-18 (File No. 33-24464-NY):
The following Exhibits are filed herewith:
(b) There were no reports on Form 8-K filed during the quarter ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there-unto duly authorized.
SPECTRUM EQUITIES INC.
By: s/Robert Harris ------------------------------------ November 7, 1996 Robert Harris, President
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 registrant and in the capacities and on the dates indicated.
s/Robert Harris November 7, 1996 - ---------------------------------- Robert Harris, Director (Principal Executive Officer and Principal Financial Officer)
Supplementary Information to be furnished with reports filed pursuant to Section 15(d) of the Act by Registrant which have not registered securities pursuant to Section 12 of the Act.
No Annual Report has been sent to security holders for the fiscal year ended September 30, 1996. Such Annual Report will be furnished subsequent to the filing of this Form 10-K.
GRANT-SCHWARTZ ASSOCIATES, INC. 40 Southeast 5th Street, Suite 500 Boca Raton, FL 33432
REPORT OF INDEPENDENT AUDITORS
Board of Directors Spectrum Equities, Inc.
We have audited the accompanying balance sheets of Spectrum Equities, Inc. as of September 30, 1996 and 1995 and the related statements of income, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes assessing the accounting principles used and significant estimates by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spectrum Equities, Inc. as of September 30, 1996 and 1995 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and currently has a shortage of working capital. These raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Boca Raton, Florida October 15, 1996 SPECTRUM EQUITIES, INC. FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC. STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
See Notes to Financial Statements SPECTRUM EQUITIES, INC. FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC. BALANCE SHEET SEPTEMBER 30,
See Notes to Financial Statements mk SPECTRUM EQUITIES, INC. FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC. STATEMENT OF INCOME AND EXPENSE YEARS ENDED SEPTEMBER 30,
See Notes to Financial Statements SPECTRUM EQUITIES, INC. FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC. STATEMENTS OF CASH FLOWS YEARS ENDED SEPTEMBER 30,
See Notes to Financial Statements SPECTRUM EQUITIES, INC. FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996
NOTE A THE COMPANY
Vision Capital, Inc., a Delaware Corporation, was incorporated November 9, 1987. On September 1, 1990, Vision Capital, Inc. completed a merger with Wilmoth Color Lab, Inc. Subsequent to the merger, the Company changed its name to Diversified Photographic Industries, Inc. The Company continued its operations until it ceased doing business on March 15, 1992. On January 5, 1994, the Company filed a voluntary petition for reorganization pursuant to Chapter 11 of the United States Code and emerged from reorganization on October 5, 1995. On February 26, 1996 the name of the Company was changed to Spectrum Equities, Inc. The Company is currently seeking a merger candidate.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all investment instruments purchased with a maturity of three months or less to be cash equivalents.
Organization Costs
The Company will amortize organization costs over a sixty month period.
Earnings Per Common Share
Earning (Loss) per share computations are based on the average number of shares of common stock outstanding during the year.