<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: MARCH 31, 1998 Commission File Number: 0-28720
SECURITIES RESOLUTION ADVISORS, INC.
(Exact name of small business issuer as specified in its charter)
ROSE INTERNATIONAL LTD.
(Former name of small business issuer)
DELAWARE 73-1479833
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
80 SEAVIEW BLVD., PORT WASHINGTON, NY 11050
(Address of principal executive office)
7633 E 63RD PLACE, SUITE 220, TULSA, OKLAHOMA 74133
(Former address of principal executive office)
(516) 625-4040
(Issuer's telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes...X.... No.........
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the close of the period covered by this report.
COMMON STOCK $0.01 PAR VALUE 6,525,000
Class Outstanding at
March 31, 1998
Transitional Small Business Disclosure Format: Yes ; No X
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SECURITIES RESOLUTION ADVISORS, INC.
INDEX
<TABLE>
<CAPTION>
Page
No.
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PART I. Financial Information
Item 1. Condensed Balance Sheets - 3
March 31, 1998 and December 31, 1997
Condensed Statements of Operations - 4
Three Months Ended March 31, 1998 and 1997
Condensed Consolidated Statement of Stockholders' Equity - 5
Three Months Ended March 31, 1998
Condensed Consolidated Statements of Cash Flows - 6-7
Three Months Ended March 31, 1998 and 1997
Notes to Condensed Consolidated Financial Statements - 8-11
Three Months Ended March 31, 1998 and 1997
Item 2. Management's Plan of Operation 12
PART II. Other information 13
</TABLE>
2
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SECURITIES RESOLUTION ADVISORS, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,033 $ 1,316
Marketable equity securities 2,878 4,931
Receivables, net 3,250 --
Prepaid expenses and other assets -- 330
------------ ------------
Total current assets 7,161 6,577
Property and equipment, net -- 10,022
Equity securities held for investment 3,000,000 3,000,000
Other 5,762 6,286
------------ ------------
$ 3,012,923 $ 3,022,885
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 27,770 $ 17,428
Accrued liabilities -- 26
------------ ------------
27,770 17,454
STOCKHOLDERS' EQUITY
Common stock 65,250 65,250
Paid-in capital 11,005,048 11,005,048
Retained earnings (deficit) (7,287,145) (7,266,867)
------------ ------------
3,783,153 3,803,431
Stock subscription receivable (798,000) (798,000)
------------ ------------
Total stockholders' equity 2,985,153 3,005,431
------------ ------------
$ 3,012,923 $ 3,022,885
============ ============
</TABLE>
See accompanying notes to financial statements
3
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SECURITIES RESOLUTION ADVISORS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
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<S> <C> <C>
SALES AND REVENUES $ -- $ --
COST OF SALES -- --
----------- -----------
GROSS PROFIT -- --
OTHER EXPENSE (INCOME)
Selling, general and administrative expense 13,733 43,934
Interest expense 50 --
Loss (gain) from sale of assets 4,560 --
Unrealized loss (gain) on marketable equity securities 2,053 4,896
Interest and other income (118) (424)
----------- -----------
20,278 48,406
----------- -----------
EARNINGS BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS (20,278) (48,406)
INCOME TAX EXPENSE (BENEFIT) -- --
----------- -----------
EARNINGS BEFORE DISCONTINUED OPERATIONS (20,278) (48,406)
DISCONTINUED OPERATIONS -- 88,017
----------- -----------
NET EARNINGS (LOSS) $ (20,278) $ 39,611
=========== ===========
NET EARNINGS (LOSS) PER SHARE $ (0.00) $ 0.01
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 6,525,000 6,525,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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SECURITIES RESOLUTION ADVISORS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Stock
Common Stock Paid-in Subscription Accumulated
Shares Par Value Capital Receivable Deficit Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998 6,525,000 $ 65,250 $11,005,048 $ (798,000) $(7,266,867) $ 3,005,431
Net earnings (loss) (20,278) (20,278)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, March 31, 1998 6,525,000 $ 65,250 $11,005,048 $ (798,000) $(7,287,145) $ 2,985,153
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
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SECURITIES RESOLUTION ADVISORS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $(20,278) $ 39,611
Adjustments to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 933 915
Discontinued operations -- (88,017)
Loss from sale of assets 4,560
Changes in assets and liabilities:
Marketable equity securities 2,053 4,896
Receivables (3,250) 3,793
Prepaid and other assets 330 (1,833)
Accounts payable and accrued liabilities 10,317 (5,163)
-------- --------
Net cash provided by (used in) operating activities (5,335) (45,798)
-------- --------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Capital expenditures -- (2,258)
Proceeds from sale of assets 5,052
Subsidiary repayment -- 2,040
-------- --------
Net cash provided by (used in) investing activities 5,052 (218)
-------- --------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
-------- --------
Net cash provided by (used in) financing activities -- --
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (283) (46,016)
CASH AND CASH EQUIVALENTS, beginning of period (continuing operations) 1,316 49,881
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 1,033 $ 3,865
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
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SECURITIES RESOLUTION ADVISORS, INC.
STATEMENTS OF CASH FLOWS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid None None
================== ====================
Income taxes paid None None
================== ====================
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
See accompanying notes to consolidated financial statements.
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SECURITIES RESOLUTION ADVISORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On July 8, 1998, Rose International Ltd. changed their name to
Securities Resolution Advisors, Inc. as a result of the acquisition
discussed in Note E below. The financial statements of Securities
Resolution Advisors, Inc., formerly Rose International Ltd. include the
accounts of Rose International Ltd. ("Rose Ltd.") (the "Company") and
formerly included its wholly-owned subsidiaries, Rose Color, Inc.
("Rose Color") and SPS Alfachem, Inc. ("SPS") and the 80% owned
subsidiary of Rose Color, JBW International, Inc. ("JBW"). Effective
September 30, 1997, Rose Ltd. exchanged the common stock of Rose Color
and SPS for three million common shares of International Imaging, Inc.
(Imaging), which resulted in Rose Ltd. owning less than 20% of Imaging.
The financial statements included in this report have been prepared by
the Company pursuant to the rules and regulations of the Securities and
Exchange Commission for interim reporting and include all adjustments
(consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation. These
financial statements have not been audited. The balance sheet at
December 31, 1997 included in this report has been derived from the
audited balance sheet.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations for interim reporting. The Company believes that
the disclosures contained herein are adequate to make the information
presented not misleading. However, these financial statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Annual Report for the year ended December 31,
1997, which is included in the Company's Form 10-KSB. The financial
data for the interim periods presented may not necessarily reflect the
results to be anticipated for the complete year. Certain
reclassifications of the amounts presented for the comparative period
have been made to conform to the current presentation.
B. MARKETABLE SECURITIES
As of March 31, 1998, the Company has an investment in marketable
equity securities, which are classified as trading securities. As of
March 31, 1998 the cost of $14,682 exceeded the fair value of the
securities by $11,804.
C. COMMON STOCK AND COMMON STOCK OPTIONS
On August 7, 1995 the Board of Directors of the Company authorized an
Incentive Stock Option Plan (the "Plan") which for a term of ten years
provides that one million shares of the Company's common stock be
reserved for issuance to selected key employees and consultants. The
Plan is to be administered by a compensation committee composed of two
directors of the Company, and this committee may grant no more than
three hundred thousand shares of common stock to any
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one individual at a price based on the fair market value of the shares
at the date of grant. The grant may be exercised over a ten year
period, in not less than one thousand share lots and when exercised,
the stock must be held for six months prior to sale. The options may be
exercised only by the person to whom the option is granted and the Plan
may be modified by the Board of Directors at any time. At March 31,
1998 the Company had granted options outstanding totaling 450,000
shares for ten years at an exercise price of $1.00 per share in
accordance with the Plan, none of which had been exercised.
On August 10, 1995 the Board of Directors adopted a 1995-1996
Nonstatutory Stock Option Plan for its officers, directors, key
employees and consultants reserving 500,000 common shares for this
option plan, which expired December 31, 1996. The options may be
granted at prices determined by the compensation committee, which
administers this plan, and may be exercised upon grant and paid for at
the discretion of the Compensation Committee, with any unpaid amounts
for shares received being evidenced by promissory notes. At September
30, 1997 the Company had outstanding grants which totaled 355,000
shares at an average exercise price of $2.11 per share, none of which
had been exercised.
Common stock options do not have an impact on primary earnings per
share or fully-diluted earnings per share as the average trading price
and the ending trading price has approximated or been less than the
lowest exercise price of the common stock options.
D. INCOME TAXES
The Company follows SFAS No. 109, "Accounting for Income Taxes".
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. SFAS No. 109 requires that a valuation allowance be
established to reduce deferred tax assets to the amount that is more
likely than not to be realized.
Deferred income taxes result primarily from temporary differences in
recognizing net operating losses for tax and financial reporting
purposes. Any future tax benefit of net operating loss carryforwards
has been fully reserved due to the uncertainty of the benefits being
realized.
E. SUBSEQUENT EVENT
Effective June 1, 1998, the Company acquired 82.01% of the outstanding
common stock of The Accord Group, Inc. ("Accord") in exchange for
8,000,000 shares of the common stock of the Company. The transaction
will be accounted for as a reverse acquisition with the historical
results of Accord becoming the historical results of the Company.
During the three months ended March 31, 1998, Accord had revenues of
$112,638 and net income of $2,490. Per share earnings would have been
zero.
9
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ITEM 2: MANAGEMENT'S PLAN OF OPERATION
Effective September 30, 1997, the Company exchanged their 100% interest
in Rose Color and SPS for three million shares of the common stock of
International Imaging, Inc., which resulted in the Company owning less
than 20% of Imaging.
The Company expects to hold their investment in Imaging for at least
the next year, at which time they may elect to sell all or part of
their investment to pursue other business opportunities. Until a future
business venture is determined, the Company has eliminated their
regular payroll and will utilize contract consultants to maintain their
reporting requirements. Accordingly, it is anticipated that only
nominal funding should be necessary for the next several months, which
amounts should be available from debt financing.
Management has determined that the Company's new business plan is
primarily to seek one or more potential businesses, which may, in the
opinion of management, warrant the Company's involvement. The Company
recognizes that as a result of its limited financial, managerial or
other resources, the number of suitable potential businesses, which may
be available to it, will be extremely limited. In seeking to attain its
business objective, the Company will not restrict its search to any
particular industry. Rather, the Company may investigate businesses of
essentially any kind or nature, including but not limited to, finance,
high technology, manufacturing, service, sports, research and
development, communications, insurance, brokerage, transportation and
others. The Company does not intend to become an investment company or
an investment advisor. Management's discretion is otherwise
unrestricted, and it may participate in any business whatsoever that
may, in the opinion of management, meet the business objectives
discussed herein. As of March 31, 1998, the Company has not chosen the
particular area of business in which it proposes to engage and has not
conducted any market studies with respect to any business or industry.
See Note E to the financial statements.
The Company will not restrict its search to any specific industry
(except as set forth above), but may acquire any entity or position in
a company which is (i) in its preliminary or development state; or (ii)
is a going concern. At this time it is impossible to determine the
needs of the business in which the company may seek to participate, and
whether such business may require additional capital, management, or
may be seeking other advantages which the Company may offer. In other
instances, possible business endeavors may involve the acquisition of
or a merger with a company that does not need additional equity, but
seeks to establish a public trading market for its securities.
Businesses which seek the Company's participation in their operations
may desire to do so to avoid what such businesses deem to be adverse
factors related to undertaking a public offering. Such factors
including substantial time requirements and legal costs, along with
other conditions or requirements imposed by Federal and state
securities laws.
The analysis of potential business endeavors will be undertaken by or
under the supervision of the Company's Directors. The Directors are
comprised of individuals of varying business experiences, and
management will rely on their own business judgment in formulating
decisions as to the types of businesses that the Company may acquire or
in which the Company may participate. It is quite possible that
management will not have any business experience or expertise in the
type of businesses engaged in by a company that may be investigated by
the Company.
In analyzing prospective businesses, management will consider such
factors as available technical, financial and managerial resources;
working capital and other financial requirements; such businesses'
history of operations, if any, and prospects for the future; the nature
of present and expected compensation; the quality and experience of
management services which may be
10
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available and the depth of that management; the potential for further
research and development; risk factors; the potential for growth and
expansion; the potential for profit; the perceived public recognition
or acceptance of such businesses, products, services, trade or service
marks; its name identification; and other relevant factors.
While these factors will be considered, to a large extent a decision to
participate in a specific business will be difficult, if not
impossible, to analyze through the application of objective criteria.
In many instances, the achievements of a specific business to date may
not necessarily be indicative of its potential for the future because
of various changing requirements in the marketplace, such as the
ability to substantially shift marketing approaches, expand
significantly or change product emphasis, change or substantially alter
management, or other factors. On the other hand, the management of such
companies may not have proven their abilities or effectiveness, or
established the viability of the market, or the products or services
which they propose to market. As such, the profitability of such a
business may be unpredictable and might therefore subject the Company
and its assets to substantial risks.
As part of the Company's investigation of a business, management
expects that it will meet personally with the target's management and
personnel, visit and inspect the target's facilities, obtain
independent analysis or verification of certain information provided,
check references of the target's management and key personnel, and
conduct other reasonable measures, to the extent that the Company's
limited resources and management's technical expertise, if any, permit.
Generally, the Company will analyze all available information and make
a determination based upon a composite of available facts, without
reliance upon a single factor as controlling.
It is anticipated that any number of prospective businesses will be
available to the Company from various sources, including its
management, its professional advisors, securities broker dealers,
venture capitalists members of the financial community, and others who
may present unsolicited proposals. In some instances, the Company may
publish notices or advertisements in financial or trade publications
seeking potential business acquisitions. In certain circumstances, the
Company may agree, in connection with an acquisition, to pay a finder's
fee or other compensation to an investment banking firm or other person
(who may or may not be affiliated with the Company) who submits to the
Company a business in which the Company participates.
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Not applicable
(b) Reports on Form 8-K - None during the three months ended March 31,
1998.
SIGNATURE
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.
SECURITIES RESOLUTION ADVISORS, INC.
Date: August 12, 1998 By: /s/ Richard Singer II
------------------------ -------------------------------
Richard Singer II
President and Principal
Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS AS OF MARCH 31, 1998 AND FOR THE THREE MONTH PERIOD THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB FOR THE QUARTER ENDED
MARCH 31, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,033
<SECURITIES> 2,878
<RECEIVABLES> 3,250
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,161
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,012,923
<CURRENT-LIABILITIES> 27,770
<BONDS> 0
0
0
<COMMON> 65,250
<OTHER-SE> 2,919,903
<TOTAL-LIABILITY-AND-EQUITY> 3,012,923
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,733
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (20,278)
<INCOME-TAX> 0
<INCOME-CONTINUING> (20,278)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,278)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
