ARTRA GROUP INC
8-K/A, 1995-12-28
COSTUME JEWELRY & NOVELTIES
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 8-K/A
                                 AMENDMENT NO. 1

                             Current Report Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


       Date of Report (Date of Earliest Event Reported): October 17, 1995
                                                         ----------------





                            ARTRA GROUP INCORPORATED
             (Exact name of registrant as specified in its charter)



                                  Pennsylvania
                  --------------------------------------------
                  State or Other Jurisdiction of Incorporation




                1-3916                                      25-1095978
         ----------------------                          -----------------
         Commission File Number                           I.R.S. Employer
                                                         Identification No.








   500 Central Avenue, Northfield, IL                          60093
 --------------------------------------                       --------
 Address of principal executive offices                       Zip Code

 Registrant's telephone number, including area code:   (708) 441-6650


                                 Not Applicable
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
<PAGE>

Item  7.          Financial Statements and Exhibits

                  On September 11, 1995, the Lori Corporation  ("Lori"),  then a
                  62.6% owned subsidiary Fill-Mor Holding Inc.  ("Fill-Mor"),  a
                  wholly-owned  subsidiary of ARTRA GROUP Incorporated  ("ARTRA"
                  or the  "Registrant"),  signed a stock  purchase  agreement to
                  participate in the  acquisition of one hundred  percent of the
                  capital stock of Spectrum  Global  Services,  Inc. d/b/a YIELD
                  Global  ("YIELD"),  a  wholly  owned  subsidiary  of  Spectrum
                  Information   Technologies,   Inc.  ("SIT").   YIELD  provides
                  telecommunications  and computer  technical  staffing services
                  worldwide to Fortune 500 companies and maintains an extensive,
                  global database of technical specialists,  with an emphasis on
                  wireless communications  capability. See Registrant's Form 8-K
                  dated September 11, 1995.

                  On October 17, 1995,  Lori  completed the  acquisition  of one
                  hundred   percent   of  the   capital   stock  of  YIELD   for
                  consideration consisting of cash of approximately  $6,000,000.
                  See Registrant's Form 8-K dated October 17, 1995.

                  Effective December 1, 1995, Lori changed its corporate name to
                  COMFORCE Corporation.

                  The registrant  hereby files this Form 8-K/A to amend its Form
                  8-K dated October 17, 1995 to file the financial statements as
                  required  in  accordance  with Item  7(a)(4) of Form 8- and to
                  file pro forma financial information as required in accordance
                  with Item 7(b) of Form 8-K as soon as  practicable,  not later
                  than 60 days after November 1, 1995.



                  (a)      Financial Statements of Business Acquired

                           COMFORCE   Corporation   (formerly   Spectrum  Global
                           Services,  Inc.) Financial Statements as of September
                           30, 1995 and December 31, 1994 (Unaudited).


                  (b)      Pro Forma Financial Information

                           Pro forma Consolidated Balance  Sheet as of September
                           28, 1995

                           Pro forma  Consolidated  Statements of Operations for
                           the nine month  period ended  September  28, 1995 and
                           the year ended December 29, 1994 (Unaudited).

<PAGE>
Item 7(a)               Financial Statements of Business Acquired


                              COMFORCE CORPORATION

                   (FORMERLY SPECTRUM GLOBAL SERVICES, INC.)

                              FINANCIAL STATEMENTS

                 AS OF SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
<PAGE>

Comforce Corporation
Index to Financial Statements

 

                                                                        Page(s)

 
Report of Independent Accountants                                          1

Financial Statements:

 Balance Sheets as of September 30, 1995 and December 31, 1994             2

 Statements of Operations and Retained Earnings(accumulated deficit)
 for the nine month period ended September 30, 1995
 and the year ended December 31, 1994                                      3

 Statements of Cash Flows for the nine month period ended
 September 30, 1995 and the year ended December 31, 1994                   4

 Notes to Financial Statements                                            5-8


<PAGE>

Report of Independent Accountants


To the Board of Directors of Comforce Corporation:

We  have  audited  the  accompanying  balance  sheets  of  Comforce  Corporation
(formerly  Spectrum  Global  Services,  Inc., the "Company") as of September 30,
1995 and  December  31,  1994,  and the related  statements  of  operations  and
retained earnings (accumulated deficit) and cash flows for the nine month period
ended  September 30, 1995 and the year ended December 31, 1994.  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 audits.

We  conducted  our  audits  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 includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 Comforce  Corporation  as of
September 30, 1995 and December 31, 1994,  and the results of its operations and
its cash flows for the nine month period ended  September  30, 1995 and the year
ended  December 31, 1994,  in  conformity  with  generally  accepted  accounting
principles.



                                             COOPERS & LYBRAND L.L.P.

Melville, New York
December 1, 1995.
<PAGE>

Comforce Corporation
Balance Sheets
as of September 30, 1995 and December 31, 1994

                                                 September 30,    December 31,
                ASSETS:                              1995             1994
                                                 ------------    ------------ 
Current assets:
  Cash and cash equivalents                      $  1,186,868    $    426,334
  Accounts receivable                               1,602,659       1,456,583
  Unbilled accounts receivable                        279,626         158,793
  Prepaid expenses and other assets                    23,173          32,664
                                                 ------------    ------------
          Total current assets                      3,092,326       2,074,374


Property and equipment, net                            93,708          55,877
Intangible assets                                   2,149,661       2,272,890
Other assets                                           14,491          25,477
                                                 ------------    ------------
          Total assets                           $  5,350,186    $  4,428,618  
                                                 ============    ============



   LIABILITIES AND STOCKHOLDERS'EQUITY(DEFICIENCY):

Current liabilities (deficiency):
  Accounts payable                               $     42,792    $     27,714
  Accrued liabilities                                 423,580         229,703
  Income taxes payable                                                 24,453
  Accounts payable - parent                           978,855         178,106
  Accounts payable - affiliates                        30,980          30,086
                                                 ------------    ------------
          Total current liabilities                 1,476,207         490,062  
                                                 ------------    ------------

Stockholders' equity (deficiency):
  Capital stock                                             1               1
  Additional paid-in capital                        3,919,999       3,919,999
  Retained earnings (accumulated deficit              (46,021)         18,556
                                                 ------------    ------------
          Total stockholders' equity                3,873,979       3,938,556
                                                 ------------    ------------
          Total liabilities and 
            stockholders' equity (deficiency)    $  5,350,186    $  4,428,618
                                                 ============    ============


The accompanying notes are an integral part of the financial statements.
<PAGE>

Comforce Corporation
Statements of Operations and Retained Earnings (Accumulated Deficit)

 
                                                  Nine month
                                                 period ended     Year ended
                                                 September 30,    December 31,
                                                     1995             1994
                                                 ------------    ------------

Sales                                            $  9,007,461    $  8,244,721
                                                 ------------    ------------


Direct costs and expenses:
Cost of sales                                       6,764,942       6,417,395
Operating expenses                                  1,159,168       1,133,298 
                                                 ------------    ------------
     Total direct costs and expenses                7,924,110       7,550,693
                                                 ------------    ------------

                                                    1,083,351         694,028
                                                 ------------    ------------

Other income (expense):
  Interest income                                       6,632           8,975
  Overhead charges from parent (Note 9)            (1,139,560)       (803,280)
                                                 ------------    ------------
  Other income (expense)                           (1,132,928)       (794,305)
                                                 ------------    ------------

Loss before provision for income taxes                (49,577)       (100,277)
                         
Income tax provision                                   15,000          14,740
                                                 ------------    ------------

     Net loss                                         (64,577)       (115,017)

Retained earnings, beginning of year                   18,556         133,573
                                                 ------------    ------------
     Retained earnings(accumulated deficit), 
       end of period                             $    (46,021)   $     18,556
                                                 ============    ============


The accompanying notes are an integral part of the financial statements.

<PAGE>
Comforce Corporation
Statements of Cash Flows

 
                                                   Nine month
                                                  period ended    Year ended
                                                  September 30,   December 31,
                                                      1995            1994
                                                 ------------    ------------

Cash flows from operating activities:
 Net (loss) income                               $    (64,577)   $   (115,017)
 Adjustments to reconcile net income to cash 
  flows provided by operating activities:
    Depreciation                                        18,836         10,173
    Amortization                                       123,229        164,305
    Changes in operating assets and liabilities:
     Accounts receivable                              (146,076)      (256,348)
     Unbilled accounts receivable                     (120,833)      (158,793)
     Prepaid expenses                                    9,491         (9,186)
     Deposits                                           10,986        (24,360)
     Accounts payable                                   15,078         22,645
     Accrued liabilities                               193,877        139,216
     Accounts payable - parent                         800,749        178,106
     Income taxes payable                              (24,453)       (18,657)
     Accounts payable - affiliate                          894         30,086
                                                  ------------   ------------
       Net cash provided by (used in) 
         operating activities                          817,201        (37,830)
                                                  ------------   ------------

Cash flows from investing activities:
 Purchase of property and equipment                    (56,667)       (54,318)
                                                  ------------   ------------
       Net cash used in investing activities           (56,667)       (54,318)
                                                  ------------   ------------

       Net increase (decrease) in cash 
         and cash equivalents                          760,534        (92,148)
                                                  ------------   ------------

Cash and cash equivalents, beginning of year           426,334        518,482
                                                  ------------   ------------

Cash and cash equivalents, end of period          $  1,186,868   $    426,334
                                                  ============   ============

Cash paid for:
 Income taxes                                     $     35,371   $     51,884
                                                  ============   ============


The accompanying notes are an integral part of the financial statements.
<PAGE>

Comforce Corporation
Notes to Combined Financial Statements


1.      Description of Business:

Comforce Corporation (formerly Spectrum Global Services, Inc., the "Company"), a
Delaware  Corporation,  became a wholly owned subsidiary of Spectrum Information
Technologies, Inc. through an acquisition of the Company's assets on October 31,
1993. On October 17, 1995, 100% of the stock of Spectrum Global  Services,  Inc.
was sold to Lori  Corporation,  at which time the  Company  changed  its name to
Comforce  Corporation.  The Company  provides  telecommunications  and computing
staffing and consulting services worldwide.

2.      Summary of Significant Accounting Policies:

Revenue Recognition

Revenue for providing  staffing services is recognized at the time such services
are rendered.

Cash and Cash Equivalents

Cash and cash equivalents  include highly liquid short-term  investments with an
original maturity of three months or less. Cash equivalents  consists  primarily
of money market funds.

Accounts Receivable and Unbilled Accounts Receivable

Accounts  receivable  consists of those  amounts due to the Company for staffing
services rendered to various customers.

Accrued  revenue  consists of revenues  earned and  recoverable  costs for which
billings  have not yet been  presented to the  customers as of the balance sheet
dates.

Property and Equipment

Property and  equipment are stated at cost.  Expenditures  for  maintenance  and
repairs are charged to operations as incurred.  Expenditures for betterments and
major  renewals  are  capitalized.  The cost of assets  sold or retired  and the
related amounts of accumulated  depreciation are eliminated from the accounts in
the year of disposal, with any resulting profit or loss included in income.

Depreciation  and  amortization  of assets are provided using the  straight-line
method over the estimated useful life of the asset.

Intangibles

Goodwill is amortized over 15 years on a straight line basis.
<PAGE>

Notes to Combined Financial Statements, Continued



Income Taxes

Effective  January 1, 1994,  the Company  adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109"). SFAS No. 109 requires  recognition of deferred tax liabilities and assets
for the expected  future tax  consequences  of events that have been included in
the  financial  statements  or tax  returns.  Under this  method,  deferred  tax
liabilities  and assets  are  determined  based on the  difference  between  the
financial  statement and tax bases of assets and  liabilities  using enacted tax
rates in effect for the year in which the differences are expected to reverse. A
valuation  allowance is recorded to reduce deferred tax assets to their expected
realizable  value.  The  cumulative  effect of  implementing  SFAS No. 109 as of
January 1, 1994 was not significant.


3.      Purchase of Assets:

On October 31, 1993,  Spectrum  Information  Technologies,  Inc.  purchased  the
assets and assumed the  liabilities  of Yield  Industries,  Inc.  ("Yield")  and
Wintec  Corporation  ("Wintec").  Subsequent  to this,  the name was  changed to
Spectrum  Global  Services,  Inc. The  acquisition  has been  accounted for as a
purchase.  The fair  value  of the  assets  acquired,  including  goodwill,  was
$4,120,000 and liabilities  assumed totaled $199,000.  Goodwill of approximately
$2,465,000 is being amortized over 15 years on a straight-line basis.


4.      Property and Equipment:

Property and equipment are summarized as follows:

                                            Life of
                                           equipment       1995         1994
                                           ---------    ---------   ---------


     Office equipment                      3-5 years    $  61,311   $  37,211
     Furniture and fixtures                 5-years        65,144      32,577
                                                        ---------   ---------
                                                          126,455      69,788
       Less, accumulated depreciation                      32,747      13,911
                                                        ---------   ---------
                                                        $  93,708   $  55,877
                                                        =========   =========
<PAGE>
Notes to Combined Financial Statements, Continued


5.      Income Taxes:

The  provision  for income taxes of $15,000 for the nine months ended  September
30, 1995 and $14,740 for the year ended December 31, 1994 reflects minimum state
and local income taxes as the Company has state net operating losses on separate
Company returns.  The Company files its federal income tax return as part of its
parent's  consolidated  return.  Due to  significant  losses of the parent,  the
Company has provided a full  valuation on the potential  future benefit from its
federal net operating losses. Net losses for financial reporting purposes do not
differ significantly from net losses for income tax purposes.


6.      Concentration of Credit Risk:

The Company's accounts receivable as of September 30, 1995 and December 31, 1994
consist primarily of amounts due from telecommunication  companies. As a result,
the  collectibility  of these receivables is dependent,  to an extent,  upon the
economic condition of the telecommunications industry. At September 30, 1995 and
December 31,  1994,  the Company had four  customers  with  accounts  receivable
balances that  aggregated  48% and 46%,  respectively,  of the  Company's  total
accounts  receivable.  Percentages of total revenues from significant  customers
for the nine month period ended  September 30, 1995 and the year ended  December
31, 1994 are summarized as follows:

                                        September 30,  December  31,
                                            1995           1994
                                        ------------   ------------

          Customer 1                         19.2%         19.9%
          Customer 2                         12.9%         12.8%
          Customer 3                         10.5%          9.9%



The Company  maintains cash in bank accounts which at times may exceed federally
insured limits.  The Company has not experienced any losses in such accounts and
believes  they are not  exposed  to any  significant  credit  risk on their cash
balances.  The Company  believes it mitigates  such risk by  investing  its cash
through major financial institutions.


7.      Accrued Expenses:

Accrued expenses consist of the following:
                                                  1995          1994
                                              ------------   ------------

  Payroll and payroll taxes                   $    274,864   $    143,449
  Workers' compensation                             70,000         70,000
  Professional fees                                 42,408          7,531
  Vacation                                          27,595          8,723
  Other                                              8,713             
                                              ------------   ------------
                                              $    423,580   $    229,703
                                              ============   ============
<PAGE>
Notes to Combined Financial Statements, Continued


8.      Commitments and Contingencies:

Leases

The Company leases office equipment under a noncancelable  lease. Rental charges
for office  space was  allocated  from its parent and  amounted  to $13,260  and
$9,945, respectively, for the nine month period ended September 30, 1995 and the
year ended December 31, 1994.

At  September  30,  1995,   future  minimum  annual  rental   commitments  under
noncancelable operating leases are as follows:

     1996                         $   57,388
     1997                             58,583
     1998                             60,703
     1999                             62,913
     2000                             54,111
                                  ----------
                                  $  293,698
                                  ==========

Total rent expense for the nine month period  ended  September  30, 1995 and the
year ended December 31, 1994 was $25,627 and $46,498, respectively.


9.      Related Party Transactions:

The  Company is charged by its parent  company  for  insurance,  rent,  payroll,
professional  fees,  and  other  miscellaneous  office  expenses.  Such  charges
amounted to $1,304,570 and $1,363,393 for the nine month period ended  September
30, 1995 and for the year ended December 31, 1994, respectively.

The Company  purchased  furniture and  equipment  and was charged  miscellaneous
office expenses from its  affiliates.  Such charges amount to $1,014 and $29,967
in 1995 and 1994, respectively.

For the nine months  ended  September  30, 1995 and the year ended  December 31,
1994,  approximately $1,139,560 and $803,280,  respectively,  was charged to the
Company by its parent, Spectrum Information  Technologies,  Inc. as a management
charge which reflects an allocation of corporate  overhead.  Management  expects
that such charges will no longer continue as a result of the sale of the Company
to Lori Corporation.


10.      Other Matters:

On January 26, 1995, Spectrum Information Technologies, Inc., filed petition for
relief under Chapter 11 of the Bankruptcy Code (Spectrum Global Services,  Inc.,
was not  included  in such  filing).  The sale of the stock of  Spectrum  Global
Services,  Inc. to Lori Corporation on October 17, 1995 was formally approved by
the bankruptcy court.

In March 1995, the United States  Attorney for the Eastern  District of New York
handed down  indictments  naming  various  officers,  directors and employees of
Spectrum  Information  Technologies,  Inc.,  including the former  president and
founder of Spectrum  Global  Services,  Inc., Mr. James  Paterek,  for allegedly
conspiring  to commit  mail/wire  fraud.  Mr.  Paterek has entered a plea of not
guilty  and the  matter  is still  pending.  He has  resigned  his  position  as
president in September  1995,  remains an owner of  approximately  14.7% of Lori
Corporation and continues as a consultant to the Company.
<PAGE>
Item 7(b)                Pro Forma Financial Information

The  following  unaudited  pro forma  condensed  consolidated  balance  sheet at
September 28, 1995  presents the financial  position of the Company at September
28, 1995 as if the  acquisition  of Yield and the related  private  placement of
Lori common shares had been  consummated as of September 28, 1995. The unaudited
pro forma  condensed  consolidated  statement of operations  for the nine months
ended  September  28,  1995 and the year ended  December  29,  1994  present the
Company's  results of operations as if the  acquisition of Yield and the related
private  placement of Lori common shares had been consummated as of December 30,
1993. Due to the issuances of additional Lori common stock relating to the Yield
acquisition  and certain other  non-related  transactions,  ARTRA's common stock
ownership  interest in Lori will be reduced to approximately  25%. The following
unaudited pro forma condensed  consolidated financial statements present ARTRA's
investment in Lori as accounted for using the equity method.

<PAGE>
                            ARTRA GROUP INCORPORATED
                             PRO FORMA BALANCE SHEET
                               September 28, 1995
                            (Unaudited in thousands)

<TABLE>
<CAPTION>
                                                               
                                                              Deconsolidate    Pro Forma     
                                                   Historical  COMFORCE (A)  Adjustments      Pro Forma
                                                   ----------  ------------  ------------    ------------
<S>                                                 <C>          <C>              <C>           <C>
Current assets
   Cash                                                 $632           ($2)                         $630
   Accounts receivable                                10,184                         $76 (B)      10,260
   Inventories                                        18,433                                      18,433
   Assets of discontinued operations 
     held for disposal                                16,164        (4,488)                       11,676
   Other current assets                                  674           (35)                          639
                                                  ----------  ------------                    ----------
                                                      46,087        (4,525)                       41,638
                                                  ----------  ------------                    ----------

Property, plant and equipment, net                    28,544                                      28,544

Investment in Yield                                      753          (753)                          --

Investment in COMFORCE (Lori)                                       (6,916)        3,631 (B)      (3,285)

Other noncurrent assets                                  105                                         105
Goodwill, net                                          3,672                                       3,672
                                                  ----------    ----------    ----------      ----------
     Total assets                                    $79,161      ($12,194)       $3,707         $70,674
                                                  ==========    ==========    ==========      ==========

Current liabilities
   Notes payable                                     $28,867       ($2,586)       $2,086 (B)     $28,367
   Current maturities of long-term debt               34,420                                      34,420
   Accounts payable                                   15,484          (660)          541 (B)      15,365
   Accrued liabilities                                18,367          (476)          125 (B)      18,016
   Income taxes                                          690                                         690
   Obligations expected to be settled
      by the issuance of common stock                  3,000        (3,000)                          --
   Liabilities of discontinued operations 
      held for disposal                               14,159        (4,517)                        9,642
                                                  ----------    ----------                    ----------
               Total current liabilities             114,987       (11,239)                      106,500
                                                  ----------    ----------                    ----------

Long-term debt                                        11,086                                      11,086
Other noncurrent liabilities                           1,455          (955)          955 (B)       1,455
Commitments and contingencies

Redeemable common stock                                4,253                                       4,253
ARTRA redeemable preferred stock                       3,551                                       3,551
Bagcraft redeemable preferred stock                   10,625                                      10,625
BCA holdings redeemable preferred stock                4,087                                       4,087

Shareholders'  Equity  (Deficit)
  Common stock                                         5,091                                       5,091
  Additional paid-in capital                          36,764                                      36,764
  Receivable from related party                       (4,159)                                     (4,159)
  Accumulated deficit                               (107,774)                                   (107,774)
                                                  ----------                                  ----------
                                                     (70,078)                                    (70,078)
  Treasury stock                                        (805)                                       (805)
                                                  ----------                                  ----------
                                                     (70,883)                                    (70,883)
                                                  ----------    ----------    ----------      ----------
                                                     $79,161      ($12,194)       $3,707         $70,674
                                                  ==========    ==========    ==========      ==========
</TABLE>

Pro Forma  Adjustments to the the unaudited  consolidated  balance sheet consist
of:

    (A)     Deconsolidate  Comforce (Lori) and reflect ARTRA's investment in and
            advances to Comforce (Lori) under the equity method.
    (B)     Lori liabilities to be assumed by ARTRA per  provisions of the Yield
            acquisition agreement.
<PAGE>
                            ARTRA GROUP INCORPORATED
                        PRO FORMA STATEMENT OF OPERATIONS
                               September 28, 1995
                 (Unaudited in thousands, except per share data)

<TABLE>
<CAPTION>
                                             
                                                           
                                                                         Deconsolidate       Pro Forma
                                                            Historical     COMFORCE (A)      Adjustments           Pro Forma
                                                           -----------    -------------   --------------          ----------
<S>                                                           <C>              <C>               <C>                 <C>    
Net sales                                                     $90,703                                                 $90,703
                                                           -----------                                             ----------

Costs and expenses:
   Cost of goods sold                                          76,871                                                  76,871
   Selling, general and administrative                         15,972          ($3,265)                                12,707
   Depreciation and amortization                                3,306                                                   3,306
                                                           -----------     -----------                             ----------
                                                               96,149           (3,265)                                92,884
                                                           -----------     -----------                             ----------

Operating loss                                                 (5,446)           3,265                                 (2,181)
                                                           -----------     -----------                             ----------

Other income (expense):
   Interest expense                                            (6,392)             410            ($410)(C)            (6,392)
   Equity in Comforce (Lori)                                                                     (3,387)(B)            (3,387)
   Other income (expense), net                                      1                                                       1
                                                           -----------     -----------                             ----------
                                                               (6,391)             410                                 (9,778)
                                                           -----------     -----------                             ----------

Loss from continuing operations before income taxes           (11,837)           3,675                                (11,959)
Provision for income taxes                                        (35)                                                    (35)
Minority interest                                                (671)                                                   (671)
                                                           -----------     -----------                             ----------
Loss from continuing operations                               (12,543)           3,675                                (12,665)
Dividends applicable to redeemable preferred stock               (422)                                                   (422)
Redeem common stock accretion                                    (246)                                                   (246)
                                                           -----------     -----------       ----------            ----------
Loss from continuing operations
   applicable to common shares                               ($13,211)          $3,675          ($3,797)             ($13,333)
                                                           ===========     ===========       ==========            ==========


Loss per share from continuing operations                      ($1.96)                                                 ($1.98)
                                                            =========                                               =========

Weighted average shares outstanding                             6,712                                                   6,712
                                                            =========                                               =========


Pro Forma Adjustments to the the unaudited  consolidated statement of operations
consist of:

    (A)     Deconsolidate  COMFORCE (Lori) and reflect ARTRA's investment in and
            advances to (Comforce) Lori under the equity method.
    (B)     Reflect ARTRA's equity in COMFORCE's (Lori) pro forma loss. 
    (C)     Interest expense on Lori obligations assumed by ARTRA.
<PAGE>

                            ARTRA GROUP INCORPORATED
                        PRO FORMA STATEMENT OF OPERATIONS
                                December 29, 1994
                 (Unaudited in thousands, except per share data)
                                                          
                                                                         Deconsolidate       Pro Forma
                                                            Historical     COMFORCE (A)      Adjustments           Pro Forma
                                                           -----------    -------------   --------------          ----------
<S>                                                           <C>              <C>               <C>                 <C>    
Net sales                                                     $111,837                                                $111,837
                                                            ----------                                              ----------

Costs and expenses:
   Cost of goods sold                                           94,766                                                   94,766
   Selling, general and administrative                          16,760            ($966)                                15,794
   Depreciation and amortization                                 4,344               (7)                                 4,337
                                                           -----------      -----------                             ----------
                                                               115,870             (973)                               114,897
                                                           -----------      -----------                             ----------

Operating loss                                                  (4,033)             973                                 (3,060)
                                                           -----------      -----------                             ----------

Other income (expense):
   Interest expense                                             (8,618)           1,316                                 (7,302)
   Equity in Comforce (Lori)                                                                      ($2,501)(B)           (2,501)
   Other income (expense), net                                      13                                                      13
                                                           -----------      -----------                             ----------
                                                                (8,605)           1,316                                 (9,790)
                                                           -----------      -----------                             ----------

Loss from continuing operations before income taxes            (12,638)           2,289                                (12,850)
Provision for income taxes                                          (9)                                                     (9)
Minority interest                                                 (889)                                                   (889)
                                                           -----------      -----------                             ----------
Loss from continuing operations                                (13,536)           2,289                                (13,748)
Dividends applicable to redeemable preferred stock                (516)                                                   (516)
Redeem common stock accretion                                     (309)                                                   (309)
                                                           -----------      -----------        ----------           ----------
Loss from continuing operations
   applicable to common shares                                ($14,361)          $2,289           ($2,501)            ($14,573)
                                                           ===========      ===========        ==========           ==========
 
Loss per share from continuing operations                       ($2.51)                                                 ($2.55)
                                                           ===========                                              ==========

Weighted average shares outstanding                              5,702                                                   5,702
                                                           ===========                                              ==========
</TABLE>
Pro Forma Adjustments to the the unaudited  consolidated statement of operations
consist of:

    (A)     Deconsolidate  COMFORCE (Lori) and reflect ARTRA's investment in and
            advances to (Comforce) Lori under the equity method.
    (B)     Reflect ARTRA's equity in COMFORCE's (Lori) pro forma loss.


<PAGE>

                                   SIGNATURES



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 thereunder duly authorized.






                                          ARTRA GROUP INCORPORATED
                                          ------------------------
                                                Registrant







Dated: December 28, 1995                      JAMES D. DOERING
- ------------------------           ------------------------------------------
                                          Vice President/Treasurer 
                                         and Chief Financial Officer



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