SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K Amended
Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1995
Commission file number: 0-2677
GAP INSTRUMENT CORP.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
_____New York_____ ____________11-1781357_________
(State of Incorporation) (IRS Employer Identification Number)
100 Horse Block Rd, Yaphank, New York __11980__
(Address of principal executive office) (Zip Code)
_______(516) 924-1700______
(Registrant's telephone number)
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, par value $.00001 per share - Traded: Over the Counter
Market Aggregate market value of voting stock held by non-affiliates:
No Value
Common stock outstanding: 98,678,423
Exhibit index: 20
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months,
Yes XX No
--------- ----------
(2) has been subject to such filing requirements for the past 90 days,
Yes XX No
--------- ----------
(3) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes No XX
---------- ----------
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CONTENTS
Page(s)
Part I
Item 1. Business ................................................. 3
2. Properties ................................................ 4
3. Legal Proceedings ......................................... 4
4. Submission of Matters to a Vote of Security Holders ....... 4
Part II
Item 5. Market for the Registrant's Common Stock
and Related Security Holders' Matters ................... 5
6. Five-Year Selected Financial Data ......................... 6
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................... 7
8. Financial Statements and Supplementary Data ............... 8
9. Disagreements on Accounting and Financial Disclosure ...... 16
Part III
Item 10. Directors and Executive Officers of the Registrant ........ 16
11. Management Remuneration and Transactions .................. 16
12. Security Ownership of Certain
Beneficial Owners and Management ........................ 17
13. Certain Relationships and Related Transactions ............ 17
Part IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K ..................................... 18
SIGNATURES ................................................. 20
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Part 1
Item 1 - Business
(a) GAP Instrument Corp., organized in 1953, is a systems engineering
oriented manufacturing organization, producing electromechanical/solid state
systems to satisfy specific military and commercial requirements for application
on board ships, in aircraft, and at ground-based installations. These various
systems are primarily servo mechanisms (gear trains run by motors, synchros and
resolvers) and state-of-the-art signal data-conversion equipment employed in
load actuation, information readout display, and operation control. While
utilizing the same disciplines to continue its efforts in the areas of test
equipment and simulation equipment, GAP is attempting to find appropriate areas
of diversification to convert form a military market to a commercial market.
GAP Instrument Corp. is fully aware that its military business over the next
decade will continue to decline. GAP Instrument Corp has found appropriate areas
of diversification to convert from a military manufacturing market. GAP
Instrument Corp has entered the tele communications market as a Value Added
Network connecting Federal contractors to the Department of Defense and
Federal Agencies. The United States Government has been in the process of
changing from a paper based system to an electronic system since 1985. This
culminated in an executive memo (Federal Register Vol. 58 #207) and by
legislation, the Federal Acquisition Streamlining Act of 1994 (Public Law
103-355). These two documents set the ground rules for the Federal conversion to
Electronic Data Interchange (EDI). The only means of communicating with the
Government is via a licensed and certified Value Added Network. GAP Instrument
Corp is one of the 26 licensed and certified Value Added Networks. Procurement
is the first area that the Government is converting to EDI.
(b) GAP Instrument Corp.'s operations are no longer classified as a
single industry segment.
(1) (I) The principal market for GAP Instrument Corp.'s equipment has
been the Department of Defense for military requirements. GAP Instrument Corp.
deals with the Department of Defense directly in open competitive bidding and
as a subcontractor to other major defense contractors on larger programs. The
defense procurement business is very competitive, however, due to the decline of
this industry in general, GAP has become the sole-source provider of a number of
parts.
(II) Not applicable
(III) The materials utilized in the equipment produced by GAP
Instrument Corp. are obtained from standard sources within the United States.
These standard sources include foundries, sheet metal shops, machine shops,
component manufacturers, etc.
(IV) None of the equipment or processes utilized by GAP Instrument
Corp. are covered by patents, licenses, franchises, etc.
(V) Not applicable.
(VI) Manufacturing operations are scheduled to fulfill specific
product orders under firm contracts primarily from the Department of Defense.
GAP Instrument Corp. does not carry significant amounts of stock inventory.
(VII) GAP Instrument Corp.'s present overall business is dependent
on a single customer, the Department of Defense, which presently purchases,
either directly or indirectly, approximately 80 percent in value of its
products.
(VIII) The dollar backlog of orders of GAP Instrument Corp. at
December 31, 1995 was $116,000, compared to $48,000 in 1994. All of the 1995
year-end backlog is expected to be shipped in fiscal year 1996.
(IX) A significant amount of the business is subject to termination
of contracts at the election of the Department of Defense. However, such
termination procedures usually provide for the recovery of incurred costs and
related profit.
(X) Item (c)(1)(I).
(XII) Compliance with environmental regulations has not had a
material effect on capital expenditures.
(2) (I) Research and development expenses of $50,628 were recorded as
prepaid expenses during 1994 for diversification into the telecommunications
market. These were expensed during 1995.
(II) Department of Defense.
(III) None.
(IV) The total number of personnel employed by GAP Instrument Corp.
as of the end of fiscal year 1995 was 4.
(d) GAP Instrument Corp. does not engage in material operations in
foreign countries, nor is its business dependent on a domestic geographic
location.
Item 2- Properties
(a) On October 20, 1993 GAP Instrument Corp. moved into space at 100
Horse Block Rd., Yaphank. The rent is currently $1,000 per month on a month to
month basis. Rent expense for 1995 was $28,600 for the Yaphank facility.
Item 3 - Legal Proceedings
(a) On September 24, 1993, GAP Instrument Corp. the Debtor filed
partitions for relief under Chapter 11 of the federal bankruptcy laws in the
United States Bankruptcy Court for the. Eastern District of New York. Under
Chapter 11, certain claims against the Debtor in existence prior to the filing
of the petitions for relief under the federal bankruptcy laws are stayed while
the Debtor continues business operations as "Debtor-in-Possession". These claims
are reflected in the December 31, 1994 balance sheet as "Liabilities subject to
Compromise." Additional claims (liabilities subject to compromise) may arise
subsequent to the filing date resulting from rejection of executory contracts,
including leases, and from the determination by the court (or agreed to by
parties in interest) of allowed claims for contingencies and other disputed
amounts. On October 2, 1995, the Company's Plan of Reorganization was approved
by the United States Bankruptcy Court. Payments under the approved plan are
reflected on the Balance Sheet as of December 31, 1995 as "Liabilities under a
Plan of Reorganization."
Under the terms of the plan of reorganization payments to the Internal
Revenue Service and New York State Department of Labor provide for full payment
of amounts due over five years. Claims of two prior officers are payable at a
reduced amount over the same five years. All unsecured creditors will be paid
fifty percent of their claim in five equal installments upon the first, second,
third, fourth and fifth anniversaries of approval of the Plan.
(b) Amendment to the by-laws approved by New York State changed
authorized shares from 4,000,000 to 104,000,000 shares, per approval by
stockholders at a special meeting of stockholders December 28, 1993.
Item 4 - Submission of Matters to a Vote of Security Holders
On 28 December 1993 a Special Meeting of Stockholders was held.
resolutions were passed to authorize and empower the Board of directors to
amend, alter, change, add to, repeal, or rescind any and all of the Bylaws, and
that the authorized common stock of GAP Instrument Corporation be increased from
its present amount thereof, to One Hundred Four Million (104,000,000) shares of
par value of One Thousandth of a cent per share ($0.00001).
(THIS SPACE INTENTIONALLY LEFT BLANK)
PART II
Item 5- Market for the Registrant's Common Stock and Related Security Holders'
Matters
At December 31, 1995, GAP Instrument Corp. had issued and outstanding
98,678,423 shares of common stock held by 1,087 stockholders of record. 2,000
shares are claimed by two former officers which are not recognized by GAP
Instrument Corp.. Market prices listed in the following tabulation were obtained
from the National Quotation Bureau, Inc., and represent prices between dealers
and do not include retail markup, markdown, or commission, and may not
necessarily represent actual transactions.
1995 1994
Bid Asked Bid Asked
First Quarter N o Q u o t e N o Q u o t e
Second Quarter N o Q u o t e N o Q u o t e
Third Quarter N o Q u o t e N o Q u o t e
Fourth Quarter N o Q u o t e N o Q u o t e
(THIS SPACE INTENTIONALLY LEFT BLANK)
Item 6- FIVE YEAR SELECTED FINANCIAL DATA FOR THE PERIODS ENDED
<TABLE>
<CAPTION>
DECEMBER 31 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Sales $258,548 $332,312 $203,354 $881,991 $1,328,031
Income (loss) from continuing operations (98,016) (154,677) (415,457) (154,083) 82,292
Provision for income taxes - - - - (26,521)
Net income (loss) before extraordinary credit
and reorganization expense (98,016) (154,677) (415,457) (154,083) 55,771
Extraordinary credit - gain from
restructuring debt, including tax benefits
net operating loss carry-forwards - - - - 113,598
Extraordinary gain -gain from adoption of plan of
Reorganization under Chapter 11 293,870
Reorganization items:
Professional fees 4,000 7,525 23,000 - -
Net Income (Loss) $191,855 ($162,202) ($438,457) ($154,083) $169,369
Earnings Per Share
Net income (loss) share before
extraordinary credit (.00) (.00) (.11) ($.08) $.03
Extraordinary credit .00 - - $.05
Earnings (loss) per share $.00 ($.00) ($.11) ($.08) $.08
Total Assets $81,332 $184,009 $118,378 $208,750 $390,731
Note Payable $-(1) $ - (1) $ 88,289 $ 99,414 -
<FN>
(1) Note Payable expunged during the Chapter 11 Proceeding
</TABLE>
Item 7-
Management's Discussion and Analysis of Financial Condition and Results of
Operations Liquidity and Capital Resources
GAP Instrument Corp. has primarily relied on its results from operations to
provide working capital. Due to lack of working capital on September 23, 1993,
GAP Instrument Corp. the Debtor filed partitions for relief under Chapter 11 of
the federal bankruptcy laws in the United States Bankruptcy Court for the
Eastern District of New York.
In order to continue operations, and pay post petition expenses, GAP
Instrument Corp. issued, on July 29, 1994, 93,000,000 shares of common stock,
and on October 31, 1995, 1,744,070 shares of common stock, to suppliers and key
personnel.
On October 2, 1995 GAP Instrument Corp. emerged from Chapter 11 and is
operating under a plan approved by the United States Bankruptcy Court for the
Eastern District of New York and the creditors.
GAP Instrument Corp. has the ability to generate sufficient cash flows to
support its operations for the twelve month period.
RESULTS OF OPERATIONS
Operating income (loss) for the years 1995 and 1994, were ($98,016) and
($154,677). Sales volume for the respective years were $258,197 and $332,312.
Operating income (loss) for 1993 was ($415,457) and sales volume was $203,354.
Sales volume for the years 1993, 1994 and 1995 were substantially less than
prior years as the Department of Defense is now only buying parts to replace and
repair as the part is needed. General and administrative costs are reviewed
continually to keep expenses as low as possible.
GAP Instrument Corp. is fully aware that its military business over the next
decade will continue to decline. Thus, GAP Instrument Corp. entered the tele
communications market as a Value Added Network for the Federal Government and as
an Internet Service Provider (ISP) for Federal contractors.
Federal tax loss carry forwards at December 31, 1995 are ($704,710) which
will provide for future tax benefits relief in future years.
The dollar backlog of sales at December 31, 1995, 1994 and 1993 were
$116,000, $48,500, and $123,885. All of the 1995 backlog will be shipped
in 1996.
(THIS SPACE INTENTIONALLY LEFT BLANK)
Item 8 - Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
Page
Balance Sheets as of December 31, 1995 and 1994. . . . . . 9
Statements of Income (Loss) and Accumulated
Deficit for the Years Ended December 31,
1995, 1994 and 1993. . . . . . . . . . . . . . . . . . . . 10
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993 . . . . . . . . . 11
Notes to Financial Statements . . . . . . . . . . . . . . . 12
Independent Auditors Report, December 31, 1995 .. . . . . . 15
Independent Auditors Report, December 31, 1994 and 1993 . . 16
GAP INSTRUMENT CORP.
BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
December 31,
Current Assets: 1995 1994
Cash $ 0 $ 14,078
Accounts receivable ( Note 3) 61,777 13,491
Inventories, at lower of cost or market (Note 4) - 40,118
---------- -----------
Total current assets 61,777 67,687
Fixed assets, at cost less accumulated
depreciation(Note 5) 12,998 3,761
Other assets 8,110 112,561
----------- -----------
Total assets $ 82,885 $ 184,009
========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities subject to compromise(Note 2) $ - $ 554,705
Current Liabilities:
Accounts payable 29,860 16,216
Cash overdraft 1,553 -
Liabilities resulting from Plan
of Reorganization (Note 3 ) 47,194 -
Accrued liabilities - 22,136
Accrued payroll and taxes 347 670
Due to officers(Note 3) 56,000 24,000
----------- -----------
Total current liabilities 134,954 617,727
----------- -----------
Long-term debt
Liabilities resulting from Plan of
Reorganization (Note 3) 189,795 -
----------- -----------
Total long-term liabilities 189,795 -
----------- -----------
Total liabilities 324,749 617,727
----------- -----------
Stockholders' Deficit:
Common stock $ .00001 par value 1995
104,000,000 shares authorized;
98,678,423 shares outstanding 1995 987
96,934,353 shares outstanding 1994 969
Capital in excess of par value 3,341,815 3,341,833
Accumulated deficit (3,584,666) (3,776,520)
------------ -----------
Total stockholders' deficit (241,864) (433,718)
------------ -----------
$ 82,885 $ 184,009
============ ===========
See Independent Auditor's Report and Notes to Financial Statements.
GAP INSTRUMENT CORP.
STATEMENTS OF INCOME (LOSS) AND ACCUMULATED DEFICIT
For the years ended December 31, 1995, 1994 and 1993
Years ended December 31,
1995 1994 1993
----------------------------------------------
Net Sales 258,548 332,312 $ 205,354
Cost of sales 199,851 206,750 287,563
Selling, general and administrative 156,713 280,239 323,156
Interest, net - - 10,092
----------- ---------- ------------
Income (loss) from continuing operations (98,016) (154,677) (415,457)
Provision for income taxes - - -
----------- ----------- -------------
Net income (loss) before extraordinary
gain and reorganization items (98,016) (154,677) (415,457)
Extraordinary Gain from adoption of
plan of reorganization 293,870 - -
Reorganization items:
Professional fees 4,000 7,525 23,000
---------- ----------- ------------
Net Income (Loss) $ 191,855 ($ 162,202) ($ 438,457)
Accumulated deficit:
Beginning of year (3,776,520) (3,614,318) (3,175,862)
------------ ----------- ------------
End of year ($3,584,666) ($3,776,520) ($3,614,318)
============ ============ ============
Earnings Per Share
Net income (loss) per share ($.00) ($.00) ($.11)
------------ ------------ ------------
Earnings Per Share ($.00) ($.00) ($.11)
============ ============ ============
See Independent Auditor's Report and Notes to Financial Statements.
GAP INSTRUMENT CORP.
STATEMENTS OF CASH FLOWS
Years ended December 31,1995, 1994 and 1993
1995 1994 1993
Cash Flows from Operating Activities:
Net income (Loss) ($102,016) ($162,202) ($438,457)
Add (deduct) non-cash items:
Depreciation and amortization 4,675 1,905 1,903
Gain from adoption of
plan of reorganization 293,870
Add (deduct) other changes:
Accounts receivable (48,286) 4,518 13,603
Inventories 40,118 4,072 83,248
Prepaid expenses - 2,217 8,161
Accounts payable 13,644 (16,888) 33,104
Cash Overdraft 1,553
Accrued liabilities (22,136) 22,136 32,996
Accrued payroll and taxes (323) (32,326) 166,730
Net Cash Provided (Used) ------------ ------------ ----------
from Operating Activities 181,098 (176,658) (112,517)
Cash Flows from Financing Activities:
Shareholder loans 32,000 18,000 6,000
Issuance of Stock for Post-Petition Debt 236,910 -
Payment of Long-term debt 94,950
Cash Provided (Used) ------------ ------------ ----------
from Financing Activities 32,000 254,910 100,950
Cash Flows from Investing Activities:
Purchase of equipment and
leasehold improvements (13,849) (1,348) -
Increase in Other Assets 104,451 (68,615) -
Decrease in Liabilities Subject
to Compromise (317,778)
Abandonment of leasehold improvements 8,954
------------ ------------ ---------
Cash Provided (Used) from
Investing Activities (227,176) (69,963) 8,954
Net Increase (Decrease) in Cash (14,078) 8,289 (2,613)
Beginning Cash 14,078 5,789 8,402
------------ ------------ ---------
Ending Cash $ 0 $ 14,078 $ 5,789
============ ============ ==========
Income Taxes 404 - -
See Independent Auditor's Report and Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
NOTE1 -BUSINESS DESCRIPTION
GAP Instrument Corp., organized in 1953, is a systems engineering oriented
manufacturing organization, producing electromechanical/solidstate systems to
satisfy specific military and commercial requirements for application on board
ships, in aircraft, and at ground-based installations. These various systems are
primarily servo mechanisms and state-of-the-art signal data-conversion equipment
employed in load actuation, information readout display, and operation control.
While utilizing the same disciplines to continue its efforts in the areas of
test equipment and simulation equipment, GAP is attempting to find appropriate
areas of diversification to convert form a military market to a commercial
market.
NOTE 2 -PETITION FOR RELIEF UNDER CHAPTER 11
On September 24, 1993, GAP Instrument Corp. the Debtor filed petitions
for relief under Chapter 11 of the federal bankruptcy laws in the United States
Bankruptcy Court for the Eastern District of New York. Under Chapter 11, certain
claims against the Debtor in existence prior to the filing of the petitions for
relief under the federal bankruptcy laws are stayed while the Debtor continues
business operations as Debtor-in-Possession. These claims are reflected in the
December 31, 1994 and 1993 balance sheets as "Liabilities subject to
Compromise". Additional claims ( liabilities subject to compromise) may come to
light subsequent to the filing date resulting from rejection of executory
contracts, including leases, and from the determination by the court or
agreement by parties in interest. A plan of reorganization was approved on
October 2, 1995. This plan calls for payments over the next five years in
settlement of the compromised liabilities. These payments are reflected in the
December 31,1995 Balance Sheet as "Liabilities Resulting from Plan of
Reorganization."
The composition of the Liabilities Resulting from the Plan or
Reorganization and the aggregate payments due in each of the next five years
are:
1996 1997 1998 1999 2000
-------------------------------------------------
Internal Revenue Service 15328 15328 15328 15328 15328
NYS Department of Labor 622 622 622 622 622
Prior Officers 7344 8109 5661 5661 5661
Prior Landlord 19238 19238 19238 1923 19238
Unsecured Creditors 12530 12530 12530 12530 12530
-------------------------------------------------
Total Payments Due 55062 55827 53379 53379 53379
=================================================
The Extraordinary Gain reflected on the income statement is the difference
between the Liabilities Subject to Compromise on the December 31, 1994 and 1993
balance sheets and the Liabilities Resulting from the Plan or Reorganization on
the December 31, 1995 balance sheet. Prior years Form 10Ks had identified long
term debt agreements all of which were expunged during the Bankruptcy
proceedings.
NOTE 3 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies of GAP
Instrument Corp. Assets and liabilities, revenues and expenses, are recognized
on the accrual basis of accounting. GAP Instrument Corp. considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Accounts receivable are recorded when goods are shipped or when customer
is registered(VAN service). Doubtful accounts are written-off when receivable
is determined to be uncollectible - e.i, contract terminated.
Inventories are stated at the lower of cost (first in-first out) or market.
Machinery and leasehold improvements are stated at cost less accumulated
depreciation and are removed from the asset and accumulated depreciation
accounts when fully depreciated. Ordinary repairs and maintenance are charged
directly to expense as incurred. Losses were recognized in 1993 for the
abandonment of leasehold improvements when GAP Instrument Corp moved.
Net sales are recorded on the completed contract method of accounting.
Sales orders normally require delivery dates of less than one year.
The preparation of financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Liabilities resulting from the adoption of the plan of reorganization under
Chapter 11 of the United States Bankruptcy Court are shown as "Liabilities
resulting from Plan of Reorganization." The payments under the Plan that are
due with-in one year are shown in the current liabilities and those due later
than one year are grouped with the long term liabilities. The balance sheet
caption "Liabilities Subject to Compromise" are the liabilities as of the date
of the Bankruptcy filing. See Note 2 above.
Officer loans are payable on demand and currently there is no interest
being accrued.
Income taxes: During 1995 adopted FAS 109 (Accounting for Income Taxes.)
This statement requires the use of the asset and liability approach in the
recognition of deferred tax assets and labilities for the expected future tax
consequences of the event that have been recognized in the company's financial
statements or tax return. If it is more likely than not that some portion or all
of a deferred tax asset will not be realized, the valuation allowance is
realized. Financial statement, prior years, have not been restated and the
cumulative effect of the accounting change will not be material.
NOTE 4 -INVENTORIES:
Inventories were carried on the FIFO basis.
December 31,
1995 1994 1993
Raw materials and components 0 35,258 36,760
Work in process 0 4,860 7,430
-------- -------- ---------
0 $ 40,118 $ 44,190
======== ======== =========
Inventories of raw materials and components written-off at December 31, 1995 due
to obsolescence of inventories. Parts are currently purchased as needed only.
NOTE 5 -FIXED ASSETS:
Fixed assets at December 31 consisted of the following:
1995 1994
Production Equipment and
leasehold improvements $ 5,730 $ 20,331
Administrative equipment 13,849 -
19,578 20,331
Less: Accumulated depreciation
and amortization (6,580) (16,570)
$ 12,998 $ 3,761
Assets are depreciated over five and ten year periods using the straight line
depreciation method. Leasehold improvements are amortized over the remaining
life of the lease. Depreciation and amortization expense for 1995, 1994 and 1993
was $4,675, $1,905, and $1,903, respectively. Leasehold improvements were
abandoned when the Company moved its facilities. Depreciation is computed on the
tax basis, MACRs. The difference between straight line and MACRS is not
material.
NOTE 6 - INCOME TAXES:
For the year ended December 31, 1995, GAP Instrument Corp. sustained, for
federal income purposes, a gain of $191,855. Prior year tax carryforwards are
$947,306 resulting in tax loss carryforwards at December 31, 1995 of $755,451.
Prior years tax loss benefits will begin to expire December 31, 2005.
The annual provision for income taxes differs from amounts computed applying the
maximum US Federal income tax rate to the pre-tax income as follows:
1995 1994
Computed tax at maximum rate 65,230
State Income Tax, net of Federal tax effect 404
Tax benefit of operating loss carry forward (65,634)
----------
Provision for income taxes 0
===
Deferred tax assets (liabilities) at December 31, 1995 and 1994 consist of the
following:.
1995 1994 Expiration
Deferred tax assets
Loss carryforward - Year End 12/31/90 709 192,564 2005
- Year End 12/31/92 154,083 154,083 2006
- Year End 12/31/93 438,457 438,457 2007
- Year End 12/31/94 162,202 162,202 2008
----------- ----------
Total Loss Carry forward 755,451 947,306
Deferred tax assets valuation allowance 755,451 947,306
----------- ----------
Net deferred tax assets 0 0
==== ===
NOTE 7 - BUSINESS SEGMENT REPORTING:
Company operations are no longer a single industry segment, namely, system
design and manufacture of electronic products used for data conversion and
display instrumentation. Direct sales to United States Government Agencies or
its prime contractors in 1995, 1994 and 1993, were $ 224,152, $246,000, and
$205,354 respectively. The Company entered a new business segment, namely,
telecommunications providing Value Added Network Services via the Internet for
the Federal Government. 1995 sales for this business segment were $ 34,045.
NOTE 8 - PER SHARE DATA:
Earnings per share data are based on the average number of common shares
outstanding during the year. Shares for convertible debt have been excluded in
these computations since their inclusion is not material. The number of common
shares outstanding for 1995 were 98,678,423, and for 1994 were 96,934,353 and
for 1993 were 3,934,354.
NOTE 9 - COMMITMENTS AND CONTINGENCIES:
On October 20, 1993 the Company moved into facilities in Yaphank, currently
rented at $3,200 per month on a month to month basics. Rent expense for 1995
was $28,600.
NOTE 10 - GOING CONCERN
There is substantial doubt about the ability of GAP Instrument Corp to
continue as a going concern at December 31, 1995. As shown in the financial
statements, the Company had net losses, before effects of extraordinary gain, of
($98,016), $(154,677), and $ (415,457) during each of the three years ended
December 31, 1995, 1994 and 1993, and, as of those dates, had net equity
(deficit) of $(241,864), $(433,718), and $(511,390) respectively.
NOTE 11 - RELATED PARTY TRANSACTIONS
GAP Instrument Corp rents its Yaphank facility from Advanced Logic
Resources, Inc. At a rental of $3200 per month on a month-to-month basis.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of GAP Instrument Corp
We have audited the accompanying balance sheet of GAP Instrument Corp
(a New York corporation) as of December 31, 1995, and the related statements of
income (loss) and accumulated deficit, and cash flows for the year 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. The financial statements of GAP Instrument Corp as of December
31, 1994 and 1993, were audited by other auditors whose report dated January 31,
1995, on those statements included explanatory paragraphs that described the
Company's going concern issue.
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 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 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 GAP Instrument Corp as of
December 31, 1995, and the results of its operations and its cash flows for the
year 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. As discussed in Note 10 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 10. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ SCHWAEBER SLOANE SCHULMAN & CO., PC
Great Neck NY
April 29, 1996
Deirdre C. Morrison, CPA
71 Amy Dr.
Sayville, New York
To the Board of Directors and Stockholders
GAP Instrument Corp
Yaphank, New York
I have audited the financial statements and supplemental schedules of GAP
Instrument Corp listed in Item 14 for the years ended December 31, 1994 and
1993. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit. The financial statements and supplemental
schedules as listed in Item 14 for the years ended December 31, 1992 and 1991
were audited by other auditors whose report dated April 30, 1993, expressed an
unqualified opinion on those statements.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. 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. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of GAP Instruments Corp as of December
31, 1994 and 1993 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 GAP
Instrument Corp will continue as a going concern. There is substantial doubt
about the ability of GAP Instrument Corp to continue as a going concern at
December 31, 1994. As shown in the financial statements, the Company had net
losses of $(162,202), $(438,457), and $ (154,083) during each of the three
years ended December 31, 1994, 1993 and 1992, and, as of those dates, had net
equity (deficit) of $(433,718), $(511,390), and $(167,934) respectively. As
described in Note 1, the Company has filed under Chapter 11 of the Bankruptcy
Code. The liabilities on the balance sheet are subject to comprise from the
reorganization plan, however, since the plan has not been finalized, no
adjustments have been made to the financial statements at December 31, 1994.
Deirdre C. Morrison, CPA
Sayville, New York
January 31, 1995
Item 9 - Disagreements on Accounting and Financial Disclosure
None
Part III
Item 10 -Directors and Executive Officers of the Registrant
Common Stock
Served of Company as
Principal Director Beneficially Owned on
Name Age Occupation From December 31, 1995
_____________________________________________________________________________
James M. Edwardson 52 Chairman of Board 1993 60,656,732 shares *
and Chief Executive Officer
Robert Baer 54 President 1995 26,000 shares
Letty A. Norjen 60 Secretary & Director 1993 61,656,732 shares *
Deirdre C Morrison 35 Treasurer - 16,000 shares
Michael H. Fasullo 49 Director 1993 31,036,732 shares ^
Lawrence Monahan 56 Vice President 5,007,400 shares
* These shares are Beneficially owned by virtue of being a Director of
Advanced Logic Resources, Inc. and Eloco, Inc.
^ These shares are Beneficially owned by virtue of being a Director of Elcoc
Inc. The shares of Common Stock indicated above are the only securities of GAP
Instrument Corp. owned by the directors and executive officers of the
registrant.
BUSINESS EXPERIENCE
James Edwardson, Chairman of the Board of Directors and CEO, a former member of
the Physics faculty of the State University of NY at Stony Brook, has twenty
plus years experience managing high tech corporations. He currently sits on the
Board of Directors of five corporations. In March of 1993 Mr Edwardson was added
to the Board of Directors to help change the direction of the company and
develop some new high tech products or services to take GAP Instrument Corp.
into the twenty-first century. Jim put together a new management team, which
was given control of the company at the annual meeting of stockholders held in
June 1993.
Robert Baer, President and Director, has owned and operated various businesses
for the past thirty years. Bob was elected President in June 1995. He has
guided GAP Instrument Corp. through its recent reorganization.
Letty A. Norjen, Secretary and Director, has served as a corporate officer and
director in various corporations for the past twenty years. She currently sits
on the Board of Directors of four corporations. She has extensive experience in
the service industry, and dealing with the public. Letty joined GAP in 1993.
Deirdre Morrison, Treasurer and CFO, is a CPA with more than fifteen years
experience in the areas of accounting and auditing. Deirdre joined GAP in
June 1995.
Michael H. Fasullo, Director, is a Senior administrator for a Government agency.
He has twenty plus years experience in the internal workings of Government.
Michael became a Director of GAP in 1993.
Item 11 -Management Remuneration and Transactions
In 1995, total remuneration for all Directors and Officers was $0
Item 12- Security Ownership of Certain Beneficial Owners and Management
Name and Address Amount Beneficially Owned Percent of Class
Eloco, Inc.
244 Mill Road
Yaphank, NY 11980 30,036,732 shares 30.44
Advanced Logic Resources, Inc.
245 Mill Road
Yaphank, NY 11980 30,620,000 shares 31.03
Alan G. Binnie
151 Leisure Glen Drive
Ridge, NY 11961 21,604,055 shares 21.89
Lawrence Monahan
75 Ridge Road
Hauppauge, NY 11788 5,007,400 shares 5.07
Beneficially owned securities of GAP Instrument Corp. held by all
Directors and Officers of GAP Instrument Corp. as a group:
Amount Beneficially Owned Percent of Class
65,664,132 66.54
Item 13- Certain Relationships and Related Transactions
None
PART IV
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(1) Financial Statements:
Reference is made to Part II, Item 8.
(2) Exhibits Index:
(3), (4) Reference is made to Form 10-K for the year ended
December 31, 1980.
(5), (9), (10), (11), (12), (13), (18), (19), (20),
(22), (23), (24), (25), and (28) are not applicable.
(3) Financial Statement Schedules for the Years Ended
December 1995, 1994 and 1993:
Page No.
Supplementary Profit and Loss Information 19
(4) Reports on Form 8-K:
The Company filed a Report on Form 8K for the last quarter covered by these
financial statements.
The Company filed a Report on Form 8K subsequent to year end.
(THIS SPACE INTENTIONALLY LEFT BLANK)
GAP INSTRUMENT CORP.
SUPPLEMENTARY PROFIT AND
LOSS INFORMATION
Charged to Profit and Loss
To Cost To Other
of Sales Accounts Total
----------------------------------------------
Year ended December 1993:
Maintenance and repairs $ 9,004 $ - $ 9,004
Depreciation and amortization
of fixed assets 1,903 1,903
Taxes other than income taxes:
Payroll 7,783 6,330 14,113
Property - 7,799 7,799
Rents 60,918 26,108 87,026
---------------------------------------------
$ 79,608 $40,237 $119,845
=============================================
Year ended December 31, 1994:
Maintenance and repairs $ 2,681 - $ 2,681
Depreciation and amortization
of fixed assets 1,905 - 1,905
Taxes other than income taxes:
Payroll 2,248 2,248
Rents 6,000 7,000 13,000
--------------------------------------------
$10,586 $ 9,248 $ 19,834
============================================
Year ended December 31, 1995:
Maintenance and repairs $ - $ 1,056 $ 1,056
Depreciation and amortization
of fixed assets - 4,675 4,675
Taxes other than income taxes:
Payroll 2,312 2,312
28,600 28,600
--------------------------------------------
$ - $ 36,643 $ 36,643
===========================================
SIGNATURES
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.
GAP INSTRUMENT CORP.
By______________________________________ Date May 1, 1996
/s/ James M. Edwardson
Chairman of the Board of Directors
and Chief Operating Officer and President
By______________________________________ Date May 1, 1996
/s/ Letty A. Norjen
Secretary and Director
By______________________________________ Date May 1, 1996
/s/ Deirdre C Morrison
Treasurer
By______________________________________ Date May 1, 1996
/s/ Michael H. Fasullo
Director
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