UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended Commission File
December 31, 1997 Number 0-3125
GENERAL DEVICES, INC.
(Exact Name of Registrant as
specified in its charter
New Jersey 21-0661726
(State of Incorporation) (I.R.S. Employer I.D. Number)
215 West Church Road
King of Prussia, PA 19406
(Address of Principal Executive Office)
Registrant's telephone number, including area code:
(610) 992-1455
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
Common Stock, Par Value $ .01 Over the Counter Market
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether registrant (1) has filed all
annual, quarterly and other reports to be filed with the
Commission and (2) has been subject to the filing requirements
for the past 90 days.
Yes x No
As of March 4, 1998 4,964,421 shares of common stock were
outstanding and the aggreate market value of such shares (based
on the average bid and asked prices of such stock) held by non-
affiliates was approximately $89,854.
Table of Contents
PART I
Page
Item 1. Business 1
Item 2. Properties 4
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security
Holders 5
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 5
Item 6. Selected Financial Data 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 7A. Quantitative and Qualitative Disclosures about 8
Market Risks
Item 8. Financial Statements and Supplementary Data 9
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 19
PART III
Item 10. Directors and Executive Officers of the Registrant 19
Item 11. Executive Compensation 19
Item 12. Security Ownership of Certain Beneficial Owners
and Management 19
Item 13. Certain Relationships and Related Transactions 20
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 21
PART I
Item 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
General Devices, Inc. (the Company), a New Jersey Corporation
organized in 1953, has been engaged in the business of providing
contract technical services. The Company has been supplying
contract technical services consisting of experienced
engineering, scientific and other technical personnel to a wide
variety of businesses in the United States and Europe directly,
or through a predecessor Company since 1956.
Effective April 14, 1990, the Company sold most of its
technical services business, and certain operation assets to TAD
Technical Services Corporation. On June 1, 1990, the Company
sold its 100% owned British subsidiary, GDI Euroforce Ltd. to TAD
Technical Services Corporation. The Company continues to operate
in the technical services business from its King of Prussia,
Pennsylvania location on a much smaller scale. It has been
inactive however, and did file a Petition of Reorganization
under Chapter 11 of the Federal Bankruptcy Code on August 23,
1996. The Court confirmed the Company's Chapter 11 reorganiztion
plan on December 22, 1997. Since that date the Company is
actually operating its business again.
The Company maintained a presence in Western Europe through its
wholly owned German subsidiary, General Devices, GmbH which was
organized in 1975. German operations have been dormant for
several years as a result of continuing litigation and were
written off during 1991. The Company is completely inactive in
Europe at this date.
At December 31, 1991, the Company owned 51% of the capital
shares of MRG Search and Placement, Inc. of New Haven,
Connecticut, an executive recruiting firm specializing in the
recruitment of middle to senior management personnel for high
technology and financial positions. The Company sold its
remaining 51% share of MRG on March 27, 1992 to MRG employees.
In 1986, the Company sold all of the stock of Worldwide
Computer Services, Inc. in a public offering.
In 1982, the Company acquired 100% of the capital shares of
Timesavers Inc., Sunnyvale, California, which was engaged
primarily in the business of providing temporary personnel, both
technical and clerical. Timesavers, Inc. was sold in August 1989
to CDI Corporation.
As of March 4, 1997, the Company's remaining operatons consist
of one administrative office, which since January 1, 1993 until
the Company's Chapter 11 Reorganization Plan was confirmed on
1
December 22, 1997, has had no active clients or revenues. There
have been no active employees. The Company is now operating as a
going concern and expects revenues shortly.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company's business had been separated in two segments:
contract technical services and executive recruiting. After the
1990 sale of the services business, the Company's remaining
operations consisted of one technical service office, a dormant
operation in Germany (which was written off in 1991) and the
executive recruiting business (which was sold in 1992). Since
then the Company has been inactive.
The Company was primarily engaged in the temporary placement of
technical, clerical and computer personnel prior to the sale of
most of its technical services division. For 1997, operations
consisted of one inactive technical service office. In 1989, the
Company employed an average of approximately 1,000 persons. In
1990, after the sale of most of the technical services business,
the Company employed approximately 35 persons as it did in 1991.
In 1992, the Company employed an average of only 6 persons
throughout the year and employed no one in 1993, 1994, 1995 or
1996. The Company had no sales or revenues in 1997.
EXECUTIVE RECRUITING
On August 20, 1981, the Company acquired in an exchange of
stock 80% of the common stock of New England Recruiters, Inc.
(MRG). During 1991, the Company reduced its ownership to 51%.
On March 27, 1992, two employees of MRG purchased the Company's
and the other stockholder, Mr. Polak's stock.
TECHNICAL SERVICES
Effective April 14, 1990, the Company sold most of its
technical services business, and certain operating assests to TAD
Technical Services Corporation. The Company continued to operate
in the technical services business from King of Prussia,
Pennsylvania on a much smaller scale as it had a 3 year non-
compete agreement with TAD that covered most of the United
States.
In the contract technical services industry, the Company
provided temporary, experienced engineering, scientific and other
technical personnel to a wide variety of business in the Eastern
United States. Total domestic and foreign technical services
revenues on an historical basis amounted to (NONE), (NONE),
(NONE) and (NONE) in 1997, 1996, 1995 and 1994 respectively.
2
During 1992 and 1991, the defense and aerospace (aircraft,
missiles, weapons systems), electronics, communications and
computer industries were among the more important industries
utilizing the Company's contract technical personnel. We
supplied no one in 1993, 1994, 1995, 1996 or 1997.
Technical personnel supplied to domestic customers are
employed by the Company, which undertakes all ordinary
administrative functions of an employee. The Company employes
individuals to fill specific requirements of its clients.
Clients are billed for the services of the Company's technical
employees, and those employees are paid on an hourly basis. The
Company derives its profit from the differential between the
hourly rates charged and those paid.
The duration of assignments varies from a few months to several
years for major defense, aerospace, communications, computer and
information technology projects. Employees work at the client's
facilities. Technical employees are either selected by the
client on the basis of resumes and other background information
supplied by the Company, or the client relies on the Company to
select the particular individual.
In all cases, the Company's technical employees worked under
the client's direction and supervision. The Company understands
that the contract technical service industry generally takes the
position that any liability for the quality of the employee's
performance rests with the client and is not aware that this
position has ever been challenged.
During 1997, 1996, 1995, 1994 and 1993, the Company had no
sales. In 1992, the Company had sales to one customer, the
Boeing Company, which constituted 46% of technical service sales.
The Technical services industry operates in a highly
competitive environment dominated by large manufacturing
customers. A majority of technical service business is obtained
by competitive bidding. There are about fifty national suppliers
of technical personnel with revenues in excess of $500 million. A
large number of suppliers and the low cost of entry has led to
very competitive bidding on most contracts. The new year does
look promising to the industry, mainly because of the deep
shortage of technical help. In addition, extensive cutbacks and
downsizing in not just the defense sector but all industries that
use our type of staffing services has caused a demand for
technical personnel. All these companies now encourage using
temporary help or outplacing when new hiring is needed. The "IT"
or Information Technology segment of our industry is especially
hot with a shortage of Technical personnel.
3
FOREIGN OPERATIONS
The Company operated its contract technical services business
in Europe through General Devices GmbH (GDIG) (no revenues since
1986) and in later years through GDI Euroforce, LTD, a 100% owned
British subsidiary. GDI Euroforce was sold June 1, 1990. The
Company had no sales overseas in 1997, 1996, 1995, 1994 or 1993.
The differences the Company had with the German government over
labor laws, tax withholding and confiscation of its assets,
resulted in our not being able to recover our German assets
because of restrictions by the German government. This was after
we "won" our case in court. During 1991 the Company ceased
funding the German representative, and the investment in GDIG was
written off and GDIG was removed from the consolidated financial
statements.
Item 2. PROPERTIES
The Company owned the building housing its corporate
headquarters and technical services division in Norristown,
Pennsylvania. On December 30, 1992 the Company signed an
agreement with its mortgagee to give them the deed "in lieu of
foreclosure". The Company had become 6 months overdue in its
mortgage payment. The Company has written off the asset of the
building and also the liability of the mortgage as of December
31, 1992. The actual sale of the building happened December 30,
1993. The Company owns no real property at this time.
Item 3. LEGAL PROCEEDINGS
All legal proceedings of the past have been litigated and
settled. At present, the Company has no ongoing legal
proceedings except for Chapter 11 Reorganization which was
confirmed on December 22, 1997. All other legal problems have
been settled or abandoned.
4
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
Item 5. MARKET FOR THE COMPANY'S STOCK AND RELATED SECURITY
MATTERS
(a) PRINCIPAL MARKET: LISTED ON THE OVER THE COUNTER
"BULLETIN BOARD" SYMBOL "GDIC"
(b) STOCK PRICE INFORMATION
The following table sets for the range of the high and low bid
quotations of the Common Stock for the past two years in the
over-the-counter market, as reported by the over the counter
"Bulletin Board" and in the pink sheets.
1996 1997
High Low High Low
1st Quarter .0025 .0025 .0001 .0001
2nd Quarter .0025 .0025 .0001 .0001
3rd Quarter .0025 .0025 .0001 .0001
4th Quarter .0025 .0025 .0001 .0001
(c) As of March 7, 1998, the Company has approximately
3,500 stockholders of which approximately 1,500 were in the name
of nominee (street name).
5
Item 6. SELECTED FINANCIAL INFORMATION (UNAUDITED)
DOLLARS IN THOUSANDS YEARS ENDED DECEMBER 31,
(Except per share amounts) 1997 1996 1995 1994 1993
RESULTS OF OPERATIONS
Revenues - total operations 0 0 0 0 0
Revenues - discontinued operations 0 0 0 0 0
Revenues - continuing operations 0 0 0 0 0
Earnings (loss) from continuing
operations $ (5) (105) 65 (140) (172)
Earnings (loss) from discontinued
operations - - - - -
Gain (loss) on disposal of
discontinued operations - - - - -
Gain (loss) before extraordinary
credits (5) - - - -
Gain from discharge of
indebtedness in bankruptcy 2163 - - - -
Net Earnings (loss) 2158 (105) 65 (140) (172)
Gain (loss) per share from
continuing operations (.03) .01 (.03) (.04)
Loss per share before
extraordinary credits - - - - -
Extraordinary credits per share .53 - - - -
Net earnings (loss) per share .53 (.03) .00 (.03) (.04)
FINANCIAL CONDITION
Working capital (deficit) 25 (2180) (2631) (2696) (2563)
Total assets - - - - -
Short-term and current portion
of long term debt 4 2179 928 926 924
Long-term debt - - - - -
Stockholders equity (deficit) 21 (2180) (2631) (2696) (2563)
No dividends have been paid
6
Item 7. MANAGEMENT DISCUSSION ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
Results of Operations
1997 vs. 1996
General Devices, Inc. was again an inactive operation in 1997.
Not only were there no sales, no revenues and no profits, the
Company had no field or staff employees. The President and the
Treasurer again donated their time to keep an ongoing continuity
to keep the Company alive, administering legal, tax or S.E.C.
inquiries.
Operating expense was still minimal without employees.
The Company operated as a "Debtor in Possession".
Administrative responsibilities of the Chapter 11 Reorganization
were carried out is a timely manner. The Reorganization Plan was
confirmed on December 22, 1997. The creditors were then all paid
in full per the conditions of the Reorganization Plan.
Results of Operations
1996 vs. 1995
General Devices, Inc. was again an inactive operation in 1996.
Not only were there no sales, no revenues and no profits, the
Company had no field or staff employees. The President and the
Treasurer again donated their time to keep an ongoing continuity
to keep the Company alive, administering legal, tax or S.E.C.
inquiries.
Operating expense was still minimal without employees.
Interest expense remained approximately the same in 1996 as in
1995, consisting primarily of the accrued unpaid interest on the
convertible debentures. We did adjust the accrued interest on
the defaulted debentures by the additional amount of $90,957 for
the period from December 1, 1995 up to the petition filing date
of August 23, 1996.
Liquidity and Capital Resources
The Company's working capital and current ratio at December 31,
in each of the past three years were:
1997 1996 1995
Working Capital (deficit)
(in thousands) $ 21 ($2180) ($1705)
Current ratio 6 to 1.0 .001 to 1 .001 to 1
7
ITEM 7A. QUANTATATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISKS
The Company had no market risk sensitive investments at the end
of its fiscal year ended December 31, 1997.
The $21,043 increase in working capital from 1996 to 1997
resulted from the confirmation of our Reorganization Plan under
Chapter 11 which eliminated all the Company's debts by an
exchange of common stock equity to satisfy all the claims of the
debtors creditors. In addition, a small group of investors
exchanged $25,000 in cash for 500,000 restricted investment
common shares enabling the Company to end up the year with
working capital of $21,043 after liabilities.
There were no capital expenditures in 1997 0r 1996
In early 1989, the Company began selling accounts receivable to
a single investment bank. This arrangement replaced the
$3,000,000 line of credit the Company had with a bank. As a
result of this transaction short term borrowing was eliminated.
As described further below this arrangement was terminated in
April 1990. A similar factoring arrangement was made with a
Company controlled by an officer in October 1991 and continued
during 1992. This arrangement was available from 1993 through
1997 but was rarely used since there had been no accounts
receivable to finance.
During April 1990, our accounts receivable factor lost backing
from the consortium of banks which funded it and financing to the
Company was terminated with only a few days notice. The Company
searched for similar alternative financing, but was unable to
locate suitable arrangements in the short time available.
Negotiations were initiated with a competitor to sell portions of
the assets of its technical services business. As of April 14,
1990 future operations of eight of the Company's nine offices
were transferred to TAD Technical Services Corporation pursuant
to an asset sales agreement.
The Company is engaged in a highly competitive business which
is very labor intensive and its services generally are priced in
a close relationship to direct labor costs. To the extent
permitted by the competitive nature of the business, increases in
direct labor, costs are passed on to clients by increasing fees
for our services. Inflation would not have a material effect on
1996 or 1997 net revenues and income from continuing operations
and we do not expect that inflation will have a significant
adverse effect to any business done in 1998.
8
The Company has continued on as an inactive entity, closing
down operations in an orderly fashion. Operating costs have been
cut and there is no staff. Cash expenditures had been deferred.
In light of the condition of the operations of the Company, it
was doubtful that the Company could continue as a going concern
much longer without some outside help or reorganization. This is
why the Company filed a petition for Chapter 11 on August 23,
1996. The Chapter 11 Reorganization Plan was confirmed on
December 22, 1997. The Company is now active in business.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements and Financial
Statement Schedules:
1. Financial Statements Page
Independent Auditors Report 10
Balance Sheets - December 31, 1997 and 1996 11
Statements of Operations - years ended
December 31, 1997, 1996 and 1995 12
Statements of Stockholder's Equity
(Deficency) - years ended December 31, 1997,
1996 and 1995 13
Statements of Cash Flows - years ended
December 31, 1997, 1996 and 1995 14
Notes to Financial Statements 15
All schedules are omitted because they are not applicable or
not required or because the required information is included in
the financial statements or notes thereto.
9
INDEPENDENT AUDITORS' REPORT
To the Stockholders
General Devices, Inc.
King of Prussia, Pennsylvania
We have audited the accompanying balance sheet of General
Devices, Inc. (a New Jersey corporation) at December 31, 1997 and
the related statements of operations, stockholders' equity
(deficiency) 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.
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 General Devices, Inc. at December 31, 1997 and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
COGEN SKLAR LLP
Bala Cynwyd, Pennsylvania
March 27, 1998
10
GENERAL DEVICES, INC.
BALANCE SHEET
DECEMBER 31, 1997 AND 1996
1997 1996
(Unaudited)
ASSETS
Current assets:
Cash 25,043 15
Accounts Receivable - -
Total current assets 25,043 15
Total assets 25,043 15
LIABILITIES & SHAREHOLDERS EQUITY
Pre-petition liabilities - 2,179,210
Current liabilities:
Accounts Payable 4,000 -
Other accrued liabilities - 670
Total current liabilities 4,000 2,179,880
Long term debt:
Other liabilities - -
Total liabilities 4,000 2,179,880
Stockholders equity:
Common stock $.01 par value: authorized
10,000,000 shares, issued 4,964,421 49,644 40,969
and 4,096,923 issued at December 31,
1997 and 1996 respectively
Capital in excess of par value 2,032,955 1,998,255
Retained earnings (2,000,077) (4,157,610)
82,522 (2,118,386)
Less:
Treasury stock at cost, 20,300 shares ( 61,479) ( 61,479)
Total shareholders equity (deficit) 21,043 (2,179,865)
Total liabilities and shareholders
equity (deficit) 25,043 15
See notes to Financial Statements
11
GENERAL DEVICES, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1997 1996 1995
(Unaudited)
Net sales - - -
Operating expenses
Cost of sales - - -
General and administrative 5,551 13,903 16,708
Operating profit (loss) ( 5,551) ( 13,903) ( 16,708)
Other expenses
Interest - ( 90,957) (139,100)
Miscellaneous income - 352 220,924
Profit (loss) before
extraordinary item ( 5,551) (104,508) 65,116
Extraordinary item
Discharge of indebtedness in
bankruptcy 2,163,084 - -
Net profit (loss) 2,157,533 (104,508) 65,116
Per Share
Profit (loss) before
extraordinary item - (0.03) 0.02
Extraordinary item 0.53 - -
Net profit (loss) per share 0.53 (0.03) 0.02
See notes to Financial Statements
12
GENERAL DEVICES, INC.
STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
YEAR ENDED DECEMBER 31, 1997
YEARS ENDED DECEMBER 31, 1996 AND 1995 (UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARES)
Capital in
Common Stock
Excess of Accum Treasury
Shares Amount Par Value Deficit
Stock Total
Balance - Dec 31, 1994 4,096,923 41 1,998 (4,118) (61) (2,140)
Net profit 65 65
Balance - Dec 31, 1995 4.096,923 41 1,998 (4,053) (61) (2,075)
Net loss (105) (105)
Balance - Dec 31, 1996 4,096,923 41 1,998 (4,158) (61) (2,180)
Issuance of additional
common stock 500,000 5 20 25
Issuance of stock for
debt in connection
with bankruptcy 367,498 3 15 18
Net profit 2,158 2,158
Balance - Dec 31, 1997 4,964,421 49 2,033 (2,000) (61) 21
See notes to Financial Statements
13
GENERAL DEVICES, INC.
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
1997 1996 1995
Cash flows from operating activities
Net income (loss)before extraordinary
item 5,551 (104,508) 65,116
Extraordinary item 2,163,084 - -
Adjustments to reconcile net income
(loss) to net cash from operating
activities
Extraordinary item (2,167,084) - -
Increase (decrease) in other
liabilities 9,579 104,503 (65,200)
Net cash provided (used) by
operations 28 (5) (84)
Cash flows from financing activities
Issuance of capital stock 25,000 - -
Increase (decrease) in cash beginning 25,028 (5) (84)
Cash - Beginning of year 15 20 104
Cash - End of year 25,043 15 20
Supplemental disclosures of cash
flow information
Cash paid during the year for:
Interest - - -
Income taxes - - -
Supplemental disclosure of noncash
financing activities
Issuance of common stock in
satisfaction of debt 18,375 - -
See notes to Financial Statements
14
GENERAL DEVICES, INC.
N
OTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operations
General Devices was engaged in the business of providing contract
technical services principally in the areas of experienced
engineering, scientific and technical personnel to a variety of
businesses. During 1997, 1996 and 1995, it has been inactive.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates based on management's knowledge and experience.
Accordingly, results could differ from those estimates.
Income Taxes
The company reports income taxes under Financial Accounting
Standards 109. However, the income tax benefits of any loss
carryover has been fully reserved.
Income (Loss) Per Share
Effective year ended December 31, 1997, the company adopted SFAS
No. 128, "Earnings Per Share" (EPS). This statement establishes
standards for computing and presenting EPS, replacing the
presentation of currently required primary EPS with a
presentation of Basic EPS. Under this new standard, Basic EPS is
computed based on weighted average shares outstanding and
excludes any potential dilution; Diluted EPS reflects potential
dilution from the exercise or conversion of securities into
common stock or from other contracts to issue common stock and
is similar to the currently required fully diluted EPS. SFAS 128
was effective for financial statementd issued for periods ending
after December 15, 1997 and requires restatement of the prior
years' earnings per share.
Prior year amounts for net loss per common share were recomputed
in accordance with SFAS No. 128; however, such recomputed
amounts were unchanged from those previously reported.
15
GENERAL DEVICES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
Basic earnings (loss) per share include the weighted average
number of common shares outstanding during the year. Diluted
earnings (loss) per share include the weighted average number
of shares outstanding and dilutive potential common shares, such
as warrants and options. Since there are no dilutive potential
common shares, basic and diluted earnings (loss) per share are
the same.
Recently Issued Accounting Standards
During June 1997, the FASB issued SFAS No. 130, "Reporting of
Comprehensive Income". This statement establishes standards for
reporting and display of comprehensive income and its components.
The reporting and display requirements of SFAS No. 130 are
effective for fiscal years beginning after December 15, 1997.
The Company intends to comply with this statement for its year
ended December 31, 1998.
During June 1997, the FASB issued SFAS No. 131, "Disclosures
About Segments of an Enterprise and Related Information". This
statement established standards for the way that public business
enterprises report information about operating segments in
annual financial statements and related disclosures about
products and services, geographic areas and major customers.
The reporting and disclosure requirements of SFAS No. 131 are
effective for periods beginning after December 15, 1997. The
Company presently intends to comply with this statement for its
year ended December 31, 1998.
NOTE 2 - EXTRAORDINARY ITEM
On August 23, 1996, the Company filed a petition for bankruptcy
and on December 22, 1997, the United States Bankruptcy Court for
the Eastern District of Pennsylvania approved the Company's plan
of reorganization. Under the plan all general creditor and
debenture bond claims amounting to $1,837,201 were converted into
367,498 shares of common stock valued at $.05 per share or
$18,375 with the balance of $1,818,826 shown as an extraordinary
item.
In prior years, the Company recorded reserves for liabilities for
which claims were not filed and were discharged in bankruptcy.
These claims of $347,981 less legal fees of $4,000 are shown as
an extraordinary item for the year ended December 31, 1997.
16
GENERAL DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
NOTE 2 - EXTRAORDINARY ITEMS (continued)
Interest on debentures for the year ended December 31, 1997 has
not been shown since all interest ceased on the filing of the
petition in bankruptcy.
NOTE 3 - PLAN OF REORGANIZATION
The Company's confirmed plan of reorganization provided for the
following:
Creditors and Debenture Holders
Class 1 priority creditors to receive payment in full. $4,000 of
legal fees has been shown in accounts payable.
Class 2 creditors - other claims received 200 shares of common
stock for each $1,000 of claim. There was issued 25,994 shares
of common stock valued at $1,300 for $129,681 of debt.
Class 3 creditors, the debenture holders, received 368 shares in
full payment for each debenture held, based on $1,000 principal
and $840 interest or a $1,840 claim. There was issued 341,504
shares of common stock valued at $17,075 issued for $1,707,520
Class 3 claims.
Class 4 - the stockholders will retain their interest without
alteration.
In summary 367,498 shares of common stock were issued with a
value of $.05 or $18,375 in satisfaction of $1,837,488 of debt.
Resumption of Operations
By agreement, 500,000 shares of common stock were issued to a
small investors group for $25,000 to be used for restart working
capital.
The Company did not meet the criteria for fresh-start reporting.
Accordingly the forgiveness of debt is reported as an
extraordinary item.
17
GENERAL DEVICES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
NOTE 4 - COMMON STOCK OPTIONS
On September 12, 1990, the Board of Directors approved a non-
qualified stock option plan authorizing the issuance of options
for 250,000 shares of common stock at market value.
During the five years ended December 31, 1997, no options were
granted or exercised. At December 31, 1997 no options were
outstanding.
NOTE 5 - INCOME TAXES
There are are no significant temporary differences between the
financial statements and tax reporting purposes.
At December 31, 1997 and 1996, the Company had net operating loss
carryovers of approximately $600,000 and $2,800,000 and general
business credit carryovers of approximately $100,000 and $100,000
available to reduce future federal income tax payable. The tax
benefit of these carryovers of approximately $300,000 and
$900,000 has been fully reserved and are not reflected in the
financial statements.
NOTE 6 - LEASES
The Company has no outstanding leases. Rent expense for 1997,
1996, and 1995 was $2,010, $2,010, and $2,010.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company's president has served without salary during the
years 1997, 1996 and 1995. In addition, he has advanced the
Company funds to pay operating expenses of approximately $5,000
per year. This loan due the president was discharged in
bankruptcy.
18
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICER OF THE COMPANY
INFORMATION CONCERNING DIRECTORS
Theodore A. Raymond, age 70, has been a Director since 1976.
He has been President and Chief Executive Officer since 1976. He
is a control person.
INFORMATION CONCERNING EXECUTIVE OFFICERS
G. William Raum, age 58, was named Assistant Treasurer in 1989.
In 1990 he was name Secretary/Treasurer and in 1991 Vice
President. He was with the Accounting Department since 1974. He
owns 500 Shares of the common stock of the Company.
Item 11. EXECUTIVE COMPENSATION
REMUNEREATION OF EXECUTIVE OFFICERS
There was no remuneration paid to any officer or director in
1997, 1996, 1995, 1994 or 1993. In 1992, none of the five most
highly compensated executive officers exceeded $60,000 in
remuneration.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth at March 3, 1997, the Company's
common stock beneficially owned by Theodore A. Raymond, the only
person known to be the beneficiaaowner of more than 5% of the
outstanding shares of common stock together with his address.
The table shows ownership by Directors and Officers.
19
Percentage of
Number of Shares Common Stock
Name of common stock Outstanding
Theodore A. Raymond 1,349,460 27.29
All Officers and Directors
as a group 1,349,960 27.30
(2 persons)
To the Company's knowledge, the stockholders listed above do not
share voting or investment power with respect to any shares of
common stock owned by them.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Starting October 1991, the Company commenced selling accounts
receivable with recourse to a corporation owned by Mr. Raymond.
There was no proceeds from the sales of such accounts receivable
during 1997, 1996 or 1995. When receivables were sold it was at
a discount rate of 2.5%. At December 31, 1997, there were no
receivables outstanding.
On January 13, 1992, T. A. Raymond, Inc., owned by Mr. Raymond,
advanced $25,000 to the Company and received a one year 10%
mortgage on which the Company's undeveloped land was the
collateral. In March of 1993, T. A. Raymond, Inc. called the
note and took over the deed of the land in lieu of foreclosure.
20
PART IV
Item 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) (1) The following financial statements are included in Part
II, Item 8:
Page
Independent Auditors Report 10
Financial Statements:
Balance Sheets, December 31, 1997 and 1996 11
Statements of Operations - years ended
December 31, 1997, 1996, and 1995 12
Statements of Stockholders Equity (Deficiency)
years ended December 31, 1997, 1996 and 1995 13
Statements of Cash Flows - years ended
December 31, 1997, 1996 and 1995 14
Notes to Financial Statements
(b) Reports on Form 8-K
A report on Form 8-K was filed by the registrant during
the last quarter of the period covering the confirmation
of the Chapter 11 Reorganization*
*Incorporated by reference
All other schedules are omitted because they are not applicable
or the required information is shown in the financial statements
or the notes thereto.
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, General Devices, Inc. has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GENERAL DEVICES, INC.
By: By:
G. William Raum Theodore A. Raymond
Secretary/Treasurer President
Date: March 10, 1998
Pursuant to the requirements of the Securities Exchange Act of
1034, this report has been signed below by the following persons
of the Registrant and in the capacities and on the dates
indicated.
By: By:
Theodore A. Raymond G. William Raum
Director, March 10, 1998 Secretary/Treasurer
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Registrants form 10-K/A for the year ended December
31, 1997.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 25,043
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25,043
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 25,043
<CURRENT-LIABILITIES> 4,000
<BONDS> 0
0
0
<COMMON> 4,964,421
<OTHER-SE> 21,043
<TOTAL-LIABILITY-AND-EQUITY> 25,043
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,551
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 2,163,084
<CHANGES> 0
<NET-INCOME> 2,167,084
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
