UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Spectrum Information Technologies, Inc.
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
847623303
(CUSIP Number)
Steven E. Gross
49 Farley Road
Short Hills, New Jersey 07078.
(973) 467-4675
(Name, address and telephone number of person
authorized to receive notices and communications)
- with a copy to -
Frederic M. Tudor, Esq.
Sills, Cummis, Radin, Tischman, Epstein & Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102
(973) 643-7000
December 21, 1998
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1 (b) (3) or (4), check the following box .
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1 (a) for other parties to whom copies are to
be sent.
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SCHEDULE 13D
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CUSIP NO. 847623303 Page 2 of 5
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- --------- ----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Steven E. Gross
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_|
(b)|_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS *
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
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7 SOLE VOTING POWER
NUMBER OF 250,000
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
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REPORTING PERSON 9 SOLE DISPOSITIVE POWER
WITH
250,000
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES * |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.4%
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14 TYPE OF REPORTING PERSON *
IN
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Item 1. Security and Issuer.
The name of the issuer with respect to which this Schedule 13D is being
filed is Spectrum Information Technologies, Inc. (hereinafter called the
"Issuer"). The address of Issuer's principal executive offices is 2700
Westchester Avenue, Purchase, NY 10577. This statement relates to Issuer's
Common Stock, $.001 par value (the "Common Stock").
Item 2. Identity and Background.
(a) This Schedule 13D is being filed on behalf of Steven E. Gross.
(b) Mr. Gross's home address is 49 Farley Road, Short Hills,
New Jersey 07078.
(c) Mr. Gross is an attorney with Sills, Cummis, Radin, Tischman,
Epstein and Gross, P.A., a law firm with its principal business
address at One Riverfront Plaza, Newark, New Jersey 07102.
(d) Mr. Gross has not, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) Mr. Gross has not, during the last five years, been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Mr. Gross is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
On December 21, 1998, Mr. Gross entered into a Stock Purchase Agreement
with Issuer pursuant to which Mr. Gross purchased 250,000 shares of Common Stock
and an option to acquire an additional 150,000 shares of Common Stock at an
exercise price of $0.15 per share (the "Option"). Mr. Gross' Option is not
exercisable until December 21, 1999 and it may be exercised from such date until
December 21, 2003. The total purchase price paid by Mr. Gross for the Common
Stock and his Option was $50,000, which was paid from family personal funds.
Item 4. Purpose of Transactions
The acquisition of his Common Stock and his Option has been made by Mr.
Gross for investment purposes. He intends continuously to review his investment
in Issuer. In reaching any decision with respect to such investment, he will
take into consideration various factors, such as Issuer's business prospects and
financial position, other developments concerning Issuer, the price level of the
Common Stock, conditions in the securities markets, and general economic and
industry conditions. Depending upon the results of his review of any or all of
the aforementioned factors, he may decide to purchase additional securities of
Issuer or to dispose of all or a portion of his Common Stock or his Option.
Mr. Gross has no present plan or proposal that relates to or would result
in any of the actions specified in clauses (a) through (j) of Item 4 of the
Schedule 13D. However, Mr. Gross is aware that Issuer's new Board of Directors
is proposing or plans to propose certain such actions, and he reserves the right
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to propose or participate in future transactions that may result in one or more
of such actions.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Gross beneficially owns 250,000 shares of Common Stock.
This represents 4.4% of the issued and outstanding Common Stock.
The shares underlying Mr. Gross' Option are not included in the
number of shares beneficially owned by Mr. Gross since, as noted
in Item 3, Mr Gross'Option is not exercisable until December 21,
1999. In addition, Mr. Gross disclaims beneficial ownership of
the securities of Issuer owned by Jason Gross, his son (who does
not live with Mr. Gross). Jason Gross has filed a separate
Schedule 13D with respect to such securities.
(b) Mr. Gross has sole voting power and dispositive power with
respect to his shares of Common Stock.
(c) There have been no transactions in respect of the Common Stock
during the past 60 days which are required to be reported in this
Item 5 except as described in Item 3.
(d) No person other than Mr. Gross has the right to receive or the
power to direct the receipt of dividends from or the proceeds
from the sale of Common Stock owned beneficially by Mr. Gross.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
None, other than described in Item 3.
Item 7. Material to be Filed as Exhibits.
7.1 Stock Purchase Agreement between Spectrum Information Technologies,
Inc. and Steven E. Gross dated December 21, 1998.
7.2 Option Agreement between Spectrum Information Technologies, Inc. and
Steven E. Gross dated December 21, 1998.
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1998 /s/ Steven E. Gross
Steven E. Gross
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EXHIBIT A
Steven E. Gross
December 21, 1998
Spectrum Information Technologies, Inc.
2700 Westchester Avenue
Purchase, NY 10577
Re: Stock Purchase Agreement
Gentlemen:
The following sets forth the terms and conditions of a purchase of
securities in Spectrum Information Technologies, Inc. (the "Company") by the
undersigned, to be completed concurrently with the execution of this Agreement:
1. Stock Purchase. Steven E. Gross ( "Purchaser") shall purchase
250,000 shares of common stock par value $.001 of the Company (the "Common
Stock"), and an option to acquire 150,000 additional shares of such Common Stock
(the "Option"), for a total purchase price of $50,000, payable by bank or
certified check upon the execution of this Agreement. The terms and provisions
of the Option are set forth in Exhibit A annexed hereto. The Purchaser has
further delivered the Investor's Representation Letter attached hereto as
Exhibit B.
2. Representations and Warranties of the Company. These representations
and warranties shall survive for twelve (12) months following the date of this
Agreement. In consideration of the purchase described above and the remaining
terms hereof, the Company represents and warrants that to its knowledge:
a. Stock Ownership. Upon issuance, the Common Stock and the shares
underlying the Option will be duly authorized and validly issued, fully paid and
non-assessable. The Option shall be enforceable in accordance with its terms.
b. Title. Following consummation of the transaction, the Company
warrants title to the Common Stock and Option and covenants and agrees at its
expense to defend Purchaser's right, title and ownership of the Common Stock
(whether issued on the date hereof or upon exercise of the Option) against the
claims and demands of all persons whomsoever.
c. Company's Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all necessary power to carry on its business as now operated
by it.
d. Authorization to Convey Stock. The Company has full power and
authority to enter into this Agreement and the Option and the Company has full
power and authority to sell, convey, assign and transfer the Common Stock and
Option to Purchaser and otherwise consummate the transaction contemplated by
this Agreement; this Agreement constitutes the valid and binding obligations of
the Company enforceable in accordance with its terms; neither the execution and
delivery of this Agreement and the Option, nor the consummation of the
transaction contemplated herein in the manner herein provided, will violate any
agreement to which the Company is a party or by which the Company is bound, or
any law, order, decree or judgment applicable to the Company; and no
authorization, approval or consent of any third party is required for the lawful
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execution, delivery and performance of this Agreement and the Option by the
Company.
e. All the reports filed by the Company under the Securities
Exchange Act of 1934, from March 31, 1997 through the date of this Agreement are
true and correct in all material respects, comply in all material respects with
the federal securities laws, are complete and up-to-date as of the date reported
in all material respects, and neither contain any untrue statement of a material
fact, nor omit to state any material fact necessary, in the light of the
circumstances under which the statements are made, to make the statements
therein not misleading.
f. The cash flow requirements schedule annexed hereto as Exhibit C,
which is based on estimates made in good faith as of the date hereof, is true
and correct, contains a list of all liabilities to be paid or provided for by
the Company through December 11, 1998, and the cash sources and means for paying
such liabilities. There are no other claims, liabilities or obligations
(contingent or otherwise) of the Company, except as set forth in this Agreement,
existing option agreements as set forth in a schedule hereto, a closing balance
sheet (which presents estimates made in good faith of the assets and liabilities
of the Company as of December 11, 1998) or a supplementary disclosure list
approved by the undersigned, such schedule, balance sheet and list are contained
in Exhibit D annexed hereto. Except as set forth in Exhibit D, and except for
options granted to Powers & Co., Maurice Schonfeld, Robert Ingenito and Jon
Gerber, there are no outstanding options, warrants, subscription or other rights
or arrangements relating to, or with respect to, any equity interest in the
Company. There are currently: (i) 5,129,295 shares of Common Stock outstanding;
(ii) 37,980 shares of the Company's Class A Convertible Preferred Stock issued
and outstanding; (iii) 2,955,191 shares of the Company's pre-reorganization
common stock outstanding that have not yet been submitted to the Company's
transfer agent for conversion in accordance with the 75 to 1 stock split (which
will yield 39,403 shares of Common Stock if and when converted); and (iv)
762,303 shares of the Company's Class A Convertible Preferred Stock issued to
the trustee for the Class Action lawsuit pending instructions for distribution
to members of the class.
g. The Company has disclosed two threatened claims to Purchaser
alleging collectively $28,000 in damages and has provided documentation
regarding such claims to Purchaser. Other than such claims and as disclosed in
the Company's filings with the SEC, there are no litigations or investigations
pending or threatened against the Company by or in any court or administrative
agency, and all term and provisions of its Third Amended Plan of Reorganization
that was substantially consummated on March 31, 1997 have been performed by the
Company in accordance therewith, including without limitation, the payment of
all administrative costs relating thereto through the date of this Agreement.
Except as may be included in Exhibit C, as of December 11, 1998, there were no
unpaid claims for legal or accounting fees or other professional fees or costs.
h. All written statements, documents, schedules, and agreements
furnished to the undersigned, in connection with this Agreement are true,
complete, correct and up-to-date as of the date furnished in all material
respects, and neither contain any untrue statement of a material fact, nor omit
to state any material fact necessary, in the light of the circumstances under
which the statements are made, to make the statements therein not misleading.
i. The Board of Directors of the Company (the "Board") has reviewed
the transaction contemplated by this Agreement and a certified copy of its
minutes and resolutions approving the transaction have been provided to
Purchaser.
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j. The Company is in compliance in all material respects with all
material legal requirements applicable to it, its business and its assets.
3. Covenants of the Company. The Company agrees to fulfill the following
covenants as soon as possible after the date hereof:
a. The share and Option certificates purchased by the undersigned
which consist of shares duly authorized and unissued shall be delivered, as
provided herein.
b. Any acts, filings or activities necessary or reasonably
appropriate to preserve and protect the assets and standing of the Company shall
be undertaken in a cooperative manner with the undersigned as soon as possible
4. Modification, Discharge, Termination. Neither this Agreement nor any
provisions hereof shall be modified, discharged, or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge, or termination is sought.
5. Notices. Any notice, demand, or other communication that any party
hereto may be required, or may elect, to give to anyone interested hereunder
shall be sufficiently given if (a) deposited, postage prepaid, registered or
certified, return receipt requested, addressed to such address as may be given
herein; or (b) delivered personally at such address.
6. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the parties' benefit and the
benefit of the parties' successors, legal representatives, and assigns.
7. Entire Agreement. This Agreement and its Exhibits hereto contains
the entire agreement of the parties, and there are no representations,
covenants, or other agreements except as stated or referred to herein.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, both substantive and
remedial.
9. Severability. If any provision of this Agreement shall be held to be
void or unenforceable under the laws of any place governing its construction or
enforcement, this Agreement shall not be voidable as a result thereof, but shall
be construed to be otherwise in force with the same effect as though such
provisions were omitted.
10. Section Headings. The section headings contained herein are for
reference purpose only and shall not in any way affect the meaning or
interpretation of this Agreement.
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If the foregoing accurately reflects our agreement, please so indicate in
the appropriate space below.
SPECTRUM INFORMATION
TECHNOLOGIES, INC.
By:________________________________ _____________________________________
LAWRENCE M. POWERS, STEVEN E. GROSS
Chairman and CEO
Address: 2700 Westchester Avenue Address: 49 Farley Road
Purchase, New York 10577 Short Hills, New Jersey 07078
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EXHIBIT B
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT is made as of this 21st day of December, 1998,
by and between Spectrum Information Technologies, Inc. a Delaware Corporation
("Spectrum") and Steven Gross (the "Optionee").
WHEREAS, Spectrum and Optionee have entered into a Stock Purchase Agreement
dated December 21, 1998 providing for the sale to Optionee of shares of common
stock of this corporation and the stock option described herein at an agreed
overall cash purchase price of $50,000 which has been duly paid.
NOW, THEREFORE, in consideration of the payment described, the mutual
covenants hereinafter set forth and for other good and valuable consideration,
the parties hereto agree as follows:
1. GRANT OF OPTION. Spectrum hereby grants to the Optionee the right and
option (hereafter called the "Option"), to purchase all or any part of an
aggregate of 150,000 shares of Spectrum common stock, par value $0.001 per
share, on the terms and conditions set forth herein. This grant is made pursuant
to a resolution of the Company's Board of Directors duly adopted.
2. EXERCISE PRICE AND EXPIRATION. The exercise price and the expiration dates
as to the share underlying this Option shall be as follows:
Number of Share Exercise Price Expiration Date
150,000 $0.15 per share December 21, 2003
3. DURATION. The Option granted hereby shall become exercisable on December
21, 1999 and shall remain exercisable at the stated price through the expiration
date set forth above. To facilitate partial transfer, exercise or sale, this
Option may be subdivided into options in smaller denominations upon Optionee's
request in writing from time to time.
4. LIMITATION ON DISPOSITION. The Option and underlying shares of common
stock have not been registered under the Securities Act of 1933 (the "Act") or
under applicable state securities laws and, therefore, cannot be sold, assigned,
or otherwise transferred unless they are subsequently registered under the Act
and under applicable state securities laws or an exemption from such
registration is then available. Optionee hereby agrees that he will not sell,
assign, or transfer the Option and underlying shares following exercise unless
they are registered under the Act and under applicable state securities laws or
an exemption from such registration is then available, according to a legal
opinion reasonably acceptable to the Company.
5. MANNER OF EXERCISE OF OPTION. This Option may be exercised, subject to
the terms and conditions contained herein, by delivering written notice to the
Chief Executive Officer or President or Chief Accounting Officer of Spectrum, at
its principal office no less than three days in advance of the proposed exercise
date. Such notice shall specify the number of shares of common stock with
respect to which the Option is being exercised and the effective date of the
proposed exercise and shall be signed by the Optionee. The notice shall be
accompanied by a certified check or cash in the amount of the aggregate option
exercise price for such number of shares. In no event shall stock be issued or
certificates be delivered until full payment shall have been received by
Spectrum as to such exercise or partial exercise, nor shall Optionee have any
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right or status as a shareholder of such underlying shares prior to such
exercise. Certificates for shares of common stock purchased upon the exercise of
the Option shall be delivered to the Optionee as soon as practicable following
the effective date on which the Option is exercised.
6. ADJUSTMENT ON RECAPITALIZATION, MERGER OR REORGANIZATION. If the
outstanding shares of the common stock of Spectrum are subdivided, consolidated,
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities of Spectrum through reorganization, merger,
recapitalization, reclassification, capital adjustment or otherwise, or if
Spectrum shall issue common stock as a dividend or upon a stock split, then the
number of shares subject to the unexercised portion of this Option shall be
appropriately adjusted by the Board of Directors. Any such adjustment on
outstanding Options shall be made without change in the total exercise price
applicable to the unexercised portion of the Option. If, in the event of a
merger or consolidation, Spectrum is not the surviving corporation, and the
event that the Agreement of Merger or Consolidation does not provide for the
substitution of a new Option for this Option, or for the assumption of this
Option by the surviving corporation, or in the event of the dissolution or
liquidation of Spectrum, the Optionee shall have the right immediately prior to
the effective date of such merger, consolidation, dissolution or liquidation, to
exercise this Option in whole or in part, provided, however, that this Option
shall not be exercisable in whole or in part later than the date noted in
paragraph 2 above. Any adjustments made pursuant to this section shall be made
by the Board of Directors of Spectrum, whose good faith determination in
compliance with Delaware law, as to what adjustment shall be made and the extent
thereof, shall be final, binding and conclusive. In computing any adjustment
hereunder, any fractional share which might otherwise become subject to an
Option shall be eliminated.
SPECTRUM INFORMATION TECHNOLOGIES, INC
By:________________________________________
Lawrence M. Powers, Chairman and CEO
OPTIONEE
___________________________________________
Steven Gross
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