SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1991
COMMISSION FILE NO.: 0-161470
TELE-OPTICS, INC.
(Name of Small Business Issuer in its Charter)
Delaware 65-0008442
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
21218 St. Andrews Boulevard, Suite 642, Boca Raton, Florida 33433
(Address of principal executive offices, including zip code)
(561) 360-4951
(Issuer's telephone number)
1006 West 15th Street, Riviera Beach, Florida 33404
(Former Name, Former Address and former Fiscal Year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to 12(g) of the Act:
Common Stock, par value $.01 per share
Check whether the Issuer (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 (or for such shorter period that the
Issuer was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days. Yes No x
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-B is not contained herein, and will not
be contained, to the best of Issuer's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. (X)
State issuer's revenues for its most recent fiscal year: $-0-
The aggregate market value of the Registrant's voting stock held by
non-affiliates, based upon the closing sales price for the common
stock of $-0- per share on April 30, 1999, was $-0-.
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.
As of April 30, 1999 there were 4,790,000 shares issued of which
total 4,790,000 were outstanding.
<PAGE> 1
TELE-OPTICS, INC.
TABLE OF CONTENTS
Page
PART I
Item 1. Business........................................ 3
Item 2. Properties...................................... 5
Item 3. Legal Proceedings............................... 5
Item 4. Submission of Matters to a
Vote of Security Holders.................... 5
PART II
Item 5. Market for Company's Common Equity
And Related Stockholder Matters............. 6
Item 6. Management's Discussion and
Analysis or Plan of Operations.............. 7
Item 7. Financial Statements and Supplementary Data..... 9
Item 8. Change in and Disagreements
with Accountants on Accounting
and Financial Disclosure.................... 20
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with
Section 16(a) of the Exchange Act........... 21
Item 10. Executive Compensation.......................... 22
Item 11. Security Ownership of Certain
Beneficial Owners and Management.......... 23
Item 12. Certain Relationships and Related Transactions.. 24
Item 13. Exhibits, Financial Statement
Schedules and Reports on Form 8-K.......... 25
SIGNATURES
<PAGE> 2
PART I
ITEM 1. BUSINESS
Tele-Optics, Inc. (the "Company" or the "Registrant") was
incorporated in December 1986 for the purpose of acquiring all of
the common stock of Lenzar Optics, Inc. ("Lenzar"). Lenzar was
then engaged in development, manufacture and marketing of a variety
of optical, electronic and electro-optical products for use in the
medical and defense industries. In September, 1991, the Company
sold all assets related to Lenzar's operations to a third party.
Following that sale, the Company had no active business operations
and intended to liquidate its assets. In December 1991, the
Company entered into an agreement to acquire all of the issued and
outstanding common stock of Fantasia Home, Inc. ("Fantasia") (the
"Fantasia Agreement"). In May 1992, however, the Company rescinded
the Fantasia Agreement and canceled all shares of its common stock
issued in connection with the Fantasia Agreement. Since rescission
of the Fantasia Agreement, the Company has investigated the
possibility of acquiring a potential business opportunity. The
Company however did not possess the capital necessary to
successfully pursue any such acquisition. In addition, since 1991,
the Company lacked the capital necessary to prepare and file with
the Securities and Exchange Commission (the "Commission") all
reports which the Company was required to file under the Securities
Exchange Act of 1934, as amended (the " 1934 Act"). The Company
has had virtually no active business operations since late 1991.
On November 21, 1997, (the "Closing Date"), new investors,
including the Company's current management (the "Buyers"),
completed the purchase of an aggregate of 3,100,000 shares of the
Company's Common Stock (the "Purchased Shares"), representing
approximately sixty-two (62%) percent of the Company's issued and
outstanding Common Stock as of the Closing Date. The Purchased
Shares were acquired from the authorized but previously unissued
shares of the Company's Common Stock. As part of the aggregate
purchase price for the Purchased Shares, the Buyers agreed to pay
certain obligations of the Company, including certain past due and
current accounting and legal fees, stock transfer agent fees,
franchise taxes, state and federal taxes, and other expenses
incurred or to be incurred in connection with bringing the Company
current with respect to reporting obligations under the 1934 Act.
As a result, the Company has filed certain disclosure documents
with the Commission, including Annual Reports on Form 10-KSB for
the years ended December 31, 1991, 1992, 1993, 1994, 1995, 1996 and
1997, and Quarterly Reports on Form 10-QSB for the three month
periods ended March 31, June 30, and September 30, 1992, 1993,
1994, 1995, 1996, 1997 and 1998. Simultaneously with the
acquisition of the Purchased Shares, an additional 300,000 shares
of the Company's Common stock was issued to a member of the law
firm which represented the Company in connection with the
transaction. See "Financial Statements".
Management has determined that the Company's business plan is
primarily to seek one or more potential businesses which may, in
the opinion of management, warrant the Company's involvement. The
Company recognizes that as a result of its limited financial,
managerial or other resources, the number of suitable potential
businesses which may be available to it will be extremely limited.
In seeking to attain its business objective, the Company will not
restrict its search to any particular industry. Rather, the
Company may investigate businesses of essentially any kind or
nature, including but not limited to, finance, high technology,
manufacturing, service, sports, research and development,
communications, insurance, brokerage, transportation and others.
Notwithstanding the foregoing, management does not intend to become
involved with a company which is an "investment company" under the
Investment Company Act of 1940, or with a company which may be
deemed an "investment advisor" under the Investment Advisors Act of
1940. Nor does the Company intend to become an investment company
or an investment advisor. Management's discretion is otherwise
unrestricted and it may participate in any business whatsoever
<PAGE> 3
which may in the opinion of management, meet the business
objectives discussed herein. It is emphasized that the business
objectives discussed herein are extremely general and are not
intended to be restrictive upon the discretion of management. As
of the date of this report, the Company has not chosen the
particular area of business in which its proposes to engage and has
not conducted any market studies with respect to any business or
industry, although management of the Company has had preliminary
discussions with a variety of enterprises.
The Company will not restrict its search to any specific industry
(except as set forth above), but may acquire an entity or position
in a company which is (i) in its preliminary or development state;
or (ii) is a going concern. At this time, it is impossible to
determine the needs of the business in which the Company may seek
to participate, and whether such business may require additional
capital, management, or may be seeking other advantages which the
Company may offer. In other instances, possible business endeavors
may involve the acquisition of or a merger with a company which
does not need additional equity, but seeks to establish a public
trading market for its securities.
Businesses which seek the Company's participation in their
operations may desire to do so to avoid what such businesses deem
to be adverse factors related to undertaking a public offering.
Such factors include substantial time requirements and legal costs,
along with other conditions or requirements imposed by Federal and
state securities laws.
The analysis of potential business endeavors will be undertaken by
or under the supervision of the Company's management. Management
is comprised of individuals of varying business experiences, and
management will rely on their own business judgment in formulating
decisions as to the types of businesses which the Company may
acquire or in which the Company may participate. It is quite
possible that management will not have any business experience or
expertise in the type of businesses engaged in by a company which
may be investigated by the Company.
In analyzing prospective businesses, management anticipates
considering such factors as available technical, financial and
managerial resources; working capital and other financial
requirements; such businesses' history of operations, if any, and
prospects for the future; the nature of present and expected
competition; the quality and experience of management services
which may be available and the depth of that management; the
potential for further research and development; risk factors; the
potential for growth and expansion; the potential for profit; the
perceived public recognition or acceptance of such businesses,
products, services, trade or service marks; its name
identification; and other relevant factors.
While it is anticipated that these factors will be considered, to
a large extent a decision to participate in a specific business
will be difficult, if not impossible, to analyze through the
application of objective criteria. In many instances, the
achievements of a specific business to date may not necessarily be
indicative of its potential for the future because of various
changing requirements in the marketplace, such as the ability to
substantially shift marketing approaches, expand significantly or
change product emphasis, change or substantially alter management,
or other factors. On the other hand, the management of such
companies may not have proven their abilities or effectiveness, or
established the viability of the market, or the products or
services which they propose to market. As such, the profitability
of such a business may be unpredictable and might therefore subject
the Company and its assets to substantial risks.
It is anticipated that any number of prospective businesses will be
available to the Company from various sources, including its
management, its professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and others
who may present unsolicited proposals. In some instances, the
Company may publish notices or advertisements in financial or trade
<PAGE> 4
publications seeking potential business acquisitions. In certain
circumstances, the Company may agree, in connection with an
acquisition, to pay a finder's fee or other compensation to an
investment banking firm or other person (who may or may not be
affiliated with the Company) who submits to the Company a business
in which the Company participates.
It is anticipated that locating and investigating specific
proposals will take a substantial period of time, although the time
such process will take can by no means be assured. Further, even
after a business is located, the negotiation, drafting and
execution of relevant agreements, disclosure documents and other
instruments may require substantial additional time, effort and
attention on the part of management, as well as substantial costs
for attorneys, accountants and others. If a decision is made not
to participate in a specific business endeavor, the costs
theretofore incurred in the related investigation might not be
recoverable. Furthermore, even if an agreement were reached for
the participation in a specific business, the failure to consummate
that transaction might result in the loss to the Company of the
related costs incurred.
ITEM 2. PROPERTIES
At present the Company does not own any property. The Company
maintains its business address at a minimal cost. Administrative
services, including the use of fixtures, furniture and equipment,
and the use of employees to provide secretarial and bookkeeping
services, are provided to the Company at no cost by the Company's
current officers and directors.
ITEM 3. LEGAL PROCEEDINGS
During the period between the fourth quarter of the fiscal year
ended December 31, 1991 and the present, the Company was not party
to any litigation. To the knowledge of management, no litigation
is currently threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters to a vote of its security
holders during the fourth quarter of the fiscal year ended December
31, 1991, nor during any subsequent period including up to the date
of the filing of this report.
<PAGE> 5
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock commenced trading in the over-the-
counter market during the second quarter of 1988. The last
quotation for the Company's Common Stock, which management is aware
of, appeared on Nasdaq on October 7, 1991. The Company is
currently unaware of any trading market for its Common Stock. The
following table sets for the range of high and low bid quotations
for the Company's Common Stock forth the period indicated as
reported by Nasdaq during the two years prior to October 7, 1991.
The below quotations represent prices between dealers and do not
include retail mark-up, mark-down or commission. The quotations do
not necessarily represent actual transactions.
Fiscal Period High Bid Low Bid
1989:
First Quarter............................... $ 3.25 $ 2.00
Second Quarter.............................. 3.75 1.875
Third Quarter............................... 2.125 1.625
Fourth Quarter.............................. 2.00 1.25
1990:
First Quarter.............................. $ 1.875 $ 1.125
Second Quarter............................. 1.875 0.8125
Third Quarter.............................. 0.875 0.3125
Fourth Quarter............................. 0.375 0.025
1991:
First Quarter.............................. $ 0.625 $ 0.25
Second Quarter............................. 0.6875 0.50
Third Quarter.............................. 0.5625 0.34375
Fourth Quarter
(through October 7, 1991).............. 0.0625 0.03125
To the best of the Company's knowledge the last available
quotations for its Common stock appeared in the Nasdaq System on
October 7, 1991. High and low bid prices were 1/16 and 1/32
respectively, on that date.
As of April 30, 1999, there were approximately 251 record holders
of the Company's outstanding Common Stock. Since additional shares
of the Company's Common Stock are held for stockholders at
brokerage firms and/or clearing houses, the Company was unable to
determine the precise number of beneficial owners of its Common
Stock as of April 30, 1999.
The Company has never declared or paid cash dividends on its
capital stock and the Company's Board of Directors intends to
continue that policy for the foreseeable future. Earnings, if any,
will be used to finance the development and expansion of the
Company's business. Future dividend policy will depend upon the
Company's earnings, capital requirements, financial condition and
other factors considered relevant by the Company's Board of
Directors and will be subject to limitations imposed under Delaware
law.
<PAGE> 6
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OR PLAN OF OPERATIONS
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements including
the notes thereto.
During 1998, the Company commenced preparation of all past due
Annual Reports on Form 10-KSB and Quarterly Reports on Form 10-QSB,
which it was required to file under the 1934 Act. Prior to 1992,
the last Annual Report filed by the Company with the Commission was
an amended Annual Report for the fiscal year ended December 31,
1990. The December 31, 1990 Amended Annual Report was filed with
the Commission on or about August 15, 1991. Prior to 1998, the
last Quarterly Report on Form 10-Q filed by the Company with the
Commission was a Quarterly Report for the period ended September
30, 1991. The September 30, 1991 Quarterly Report was filed with
the Commission on or about December 9, 1991. In order to render
itself current with its reporting obligations under the 1934 Act,
the Company has prepared and will simultaneously file with the
Commission Annual Reports on Form 10-KSB for the years ended
December 31, 1991, 1992, 1993, 1994, 1995, 1996 and 1997, and
Quarterly Reports on Form 10-QSB for the quarterly periods ended
March 31, June 30, and September 30, 1992, 1993, 1994, 1995, 1996
and 1997. The Company has been advised by its independent auditors
that the Company is unable to complete and file audited financial
statements for the Company's fiscal years ended December 31, 1991
and 1992. The Company, therefore, used its best efforts to compile
financial statements which are as complete as possible in
accordance with audit requirements for this fiscal period ended
December 31, 1991 and the fiscal period ended 1992. The Company
has completed and filed with the Commission audited financial
statements prepared in accordance with general accepted accounting
principles for the fiscal periods ended December 31, 1993, 1994,
1995, 1996, and 1997.
In 1991, the Company sold its only operating assets realizing a
loss of approximately $1,655,000. The Company has not engaged in
any business activities since and has written off all material
assets which it had on its books at December 31, 1991. At December
31, 1997, the only assets which the Company possessed was
approximately $29,000 after expenses which was paid in cash by the
Buyers in exchange for the issuance of 3,100,000 new shares of
Common Stock. The Company is utilizing the funds received from the
Buyers to bring the Company current in its reporting obligation
under the 1934 Act and to pay certain obligations of the Company,
including certain past due and current accounting and legal fees,
stock transfer agent fees, franchise taxes, state and federal
taxes, and other expenses, to operate and maintain the Company, to
continue to fulfill the Company's reporting obligations, and to
attempt to seek out a suitable business opportunity. As a result
of the Company's limited assets and the potential for other
presently unforeseeable obstacles, there can be no assurance that
the Company will be successful in this effort. See "Business".
Financial Condition
At December 31, 1991, the Company had current assets and total
assets of $412,781 (unaudited) as compared to current assets and
total assets of $3,887,297 at December 31, 1990; total liabilities
of $199,533 (unaudited), as compared to total liabilities of
$1,198,311 at December 31, 1990 and a net worth of $213,248
(unaudited), as compared to a net worth of $2,688,986 at December
31, 1990.
<PAGE> 7
Liquidity
Since the Company's operating expenses, in management's opinion,
will be minimal during the Company's 1998 fiscal year and until the
Company is able to engage in meaningful operations, the Company
does not now anticipate a liquidity deficiency. It is anticipated
that the Company's current management and others will fund the
Company's operations, if required, by loans and/or contributions of
capital. The Company has no present commitment that is likely to
result in its liquidity increasing or decreasing in any material
way. In addition, the Company knows of no trend, additional
demand, event or uncertainty that will result in, or that are
reasonably likely to result in, the Company's liquidity increasing
or decreasing in any material way.
Capital Resources
The Company has no material commitments for capital expenditures.
The Company knows of no material trends, favorable or unfavorable,
in the Registrant's capital resources. The Company has no
outstanding credit lines or credit commitments in place and has no
current need for financial credit.
Results of Operations
The Company has not had any operations since 1991. The Company had
minimal revenues of $13,322 (unaudited) for the fiscal year ended
December 31, 1991 as compared to revenues of $5,593,802 in the
period ended December 30, 1990. Similarly, during the fiscal year
ended December 31, 1991, the Company had costs and expenses in the
amount of $86,621 (unaudited) as compared to expenses of 6,345,397
during the year ended December 31, 1990. During 1991 the Company
did not engage in any meaningful operations and sustained a net
loss of $1,655,738 (unaudited) as compared to a net loss of
$563,290 in the previous fiscal year.
The Registrant knows of no trends or uncertainties that had, or
that the Company reasonably expects will have, a materially
favorable or unfavorable impact on net sales, revenues or income
from continuing operations. Other than expenses incurred in the
preparation and filing of its delinquent and current reports on
Forms 10-KSB and Forms 10-QSB, the Registrant knows of no events
that will cause a material change in the relationship between its
costs and revenues. The Company's income has been unaffected by
inflation. See "Business".
<PAGE> 8
ITEM 7. FINANCIAL STATEMENTS
<PAGE> 9
ACCOUNTANTS' REPORT
We were engaged to bring the financial filing requirements, under
Regulation S-X of the Security and Exchange Commission, of Tele-
Optics, Inc. into compliance. The filings have been delinquent
since the quarter ended September 30, 1991. In connection
therewith, we have prepared the accompanying balance sheet of Tele-
Optics, Inc. as of December 31, 1991 and the related statements of
operations, shareholders' equity and cash flows for the year then
ended. Theses financial statements are the responsibility of the
Company's management.
Because we were not engage as auditors until December, 1997, we
were unable to examine any documents, agreements, or underlying
data which is reflected in the financial statements contained
herein. Since the limitation of scope prevents our ability to
examine the documents enumerated, we are unable to satisfy
ourselves as to the propriety of the transactions reported.
Since the above described limitations significantly affect the
determination of financial position as of December 31, 1991 and the
result of operations and cash flows, the scope of our work was not
sufficient to enable us to express an opinion, and we do not
express an opinion on the financial statements referred to above.
As discussed in Note 8, the Company, in 1991 and subsequently in
1992, disposed of all revenue producing business operations and was
attempting to acquire through merger or acquisition, an operating
business. Further, the Company reported substantial losses in 1991
and subsequently in 1992. These factors raise substantial doubt as
to the Company's ability to continue as a going concern unless
management can acquire a profitable operation and develop the
necessary cash flow to meet financial obligations as they become
due.
Wlosek & Braverman, L.L.C.
Certified Public Accountants
Clifton, New Jersey
<PAGE> 10
TELE-OPTICS, INC.
BALANCE SHEET
DECEMBER 31, 1991
(UNAUDITED)
ASSETS
Current Assets:
Cash $ 199,363
------------
Other Assets:
Note receivable 211,861
Deposits 1,557
------------
Total Other Assets 213,418
------------
$ 412,781
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 199,533
------------
Shareholders' Equity:
Common stock, par value, $.01 per
share; authorized, 5,000,000 shares;
issued, 1,690,000 shares; outstanding,
1,640,000 shares 16,400
Additional paid-in capital 1,863,042
Retained earnings (deficit) (1,491,106)
------------
388,336
Less: Treasury stock, 50,000 shares
at cost ( 175,088)
------------
Total Shareholders' Equity 213,248
------------
$ 412,781
============
See notes to financial statements.
<PAGE> 11
TELE-OPTICS, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1991
(UNAUDITED)
Revenues:
Fees $ 12,400
Interest 922
--------------
Total Revenues 13,322
--------------
Costs and Expenses:
Administrative 20,436
Interest 66,185
--------------
Total Costs and Expenses 86,621
--------------
Loss before discontinued operations
and extraordinary item ( 73,299)
Loss on discontinued operations ( 1,452,553)
--------------
Loss before extraordinary item ( 1,525,852)
Loss on sale of subsidiary ( 129,886)
Net Loss $( 1,655,738)
==============
Loss per share before discontinued
operations and extraordinary item $( .04)
Loss per share, discontinued operations ( .89)
Loss per share, extraordinary item ( .08)
--------------
Net loss per share $( 1.01)
==============
Average number of shares outstanding 1,640,000
==============
See notes to financial statements.
<PAGE> 12
TELE-OPTICS, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional
Outstanding Paid - in Retained Treasury
Shares Amount Capital Earnings Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1991 1,690,000 $ 16,900 $ 1,862,542 $ 984,632 $( 175,088) $ 2,688,986
Reclassification of treasury stock
issued, not outstanding ( 50,000) ( 500) 500 -
Cash dividend, $0.50 per share ( 820,000) ( 820,000)
Net loss, year ended
December 31, 1991 (1,655,738) (1,655,738)
--------- ---------- ----------- ----------- ---------- -----------
Balance at December 31, 1991 1,640,000 $ 16,400 $ 1,863,042 $(1,491,106) $( 175,088) $ 213,248
</TABLE>
See notes to financial statements.
<PAGE> 13
TELE-OPTICS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1991
(UNAUDITED)
Cash provided (used) In:
Operating Activities $( 599,821)
------------
Investing Activities:
Purchases of property, plant and equipment ( 38,932)
Advances to officers and employees ( 5,122)
Sale of Lenzar assets 2,848,613
Sale of Lenzar liabilities, net of eliminations ( 1,664,672)
------------
Total Investing Activities 1,139,887
------------
Financing Activities:
Payments on notes payable and capital
lease obligations ( 357,598)
Dividends paid ( 820,000)
-----------
Total Financing Activities (1,177,598)
-----------
Decrease in Cash ( 637,532)
Cash balance, beginning 836,895
-----------
Cash balance, end $ 199,363
===========
See notes to financial statements.
<PAGE> 14
TELE-OPTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
Tele-Optics, Inc. (the Company) was incorporated on December
31, 1986 and on that date and in early 1987, issued a total
of 1,000,000 shares of its $0.01 par value common stock as
follows: (a). 100,000 shares at incorporation, (b). 101,216
shares to its founder and 21,000 shares to others for the
rights to certain property and technology, (c). 33,500
shares in consideration of services rendered to the Company
and (d). 744,284 shares in exchange for all outstanding stock
of Lenzar Optics Corporation (Lenzar). The Company has been
considered to be the successor to Lenzar, and the equity
transactions described herein have been reflected as a
reorganization of the capital structure.
Unaudited Statements:
Since none of the Company's current officers and directors
were in control of the Company during 1991 and 1992, the
disclosure regarding agreements and other documents as well
as financial data contained in the accompanying financial
statements, were reconstructed from currently available books
and records of the Company and could not be audited.
Accordingly, although the Company believes the information
and data contained herein is accurate and complete to the
best knowledge of the Company and its present officers and
directors, neither the Company nor its present management can
represent assurances as to the fairness, accuracy or
completeness of the disclosures and financial data included
herein.
Public Offering:
Pursuant to a public offering in 1987, the Company issued
690,000 shares of its common stock, par value $.01 per share
along with 690,000 warrants to purchase one share of common
stock at $4.00 per share at any time prior to August 11,
1989. No warrants were exercised prior to expiration. In
connection with the public offering, the Company received
proceeds of $1,820,864 net of offering costs of $594,136. The
net proceeds were credited to common stock at par value of
$6,900 and $1,813,964 was credited to additional paid-in
capital.
<PAGE> 15
TELE-OPTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Treasury Stock:
In November, 1987, the Company purchased 50,000 of its $.01
par value common stock in the open market at an aggregate
cost of $175,088.
Cash Flow Statements:
The Company considers all highly liquid investments, with a
maturity date of three months or less when purchased, to be
cash equivalents.
NOTE 2: CERTAIN TRANSACTIONS
The Company was incorporated in December 1986 for the purpose
of acquiring all of the common stock of Lenzar Optics, Inc.
("Lenzar"). Lenzar was then engaged in development,
manufacture and marketing of a variety of optical, electronic
and electro-optical products for use in the medical and
defense industries. In August, 1991, the company sold all
assets related to Lenzar's operations to an unrelated third
party. Following that sale, the Company had no active
business operations and intended to liquidate its assets. In
December, 1991, the Company entered into an agreement to
acquire all of the issued and outstanding common stock of
Fantasia Home, Inc., "Fantasia". In May, 1992, however, the
Company rescinded the Fantasia Acquisition and canceled all
shares of its common stock issued in connection with the
Fantasia Agreement. Since rescission of the Fantasia
Agreement, the Company intended to investigate the
possibility of acquiring a potential business opportunity;
however, the Company does not possess the capital necessary
to effectively pursue any such acquisition. In connection
with the rescission of the Fantasia agreement, the Company
canceled 3,162,912 shares of its common stock issued to Mr.
Malcolm Roy (Fantasia's sole shareholder and President.) The
rescission was deemed effective as of the acquisition date
and, accordingly, no share transactions are reported in the
accompanying financial statements.
<PAGE> 16
TELE-OPTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 3: NOTE RECEIVABLE
Pursuant to the rescission of the Fantasia acquisition in
May, 1992, Mr. Malcolm Roy executed a note in favor of the
Company in order to reimburse for expenditures made on behalf
of the real estate operations of Fantasia and any of its
related companies. The Company gave effect to this
reimbursement as of December 31, 1991 in the accompanying
financial statements. The note had a five year term with a
maturity date in May, 1997. The note was dishonored at
maturity and, accordingly, the Company reported the
corresponding loss in 1992. In connection with the loss on
the default, the Company canceled an additional 203,219
shares of common stock beneficially owned by Mr. Malcolm Roy,
which served as security under the note.
NOTE 4: LIQUIDATION AND DISSOLUTION RESCISSION
On August 29, 1991, the stockholders, at a special meeting,
approved the sale of Lenzar, the Company's operating
subsidiary. In connection therewith, the stockholders
approved a plan of liquidation and dissolution. In May 1992,
the stockholders rescinded the plan of liquidation and
dissolution. The Board of Directors approved a proposal that
the Company shall aggressively seek a merger or acquisition
partner in an effort to enhance shareholder value.
NOTE 5: SALE OF OPERATING SUBSIDIARY
On August 29, 1991, the stockholders approved the sale of the
Company's wholly-owned subsidiary, Lenzar Optics Corp. to
Condor Electro-Optics, Inc., an unrelated company. The sale
consideration aggregated $1,025,000 in cash plus the
assumption of certain liabilities and, pursuant thereto, the
Company reported a loss on the sale of $129,886, which is
included in the accompanying statement of operations in 1991
as an extraordinary item. The Company made dividend
distribution from the sale proceeds of $.50 per share or an
aggregate of $820,000 as a non-liquidating dividend. In
addition, the Company retained $205,000 to cover expenses, if
any, pursuant to the sale agreement.
<PAGE> 17
TELE-OPTICS, INC.
NOTES TO FINANCIAL STATEMENTS
ITEM 6: DISCONTINUED OPERATIONS
The Company reported discontinued operations in 1991 relating
to the sale of its operating subsidiary, Lenzar Optics Corp.,
(see Note 5). The reported discontinued operating loss is
summarized as follows:
Net Sales $ 1,426,891
------------
Costs and expenses:
Cost of products sold 1,399,985
Selling and administrative 1,479,459
------------
Total costs and expenses 2,879,444
------------
Loss from discontinued operations $( 1,452,553)
============
NOTE 7: DIVIDENDS PAID
In connection with the sale of the Company's subsidiary
in August, 1991, (see Note 5), the Company made a
distribution of the sale proceeds at $.50 per share or
an aggregate of $820,000 to shareholders of record at
the close of business September 12, 1991. The dividends
were paid on or about September 30, 1991.
<PAGE> 18
TELE-OPTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 8: GOING CONCERN UNCERTAINTY
As of December 31, 1991, the Company had disposed of its
wholly-owned operating subsidiary, Lenzar Optics Corp.
and, subsequently, in 1992, rescinded the acquisition
of Fantasia Homes, Inc., (see Note 2). Thus, the Company
effectively had no operations and was seeking a merger
or acquisition partner for future operations. In
addition, the Company reported a substantial net loss
for 1991, aggregating $1,655,738 and a subsequent loss
in 1992 of approximately $213,200, including the loss on
the note default of $211,861 described in Note 3 above.
These factors raise substantial doubt as to the
Company's ability to continue as a going concern unless
management can acquire a profitable operation and
develop the necessary cash flow to meet financial
obligations as they become due. Presently, management
is attempting to fulfill these objectives by bringing
the Company into compliance with the filing requirements
of the Securities and Exchange Commission.
<PAGE> 19
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AN FINANCIAL DISCLOSURE
On January 31, 1991, the Company dismissed Ernst & Young (E&Y) as
the Company's independent certified public accountants. The
decision to change accountants was approved by the Company's Board
of Directors. During the Company's two most recent fiscal years
and the subsequent interim period preceding the dismissal of E&Y,
there were no disagreements with the former accountant on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved
to the satisfaction of E&Y, would have been referred to in their
report. The report of E&Y on the Company's 1990 financial
statements contained a disclosure expressing the auditors
substantial doubt about the ability of the Company to continue as
a going concern. Pursuant to Item 304(a) of Regulation S-K, the
Company filed a letter with the Commission stating whether it
agreed with the statements made by the Company in response to Item
304(a) and, if not, stating the respects in which they did not
agree.
In connection with the change of control of the Registrant, on
November 21, 1997, the Registrant changed accountants beginning
with the preparation of its Financial Statements for the year
ended December 31, 1991, to Wlosek & Braverman, L.L.C., Certified
Public Accountants ("Wlosek & Braverman").
In connection with the audit of the Registrant's financial
statements for the fiscal years ended December 31, 1993, 1994,
1995 and 1996, there were no disagreements, disputes, or
differences of opinion with Wlosek & Braverman on any matters of
accounting principles or practices, financial statement
disclosure, or auditing scope and procedures, which, if not
resolved to the satisfaction of Wlosek & Braverman would have
caused Wlosek & Braverman to make reference to the matter in its
report. In all instances, however, in light of the Company's lack
of commercial operations, the auditor's report raises substantial
doubt about the Company's ability to continue as a going concern.
<PAGE> 20
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT
The directors and executive officers of the Company as of the date
of this report are as follows:
Name Age Position
John P. Little 57 President and Director
Bert L. Gusrae 62 Vice President and
Director
David A. Carter 48 Secretary/Treasurer and
Director
John P. Little joined the Company in 1991 as a director and has
served as President and as a director of the Company since 1992.
Mr. Little is also President of Southern Leasing Services, Inc.,
an equipment leasing company with offices in North Palm Beach and
Tampa, Florida. From October, 1993 to December, 1997, Mr. Little
was also Senior Vice President of Trans-Ocean Investment
Corporation, an advisor to individuals and corporations with
regard to investment possibilities within Europe. Mr. Little
holds the Bachelors Business Administration degree from the
University of Mississippi with emphasis in banking, finance and
accounting. Mr. Little also operates a consulting practice
providing services to international business investors requiring
local contacts and banking practices knowledge, principally in the
Carribean basin. In his consulting practice, Mr. Little
emphasizes the formation of international business corporations,
trusts and other business entities engaged in international
business and investments.
Bert L. Gusrae has been a Vice-President and a Director of the
Company since November 21, 1997. Mr. Gusrae is an attorney, and
during the past five years, he has been of counsel to David A.
Carter, P.A., and Gusrae, Kaplan & Bruno. During the past five
years, Mr. Gusrae was a director of the following public
companies: The 87 Acquisition Corp. and ATC Capital Group, Ltd.
Mr. Gusrae is no longer a director of either company.
David A. Carter has been Secretary/Treasurer and a Director of the
Company since November 21, 1997. Mr. Carter has managed a legal
practice under the name David A. Carter, P.A. since October 1990.
During the past five years, Mr. Carter has been an officer and
director of the following public companies: The 87 Acquisition
Corp., The Rothchild Companies, Inc., ATC Capital Group, Ltd. and
Action Products International, Inc. Mr. Carter is no longer a
director of any of these companies.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's officers and directors, and
persons who own more than ten percent of a registered class of the
Company's equity securities (collectively the "Reporting Persons")
to file reports and changes in ownership of such securities with
the Securities and Exchange Commission and the Company. Based
solely upon a review of (i) Forms 3 and 4 and amendments thereto
furnished to the Company pursuant to Rule 16a-3(e), promulgated
under the Exchange Act, during the Company's fiscal year ended
December 31, 1996 and (ii) Forms 5 and any amendments thereto
and/or written representations furnished to the Company by any
Reporting Persons stating that such person was not required to
<PAGE> 21
file a Form 5 during the Company's fiscal year ended December 31,
1997, it has been determined that no Reporting Persons were
delinquent with respect to such person's reporting obligations set
forth in Section 16(a) of the Exchange Act.
Item 10. EXECUTIVE COMPENSATION
The following table sets forth summary compensation information
with respect to compensation paid by the Company to the Chief
Executive Officer of the Company ("CEO") and the Company's four
most highly compensated executive officers other than the CEO, who
were serving as executive officers during the Company's fiscal
years ended December 31, 1992; and December 31, 1993 through 1996;
and December 31, 1997.
SUMMARY COMPENSATION TABLE - 1992
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------- -----------------------------------------------------
Awards Payments
----------------------- ------------------------
Restricted Securities
Name of Individual Other Annual Stock Underlying/ LTIP All Other
and Principal Position Year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John P, Little (1) 1992 $51,803 -0- $ 7,347 -0- -0- -0- -0-
President
</TABLE>
__________________________________________
(1) In addition to compensation, during the period extending from
December 31, 1990 through December 31, 1996, Mr. Little was
reimbursed by the Registrant for out-of-pocket expenses in the
aggregate amount of $7,347.
The following table sets forth summary compensation information
with respect to compensation paid by the Company to the Chief
Executive Officer of the Company ("CEO") and to the Company's four
most highly compensated executive officers other than the CEO, who
served as executive officers during the Company's fiscal years
ended December 31, 1993 through December 31, 1996.
SUMMARY COMPENSATION TABLE - (1993 through 1996)
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------- -----------------------------------------------------
Awards Payments
----------------------- ------------------------
Restricted Securities
Name of Individual Other Annual Stock Underlying/ LTIP All Other
and Principal Position Year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John P, Little 1993 -
President 1996 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
__________________________________________
The following table sets forth summary compensation information
with respect to compensation paid by the Company to the Chief
<PAGE> 22
Executive Officer of the Company ("CEO") and the Company's four
most highly compensated executive officers other than the CEO, who
were serving as executive officers during the Company's fiscal year
ended December 31, 1997.
SUMMARY COMPENSATION TABLE - (1997)
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------- -----------------------------------------------------
Awards Payments
----------------------- ------------------------
Restricted Securities
Name of Individual Other Annual Stock Underlying/ LTIP All Other
and Principal Position Year Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John P, Little
President 1997 $ -0- $ -0- $ -0- -0- -0- -0- -0-
Bert L. Gusrae
Vice President 1997 $ -0- $ -0- $ -0- -0- -0- -0- -0-
David A. Carter
Secretary/Treasurer 1997 $ -0- $ -0- $ -0- -0- -0- -0- -0-
</TABLE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of March, 15, 1999, certain
information concerning beneficial ownership of the Company's Common
Stock by (i) each person known to the Company to own 5% or more of
the Company's outstanding Common Stock, (ii) all directors of the
Company and (iii) all directors and officers of the Company as a
group:
Shares
Name and Address Beneficially Percent of
of Beneficial Owner Owned (1) Class
David A. Carter 750,000 15.0%
21218 St. Andrews Blvd.
Suite 642
Boca Raton, Florida 33431
Bert L. Gusrae 750,000 15.0%
21218 St. Andrews Blvd.
Suite 642
Boca Raton, Florida 33431
Alicia M. LaSala 750,000 15.0%
6674 Serena Lane
Boca Raton, Florida 33433
MIV, Inc.(2)(3) 550,000 11.0%
600 Sandtree Drive
Suite 206-A
Palm Beach Gardens, FL 33403
<PAGE> 23
Contd...
Shares
Name and Address Beneficially Percent of
of Beneficial Owner Owned (1) Class
Austral Financial
Services, Inc.(2)(3) 400,310 8.0%
600 Sandtree Drive
Suite 206-A
Palm Beach Gardens, FL 33403
Leonard Marshall 300,000 6.0%
21756 Marigot Drive
Boca Raton, Florida 33436
Eugene M. Kennedy 300,000 6.0%
517 S.W. 1st Avenue
Ft. Lauderdale, FL 33301
All Directors and Executive
Officers as a Group (3 persons) 3,200,310 64.0%
________________________
(1) As used herein, the term beneficial ownership with respect to
a security is defined by Rule 13d-3 under the Securities
Exchange Act of 1934 as consisting of sole or shared voting
power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to
dispose or direct the disposition of) with respect to the
security through any contract, arrangement, understanding,
relationship or otherwise, including a right to acquire such
power(s) during the next 60 days. Unless otherwise noted,
beneficial ownership consists of sole ownership, voting and
investment rights.
(2) Carole A. Little is the beneficial owner of 100% of the issued
and outstanding securities of MIV, Inc. The Registrant's
President and director, John P. Little claims beneficial
ownership of all of MIV, Inc.'s Common Stock. The MIV, Inc.
Tele-Optic shares should be deemed controlled by and
attributed to Mr. Little. The Registrant's President and
director, John P. Little, is the beneficial owner of 100% of
the issued and outstanding securities of Austral Financial
Services, Inc. The Austral Financial Services, Inc. Tele-
Optic shares should be deemed controlled by, and attributed
to, Mr. Little. Mr. Little should be deemed to be in control
of 19% of the Registrant's voting stock.
(3) Carole A. Little and John P. Little are husband and wife.
______________________
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 10, 1991, the Company entered into an acquisition
agreement with Malcolm R. Roy and Fantasia Homes, Inc. to acquire
all of the issued and outstanding common stock of Fantasia Homes,
Inc. from Mr. Roy, its President and sole shareholder. Fantasia
Homes, Inc. had a wholly owned subsidiary, Casa Del Rey Ventures,
II, Inc. which was in the business of selling single family
<PAGE> 24
residential properties that it owns in Palm Beach County, Florida.
In exchange for the stock of Fantasia Homes, Inc., the Company
issued 3,162,912 shares of its common stock to Mr. Roy,
constituting 65.85% of the Company's issued and outstanding common
stock. The transaction was approved by the Company's Board of
Directors in accordance with Delaware law and Mr. Roy, John Little
and Alex Brunner were elected as Directors of the Company. Mr. Roy
was also elected as an officer of the Company.
On December 9, 1991, Mr. Roy obtained an assignment of Stock
Purchase Agreement between Austral Financial Services, Inc. and H.
Bradley Ganther for the right to acquire 203,219 shares of the
Company's common stock and closed the sale on the same date. Mr.
Roy also obtained an option to acquire 239,619 shares of the
Company's common stock from James E. Davis and Marjorie Davis at
various exercise prices over a twenty-four (24) month period
beginning on December 9, 1991. During the period of the option,
Mr. Roy had the right to vote the shares owned by Mr. and Mrs.
Davis pursuant to a voting trust agreement. The option was not
exercised prior to expiration.
On May 22, 1992, the Company rescinded the transaction, which
included the Acquisition Agreement with Malcolm R. Roy and Fantasia
Homes, Inc. which the Company had entered into on December 10,
1991. The recission of the transaction was approved by the
Company's Board of Directors in accordance with Delaware law. In
addition, on May 22, 1992, Malcolm Roy and Alex Brunner resigned
from the Company's Board of Directors and Mr. Roy also resigned as
President. John P. Little assumed the position of President of the
Company and remained as a Director. The Board of Directors agreed
to hold harmless Malcolm Roy for any acts performed by him in good
faith as an officer and director of the Company.
The Board of Directors unanimously approved recission of the Plan
for Liquidation and Dissolution adopted by the Directors and
Shareholders of the Company on August 29, 1991, and approved
placing ratification of the recission on the agenda for the annual
meeting of shareholders for the year 1992. The Board of Directors
unanimously approved the Company seeking a merger or acquisition
partner in an effort to enhance shareholder value.
On November 21, 1997, (the "Closing Date"), new investors,
including the Company's current management (the "Buyers"),
completed the purchase of an aggregate of 3,100,000 shares of the
Company's Common Stock (the "Purchased Shares"), representing
approximately sixty-two (62%) percent of the Company's issued and
outstanding Common Stock as of the Closing Date. The Purchased
Shares were acquired from the authorized but previously unissued
shares of the Company's Common Stock. As part of the aggregate
purchase price for the Purchased Shares, the Buyers agreed to pay
certain obligations of the Company, including certain past due and
current accounting and legal fees, stock transfer agent fees,
franchise taxes, state and federal taxes, and other expenses
incurred or to be incurred in connection with bringing the Company
current with respect to reporting obligations under the 1934 Act.
As a result, the Company has filed certain disclosure documents
with the Commission, including Annual Reports on Form 10-KSB for
the years ended December 31, 1991, 1992, 1993, 1994, 1995, 1996 and
1997, and Quarterly Reports on Form 10-QSB for the three month
periods ended March 31, June 30, and September 30, 1992, 1993,
1994, 1995, 1996, 1997 and 1998. Simultaneously with the
acquisition of the Purchased Shares, an additional 300,000 shares
of the Company's Common stock was issued to a member of the law
firm which represented the Company in connection with the
transaction. See "Financial Statements".
<PAGE> 25
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a)(3) The following Exhibits are incorporated as part of this
report
3.1 Certificate of Incorporation [1]
3.2 By-laws [1]
3.3 Form of certificate evidencing shares of Common Stock [1]
_________________
[1] Filed as an exhibit to the Company's Registration
Statement on Form S-18 (File No: 33-13609-A) and
incorporated herein by reference.
(b) Reports on Form 8-K
The last Current Report on Form 8-K filed by the Company was
dated December 23, 1991, and reported as Items 1 and 2, that
the Company entered into an agreement with Malcolm Roy and
Fantasia Home, Inc. That agreement was subsequently rescinded
in its entirety. The Company has not filed any subsequent
Current Reports on Form 8-K.
<PAGE> 26
SIGNATURES
In accordance with the requirements of Section 13 and 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TELE-OPTICS, INC.
Dated: April 30, 1999 By:/s/John P. Little
John P. Little,
President and Director
In accordance with the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons
on behalf of the Company and in the capacities and on the dates
indicated.
Signature Capacity Date
/s/John P. Little President and Director April 30, 1999
John P. Little
/s/Bert L. Gusrae Vice President and April 30, 1999
Bert L. Gusrae Director
/s/David A. Carter Secretary/Treasurer and April 30, 1999
David A. Carter Director
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extraced from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in Part II, Item 7. of this Form 10-KSB and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1991
<PERIOD-END> DEC-31-1991
<CASH> 199,363
<SECURITIES> 0
<RECEIVABLES> 211,861
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 412,781
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 412,781
<CURRENT-LIABILITIES> 199,533
<BONDS> 0
0
0
<COMMON> 16,400
<OTHER-SE> 213,248
<TOTAL-LIABILITY-AND-EQUITY> 412,781
<SALES> 0
<TOTAL-REVENUES> 13,322
<CGS> 0
<TOTAL-COSTS> 20,436
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 66,185
<INCOME-PRETAX> (1,655,738)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (1,452,553)
<EXTRAORDINARY> (73,299)
<CHANGES> 0
<NET-INCOME> (1,655,738)
<EPS-PRIMARY> (1.01)
<EPS-DILUTED> (1.01)
</TABLE>
