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, 1999
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, #642, Boca Raton, Florida 33433
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(954) 360-4951
---------------------------
(Issuer's telephone number)
None
-----------------------------------------------------
(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 $.001 per share
--------------------------------------
(Title of Class)
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 x No
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 March 15, 2000, was $ -0-.
As of March 15, 2000, there were 7,000,000 shares of the Registrant's Common
Stock issued and outstanding.
<PAGE>
TELE-OPTICS, INC.
TABLE OF CONTENTS
Page
PART I
Item 1. Business......................................... 3
Item 2. Properties....................................... 6
Item 3. Legal Proceedings................................ 6
Item 4. Submission of Matters to a
Vote of Security Holders....................... 6
PART II
Item 5. Market for Company's Common Equity
And Related Stockholder Matters................ 8
Item 6. Management's Discussion and
Analysis or Plan of Operations................. 9
Item 7. Financial Statements and Supplementary Data...... 11
Item 8. Change in and Disagreements
with Accountants on Accounting
and Financial Disclosure....................... 11
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with
Section 16(a) of the Exchange Act.............. 12
Item 10. Executive Compensation........................... 13
Item 11. Security Ownership of Certain
Beneficial Owners and Management............... 14
Item 12. Certain Relationships and Related Transactions... 15
Item 13. Exhibits, Financial Statement
Schedules and Reports on Form 8-K.............. 17
SIGNATURES
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<PAGE>
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 Homes, 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. 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 then 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 Securities
and Exchange Act of 1934 (the "Act"). As a result, the Company has
filed certain disclosure documents with the Securities and Exchange
Commission ("SEC"), including Annual Reports on Form 10-KSB and
Quarterly Reports on Form 10-QSB. Simultaneously with the
acquisition of the Purchased Shares, an additional 300,000 shares
of the Company's Common Stock was acquired by a member of the law
firm which represented the Company in connection with the
transaction. Such shares were issued during 1999. See "Financial
Statements"
In addition, since the Closing Date, the Buyers and others have
provided additional sufficient funds in the form of equity
investment to ensure the Company's viability and permit the Company
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to continue its limited operations and pursue business
opportunities, including a possible business combination, merger or
similar transaction. During 1999, the Company issued an additional
1,960,000 shares for an aggregate purchase price of $19,600, which
includes $4,600 for services that were rendered to the Company.
The Company continues to engage in no commercial operations at this
time. See "Financial Statements".
Management has determined that the Company's current 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
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 stage;
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
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<PAGE>
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. The Company may
compensate its management and/or advisors in connection with the
review and analysis of a prospective business combination.
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
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<PAGE>
Company may publish notices or advertisements in financial or trade
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, including compensation paid to management
and its advisors.
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 minimal cost by the
Company's current officers and directors.
ITEM 3. LEGAL PROCEEDINGS
-----------------
The Company is 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's Board of Directors approved a proposal on October 12,
1999 authorizing an amendment to the Company's Certificate of
Incorporation increasing the authorized number of shares of the
Company's Common Stock from 5,000,000 shares to 100,000,000 shares.
The Board of Directors authorized the increase in authorized Common
Stock in connection with the Company's on-going efforts to seek and
acquire a business which might warrant the Company's involvement.
The Company anticipates that it will require issuance of additional
Common Stock to complete a suitable acquisition if and when it is
able to do so. The increase in authorized Common Stock was also
approved by the written consent of the Company's majority
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<PAGE>
stockholders on October 12, 1999. Such consent from holders of a
majority of the Company's issued and outstanding shares was
sufficient to approve the increase in authorized Common Stock under
the Delaware General Corporation Law. No other vote or consent of
any other stockholders, including the vote or consent of a majority
of the unaffiliated stockholders was required or sought in
connection with the increase in authorized Common Stock. Under the
Delaware General Corporation Law and the Company's Certificate of
Incorporation, the affirmative vote of a majority of the issued and
outstanding shares voting by written consent constitutes the act of
the stockholders. Accordingly, the Company did not solicit proxies
from all stockholders in connection with this matter.
The Company provided an Information Statement to all of the
Company's stockholders in connection with the increase of
authorized Common Stock. The Information Statement and such
accompanying materials were first sent or given to stockholders on
or about November 8, 1999, to stockholders of record as of October
13, 1999. The Company filed the amendment to its Certificate of
Incorporation in Delaware and the amendment became effective on or
about November 29, 1999.
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<PAGE>
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 1987. 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.
<TABLE>
<CAPTION>
Fiscal Period High Bid Low Bid
<S> <C> <C>
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
</TABLE>
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 February 29, 2000, there were approximately 233 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 February 29, 2000.
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<PAGE>
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.
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 filed with the Commission Annual Reports on Form
10-KSB for the years ended December 31, 1991, 1992, 1993, 1994,
1995, 1996, 1997, and 1998 and Quarterly Reports on Form 10-QSB for
the quarterly periods ended March 31, June 30, and September 30,
1992, 1993, 1994, 1995, 1996, 1997, 1998 and 1999. 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, 1997 and 1998.
In 1991, the Company sold its only operating assets realizing a
loss of approximately $1,655,000. The Company has not engaged in
any material business activities since and has written off all
material assets which it had on its books at December 31, 1991.
During November, 1997, the Company sold an aggregate of 3,100,000
shares of Common Stock for aggregate proceeds of $31,000, and
agreed to issue 300,000 shares for services rendered (which shares
were issued during 1999). During 1999, the Company issued an
additional 1,960,000 shares for an aggregate purchase price of
$19,600, which includes $4,600 for services that were rendered to
the Company. After payment of expenses incurred during the past
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<PAGE>
two (2) years, at December 31, 1999, the only asset which the
Company possessed was cash in the amount of $13,261. (See
"Financial Statements" and "Business".) The Company plans to
continue to utilize these funds to operate and maintain the
Company, to continue to fulfill the Company's reporting obligations
with the SEC, 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, 1999, the Company had current assets and total
assets of $13,261 as compared to current assets and total assets of
$28,145 at December 31, 1998; liabilities of $5,266 as of December
31, 1999, as compared to liabilities of $-0- as of December 31,
1998, and a net worth of $7,995 as of December 31, 1999, as
compared to a net worth of $28,145 at December 31, 1998. The
decrease in net worth was the result of expenses incurred by the
Registrant in connection with bringing the Company current in its
periodic filings with the SEC and related operating expenses. See
"Business" and "Financial Statements".
Liquidity
- ---------
Since the Company's operating expenses, in management's opinion,
will be minimal during the Company's 2000 fiscal year and until the
Company is able to engage in meaningful operations, the Company
does not now anticipate a significant 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 further
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 material operations since 1991. The
Company had no revenues for the fiscal year ended December 31,
1999. During the fiscal year ended December 31, 1999, the Company
incurred expenses in the amount of $42,750 in connection with
bringing the Company current in its periodic reporting, and other
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<PAGE>
miscellaneous expenses. During 1999, the Company did not engage in
any meaningful operations.
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 sales, revenues or income from
operations. Other than expenses incurred in the preparation and
filing of its delinquent and current reports on Forms 10-KSB and
Forms 10-QSB and related expenses, the Registrant knows of no
events that caused a material change in the relationship between
its costs and revenues, and knows of no such cause for the future.
The Company's income has been unaffected by inflation. See
"Business".
ITEM 7. FINANCIAL STATEMENTS
--------------------
The financial statements required pursuant to this Item 7 are
included in this Form 10-KSB as a separate section commencing on
page F-1 and are hereby incorporated by reference into this Item 7.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AN FINANCIAL DISCLOSURE
------------------------------------------------
The Company changed accountants beginning with the audit of the
financial statements included herewith, from Wlosek and Braverman,
Certified Public Accountants ("Wlosek and Braverman") to Thomas W.
Klash, Certified Public Accountant. Wlosek and Braverman resigned
as the Company's accountant in or about March 2000.
The report of Wlosek and Braverman on the Company's financial
statements for the fiscal year ended December 31, 1998 did not
contain an adverse opinion or disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope, or accounting
principles, except for a going concern uncertainty.
In connection with the audit of the Company's financial statements
for the fiscal year ended December 31, 1998, and in the subsequent
interim period, there were no disagreements, disputes, or
differences of opinion with Wlosek and 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 and Braverman would have caused Wlosek and
Braverman to make reference to the matter in its report.
The accounting firm of Thomas W. Klash, Certified Public
Accountant, has prepared the Company's financial statements for the
Company's fiscal year ended December 31, 1999 (see item 7 above).
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<PAGE>
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 59 President and Director
Bert L. Gusrae 64 Vice President and Director
David A. Carter 49 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 of 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
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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, 1999 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 file
a Form 5 during the Company's fiscal year ended December 31, 1998,
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 year
ended December 31, 1999.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
--------------------------------------- ---------------------------
Awards Payouts
---------------------------
Name and Other Restricted All
Principal Annual Stock Options/ LTIP Other
Position Year Salary Bonus(2) Compensation Awards SARS Payouts Compensation
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John P, Little
President 1999 $ -0- $ -0- $ -0- -0- -0- -0- -0-
Bert L. Gusrae
Vice President 1999 $ -0- $ -0- $ -0- -0- -0- -0- -0-
David A. Carter
Secretary/Treasurer 1999 $ -0- $ -0- $ -0- -0- -0- -0- -0-
</TABLE>
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<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
---------------------------------------------------
The following table sets forth, as of the date of this report,
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:
<TABLE>
<CAPTION>
Shares
Name and Address Beneficially Percent of
of Beneficial Owner Owned (1) Class
- ------------------- ------------ ----------
<S> <C> <C>
David A. Carter 1,050,000 15.0%
21218 St. Andrews Blvd.
#642
Boca Raton, Florida 33431
Bert L. Gusrae 1,050,000 15.0%
21218 St. Andrews Blvd.
#642
Boca Raton, Florida 33431
Alicia M. LaSala 750,000 10.7%
6674 Serena Lane
Boca Raton, Florida 33433
Leonard Marshall 600,000 8.6%
21756 Marigot Drive
Boca Raton, Florida 33436
Eugene M. Kennedy 560,000 8.0%
517 S.W. 1st Avenue
Ft. Lauderdale, FL 33301
MIV, Inc.(2)(3) 550,000 7.8%
600 Sandtree Drive
Suite 206-A
Palm Beach Gardens, FL 33403
Austral Financial
Services, Inc.(2)(3) 400,310 5.7%
600 Sandtree Drive
Suite 206-A
Palm Beach Gardens, FL 33403
All Directors and Executive
Officers as a Group
(3 persons) 3,850,000 55.0%
________________________
</TABLE>
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<PAGE>
(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 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 then 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 Securities and Exchange Commission ("SEC"), including
Annual Reports on Form 10-KSB and Quarterly Reports on Form 10-QSB.
Simultaneously with the acquisition of the Purchased Shares, an
additional 300,000 shares of the Company's Common Stock was
acquired by a member of the law firm which represented the Company
-15-
<PAGE>
in connection with the transaction. Such shares were issued during
1999.
In addition, since the Closing Date, the Buyers and others have
provided additional sufficient funds in the form of equity
investment to ensure the Company's viability and permit the Company
to continue its limited operations and pursue business
opportunities, including a possible business combination, merger or
similar transaction. During 1999, the Company issued an additional
1,960,000 shares for an aggregate purchase price of $19,600, which
includes $4,600 for services that were rendered to the Company.
The Company continues to engage in no commercial operations at this
time. See "Financial Statements".
-16-
<PAGE>
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 Incorporation1
3.2 By-laws [1]
3.3 Form of certificate evidencing shares of
Common Stock [1]
16.1 Letter on Change in Certifying Accountant
_________________
[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 Company did not file any reports on Form 8-K during the
quarter ended December 31, 1999.
-17-
<PAGE>
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: March 29, 2000 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 March 29, 2000
John P. Little and Director
/s/Bert L. Gusrae Vice President March 29, 2000
Bert L. Gusrae and Director
/s/David A. Carter Secretary/Treasurer March 29, 2000
David A. Carter and Director
-18-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Tele-Optics, Inc.
(A Development Stage Company)
Boca Raton, Florida
I have audited the accompanying balance sheet of Tele-Optics, Inc.
as of December 31, 1999, and the related statements of operations,
shareholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material 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. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Tele-
Optics, Inc. as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
March 3, 2000
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Tele-Optics, Inc.
Boca Raton, Florida
We have audited the accompanying balance sheet of Tele-Optics, Inc.,
as of December 31, 1998 and the related statements of operations,
shareholders' equity and cash flows for the years ended December 31,
1998 and 1997. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
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 in significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Tele-Optics,
Inc., as of December 31, 1998, and the results of operations
shareholders' equity and its cash flows for the years ended December 31,
1998 and 1997 in conformity with generally accepted accounting principles.
As discussed in Note 5, as of December 31, 1998, the Company had disposed
of its operating subsidiary, Lenzar Optics Corp. in 1991, and rescinded a
subsequent acquisition with Fantasia Homes, Inc in 1992. Accordingly, the
Company effectively had no assets or business operations since 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 flows to meet financial
obligations as they become due.
Wlosek & Braverman, L.L.C.
Certified Public Accountants
Clifton, New Jersey
June 22, 1999
F-2
<PAGE>
TELE-OPTICS, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
------
CURRENT ASSETS:
Cash $ 13,261
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 5,266
-----------
SHAREHOLDERS' EQUITY:
Common stock, par value $.001;
Authorized 100,000,000 shares;
issued and outstanding
7,000,000 shares 7,000
Additional paid-in capital 1,750,954
Accumulated deficit - prior (1,707,209)
Deficit accumulated during
development stage (42,750)
-----------
TOTAL SHAREHOLDERS' EQUITY 7,995
-----------
TOTAL LIABILITIES AND EQUITY $ 13,261
===========
See accompanying notes to financial statements.
F-3
<PAGE>
TELE-OPTICS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
REVENUES $ - $ -
COSTS AND EXPENSES 42,750 2,855
----------- ------------
NET (LOSS) $ (42,750) $ (2,855)
=========== ===========
NET (LOSS) PER COMMON SHARE $ (.01) $ -
=========== ===========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 4,984,000 4,470,000
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
TELE-OPTICS, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Common Stock
$.0001 Par Value Additional
Authorized 100,000,000 Shares Paid-In Treasury Accumulated
Shares Amount Capital Stock Deficit Total
--------- -------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1998 4,740,000 $ 47,400 $ 1,863,042 $(175,088) $(1,704,354) $ 31,000
Net (loss) for 1998 - - - - (2,855) (2,855)
--------- -------- ----------- --------- ----------- -----------
Balance - December 31, 1998 4,470,000 47,400 1,863,042 (175,088) (1,707,209) 28,145
Issuance of common stock
for services 300,000 3,000 - - - 3,000
Reduction in par value per
share from $.01 to $.001 - (45,360) 45,360 - - -
Issuance of common stock
for cash 1,500,000 1,500 13,500 - - 15,000
Issuance of common stock
for services 460,000 460 4,140 - - 4,600
Cancellation of treasury
stock - - (175,088) 175,088 - -
Net (loss) for 1999 - - - - (42,750) (42,750)
--------- ------- ----------- --------- ----------- ----------
Balance - December 31, 1999 7,000,000 $ 7,000 $ 1,750,954 $ - $(1,749,959) $ 7,995
========= ======= =========== ========= =========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
TELE-OPTICS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (42,750) $ (2,855)
Adjustments to reconcile net
(loss) to net cash used in
operating activities:
Increase in accounts payable 5,266 -
Stock issued for services 7,600 -
---------- -----------
Net cash used in
operating activities (29,884) (2,855)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 15,000 -
Escrow advance repayment - (3,000)
---------- -----------
Net cash provided by (used in)
financing activities 15,000 (3,000)
---------- -----------
Net (Decrease) in cash (14,884) (5,855)
CASH - BEGINNING 28,145 34,000
---------- -----------
CASH - ENDING $ 13,261 $ 28,145
========== ===========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Operations - Tele-Optics, Inc. (the "Company") was
incorporated in the state of Delaware on December 31,
1986. In 1987, the Company issued shares of its common
stock pursuant to a public offering. The Company was
engaged in the development, manufacture and marketing of
optical products until 1991 when all assets and
operations were sold.
During, 1999, the Company has devoted its activities to
raising capital, becoming current on all previously
delinquent regulatory reporting obligations, and seeking
to effect a merger or acquisition with a company that
management believes to have significant growth potential.
Accordingly, the Company is classified as a Development
Stage Company, effective January 1, 1999.
Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions
that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statement and
the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Income Taxes - Deferred taxes are provided on the
"liability" method whereby deferred tax assets are
recognized for operating loss carryforwards. Deferred
tax assets are reduced by a valuation allowance, when, in
the opinion of management, it is more likely than not
that some portion or all of the deferred tax asset will
not be realized.
Loss Per Share - Loss per common share is based upon the
weighted average number of common shares outstanding
during the period.
Cash and Cash Equivalents - The Company considers all
highly liquid investments, with a maturity date of three
months or less at the time of purchase, to be cash
equivalents.
F-7
<PAGE>
NOTE B - COMMON STOCK TRANSACTIONS
-------------------------
Treasury Stock - In November, 1988, the Company purchased
50,000 of its $.01 par value common stock in the open
market at an aggregate cost of $175,088. The acquired
shares decreased common stock outstanding for financial
statement purposes.
During 1999, the Company cancelled the shares acquired.
Cost of shares acquired and cancelled was offset against
additional paid-in capital in the accompanying statement
of shareholders' equity.
Common Stock - In October, 1999, the Company's Board of
Directors authorized an amendment of the Company's
Certificate of Incorporation to increase the authorized
capital stock from 5,000,000 shares of common stock, $.01
par value to 100,000,000 shares of common stock, $.001
par value.
NOTE C - RELATED PARTY TRANSACTIONS
--------------------------
Occupancy and Administrative Costs - At the present time,
certain of the Company's administrative costs are being
paid by certain shareholders and other affiliated
entities. The financial statements do not include these
costs. No estimate has been made as to the effect these
costs would have on reported results of operations.
Non-Monetary Transactions - During 1999, the Company
issued 760,000 common shares to individuals providing
legal and administrative services. Fair value of
services rendered ($7,600) was used in valuing the shares
issued in the accompanying financial statements.
NOTE D - INCOME TAXES
------------
Deferred taxes relating to the tax benefit the Company's
net operating loss was offset by a valuation allowance
due to the uncertainty of profitable operations in the
future.
The Company's net operating loss carryforward of
approximately $1,600,000 may be carried forward through
the year 2015 for tax purposes, to offset taxable income.
F-8
<PAGE>
SEC FILE NO. 0-161470
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
EXHIBITS
TO
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, 1999
OF
TELE-OPTICS, INC.
<PAGE>
To the Board of Directors
Tele-Optics, Inc.
(A Development Stage Company)
Boca Raton, Florida
In connection with the audit of the Company's financial statements
for the fiscal year ended December 31, 1998, and in the subsequent
interim period, there were no disagreements, disputes, or
differences of opinion with our firm on any matters of accounting
principles or practices, financial statement disclosure, or
auditing scope and procedures, which, if not resolved to the
satisfaction of our firm, would have caused our firm to make
reference to the matter in its report.
We consent to the use of our Independent Auditors Report of Tele-
Optics, Inc. for the fiscal year ended December 31, 1998, which
Report is dated June 22, 1999, in the Form 10-KSB of Tele-Optics,
Inc. for the fiscal year ended December 31, 1999.
Wlosek & Braverman, L.L.C.
Certified Public Accountants
Clifton, New Jersey
March 28, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted 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-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 13,261
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,261
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,261
<CURRENT-LIABILITIES> 5,266
<BONDS> 0
0
0
<COMMON> 7,000
<OTHER-SE> 995
<TOTAL-LIABILITY-AND-EQUITY> 13,261
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 42,750
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (42,750)
<INCOME-TAX> 0
<INCOME-CONTINUING> (42,750)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (42,750)
<EPS-BASIC> (.01)
<EPS-DILUTED> 0
</TABLE>
