<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM l0-K
X Annual report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
For the Fiscal Year Ended: September 30, 1996
Transition report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
Commission File No. 33-24464-NY
SPECTRUM EQUITIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2958856
- -------------------------- -------------------------------
(State of Incorporation) (IRS Employer Identification)
9942 N.W. 6th Place, Plantation, FL 33324
- ----------------------------------------- -------------------------------
(Address of principal executive offices) (zip code)
Registrant's Telephone No. including area code: (954) 967-4916
----------------------
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the
Registrant was required to file such reports); and, (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.
There is currently no market for the issuer's stock.
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as the latest practicable date. 243,901,667 shares, as of
November 7, 1996.
Documents Incorporated by Reference
-----------------------------------
NONE
<PAGE> 2
Item 1. Business.
Spectrum Equities, Inc. (the "Company") is currently inactive, having
emerged from reorganization under Chapter 11 of the Bankruptcy Code on October
5, 1995. The Company is currently searching for an operating company seeking
to establish itself as a publicly reporting company through a reorganization
transaction with the Company.
The Company believes that it has the potential for assisting such an
operating company in entering the public marketplace on an expeditious and
financially beneficial basis. However, there can be no assurance that any such
reorganization transaction will take place or if it does take place, that a
meaningful market for the Company's common stock will be established or
maintained.
The Company was organized as a Delaware corporation in 1987 under the
name Vision Capital, Inc. On March 31, 1989, it completed a public offering of
10,000 units at a price of $5.00 each which units were included in a
registration statement filed with the Securities and Exchange Commission. On
May 31, 1990, Vision entered into an agreement of merger with Wilmoth's Color
Lab, Inc., ("Wilmoth"), a Tennessee Corporation, to acquire all of the issued
and outstanding shares of common stock of Wilmoth in exchange for a total of
15,340,000 newly issued shares of Vision common stock, which merger resulted in
a change in the voting control, principal business, and management of Vision.
By September 1, 1990, the merger of Wilmoth into Vision was consummated and
Vision changed its name to Diversified Photographic Industries, Inc. and
continued the operations of Wilmouth, a photo finishing laboratory in Memphis,
Tennessee. Wilmoth conducted operations in that location through the date of
the merger. The Company continued its operations as a photo finishing
laboratory, processing and printing film for commercial photographers and
photographic studios and, including portrait studio operations, up until the
time that the Company ceased operations on March 15, 1992. At that time, the
secured creditors foreclosed the principal assets of the Company and the
remaining unsecured assets were sold to United Color Lab, Inc. on August 21,
1992 for the sum of $85,000.00. From that time the Company has been dormant.
The Company filed for reorganization under Chapter 11 of the Bankruptcy Code in
U.S. Bankruptcy Court for the Northern District of Texas and its Plan of
Reorganization was approved in 1995 and the Company emerged as a corporate
shell with no liabilities relating to its prior business ventures. It changed
its name to Spectrum Equities Inc. on February 26, 1996.
Its offices are currently located at 9942 N.W. 6th Place, Plantation,
Florida 33324 and its telephone number at that address is (954) 967-4916.
Employees
At the date hereof the Company had one employee, its President.
2
<PAGE> 3
Item 2. Properties
The Company's executive offices are provided as needed by its
President.
Item 3. Legal Proceedings.
The Company filed a voluntary petition for reorganization pursuant to
Chapter 11 of the Bankruptcy Code on January 5, 1994 with the U.S. Bankruptcy
Court for the Northern District of Texas. Its Plan of Reorganization was
approved by the Court on October 5, 1995.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
There is no known market for the Company's common stock at the present
time. As of November 7, 1996, there were 65 holders of record of the Company's
common stock.
The Company has not paid any dividends.
Item 6. Selected Financial Data.
The following data have been derived from financial statements that have been
audited by Grant-Schwartz Associates, CPAs, independent accountants, and should
be read in conjunction with such statements appearing herein:
<TABLE>
<CAPTION>
Year ended September 30 1996 1995
----------------------- ---- ----
<S> <C> <C>
Sales 0 0
Operating Income 0 0
Net Income (Loss) 0 0
Per Share 0 0
Balance Sheet Data:
-------------------
Total Assets $2,142 0
Stockholders Equity $2,142 $(37,991)
</TABLE>
3
<PAGE> 4
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
The Company is still in the developmental stage since emerging from
Chapter 11 in October 1995. The Company anticipates that it will require
minimal working capital in order to continue the search for an operating
company to acquire. Since emerging from bankruptcy all of its minimal working
capital needs were met by its shareholders. There can be no assurance that the
Company will be able to successfully complete the transition from a development
stage company to an operating company.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is listed in Part IV,
Item 14(a)1 and Item (a)2 and such information is filed as part of this report.
Item 9. Changes in and Disagreements with Accounting and
Financial Disclosures.
In 1996 the Company engaged Grant Schwartz Associates, CPAs as
independent auditor to audit the financial reports for the five years ended
September 30, 1995. This engagement arose out of the current managements
intention to bring the Company into compliance with the current reporting
requirements of the Securities Exchange Act of 1934 and not due to any
disagreement with the Company's prior auditors.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The directors and executive offices of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ------------- --- --------
<S> <C> <C>
Robert Harris 53 President, Secretary and Director
</TABLE>
Robert Harris has been President, Secretary/Treasurer and sole
Director of the Company since February 1996. From November 1994 to the
present, Mr. Harris has been Director and Secretary of DGL, Inc. in the
food/beverage industry. From July 1991 to the present, he has been a marketing
representative for Sam's Club, a division of Wal-Mart Stores, Inc., in the
retailing industry. Concurrently, for more than the last five years, Mr.
Harris has been an independent financial analyst.
4
<PAGE> 5
Item 11. Executive Compensation.
The Company was inactive during the three years ended September 30,
1996 and accordingly paid no compensation to its executive officers and
directors during such period. There is no stock option plans, pension plans,
profit sharing plans or other such plans.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of November 7, 1996, the
beneficial ownership of the Company's Common Stock by (i) the only persons who
own of record or are known to own, beneficially, more than 5% of the Company's
Common Stock; (ii) each director of the Company; and (iii) all directors and
officers as a group.
<TABLE>
<CAPTION>
Percent of
Number of Outstanding
Name and Address Shares Common Stock
- ---------------- --------- ------------
<S> <C> <C>
Robert Harris 92,614,544 38.0%
9942 N.W. 6th Place
Plantation, FL 33324
Joseph Perretta 110,117,247 45.2%
5701 Hawkes Bluff Avenue
Davie, FL 33331
Officers and Directors as a
group (1 person) 92,614,544 38.0%
</TABLE>
Item 13. Certain Relationships and Related Transactions.
None.
5
<PAGE> 6
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.
(a) 1. The following financial statements are filed as
part of this report:
Report of Independent Auditors
Balance Sheets, as of September 30, 1996, 1995
Statements of Income (Loss) for the two years ended September
30, 1996
Statements of Shareholders' Equity for the Period from
September 30, 1995 to September 30, 1996
Statements of Cash Flows for the two years ended September 30,
1996.
Notes to the Financial Statements.
2. Financial schedules are omitted.
The following Exhibits are incorporated by reference to the Company's
Registration Statement on Form S-18 (File No. 33-24464-NY):
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.0 Articles of Incorporation of the Registrant
2.1 Bylaws of the Registrant
</TABLE>
The following Exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
23 Consent of Independent Auditor
27 Financial Data Schedule (for SEC use only)
</TABLE>
(b) There were no reports on Form 8-K filed during the quarter
ended September 30, 1996.
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, there-unto duly authorized.
SPECTRUM EQUITIES INC.
By: s/Robert Harris
------------------------------------
November 7, 1996 Robert Harris, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
s/Robert Harris November 7, 1996
- ----------------------------------
Robert Harris, Director
(Principal Executive Officer and
Principal Financial Officer)
Supplementary Information to be furnished with reports filed pursuant
to Section 15(d) of the Act by Registrant which have not registered securities
pursuant to Section 12 of the Act.
No Annual Report has been sent to security holders for the fiscal year
ended September 30, 1996. Such Annual Report will be furnished subsequent to
the filing of this Form 10-K.
7
<PAGE> 8
GRANT-SCHWARTZ ASSOCIATES, INC.
40 Southeast 5th Street, Suite 500
Boca Raton, FL 33432
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Spectrum Equities, Inc.
We have audited the accompanying balance sheets of Spectrum Equities, Inc. as
of September 30, 1996 and 1995 and the related statements of income,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit also includes assessing the accounting
principles used and significant estimates by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spectrum Equities, Inc. as of
September 30, 1996 and 1995 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations and currently has a shortage of working capital. These
raise substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Boca Raton, Florida
October 15, 1996
<PAGE> 9
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK PAID RETAINED SHARE-
IN EARNINGS HOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) EQUITY
----------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance September 30, 1995 19,275,000 $ 19,275 $ 19,449 $ (76,715) $ (37,991)
Balance December 31, 1995 19,275,000 19,275 19,449 (76,715) (37,991)
Retired - As Per Agreement (12,323,500)
Issued By Court Order 38,725,167
Change in Par Value
to $.000001 (19,229) 19,229
Sale - Common Stock 178,075,000 178 178
----------- -------- -------- --------- ---------
Balance March 31, 1996 223,751,667 224 38,678 (76,715) (37,813)
Sale - Common Stock 13,950,000 14 14
Conversion of Loans to
Equity 39,013 39,013
----------- -------- -------- --------- ---------
Balance June 30, 1996 237,701,667 238 77,691 (76,715) 1,214
Sale - Common Stock 6,200,000 6 6
Contribution - Paid in
Capital 922 922
----------- -------- -------- --------- ---------
Balance September 30, 1996 243,901,667 $ 244 $ 78,613 $ (76,715) $ 2,142
=========== ======== ======== ========= =========
</TABLE>
See Notes to Financial Statements
<PAGE> 10
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
BALANCE SHEET
SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ -0- $ -0-
-------- --------
OTHER ASSETS
Organization Costs 2,142 -0-
-------- --------
Total Assets $ 2,142 $ -0-
======== ========
LIABILITIES AND OWNERS' EQUITY
Current Liabilities
Payable as per Bankruptcy $ -0- $ 37,991
-------- --------
Total Liabilities -0- 37,991
-------- --------
Shareholders' Equity
Common Stock - Par Value $.000001
and $.001, 250,000,000 Shares
Authorized, Issued 243,901,667
and 19,275,000 244 19,275
Paid in Capital 78,613 19,449
Retained Earnings - Deficit (76,715) (76,715)
-------- --------
Total Shareholders' Equity 2,142 (37,991)
-------- --------
Total Liabilities and
Shareholders' Equity $ 2,142 $ -0-
======== ========
</TABLE>
See Notes to Financial Statements
<PAGE> 11
mk
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
STATEMENT OF INCOME AND EXPENSE
YEARS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Sales $ -0- $ -0-
Selling and General Expenses -0- -0-
----- -----
NET INCOME (LOSS) $ -0- $ -0-
===== =====
EARNINGS PER SHARE $ -0- $ -0-
===== =====
</TABLE>
See Notes to Financial Statements
<PAGE> 12
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (Loss) for the Periods $ -0- $ -0-
Decrease - Payable as Per Bankruptcy (37,991) -0-
-------- --------
Cash Flows Used by Operating
Activities (37,991) -0-
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase - Paid in Capital 922 -0-
Increase - Organization Cost (2,142) -0-
Proceeds from Borrowing 39,013 -0-
Sale of Common Stock 198 -0-
-------- --------
Cash Flows from Financing
Activities 37,991 -0-
-------- --------
Increase (Decrease) in Cash -0- -0-
Cash - Beginning -0- -0-
-------- --------
Cash - Ending $ -0- $ -0-
======== ========
NON-CASH TRANSACTIONS:
Debt Converted to Equity $ 39,013 $ -0-
======== ========
</TABLE>
See Notes to Financial Statements
<PAGE> 13
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE A THE COMPANY
Vision Capital, Inc., a Delaware Corporation, was incorporated
November 9, 1987. On September 1, 1990, Vision Capital, Inc. completed a
merger with Wilmoth Color Lab, Inc. Subsequent to the merger, the Company
changed its name to Diversified Photographic Industries, Inc. The Company
continued its operations until it ceased doing business on March 15, 1992. On
January 5, 1994, the Company filed a voluntary petition for reorganization
pursuant to Chapter 11 of the United States Code and emerged from
reorganization on October 5, 1995. On February 26, 1996 the name of the
Company was changed to Spectrum Equities, Inc. The Company is currently
seeking a merger candidate.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all investment instruments purchased with a maturity of three months
or less to be cash equivalents.
Organization Costs
The Company will amortize organization costs over a sixty
month period.
Earnings Per Common Share
Earning (Loss) per share computations are based on the average
number of shares of common stock outstanding during the year.
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
AS INDEPENDENT PUBLIC ACCOUNTANTS, WE CONSENT TO THE USE OF OUR REPORT DATED
OCTOBER 15, 1996 TO ALL REFERENCES TO OUR FIRM INCLUDED IN OR MADE A PART OF
THE FORM 10KSB OF SPECTRUM EQUITIES, INC.
GRANT-SCHWARTZ ASSOCIATES, CPA'S
BOCA RATON, FLORIDA
OCTOBER 23, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.<F1>
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,142
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,142
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,142
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,142
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>AMOUNTS INAPPLICABLE OR NOT DISCLOSED AS A SEPARATE LINE ON THE FINANCIAL
STATEMENTS ARE REPORTED AS 0 HEREIN.
</FN>
</TABLE>
