<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 Years Ended: September 30, 1995, 1994, 1993, 1992 and 1991
____ 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 No X
--- ---
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.
$38.07.
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as the latest practicable date. 237,701,667 shares, as of
June 30, 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.
No proxies were solicited and the directors were elected by written
consent of the holders of a majority of the outstanding shares.
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 June 30, 1996, there were 63 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 March 31, 1995 1994 1993 1992 1991
- -------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sales 0 0 0 $299,916 $1,915,709
Operating Income 0 0 0 (122,872) (186,583)
Net Income (Loss) 0 0 0 (313,007) (247,986)
Per Share 0 0 0 (.02) (.01)
Balance Sheet Date:
Total Assets 0 0 0 0 548,957
Stockholders Equity 0 0 0 0 548,957
</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,
1995 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 June 30, 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(1) Common Stock
- ---------------- --------- ------------
<S> <C> <C>
Robert Harris 90,114,544 37.9%
9942 N.W. 6th Place
Plantation, FL 33324
Joseph Perretta 109,517,247 46.1%
5701 Hawkes Bluff Avenue
Davie, FL 33331
Officers and Directors as a
group (1 person) 90,114,544 37.9%
</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, 1995, 1994, 1993, 1992, 1991
Statements of Income (Loss) for the five years ended September
30, 1995
Statements of Shareholders' Equity for the Period from September
30, 1990 to September 30, 1995
Statements of Cash Flows for the five years ended September 30,
1995.
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>
10.1 Plan of Reorganization
23 Consent of Independent Auditor
</TABLE>
(b) There were no reports on Form 8-K filed during the quarter ended
March 31, 1996.
6
<PAGE> 7
GRANT-SCHWARTZ ASSOCIATES, CPA'S
40 SE 5TH STREET -- STE 500
BOCA RATON, FLORIDA 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, 1995, 1994, 1993, 1992 and 1991 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 option 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, 1995, 1994, 1993, 1992 and 1991 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
finncial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Grant-Schwartz Associates, CPA's
Boca Raton, Florida
May 16, 1996
<PAGE> 8
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
BALANCE SHEET
YEARS ENDED SEPTEMBER 30,
ASSETS
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ -0- $ -0- $ -0- $ -0- $ 8,258
Accounts Receivable -0- -0- -0- -0- 171,901
Inventories -0- -0- -0- -0- 27,323
Prepaid Expenses -0- -0- -0- -0- 13,590
------ ------ ------ ------ --------
-0- -0- -0- -0- 221,072
------ ------ ------ ------ --------
FIXED ASSETS
Plant Equipment -0- -0- -0- -0- 319,047
Equipment Under Capital Lease -0- -0- -0- -0- 158,921
Leasehold Improvements -0- -0- -0- -0- 34,274
Office Furniture -0- -0- -0- -0- 9,243
Transportation -0- -0- -0- -0- 7,742
------ ------ ------ ------ --------
-0- -0- -0- -0- 529,227
Accumulated Depreciation -0- -0- -0- -0- (206,664)
------ ------ ------ ------ --------
-0- -0- -0- -0- 322,563
------ ------ ------ ------ --------
OTHER ASSETS
Organization Costs (Net
of Amortization of $4,616) -0- -0- -0- -0- 5,322
------ ------ ------ ------ --------
TOTAL ASSETS $ -0- $ -0- $ -0- $ -0- $548,957
====== ====== ======= ======= ========
</TABLE>
See Notes to Financial Statements
<PAGE> 9
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
BALANCE SHEET
YEARS ENDED SEPTEMBER 30,
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CURRENT LIABILITIES
Payable As Per Bankruptcy $ 37,991 $ -0- $ -0- $ -0- $ -0-
Bank Overdraft -0- -0- -0- -0- 8,346
Short Term Notes Payable -0- 209,725 209,725 209,725 291,099
Accounts Payable -0- 397,344 397,344 397,344 278,536
Customer Deposits -0- -0- -0- -0- 19,009
Payroll Taxes Payable -0- 9,363 9,363 9,363 10,226
Accrued Expenses -0- -0- -0- -0- 79,897
Current Maturities of Long
Term Debt and Capital
Lease Obligations -0- -0- -0- -0- 53,065
------- -------- -------- -------- --------
37,991 616,432 616,432 616,432 740,178
------- -------- -------- -------- --------
NON-CURRENT LIABILITIES
Non-Current Maturities
of Long Term Debt and
Capital Obligations -0- -0- -0- -0- 112,204
------- -------- -------- -------- --------
TOTAL LIABILITIES 37,991 616,432 616,532 616,432 852,382
------- -------- -------- -------- --------
SHAREHOLDERS' EQUITY
Common Stock, Par Value
$.001, 40,000,000 Shares
Authorized, 19,275,000
Issued and Outstanding 19,275 19,275 19,275 19,275 19,275
Paid In Capital 19,449 19,449 19,449 19,449 19,449
Accumulated Deficit (76,715) (655,156) (655,156) (655,156) (342,149)
------- -------- -------- -------- --------
TOTAL SHAREHOLDERS' EQUITY (37,991) (616,432) (616,432) (616,432) (303,425)
------- -------- -------- -------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ -0- $ -0- $ -0- $ -0- $548,957
======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements
<PAGE> 10
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
YEARS ENDED SEPTEMBER 30,
STATEMENTS OF INCOME (LOSS)
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sales $ -0- $ -0- $ -0- $ 299,916 $1,915,709
Cost of Sales -0- -0- -0- 265,216 1,694,062
------- ------- ------- --------- ----------
Gross Profit -0- -0- -0- 34,700 221,647
Selling and General Expenses -0- -0- -0- 157,572 408,230
------- ------- ------- --------- ----------
Operating Income (Loss) -0- -0- -0- (122,872) (186,583)
------- ------- ------- --------- ----------
OTHER INCOME (EXPENSE)
Interest Expense -0- -0- -0- -0- (52,764)
Bad Debt Expense -0- -0- -0- -0- (3,928)
Loss of Equipment Disposal -0- -0- -0- -0- (27,102)
Bad Debt Recovery -0- -0- -0- -0- 10,009
Other Income -0- -0- -0- -0- 12,382
Loss on Foreclosure -0- -0- -0- (157,002) -0-
Abandonment Leasehold -0- -0- -0- (33,133) -0-
------- ------- ------- --------- ----------
TOTAL OTHER INCOME
(EXPENSE) -0- -0- -0- (190,135) (61,403)
------- ------- ------- --------- ----------
NET INCOME (LOSS) $ -0- $ -0- $ -0- $(313,007) $ (247,986)
======= ======= ======= ========= ==========
EARNINGS (LOSS) PER SHARE $ -0- $ -0- $ -0- $ (.02) $ (.01)
======= ======= ======= ======== ==========
</TABLE>
See Notes to Financial Statements
<PAGE> 11
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Loss for Year $ -0- $ -0- $ -0- $(313,007) $(247,986)
Adjustments to Reconcile
Net Loss to Net Cash
Provided by Operating
Activities:
Depreciation and Amortization -0- -0- -0- 29,614 53,428
(Increase) Decrease - Accounts
Receivable -0- -0- -0- -0- (49,740)
(Increase) Decrease - Inventories -0- -0- -0- -0- 44,470
Increase (Decrease) - Payables -0- -0- -0- -0- 50,384
Loss on Equipment Disposal -0- -0- -0- -0- 27,102
Loss on Foreclosure and Abandonment -0- -0- -0- 190,135 -0-
------ ------ ------ --------- ---------
-0- -0- -0- (93,258) (122,342)
------ ------ ------ --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase Fixed Assets -0- -0- -0- -0- (23,792)
Proceeds from Sale of Equipment -0- -0- -0- 85,000 65,000
------ ------ ------ --------- ---------
-0- -0- -0- 85,000 41,208
------ ------ ------ --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of Debt -0- -0- -0- -0- (157,540)
Payment of Capital Lease Obligations -0- -0- -0- -0- (17,067)
Proceeds from Borrowing -0- -0- -0- -0- 245,392
------ ------ ------ --------- ---------
-0- -0- -0- -0- 70,785
------ ------ ------ --------- ---------
DECREASE IN CASH -0- -0- -0- (8,258) (10,349)
BALANCE - BEGINNING -0- -0- -0- 8,258 18,607
------ ------ ------ --------- ---------
BALANCE - ENDING $ -0- $ -0- $ -0- $ -0- $ 8,258
====== ====== ====== ========= =========
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC
INDUSTRIES, INC. STATEMENT OF
SHAREHOLDERS' EQUITY
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
COMMON STOCK PAID RETAINED SHARE-
IN EARNINGS HOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) EQUITY
---------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance September 30, 1990 19,275,000 $19,275 $19,449 $ (94,163) $ (55,439)
Loss - Year End September 30, 1991 (247,986) (247,986)
---------- ------- ------- --------- ---------
Balance - September 30, 1991 19,275,000 19,275 19,449 (342,149) (303,425)
Balance - September 30, 1992 19,275,000 19,275 19,449 (655,156) (616,432)
Loss - Year End September 30, 1992 (313,007) (313,007)
---------- ------- ------- --------- ---------
Year End September 30, 1993 -0- -0-
---------- ------- ------- --------- ---------
Balance September 30, 1993 19,275,000 19,275 19,449 (655,156) (616,432)
Balance - September 30, 1994 19,275,000 19,275 19,449 (655,156) (616,432)
Year End September 30, 1994 -0- -0-
---------- ------- ------- --------- ---------
Reduction of Debt Based on
Approved Reorganization 578,441 578,441
---------- ------- ------- --------- ---------
Balance September 30, 1994 19,275,000 $19,275 $19,449 $ (76,715) $ (37,991)
========== ======= ======= ========= =========
</TABLE>
See Notes to Financial Statements
<PAGE> 13
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
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
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.
Accounts Receivable
The Company used the direct charge-off method of accounting
for bad debts. In consistent application of this method the
accounts considered uncollectible had been written off against
income.
Inventories
Inventories consisted of photographic paper, chemicals and
work-in-process and were stated at the lower of cost or market.
The Company did not have finished goods as the products were
shipped, usually via express shipping, when they were
completed. Cost elements included in work-in-process were raw
materials, direct labor and manufacturing overhead.
Property, Plant and Equipment
Additions to property, plant and equipment were recorded at
cost when first placed in service. Depreciation and
amortization were provided for in amounts sufficient to relate
the cost of depreciable assets to operations over their
estimated service lives. Leased property under capital leases
were amortized over the lives of the respective leases, or
over the service lives of the assets for those leases that
substantially transfer ownership.
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> 14
SPECTRUM EQUITIES, INC.
FORMERLY DIVERSIFIED PHOTOGRAPHIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE C PLAN OF BANKRUPTCY
The plan provides for the creation of three classes of claims.
1: The expenses of administration will be paid in full.
2: Tax claims of governmental units will be paid in full.
3: All non-priority unsecured claims will be paid at 2% of
the claim.
The payment of the above claims will be made from the proceeds
of a loan agreed to with certain investors.
NOTE D SUBSEQUENT EVENTS
1. The Company emerged from bankruptcy during October,
1995.
2. Pursuant to an agreement with various shareholders,
12,323,500 common shares were returned to the Company
for cancellation and 38,825,167.
3. During February 1996, the name of the Company was
changed to Spectrum Equities, Inc.
4. The Articles of Incorporation was amended to increase
the authorized shares to 250,000,000 and to change
the par value to $.000001.
5. The following is a pro forma shareholders' equity of
the above events occurring on September 30, 1995:
<TABLE>
<S> <C>
Common Stock - Par value $.000001,
authorized 250,000,000 shares,
issued and outstanding $ 46
Paid In Capital 38,679
Accumulated Deficit (76,715)
--------
SHAREHOLDERS' EQUITY - DEFICIT $(37,990)
========
</TABLE>
<PAGE> 15
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
--------------------------
June 30, 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 June 30, 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 March 31, 1996. Such Annual Report will be furnished
subsequent to the filing of this Form 10-K.
<PAGE> 1
EXHIBIT 10.1
DEBTOR'S MODIFIED PLAN OF REORGANIZATION
----------------------------------------
Article I
---------
Classification of Creditors
---------------------------
The creditors are divided into the following classes:
Class 1: Expenses of administration of the attorneys for the Debtor, and
the accountants and agents of the Debtor.
Class 2: Tax claims of governmental units to the extent they are entitled to
priority under 11 USC Section 506.
Class 3: Class 3: All non-priority unsecured claims.
Article II
----------
Provisions for Satisfying Claims of Creditors
---------------------------------------------
The priority claims will be satisfied in the following manner:
Class 1: The claims of all Class 1 creditors, upon allowance by the Court, will
be paid in cash in full on confirmation.
Class 2: The claims of all Class 2 creditors shall be assumed by the
reorganized Debtors and shall be paid in full out of the loan proceeds as set
forth herein below in Article IV.
Class 3: The claims of all Class 3 creditors shall be paid by paying the
claimant of each claim filed, an amount equal to two percent (2%) of the
amount of such claim filed as shown on the statement of all liabilities of
Debtor previously filed with the papers in this bankruptcy or by subsequent
allowed claim filed by such claimant and shall be paid out of the proceeds of
the loan as set forth hereinafter in Article IV.
Article III
-----------
Lien Rights Not Affected
------------------------
Nothing contained in this plan shall affect the right of any Class 2 creditor
to perfect its lien rights under the law whether their claims arise before or
after filing the petition commencing this case.
Article IV
----------
Execution and Implementation of the Plan
----------------------------------------
1. A group of six investors ("Investor Group") headed by Mr. Ronald A. Adams
(the identity of which group of investors is described more fully below in the
Article IVB) holds a claim for administrative expenses in these proceedings.
The Company has entered into an agreement with the investors, whereby the funds
necessary for satisfaction of creditors' claims shall be generated from the
proceeds of a loan from such investors, which loan shall be funded within
thirty days of the confirmation of the Plan or any confirmed modification
thereof. In exchange for the Investor Group's claim for Administrative expenses,
the Company shall issue so many shares of its common stock as is necessary to
vest in the Investor Group ownership of 85% of the outstanding common stock of
the Company. The issuance of all securities issued under the Plan shall be
exempt from the registration requirements of Section 5 of the Securities Act of
1933 as amended or any state or local law requiring registration for an offer
or sale of a security pursuant to Section 1145 of the Code.
Article V
---------
Modification of the Plan
------------------------
The Debtor may propose amendments or modification of this plan at any time
prior to confirmation, with leave of the Court, upon notice to the creditors
committees, if any are formed. After confirmation, the Debtor may, with
approval of the court, and so long as it does not materially or adversely
affect the interest of the creditors, remedy any defect or omission, or
reconcile any inconsistencies in the plan, or in the order of confirmation, in
such a manner as may be necessary to carry out the purposes and effect of this
plan.
Article VI
----------
Jurisdiction of the Court
-------------------------
Subject to Article 4, the Court will retain jurisdiction until this plan has
been fully consummated, including, but not limited to the following purposes
1. The classification of the claim of any creditor and the re-examination of
the claims which have been allowed for purposes of voting, and the
determination of such objections as may be filed to creditors' claims. The
failure by the Debtor to object, or to examine any claim for the purpose of
voting, shall not be deemed to be a waiver of the Debtor's right to object to,
or re-examine the claim in whole or in part.
2. Determination of all questions and disputes regarding title to the assets
of the estate, and determination of all causes of actions, controversies,
disputes, or conflicts, whether or not subject to action pending as of the date
of confirmation, between the debtor and any other party, including but not
limited to, any right of the Debtor to recover assets pursuant to the provision
of Title 11 of the United States Code.
3. The correction of any defect, the curing of any omission, or the
reconciliation of any inconsistency in this plan or the order of confirmation
as may be necessary to carry out the purposes and intent of this plan.
4. The modification of this plan after confirmation pursuant to the Bankruptcy
Rules and Title 11 of the United States Code.
5. To enforce and interpret the terms and conditions of this plan.
6. Entry of any order, including injunctions, necessary to enforce the title,
rights, and powers of the Debtor and to impose such limitations, restrictions,
terms and conditions of such title, rights, and powers as this court may deem
necessary.
7. Entry of an order concluding and terminating this case.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
As Independent Public Accountants, we consent to the use of our report dated
May 16, 1996 to all references to our firm included in or made a part of the
Form 10-K of Spectrum Equities, Inc.
/s/ Grant-Schwartz Associates, CPA'S
------------------------------------
GRANT-SCHWARTZ ASSOCIATES, CPA'S
Boca Raton, Florida
June 5, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SPECTRUM EQUITIES, INC. FOR THE YEAR ENDED SEPTEMBER 30,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 37,991
<BONDS> 0
0
0
<COMMON> (37,991)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> (37,991)
<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
</TABLE>
