<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998
Commission File Number 1-11454-03
Peachtree FiberOptics, Inc.
------------------------------------
(Exact name of small business issuer
as specified in its charter)
DELAWARE 58-1974423
- ---------------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
701 Brickell Avenue, Suite 2000
Miami, Florida 33131
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (305) 374-0282
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for 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 [ ]
Number of shares of Peachtree FiberOptics, Inc. Common Stock, $0.01 par value,
issued and outstanding as of June 30, 1998: 3,583,332
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
1
<PAGE> 2
PEACHTREE FIBEROPTICS, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Statements of Deficiency in Net Assets
Available in Liquidation 3
Condensed Statements of Changes in Deficiency in Net
Assets Available in Liquidation for the six months
ended June 30, 1998 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Deficiency
in Net Assets Available in Liquidation
PART II. OTHER INFORMATION
SIGNATURES
</TABLE>
2
<PAGE> 3
PEACHTREE FIBEROPTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF DEFICIENCY IN NET ASSETS
AVAILABLE IN LIQUIDATION
(LIQUIDATION BASIS)
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- -----------------
(Unaudited)
<S> <C> <C>
Assets
Cash $ 964 $ 1,813
----------- -----------
Total Assets $ 964 $ 1,813
----------- -----------
Liabilities
Accounts Payable $ 134,915 $ 134,915
Accrued expenses 76,837 69,572
Lease obligations 4,276 4,276
Managing agent fee 700,000 625,000
Notes Payable 50,000 50,000
----------- -----------
Total liabilities $ 966,028 $ 883,763
----------- -----------
Net deficiency in net assets available in liquidation
$ (965,064) $ (881,950)
----------- -----------
Stockholders' deficiency in net assets
Common stock, $.01 par value; 20,000,000 shares
authorized, 3,583,332 shares issued and outstanding $ 32,250 $ 32,250
Additional paid-in capital $ 3,496,960 $ 3,496,960
Accumulated deficit $(4,494,274) $(4,418,660)
----------- -----------
Net stockholders' deficiency in net assets $ (965,064) $ (881,950)
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE> 4
PEACHTREE FIBEROPTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF CHANGES IN DEFICIENCY IN
NET ASSETS AVAILABLE IN LIQUIDATION
PERIOD FROM JANUARY 1, 1998 THOUGH JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
Deficiency in net assets available in $(881,950)
liquidation at January 1, 1998
Changes in net assets available in liquidation attributed to:
General and administrative expenses (8,114)
Managing Agent Fee (75,000)
---------
Deficiency in net assets available in
liquidation at June 30, 1998 $(965,064)
=========
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE> 5
PEACHTREE FIBEROPTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1998
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary to present fairly the statement of deficiency in net assets available
in liquidation and changes in deficiency in net assets available in liquidation
at June 30, 1998 have been made. The statement of deficiency in net assets
available in liquidation and changes in deficiency in net assets available in
liquidation at June 30, 1998 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1998. For further information,
refer to the financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the period ending December 31, 1997
and to the Company's quarterly reports on Form 10-QSB.
NOTE 2. LIQUIDATION OF CERTAIN ASSETS
On October 27, 1993 the Company granted any officer of JW. Securities, Inc. and
Corporate Securities Group, Inc., the Company's managing underwriters, a limited
power-of-attorney to negotiate and execute an agreement with Genesis Partners,
Inc. (the "Managing Agent") to act as exclusive manager of the Company and all
of its business interests. The Managing Agent commenced a liquidation of certain
assets of the Company shortly thereafter. The Company agreed to pay the Managing
Agent $150,000 per year and issue Leonard J. Sokolow, the sole stockholder of
the Managing Agent, 10% of the Company's outstanding common stock on a fully
diluted basis. As of the date of this report no cash compensation has been paid
to the Managing Agent. However, the Company has accrued $700,000 for the first,
second, third and part of the fourth year fee. Payment of such compensation is
contingent upon the Company obtaining sufficient capital through a private
placement or a public offering and/or the completion of a merger or acquisition.
Pursuant to such agreement, on February 28, 1994, and February 15, 1995, the
Company issued Mr. Sokolow 287,288 and 71,044 shares, respectively, of the
Company's Common Stock. This agreement was to have expired on October 26, 1995
but was extended for an additional three years and will expire on October 26,
1998. On May 16, 1996, the Company sold a patent on its fiber optic technology,
which was previously licensed to a third party, for $10,100. Moreover, the
Company may receive a possible additional payment of $15,000 in the event the
purchaser of the patent is able, by May 16, 1999, to obtain certain rights with
respect to such patent or a release from the third party license holder of such
license holder's rights under such license.
5
<PAGE> 6
NOTE 3. BRIDGE FINANCING
On May 15, 1995, the Company obtained bridge financing in the aggregate amount
of $50,000 from two investors, less a 10% fee paid to JW Charles Securities,
Inc. for arranging the transaction. The Company used approximately $45,000 of
the proceeds from this financing to pay professional fees and operating expenses
and intends to use the remainder of the proceeds to meet professional fees and
operating expenses. In exchange for such financing, the Company issued a
promissory note in the principal amount of $25,000 each to the two investors.
Such notes bear interest at a rate of 10% per annum and become due upon the
earlier of November 15, 1995 or the closing date of a firm commitment
underwritten secondary public offering of the Company's securities. No
agreement, understanding or arrangement presently exists with respect to any
secondary public offering. In addition, the Company granted to each investor an
immediately exercisable three-year warrant to purchase 10,000 shares of Common
Stock at a price of $2.50 per share. The shares underlying such warrants have
been granted piggyback registration rights during the term of the warrants and
demand registration rights during the last two years of the term of the
warrants. Such warrants also contain certain anti-dilution rights.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF DEFICIENCY IN NET ASSETS
AVAILABLE IN LIQUIDATION:
As a result of the Company's decision to liquidate certain assets, the Company
began using the liquidation basis of accounting for the period beginning October
28, 1993. Therefore, for the period beginning October 28, 1993 assets have been
adjusted to settlement amounts plus estimated liquidation costs. As of June 30,
1998 the net realizable value of the Company's assets were approximately $964
and its total liabilities were approximately $966,028. Therefore, it is highly
unlikely that there will be any funds available for disbursement to unsecured
creditors.
6
<PAGE> 7
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K
during the quarter ended June 30, 1998.
7
<PAGE> 8
SIGNATURES
Pursuant to the Requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Peachtree FiberOptics, Inc.
(Registrant)
Date: August 12, 1998
By: /s/ Leonard J. Sokolow
------------------------------
LEONARD J. SOKOLOW
MANAGING AGENT
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 964
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 964
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 964
<CURRENT-LIABILITIES> 965,064
<BONDS> 0
0
0
<COMMON> 32,250
<OTHER-SE> 3,496,960
<TOTAL-LIABILITY-AND-EQUITY> (4,494,274)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (83,114)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (83,114)
<INCOME-TAX> 0
<INCOME-CONTINUING> (83,114)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (83,114)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
