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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 March 31, 1998
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Commission File Number 1-11454-03
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Peachtree FiberOptics, Inc.
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(Exact name of small business issuer
as specified in its charter)
Delaware 58-1974423
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
701 Brickell Avenue, Suite 2000
Miami, Florida 33131
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (305) 374-0282
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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
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Number of shares of Peachtree FiberOptics, Inc. Common Stock, $0.01 par value,
issued and outstanding as of March 31, 1998: 3,583,332
Transitional Small Business Disclosure Format (check one):
Yes No X
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PEACHTREE FIBEROPTICS, INC.
INDEX
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION PAGE
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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 three months
ended March 31, 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
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SIGNATURES
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
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PEACHTREE FIBEROPTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF DEFICIENCY IN NET ASSETS
AVAILABLE IN LIQUIDATION
(LIQUIDATION BASIS)
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<CAPTION>
March 31, 1998 December 31,
1997
(Unaudited)
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Assets
Cash $ 1,798 $ 1,813
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Total Assets $ 1,798 $ 1,813
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Liabilities
Accounts Payable $ 134,915 $ 134,915
Accrued expenses 74,056 69,572
Lease obligations 4,276 4,276
Managing agent fee 662,500 625,000
Notes Payable 50,000 50,000
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Total liabilities $ 925,747 $ 883,763
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Net deficiency in net assets
available in liquidation $ (923,949) $ (881,950)
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Stockholders' deficiency in
net assets
Common stock, $.01 par value;
20,000,000 shares authorized,
3,583,332 shares issues and $ 32,250 $ 32,250
outstanding
Additional paid-in capital $ 3,496,960 $ 3,496,960
Accumulated deficit $(4,453,159) $(4,418,660)
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Net stockholders' $ (923,949) $ (881,950)
deficiency in net assets =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES.
3
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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 MARCH 31, 1998
(UNAUDITED)
<TABLE>
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Deficiency in net assets available in
liquidation at January 1, 1998 $(881,850)
Changes in net assets available in liquidation attributed to:
General and administrative expenses (4,499)
Managing Agent Fee (37,500)
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Deficiency in net assets available in
liquidation at March 31, 1998 $(923,949)
=========
</TABLE>
SEE ACCOMPANYING NOTES.
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PEACHTREE FIBEROPTICS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 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 March 31, 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 March 31, 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 $662,500 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.
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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 March 31, 1998 the net realizable value of the Company's assets were
approximately $1,798 and its total liabilities were approximately $925,747.
Therefore, it is highly unlikely that there will be any funds available for
disbursement to unsecured creditors.
PART II - OTHER INFORMATION
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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 March 31, 1998.
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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.
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(Registrant)
Date: May 14, 1998
By: /s/ Leonard J. Sokolow
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LEONARD J. SOKOLOW
MANAGING AGENT
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF PEACHTREE FIBEROPTICS FOR THE THREE MONTHS ENDED MARCH
31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,798
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,798
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,798
<CURRENT-LIABILITIES> 925,747
<BONDS> 0
0
0
<COMMON> 32,250
<OTHER-SE> 3,496,960
<TOTAL-LIABILITY-AND-EQUITY> (4,453,159)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (41,999)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,999)
<INCOME-TAX> 0
<INCOME-CONTINUING> (41,999)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41,999)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
