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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Item 5
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 23, 1999
PHOTONICS CORPORATION
dba
DTC Data Corporation
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-22514 77-0102343
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
606 CHARCOT DRIVE, SAN JOSE, CA 95131
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408)546-5600
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
On June 21, 1999, the Registrant's board of directors determined to
lay off all employees except those essential to an orderly shut-down of the
business unless the Registrant should unexpectedly receive a large order for
product it could ship from inventory. Effective June 23, 1999, Registrant's
board of directors and officers resigned. Prior to such resignation,
Registrant's board of directors hired James T. Koo, formerly Registrant's
President, to serve as a consultant at no pay to attempt to find a buyer for
the Registrant and otherwise to sell such assets as he is able and then to
shut down the business.
The Registrant has approximately $420,000 of accounts receivable which
it believes, although no assurance can be given, have a reasonable chance of
collection, approximately $110,000 of secured bank debt, approximately
$180,000 of back payroll and accrued vacation pay, and approximately $3.6
million of accounts payable and other unsecured debt, including approximately
$2.0 million owed to Registrant's former officers, board members, and their
affiliated companies. The Registrant intends to use the proceeds from its
accounts receivables and any inventory or assets it sells to first pay off
the secured bank loan. Additional funds would be used to fund June and July
wind-down expenses estimated at $50,000 and employee wage claims up to $4,300
per employee, which is estimated to require about $35,000. (This corresponds
to the portion of employee wage claims which would be entitled to statutory
priority under Section 507(a)(3) of the US Bankruptcy Code were the
Registrant to initiate a Chapter 7 filing.) Any subsequent excess would be
divided 10% to meet the remaining unsatisfied payroll and vacation pay and
90% to pay other creditors until the payroll and vacation pay was paid off.
Thereafter, all proceeds would go to the creditors of Registrant.
The Registrant is following this procedure rather than filing for Chapter 7
in order to maximize return to creditors. Should creditors not go along with the
procedure and individually attempt to seize assets through writs of attachments
or like devices the Registrant would intend to file for Chapter 7 which
Registrant believes would cause all creditors to receive less.
Absent a sale of the business generating significant cash, which the
Registrant believes is remote, the Registrant would expect to pay off its
secured lender, fund June and July operating expenses of $50,000 and the
priority employee payroll and vacation debt of about $35,000 and then to pay
unsecured debt holders approximately five cents ($0.05) for every dollar of
debt, although no assurance can be given that there will be funds generated to
pay any person. Should creditors force a Chapter 7 filing, Registrant believes
that they would receive less proceeds. Registrant does not expect its
shareholders to obtain any monies.
Unless the situation changes dramatically, Registrant does not intend to
file further reports with the SEC and expects to go out of business prior to the
end of the third calendar quarter of 1999.
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SIGNATURE
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, hereunto duly authorized.
PHOTONICS CORPORATION
Date: June 23, 1999 By: /s/ James T. Koo
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James T. Koo
President and Chief
Executive Officer
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