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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
__________________________________
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
____________________________________
For the Fiscal Year Ended: Commission File Number:
September 30, 1997 0-16397
_____________________________________
APPLIED SPECTRUM TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Minnesota 41-1419457
(State of Incorporation) (IRS Employer Identification Number)
P.O. Box 26707
St. Louis Park, Minnesota 55426
(Address of Principal Executive Offices)
Registrant's Telephone Number,
Including Area Code
(612) 947-0714
_______________________________________
Securities Registered Pursuant to 12(b) of the Act: None
Securities Registered Pursuant to 12(g) of the Act:
Common Stock - $.01 par value
Common Stock Purchase Warrants
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 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.
X Yes No
As of November 30, 1997, 2,953,941 shares of Common Stock of the Registrant were
outstanding, and the aggregate market value of the Common Stock of the
Registrant as of that date (based on the Company's plan to dissolve), excluding
shares owned beneficially by officers and directors, is estimated to be $46,021.
PART I
ITEM 1. BUSINESS
(a) General Development of Business.
During fiscal 1994 Applied Spectrum Technologies, Inc. (AST) began
implementing a Plan of Dissolution that was approved by its shareholders at a
Special Shareholders' Meeting held on November 30, 1993. Under the Company's
Plan of Dissolution most of its assets were sold during 1994 with some payments
deferred into 1995 and beyond. The recovery period ran through 1997. During
fiscal 1995 most of the tangible asset sales were collected and only technology
licenses remained to be collected. During fiscal 1996 the Company continued to
collect license fees and payments on one equipment lease. The results of the
Plan of Dissolution have been successful and all liabilities and expenses have
been either paid or are covered in reserves. A liquidating dividend will be
paid to shareholders in early 1998.
Prior to implementation of the Dissolution Plan, AST was engaged in the
development, manufacture, marketing and sale of digital business communication
systems. In recent years the Company has allocated most of its available
resources to the marketing and sale of its T-1 Multiplexer product which is a
communication system that allows many individual telephone and data services to
be transmitted and received over one high speed digital transmission line. The
CENTRA Series of T-1 systems includes channel banks and T-1 Multiplexers which
support voice, data and video communications for point to point interoffice
requirements as well as digital access to long distance carrier networks.
The Company entered into OEM sub-license agreements with four of its
T-1 Multiplexer customers between 1991 and 1993. The Company also sold its
T-1 Multiplexers through direct and distribution sales channels until the
implementation of the Dissolution Plan.
The Company's initial products were intended for use (i) in the Telco
market, and (ii) in the onpremises network market. In 1990 the Company was
restructured to de-emphasize its initial products to concentrate primarily on
its new T-1 Multiplexer product. The Company continued to make their initial
products available for sale but did not actively market these products nor did
the Company do any additional unfunded development work on these products after
1990.
The Company was organized as a Minnesota Corporation on February 17, 1982.
The Company's principal executive offices have relocated from 450 Industrial
Boulevard, Minneapolis, Minnesota 55413 to P.O. Box 26707, St. Louis Park,
Minnesota 55426-0700, and its telephone number is (612) 947-0714.
(b) Financial Information About Industry Segments.
2
Since its inception, the Company has operated in one industry segment - the
development, manufacture, marketing and sales of communications products and
networks some of which transmit digital data over existing local telephone wires
simultaneously with normal voice communications.
(c) Narrative Description of Business.
BACKGROUND
The technology on which the Company's original products are based,
including Spread Spectrum Technology, permit data and telemetry to be
transmitted simultaneously over telephone wire without interfering signals with
normal voice service. The Company's products are known as data/voice
multiplexing ("DVM") equipment and are aimed at operating telephone companies
(Telco market).
The Company's Alarm and DVM-400 products were introduced to a Telco
marketplace which was slow to develop. Consistent with a strategy begun in
1988, the Company has been redirecting its efforts towards the commercial
marketplace, with recent emphasis on the T-1 Multiplexer market.
During 1989 and early 1990 the Company worked on the development of the T-1
product which was introduced to the market in 1990 and became the Company's
primary product.
The Company's lack of financial resources caused the Company to pursue a
plan of dissolution as approved by the Board of Directors and approved by the
shareholders on November 30, 1993. For more information see Item 7 - Management
Discussion and Analysis of Financial Condition.
PRODUCTS
After AST ceased operations in 1993, as part of the implementation of the
Dissolution Plan, the Company's Products were eliminated through the dissolution
process.
MARKETS
During the Dissolution Plan, the Company ceased to pursue any of its former
markets.
SALES AND DISTRIBUTION
After ceasing operations and implementing the Dissolution Plan in 1993, the
Company did not pursue Sales and Distribution efforts.
Between 1991 and 1993, the Company entered into four agreements with OEM
customers which provide for non-exclusive rights to sales, manufacturing and
technology of the T-1 Multiplexer product.
3
During fiscal 1994, two of these OEM agreements were terminated by the
customer. The other two OEM agreements expired in fiscal 1997.
PRODUCT DEVELOPMENT
During fiscal 1995 and 1996, there were no product development activities
because of the implementation of the Plan of Dissolution.
During fiscal 1996, the Company continued to support its OEM Licenses by
use of former employees as consultants.
MANUFACTURING, SERVICE AND SUPPORT
Prior to ceasing operations and implementing the Dissolution Plan, the
Company's manufacturing operations consisted primarily of assembly, test and
quality control of components and subassemblies and final testing of completed
products. Subcontractors assemble printed circuit boards for the Company's
products.
Due to a lack of resources and attrition the Company ceased manufacturing
and service operations at the end of fiscal 1993. The Company entered into
agreements with third parties which protected its customer base from a
manufacturing and service standpoint.
A one-year warranty was given on all historic products, and longer
warranties were sometimes granted on products sold to distributors and OEMs.
During 1992 the Company extended the warranty on its CENTRA T-1 Multiplexer
products from one year to five years. Warranty coverage on the CENTRA T-1
Product has been assigned to a third party. Under the terms of the sale of its
T-1 inventory as part of the Dissolution Plan, the Company granted extended
warranty coverage to the Buyer. The Company believes that any previous
liability for warranty obligations has been satisfied.
The Company had a customer service department which provided training,
installation and product support. The customer service department administers
customer warranties and repairs and provides telephone and on-site assistance.
The Company sold its customer service department to a third party in September,
1993.
COMPETITION
The company implemented its Plan of Dissolution in 1993 and therefore has
not been tracking any competitors the past four years.
BACKLOG
At September 30, 1997 and 1996, the Company's backlog of orders was zero.
4
GOVERNMENT REGULATION
Communications equipment is subject to federal regulations which require
that they be tested and then approved or certified by the Federal Communications
Commission (the "FCC") prior to their use, sale, lease or distribution. Where
required or appropriate, the Company's products were tested and approved by the
FCC and were authorized for distribution.
The Telcos are regulated by the states in which they operate and are
generally required to establish a tariff for each new service they offer,
including those which would use the Company's products.
EMPLOYEES
At September 30, 1997, the Company employed 1 part-time employee who is
winding down the Dissolution Plan. That employee plans to resign from the
Company December 31, 1997.
PATENTS, TRADEMARKS AND LICENSES
Prior to adopting the Dissolution Plan, the Company had obtained a number
of United States and foreign patents. The 17-year terms of the Company's United
States patents expire from the years 2001 to 2004. The Company believed,
however, that its principal technological advantage, if any, over current and
prospective competitors was in the ability of its personnel to apply a broad
range of techniques, some of which may be trade secrets of the Company, to the
resolution of the customer needs. The Company attempted to protect its trade
secrets by requiring each of its employees to execute a confidentiality
agreement and by other measures common to technical industries. There was no
assurance that any of the Company's patents or other proprietary rights of the
Company would be sufficient to prevent effective competition with its products.
The Company's product name "DWV-200" is registered as a trademark in the
United States. The Company also claims common law trademark rights with respect
to the name "DVM-400". The Company has registered the name SPECTRA as a
trademark in the United States.
During 1994, the Company stopped paying for any further patent or
trademark applications or renewals. The Company believes that it has
exhausted all efforts of future value for its technologies.
(d) Financial Information About Foreign and Domestic Operation and Export
Sales.
Substantially all of the Company's revenue, operating profit and
identifiable assets have been attributable to the Unites States.
5
ITEM 2. PROPERTY
On September 16, 1993, the Company vacated its former headquarters and
manufacturing facilities located at 450 Industrial Boulevard, Minneapolis,
Minnesota. Since 1993, the Company has conducted business through voice mail,
P.O. box and facsimile machines. From 1993 to 1997 the Company obtained
approximately 300 square feet space for storage of its assets at reasonable
monthly rental amounts. In November 1997, the Company vacated its storage
space and transferred all of its important records to a storage site in
New York.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a
party or to which any of its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
Year First
Elected or
Name Age Appointed Position Currently Held
- ---- --- ---------- ------------------------
Edward F. Mackay 55 1983 Chief Executive Officer
& Chief Financial Officer
Mr. Mackay has been Chief Executive Officer of the Company since July 1993.
Mr. Mackay was Executive Vice President and Chief Financial Officer of the
Company from July 1991 until July 1993. Mr. Mackay was Vice President - Finance
and Chief Financial Officer of the Company from October 1985 to July 1991. From
June 1983 until September 1985, Mr. Mackay served as the Company's Treasurer and
Controller. Mr. Mackay plans to resign on December 31, 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's common stock has been traded on the national,
over-the-counter market under the symbol ASTI since the time of its initial
public offering in January 1988. However, the Company
6
was notified by NASDAQ that, due to low trading volume, it would not report
transaction in the Company's stock after October 13, 1989.
The only significant support for valuation of the Company's common stock
since October 1989 was the sale of additional common stock to private investors
in March 1990, at a price of $.50 per share.
As of August 6, 1993, there were approximately 953 holders of record of the
Company's common stock.
The Company has never declared or paid cash dividends on its common stock.
The Company intends to pay a liquidating dividend of approximately $207,600 as
completion of the Dissolution Plan.
(The remainder of this page has been intentionally left blank.)
7
ITEM 6. SELECTED FINANCIAL DATA
APPLIED SPECTRUM TECHNOLOGIES, INC.
SUMMARY FINANCIAL INFORMATION
(THOUSANDS EXCEPT PER SHARE AMOUNTS)
For the Five Years Ended September 30,
----------------------------------------
STATEMENTS OF OPERATIONS DATA: 1997 1996 1995 1994 1993
Net sales $ 4 $ 3 $ 4 $ 11 $1,393
Development contract revenues - - - - 21
Sublicensing revenues 8 58 71 30 91
----- ----- ----- ----- ------
Total revenues 12 61 75 41 1,505
Operating profit (loss) (22) 16 1 (46) (140)
Other income (expense) 74 6 (6) 221 (33)
----- ----- ----- ----- ------
Net profit (loss) 52 22 (5) 175 (173)
Net profit (loss) per share $0.01 $0.01 $0.00 $0.09 ($0.09)
Weighted average number of
shares outstanding 2,954 2,954 2,686 1,996 1,996
BALANCE SHEET DATA:
Cash & short-term investments $ 324 $ 308 $ 293 $ 149 $ 145
Working capital 207 155 133 129 (97)
Total assets 316 308 293 333 515
Long-term liabilities
Shareholders' equity 207 156 134 130 (45)
8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
All amounts in the following discussion have been rounded to the nearest
$1,000.
GENERAL
In its latest audited financial statement, September 30, 1992, the
Company's auditors issued a qualified opinion regarding the Company's ability to
continue as a going concern. Revenues had been insufficient to generate cash
flows sufficient to support operations and pay liabilities. Revenue changes are
customer and competitor related. Price changes within product lines were
minimal. Therefore, most changes were related to the volume of product
purchased. The Company was declared to be in default on its secured credit line
in May 1993 and has since deferred payment on its liabilities to many unsecured
creditors. A reduction in staffing and departure of key employees such as the
President and CEO, Director of Operations and Service Department Manager also
negatively impacted the Company's chances of continuing its operations.
We previously disclosed in our 10-K for the year ended September 30, 1992,
the Company's liquidity is dependent on its ability to generate additional
revenues and make use of the Norwood Credit Line. The Company was unsuccessful
in its attempts to raise additional equity financing or find a strategic
partner. During the second fiscal quarter of 1993, the Company's secured lender
Norwood Venture Corp. acquired all of the Company's stock owned by Oxford
Partners and Norwood is the majority (77.3%) owner of the Company.
During March 1993 the Company reduced its work force from 20 employees to
13 employees and placed its engineering development plans on hold as a means of
matching fixed costs to revenues. In an unrelated event the Company's President
and CEO, James J. Szeliga, resigned as an officer of the Company on May 7,
1993.
For the first nine months of fiscal year 1993 revenues decreased $276,000.
Cash decreased $31,000 to $3,000, net working capital excluding cash and credit
line borrowing decreased $48,000 to $99,000 and the Company borrowed an
additional $88,000 under its Norwood Credit Line. At June 30, 1993 the balance
owing on the Norwood Credit Line was $195,000.
In light of the above, the Company embarked upon an extensive search for
additional equity or debt investment and for a strategic partner with which to
merge, or a purchaser of the Company as a going concern. (See: SEARCH FOR
STRATEGIC PARTNER below). When neither additional funding nor a strategic
partner were located, liquidation pursuant to Chapter 7 or Reorganization under
Chapter 11 of the United States Bankruptcy Code were considered. However, the
Company believed a greater monetary return would be realized if the Company
conducted a controlled dissolution and the assets are sold pursuant to
independently negotiated agreements. The Company also concluded that attempted
reorganization under Chapter 11, given the Company's inability to generate
sufficient
9
revenue to sustain its operations and attrition of its staff and key
employees would only serve to further erode the value of the Company's
existing assets.
As a result, the Board of Directors, as a means of attempting to maximize
any recovery to its creditors and shareholders, adopted a plan of dissolution
such that a payment plan to creditors could be implemented and foreclosure by
its secured lender could be avoided. As part of the dissolution plan, the
Company will attempt to sell its assets contingent on future payments. If
future results were successful and all liabilities and expenses are covered, a
liquidating dividend will be paid to shareholders. The estimated recovery
period is two to three years. The Board of Directors of the Company did not
seek or obtain an independent report, appraisal or fairness opinion in
connection with the proposed dissolution due to the lack of funds required to
obtain such an opinion.
SEARCH FOR STRATEGIC PARTNER
Between late 1992 and mid-1993, the Company contacted approximately 60
entities, including HT Communications, Inc. ("HT" or "HT Communications"),
seeking equity or debt investment or a strategic partner with respect to a
possible merger. Such searches were unsuccessful. Contacts were made with OEM
customers, competitors and numerous other companies in the data communications
industry regarding the sale of the Company as an operating concern. The
majority of these contacts expressed no interest and none resulted in a feasible
offer that would have paid all of AST's outstanding liabilities, nor did any of
these contacts culminate in a letter of intent or a definitive agreement.
SHAREHOLDER APPROVAL
Shareholder approval of the Dissolution Plan was received at a special
shareholders' meeting held on November 30, 1993.
TRANSACTION WITH HT COMMUNICATIONS, INC.
Having received no positive results from its search for a strategic
partner, the Company again contacted a number of these same entities to discuss
a possible licensing arrangement and/or asset sale. HT Communications was the
only company which expressed an interest in pursuing further discussions with
AST. All negotiations have been conducted exclusively between Mr. Mackay, on
behalf of the Company, and HT's President.
In August, 1993, AST entered into a License Agreement with HT
Communications granting HT a non-exclusive, perpetual, world-wide license to
manufacture those T-1 digital Multiplexer products marketed under the name
CENTRA Series 4000 and CENTRA Series 3000. In consideration, HT pays to AST
royalties on its sale of certain AST products for a period of three (3) years.
With respect to its general terms, the License Agreement with HT was negotiated
along the lines of AST's previously existing License Agreements.
In addition to the License Agreement already in place with HT, AST entered
into an agreement in December of 1993 with HT Communications for the acquisition
of the majority of the T-1 assets of
10
AST. The Agreement called for HT to purchase the fixed assets and inventory
at their fair market value and standard cost respectively in installments
over approximately nine (9) months commencing in December 1993. In addition,
HT agreed to assume obligations associated with certain AST contracts and to
offer some AST employees jobs. Due to HT's cash flow problems, the payment
terms of the Agreement were amended such that AST was given a secured
interest in HT's assets and the payments were extended to December, 1995
including interest on the unpaid balance at the rate of 12% per annum, with
HT having the right to prepay any balance owing.
FEDERAL INCOME TAX CONSEQUENCES OF DISSOLUTION
In 1993, the Company was unable to determine with specificity what the
income tax consequences of the proposed dissolution of the Company would be
given the uncertainty as to the actual dollars which will be realized upon
liquidation of the Company's assets as well as questions regarding how the net
operating loss carried forward would be dealt with in light of the changes in
control of the Company. However, the Company did make the following estimate in
this regard:
(i) The extent of net operating loss available to offset income is unknown
due to the changes in ownership and the difficulty in determining fair
market value of the Company;
(ii) The 1993 fiscal year's operating loss will probably offset any gain on
the recapture of depreciation or value from the sale of fixed assets;
(iii) Inventory will be sold at approximately the same value as cost, so there
will be no income tax consequences; and
(iv) Future royalties will be taxable at normal tax rates unless they can be
offset by net operating losses.
The Company has now filed all of its Income Tax Returns and has been
able to offset all income from the dissolution recovery process with net
operating loss carry forwards. The Company's income tax returns have not been
audited by the Internal Revenue Service. The Company believes that the net
liquidating dividend to be paid to shareholders will be treated as a return of
capital.
REVENUES
Revenues in 1997 decreased $49,000 as a result of the decreased license
fees. 1997 revenues consisted of $4,000 in net sales, primarily equipment
leases, and $8,000 of sub-licensing fees from OEM licensees.
Revenues in 1996 increased $14,000 as a result of the decreased license
fees. 1996 revenues consisted of $3,000 in net sales, primarily equipment
leases, and $58,000 of sub-licensing fees from OEM licensees.
11
Revenues in 1995 increased $34,000 as a result of the increased license
fees. 1995 revenues consisted of $4,000 in net sales, primarily equipment
leases, and $71,000 of sub-licensing fees from OEM licenses.
COST OF PRODUCT SOLD
There were no cost of products sold in 1997,1996 and 1995 because of the
Dissolution Plan.
EXPENSES
General and administrative expenses in 1997,1996 and 1995 relate to the
implementation of the Dissolution Plan. Sales and marketing and product
development expenses were eliminated in 1997, 1996 and 1995 as part of the
Dissolution Plan.
The Company records the development expenses related to development
contracts in development contract costs.
OTHER INCOME/EXPENSES
Other expense of $20,000 in 1995 is the result of further settlement of
liabilities.
Other income of $61,000 in 1994 consists of $75,000 from an unneeded
reserve for warranty costs being reversed when the HT Communications, Inc.
licensing agreement expired in 1997, $13,000 from the settlement of liabilities,
less $27,000 estimated costs to complete the Dissolution Plan and processing of
the liquidating dividend to shareholders.
CAPITAL RESOURCES AND LIQUIDITY
Substantially all of the Company's working capital needs to date have been
funded through proceeds from the sales of Common Stock and preferred stock,
loans from or guaranteed by certain shareholders, issued shares of Common Stock
and three series of preferred stock for aggregate consideration of $11,796,000.
During 1987, all three series of preferred stocks were converted to Common
Stock. In January 1988, the Company's initial public offering (IPO) was
completed. Net proceeds from the IPO were $3,841,000, The funds from the IPO
were used to repay $691,000 of convertible debentures and to fund activities in
product development and sales and market development during 1988, 1989 and the
first half of 1990. The Company also pursued some unsuccessful acquisition
strategies during 1989 and 1990.
In the second quarter of fiscal 1990 the Company did a restructuring and
recapitalization to concentrate primarily on its new CENTRA T-1 Multiplexer
product line. The restructuring resulted in substantially all resources being
directed towards penetration of the commercial T-1 marketplace. The
recapitalization resulted in a 1 for 100 reverse split of the Company's voting
common stock. Following the reverse split the Company issued 1,268,000 new
shares of voting Common Stock on March 26, 1990 to private investors at $0.50
per share which resulted in $634,000 of equity funding.
12
In addition to the sale of stock in March 1990, the Company obtained a
revolving credit line of up to $500,000 from Norwood Venture Corp. The credit
line which is secured by all assets were useable based on a borrowing formula
equal to 90% of eligible receivables. The agreement with Norwood has been
modified three times. The most recent modification in March 1992 increased the
total line from $500,000 to $600,000 and increased the borrowing base to include
up to $100,000 of T-1 Multiplexer inventory. As part of these modifications,
Norwood was granted an increase to 1,000,000 shares in its warrants to purchase
the Company's common stock at $0.50 per share. Another condition of the
modification was a provision that reduced Norwood's Warrant price from $0.50 per
share to $0.01 per share upon the notice if default by the Company. The Company
defaulted on its agreement with Norwood in 1993 and then the warrant price was
reduced to $0.01 per share. As of June 30, 1993, the Company had $195,000
outstanding against the credit line. During the fourth quarter of 1993, the
Company was able to repay the balance owed Norwood on its credit line as part of
the early stages of the dissolution process.
Through September 1997, the Company has incurred net cumulative losses of
$16,096,012.
The implementation of the Dissolution Plan has resulted in a reduction of
liabilities of $426,000 between fiscal 1993 and 1997. As of September 30,
1997, the Company had cash of $324,000 and booked liabilities of $117,000. The
net book value of the Company at September 30, 1997 is $207,000 or $.07 per
outstanding share.
The Company's director and major shareholder has voted to revoke the
dissolution of AST and to retain the corporate shell for an unspecified time in
hope that it has some additional future value for AST's shareholders. Contingent
upon the approval of the majority of its shareholders, the Company plans to pay
a liquidating dividend to shareholders in early 1998 of approximately $207,600.
The Company estimates that $8,500 of undistributed cash will be sufficient to
cover the distribution costs and the future carrying costs of the corporate
shell.
(The remainder of this page has been intentionally left blank.)
13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL DATA
FINANCIAL STATEMENTS: PAGE
Statements of Operations - Years ended 16
September 30, 1997, 1996, 1995
Balance Sheets - September 30, 1997 and 1996 17
Statements of Cash Flows - Years ended 18
September 30, 1997, 1996, 1995
Statements of Shareholders' Equity - Years ended 19
September 30, 1997, 1996, 1995
Notes to Financial Statements 20-23
The following data are included herein and should be read in conjunction
with the financial statements referred to above:
FINANCIAL STATEMENT SCHEDULES:
VIII - Valuation and Qualifying Accounts 24
X - Supplementary Income Statement Information 25
All other schedules are omitted as the required information is inapplicable
or the information is presented in the consolidated financial statements or
related notes.
1992 UNPAID AUDIT FEES
The Company's auditor during the past fiscal years, Ernst & Young, had not
been paid for their last year's audit and income tax work, leaving a total
liability in the amount of $26,675.00. The auditors are therefore refusing to
accept additional work. Preparing audited financial statements for fiscal year
ending September 30, 1993, was impossible based upon the Company's financial
position at that time. The 10-K documents were filed on a timely basis with
unaudited financial statements for the fiscal year ending September 30, 1993.
The auditors have also refused to review the 1997, 1996, 1995 and 1994
Financial Statements because of the payment situation and the lack of audited
financial statements for 1993 and so we are unable to include their opinion from
prior years on the financial statements. The 10-K documents for 1996, 1995 and
1994 have been filed on a timely basis with unaudited financial statements for
the fiscal
14
years ending September 30, 1994, 1995 and 1996. The 10-K documents for 1997
are also being filed with unaudited financial statements for the fiscal year
ended September 30, 1997.
(The remainder of this page has been intentionally left blank.)
15
APPLIED SPECTRUM TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
Year Ended September 30,
----------------------------------------
1997 1996 1995
---------- ---------- ----------
REVENUES:
Net sales $ 3,987 $ 3,186 $ 3,641
Sublicensing revenues 8,224 57,489 71,143
---------- ---------- ----------
Total revenues 12,211 60,675 74,784
Cost of product sold - - -
---------- ---------- ----------
Gross profit 12,211 60,675 74,784
General and administrative expense 34,125 45,081 74,018
---------- ---------- ----------
Operating profit (loss) (21,914) 15,594 766
Other income ( expense) - net 60,980 - (19,530)
Interest income 12,853 6,284 14,963
Interest expense - - (1,544)
---------- ---------- ----------
Net profit (loss) $ 51,919 $ 21,878 $ (5,345)
---------- ---------- ----------
---------- ---------- ----------
Net profit (loss) per share $ 0.02 $ 0.01 $ (0.00)
---------- ---------- ----------
---------- ---------- ----------
Weighted average number of
shares outstanding 2,953,941 2,953,941 2,685,698
See notes to financial statements
16
APPLIED SPECTRUM TECHNOLOGIES, INC.
BALANCE SHEETS
(UNAUDITED)
1997 1996
----------- ------------
ASSETS
CURRENT ASSETS
Cash $ 324,452 $ 307,740
Other - -
----------- ------------
Total current assets 324,452 307,740
PROPERTY AND EQUIPMENT
Equipment at fair market value - 750
----------- ------------
$ 324,452 $ 308,490
----------- ------------
----------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,747 $ 14,276
Employee compensation and taxes withheld 22,835 -
Reserve for warranty costs - 75,000
Accrued severance costs 62,250 62,250
Other accrued expenses 29,937 1,200
----------- ------------
Total current liabilities 116,769 152,726
SHAREHOLDERS' EQUITY
Common Stock, par value $.01 per share
authorized 10,000,000 shares, issued
and outstanding 2,953,941 29,540 29,540
Additional paid-in-capital 16,274,155 16,274,155
Accumulated deficit (16,096,012) (16,147,931)
----------- ------------
207,683 155,764
----------- ------------
$ 324,452 $ 308,490
----------- ------------
----------- ------------
See notes to financial statements
17
APPLIED SPECTRUM TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
Year Ended September 30,
---------------------------------
1997 1996 1995
--------- --------- ---------
OPERATING ACTIVITIES
Net profit (loss) $ 51,919 $ 21,878 $ (5,345)
Net cash flow from (used for) changes in:
Accounts receivable - - 182,770
Inventories and accounts payable (12,529) - (4,210)
Reserve for warranty costs (75,000) - -
Other current assets and liabilities 51,572 (6,834) (39,167)
--------- --------- ---------
Net cash from (used for) operating activities 15,962 15,044 134,048
INVESTING ACTIVITIES
Proceeds from sale of equipment 750 - -
--------- --------- ---------
Net cash from investing activities 750 - -
FINANCING ACTIVITIES
Proceeds from exercise of warrants - - 9,579
--------- --------- ---------
Net cash from financing activities - - 9,579
--------- --------- ---------
INCREASE IN CASH 16,712 15,044 143,627
Cash beginning of year 307,740 292,696 149,069
--------- --------- ---------
CASH END OF YEAR $ 324,452 $ 307,740 $ 292,696
--------- --------- ---------
--------- --------- ---------
See notes to financial statements
18
APPLIED SPECTRUM TECHNOLOGIES, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
Shares Amount Capital Deficit Total
--------- ------- ----------- ------------ --------
BALANCE AT
September 30, 1994 1,996,06 $19,961 $16,274,155 ($16,164,464) $129,652
Exercise of warrants 957,877 $ 9,579 $ 9,579
Net profit for the year ($ 5,345) ($ 5,345)
--------- ------- ----------- ------------ --------
BALANCE AT
September 30, 1995 2,953,941 $29,540 $16,274,155 ($16,169,809) $133,886
Net profit for the year $ 21,878 $ 21,878
--------- ------- ----------- ------------ --------
BALANCE AT
September 30, 1996 2,953,941 $29,540 $16,274,155 ($16,147,931) $155,764
Net profit for the year $ 51,919 $ 51,919
--------- ------- ----------- ------------ --------
BALANCE AT
September 30, 1997 2,953,941 $29,540 $16,274,155 ($16,096,012) $207,683
--------- ------- ----------- ------------ --------
--------- ------- ----------- ------------ --------
See notes to financial statements
19
APPLIED SPECTRUM TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A--BASIS OF FINANCIAL STATEMENT PRESENTATION
Based on the Company's adopted "Plan of Dissolution" the September 30,
1997, 1996 and 1995, financial statements which are "unaudited" have been
prepared on a dissolution basis. Tangible Assets at September 30, 1997 and
1996, have been adjusted to estimated fair market value. Intangible Assets have
been written off. Liabilities have been recorded in the normal course of
business for 1996 and for 1997 they include a reserve for final liquidation
expenses.
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Prior to implementing the Plan of Dissolution, the Company was engaged in
the development, manufacture, marketing and sale of products for the digital
transmission of data.
REVENUE RECOGNITION: Revenues from sales were recognized on shipment of the
product. Revenues pertaining to development contracts and sub-license fees
were recognized when billed. The billings were done on a progress basis to
cover expenses incurred or achievement of certain contract milestones and
specifications. Expenses in excess of related development contract revenues
were charged to product development costs because the Company believes that
such contracts may result in future product sales. The Company entered into
development contracts to perform feasibility studies and to develop certain
products.
WARRANTIES: The Company's products were generally under warranty against
defects in material and workmanship for a period of one year. During 1992, the
Company increased the warranty period on its CENTRA T-1 Multiplexer products to
five years. Under the terms of the sale of the Company's T-1 inventory in 1994,
an extended warranty was granted to the Buyer. The Company maintained an
accrual for these anticipated future warranty costs based on management's
estimates of such costs. The final liability for warranty costs expired in 1997
when the Company's agreement with the Buyer expired.
PROPERTY AND EQUIPMENT: Property and equipment in 1996 and 1995 was stated at
fair market value. Depreciation was provided using the straight line method at
rates expected to amortize the cost of the property and equipment over its
estimated useful life. During 1997, the Company disposed of all remaining
property and equipment.
20
INVESTMENT TAX CREDIT: Investment tax credits have been accounted for using the
"flow-through" method whereby the credit will be treated as a reduction of
income tax expense in the year in which the credit is was realized.
PROFIT (LOSS) PER SHARE: Profit (Loss) per share is computed by dividing the
net profit (loss) for the period by the weighted average number of shares of
Common Stock. Outstanding stock options and warrants are not included in the
loss per share calculations as they are anti-dilutive.
NOTE C--REVOLVING CREDIT LINE
The Company had a revolving credit line with Norwood Venture Corp. The
revolving credit line secured by all assets was called by Norwood during the
third fiscal quarter of 1993, because the Company was in default on its
borrowing conditions. As part of the dissolution process, the Company was able
to repay the secured lender, Norwood, as of September 30, 1993.
NOTE D--COMMON STOCK
On January 29, 1988, the Company completed its initial public offering and
as a result issued 328,073 shares of Common Stock and 164,036 warrants. The
Company received net proceeds of $3,841,222.
On March 23, 1990, the shareholders approved a one-for-one hundred reverse
stock split of the Company's Common Stock and an amendment to the Articles of
Incorporation reducing the authorized Common Stock available for issuance from
175,000,000 common shares to 10,000,000 common shares.
On March 26, 1990, the Company issued 1,268,000 shares of Common Stock to
private investors and received net proceeds of $634,000. The Company also
granted warrants to purchase up to 600,000 shares of the Company's Common Stock
at $0.50 per share to Norwood as a condition to Norwood's revolving credit line.
As a condition to amendments to Norwood's revolving credit line on March
29, 1991, and March 19, 1992, the Company granted additional warrants to
purchase an additional 400,000 shares of the Company's Common Stock at $0.50 per
share to Norwood. When the Company defaulted on the Norwood loan in 1993, the
Warrant price was automatically reduced to $0.01 per share. Norwood exercised
its rights to the warrants in January 1995 and purchased 957,877 shares of
common stock.
21
NOTE E--STOCK OPTIONS AND WARRANTS
The Company has reserved 912,900 shares at September 30, 1997 and 1996 for
issuance under stock option plans and warrants. Options granted under stock
option plans to officers, key employees and consultants are at a price equal to
the fair market value of stock at the date of grant and are generally
exercisable at the rate of 20% per year on a cumulative basis. Options to
purchase 676,000 shares were available for grant at September 30, 1997 and 1996.
Other option activity was as follows:
Year Ended September 30
------------------------------
1997 1996
----------- -----------
Outstanding at beginning of year 226,000 229,000
Granted
Canceled (1,500) (2,100)
----------- -----------
Outstanding at end of year 225,400 226,900
Comprised of at end of year
Incentive stock options 200,000 200,000
Non-Qualified stock options 25,400 26,900
----------- -----------
225,400 226,900
Price range of options outstanding $.10-$15.00 $.10-$15.00
Exercisable at end of year 225,400 226,900
In addition to the above stock option plans the following warrants to
purchase common stock were outstanding:
Year Ended September 30,
Price ------------------------
Per Expiration
Share Date 1997 1996
----- ---------- ---- ------
Miscellaneous $ .50 May 1997 10,000
Outstanding at year end 10,000
Exercisable at year end 10,000
NOTE F--MAJOR CUSTOMERS
During 1997 and 1996, HT Communications, Inc. accounted for 64% and 97% of
total revenue.
22
NOTE G--INCOME TAXES
Due to the change in ownership and plan of dissolution it is estimated that
most of the Company's net operating loss carryforwards will not be utilized. It
is assumed that the Company's operating earnings in 1997 and 1996 will be offset
by net operating loss carryforwards since the last change in ownership occurred.
NOTE H--LEASES
The Company's previously leased facility was vacated on September 16, 1993.
The facility leases expired on March 31, 1993 and the Company extended the use
of the space on a month-to-month basis through August 31, 1993.
During fiscal 1997, 1996, 1995 and 1994, the Company obtained practically
rent-free space for storage of its assets and operation of its business through
voice mail, post office box, and facsimile machines.
NOTE I--CHANGE IN CONTROL OF THE COMPANY
During the second fiscal quarter of 1993, Norwood Venture Corp., acquired
all of the Company stock owned by Oxford Venture Fund Limited Partnership and
Oxford Venture Fund II Limited Partnership placing Norwood in voting control of
the majority of the outstanding common stock of the Company.
NOTE J--SIGNIFICANT EVENTS
During 1991 and 1992 the Company entered into OEM sub-licensing
agreements with three T-1 customers and during 1993 the Company entered into
an OEM sub-licensing agreement with one T-1 customer. These agreements
required the Company to transfer certain non-exclusive manufacturing, sales
and technology rights to the OEMs. In exchange for the rights, the Company
receives sub-licensing fees, future royalties and development contract
revenues. During 1997, 1996, and 1995, the Company recognized $8,000,
$58,000, and $71,000 respectively in sub-licensing revenues from these
agreements.
In December 1993, the Company completed an Agreement to sell the majority
of its assets to HT Communications.
Based on the results of the Dissolution Plan the Company expects to be able
to pay a partial liquidating dividend to shareholders in early 1998.
23
APPLIED SPECTRUM TECHNOLOGIES, INC.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E
Additions
Charged
Balance Charged to to other Balance
Beginning Costs and Accounts Deductions End of
Classification Period Expenses Describe Describe Period
- -------------- --------- ---------- -------- ---------- --------
YEAR ENDED SEPTEMBER 30, 1997:
Deducted from asset accounts:
Allowance for doubtful accounts $0 $0 $0 $0
Reserve for warranty costs
and product returns $75,000 ($75,000) (1) $0
YEAR ENDED SEPTEMBER 30, 1996:
Deducted from asset accounts:
Allowance for doubtful accounts $0 $0 $0 $0
Reserve for warranty costs
and product returns $75,000 $75,000
YEAR ENDED SEPTEMBER 30, 1995:
Deducted from asset accounts:
Allowance for doubtful accounts $0 $0 $0 $0
Reserve for warranty costs
and product returns $75,000 $75,000
________________________
(1) Transfer of reserve to Other Income upon expiration of obligation.
24
APPLIED SPECTRUM TECHNOLOGIES, INC.
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Column A Column B
Charged to Costs and Expenses
Year Ended September 30,
Item 1997 1996 1995
- ---- ---- ---- ----
Maintenance and repairs None None None
Depreciation and amortization of intangible assets,
pre-operating costs, and similar deferrals None None None
Taxes, other than payroll and income taxes:
Real estate None None None
Personal Property None None None
Other None None None
Royalties None 1,874 6,206
Advertising costs None None None
25
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCUSSIONS
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
(a) DIRECTORS OF THE COMPANY
Principal
Occupation
and
Business
Director
Name of Director Age Experience
- ---------------- --- ----------
Since
- ----
Mark Littell 46 President, Norwood Venture Corp., 1993
a firm which manages venture
capital funds. Mr. Littell is
also a Director of Video Services
Acquisition Corp.
(b) EXECUTIVE OFFICERS OF THE COMPANY
The information required by this Item 10 regarding executive officers is
included in this Report under Item 4A, "Executive Officers of the Registrant."
(The remainder of this page has been intentionally left blank.)
26
ITEM 11. EXECUTIVE COMPENSATION
(a) CASH COMPENSATION
The following table provides information as to the compensation of the
executive officers for services rendered in all capacities during the fiscal
year ended September 30, 1997 and to all executive officers as a group.
Name of Individual Capacities in Cash
or Number in Group Which Served Compensation(1)
- ------------------ ------------- ---------------
Edward F. Mackay Chief Executive Officer $42,738
All Executive Officers
as a Group (1 Person) $42,738
(1) Includes $19,797 incentive bonus associated with completion of dissolution
plan and performance achievements in settlement of liabilities and recovery
for shareholders.
(b) COMPENSATION PURSUANT TO PLANS
AGREEMENTS. Mr. Mackay has an agreement with the Company which was
modified at the time he became Chief Executive Officer responsible for following
a Plan of Dissolution with continuing responsibility for public reporting
requirements. Mr. Mackay's contract calls for a payment of accrued bonus and a
reduced base compensation after the secured lender is paid-off. Mr. Mackay's
contract also calls for incentives to maximize the recovery process for
unsecured creditors and shareholders. Mr. Mackay's contract was amended to an
hourly retainer basis in 1997 relative to dissolution Plan activities and
reporting requirements. Mr. Mackay plans to resign as an officer of the Company
and terminate his contract as of December 31, 1997. Upon the termination of his
contract, Mr. Mackay will receive $62,250 of accrued severance pay.
In addition to the direct compensation, the 200,000 of incentive stock
options that Mr. Mackay had at $0.50 per share were rescinded during 1993 and
were reissued at $0.10 per share.
THE 1992 STOCK OPTION PLAN. The 1992 Stock Option Plan was discontinued
because it was not ratified by the shareholders.
THE 1990 STOCK OPTION PLAN. AST has adopted a 1990 Stock Option Plan which
became effective on February 14, 1990. The Plan permits the granting of
27
options to purchase 900,000 shares of voting Common Stock of AST officers,
consultants and other key employees of AST, as selected by the Compensation
Committee of the Board of Directors. Options granted under the 1990 Plan may
be either "incentive stock options" as amended, or options which do not so
qualify. The 1990 Plan provides that (a) the option price for incentive
stock options may not be less than the fair market value of the Common Stock
at the date of the grant, (b) options may not be granted after February 14,
2000, and (c) options may not be exercised after ten years from the date of
the grant.
There were no options exercised or granted during the fiscal year ended
September 30, 1997.
Also, AST has outstanding two options to purchase 1,400 shares of Common
Stock at an exercise price of $15.00 per share expiring 1998. These options
were issued under AST's prior 1987 Stock Option Plan.
(d) DIRECTOR'S COMPENSATION
Directors who are not employees of AST and who forego their regular pay in
order to attend Board meetings receive $500 for each meeting of the Board
attended and $200 for each committee meeting attended other than committee
meetings which occur on the same date as for each Board of Directors meeting at
which they attend telephonically. Mr. Littell has waived his directors fees.
(The remainder of this page has been intentionally left blank.)
28
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information pertaining to directors,
executive officers and persons who, to the best of AST's knowledge owned
beneficially more than five percent (5%) of the voting common stock of AST as of
November 30, 1997:
Shares of Common Stock
Beneficially Owned(1)(2)
Name of
Beneficial Owner Amount Percent of Class
- ---------------- ------ ------------------------
Norwood Venture Corp.(6) 2,282,564(3) 77.27
Mark Littell(7) 2,282,564(4) 77.27
Edward F. Mackay 216,539(5) 6.87
All Directors and 2,499,103 79.24
Officers as a Group
(1) Shares not outstanding but deemed beneficially owned by virtue of the right
of an individual or entity to acquire them within sixty (60) days are
treated as outstanding only when determining the amount and percentage
owned by such individual or entity. Fractional shares have been rounded to
the nearest whole share.
(2) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to the shares opposite the name of
such person or group.
(3) Consists of 2,282,564 shares owned by Norwood Venture Corp. (Norwood).
(4) Includes 2,282,564 shares owned by Norwood. Mr. Littell may be a
beneficial owner of Norwood shares.
29
(5) Includes 200,000 shares Mr. Mackay has the right to acquire within
sixty (60) days upon the exercise of options.
(6) Norwood Venture Corp. is located at 1430 Broadway Street, Suite 1607, New
York, New York 10018.
(7) Mr. Littell's business address is 1430 Broadway Street, Suite 1607, New
York, New York, 10018.
(b) CHANGES IN CONTROL
On March 19, 1992, Norwood Venture Corp. ("Norwood") and Oxford Venture
Fund Limited Partnership ("Oxford") and Oxford Venture Fund II Limited
Partnership ("Oxford II") entered into a Stock Purchase Agreement whereby
Norwood would acquire the AST stock owned by Oxford and Oxford II in the event
of default by AST under the terms of its Revolving Credit Agreement with
Norwood. Oxford and Oxford II entered into this Agreement in order to induce
Norwood to amend its Revolving Credit Agreement with AST to, among other things,
increase the amount the Company could borrow thereunder.
On February 23, 1993, AST was notified that as of February 18, 1993,
Norwood had acquired all the AST common stock previously owned by Oxford and
Oxford II. Though AST was technically in default under the Revolving Credit
Agreement and a Certificate of Default had been delivered to Oxford and Oxford
II, Norwood had not yet given AST formal notice of default or acceleration of
its loan. However, in the interest of renegotiating AST's borrowing base under
the Revolving Credit Agreement, Norwood, Oxford and Oxford II arrived at a
formula that would transfer Oxford and Oxford II's AST stock to Norwood at a
price to be determined by future borrowing requirements of AST funds received
and by Norwood as a direct result of its stock ownership in AST (the "AST
Proceeds"), in the event of a merger, corporate acquisition or public offering
of AST securities. As an inducement to Norwood to be more flexible in its
lending and to loan further amounts to AST, the percentage of The Proceeds to be
paid by Norwood to Oxford and Oxford II varies from 46.6% to 11.6% according to
amounts loaned by Norwood to AST in excess of the borrowing base as defined in
the Revolving Credit Agreement. Specifically, Norwood will pay to Oxford and
Oxford II (a) 46.4% of the AST Proceeds received by it between February 18, 1993
and the date (the "First Date") Norwood first advances to AST funds in excess of
the borrowing base; (b) 34.8% of AST Proceeds received by Norwood between the
First Date and the date (the "Second Date") Norwood first advances to AST
$100,000.00 in excess of the borrowing base; (c) 23.2% of the AST proceeds
received by Norwood between the Second Date and the date (the "Third Date") in
which Norwood first advances to AST $200,000 in excess of the borrowing base,
and (d) 11.6% of any AST proceeds received by Norwood after
30
the Third Date. Payment is to be made to Oxford and Oxford II upon Norwood's
receipt of any such proceeds which is expected to occur upon completion of
the dissolution of the Company if money remains after payment of all of AST's
creditors.
Mr. Littell participated in facilitating the February 1993 Agreement and
resulting transfer of stock to Norwood, on behalf of Norwood as its President.
Prior to this transfer, Oxford and Oxford II together beneficially owned
approximately 65.65% and Norwood beneficially owned approximately 32.52% of the
common stock of the Company. This transfer placed Norwood in voting control of
the majority of the outstanding common stock of AST.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
(The remainder of this page has been intentionally left blank.)
31
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
NO. PAGE
(a) 1. Financial Statements:
Reference is made to the Index to
Financial Data contained in this Report 14
2. Financial Statement Schedules:
Reference is made to the Index to
Financial Data contained in this Report 14
3. Reference is made to the Exhibit Index
contained in this Report 33-38
A copy of any of the Exhibits listed or referred to in the Exhibit Index
will be furnished at a reasonable cost to any person who was a such person of
written request for any such exhibit. Such requests should be sent to Applied
Spectrum Technologies, Inc., P.O. Box 26707, St. Louis Park, Minnesota 55426.
(b) Reports on Form 8-K: None were filed during the fourth quarter of the
fiscal year covered by this Report.
(The remainder of this page has been intentionally left blank.)
32
ITEM 14.(a)3. EXHIBITS
The following is a complete list of Exhibits filed or incorporated by
reference as a part of this Report:
APPLIED SPECTRUM TECHNOLOGIES, INC.
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-K
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1997
ITEM NO. DESCRIPTION METHOD OF FILING
1.1 Forms of Underwriting Incorporated by reference to Exhibit 1.1
Agreement and Dealer to the Company's Registration Statement
Agreement. on Form S-1 (File No. 33-17959)
3.1 Amended and Restated Incorporated by reference to Exhibit 3.1
Articles of Incorporation to the Company's Registration Statement
of the Company. on Form S-1 (File No. 33-17959)
3.2 By Laws of the Company. Incorporated by reference to Exhibit 3.2
to the Company's Registration Statement
on Form S-1 (File No. 33-17959)
4.1 Specimen Form of the Incorporated by reference to Exhibit 4.1
Company's Common Stock to the Company's Registration Statement
Certificate. on Form S-1 (File No. 33-17959)
4.2 Amended and Restated Incorporated by reference to Exhibit 4.4
Articles of Incorporation to the Company's Registration Statement
of the Company (See on Form S-1 (File No. 33-17959)
Exhibit 3.1).
4.3 By-laws of the Company Incorporated by reference to Exhibit 4.5
(see Exhibit 3.2). to the Company's Registration Statement
on Form S-1 (File No. 33-17959)
4.4 Agreement for 1987 Bridge Incorporated by reference to Exhibit 4.6
Financing, Conversion and to the Company's Registration Statement
Sale of Shares, dated on Form S-1 (File No. 33-17959)
September 18, 1987 between
the Company and certain
shareholders.
33
ITEM NO. DESCRIPTION METHOD OF FILING
4.5 Form of Convertible Incorporated by reference to Exhibit 4.1
Debentures issued pursuant to the Company's Registration Statement on
to Agreement for 1987 Form S-1 (File No. 33-17959)
Bridge Financing,
Conversion and Sales of
Shares.
4.6 Amended and Restated Incorporated by reference to Exhibit 4.8
Registration Agreement, to the Company's Registration Statement on
dated April 11, 1985, Form S-1 (File No. 33-17959)
between the Company and
certain shareholders.
4.7 Amendment dated October 28, Incorporated by reference to Exhibit 4.10
1987 to Agreement for 1987 to the Company's Registration Statement
Bridge Financing, on Form S-1 (File No. 33-17959)
Conversion and Sales of
Shares.
10.1 Employment Agreement dated Incorporated by reference to Exhibit 10.3
December 12, 1985 between to the Company's Registration Statement
the Company and on Form S-1 (File No. 33-17959)
Richard V. Palermo.
10.2 Exclusive License Agreement, Incorporated by reference to Exhibit 10.20
dated July 16, 1986, to the Company's Registration Statement
between the Company and on Form S-1 (File No. 33-17959)
Morse Security Group, Inc.
10.3 License Agreement dated Incorporated by reference to Exhibit 10.21
January 30, 1986, between to the Company's Registration Statement
the Company and Databit, on Form S-1 (File No. 33-17959)
Inc.
10.4 Agreement dated April 11, Incorporated by reference to Exhibit 10.22
1986, between the Company to the Company's Registration Statement
and Databit, Inc., as on Form S-1 (File No. 33-17959)
amended
10.5 Amendment to Agreement with Incorporated by reference to Exhibit 10.30
Siemens Data Switching to the Company's Form 10-K for the
Systems, Inc. period ending September 30, 1988
(File No. 0-16397)
34
ITEM NO. DESCRIPTION METHOD OF FILING
10.6 Form of Amendment to Incorporated by reference to Exhibit 10.32
Warrant Agreement dated to the Company's Form 10-K for the
December 18, 1987. period ending September 30, 1988
(File No. 0-16397)
10.7 Agreement dated March 30, Incorporated by reference to Exhibit 10.30
1989, between the Company to the Company's Form 10-K for the
and Digi-Voice Corporation. period ending September 30, 1989
(File No. 0-16397)
10.8 Agreement dated March 19, Incorporated by reference to Exhibit 10.18
1990, between the Company to the Company's Form 10-K for the
and Norwood Venture Corp. period ending September 30, 1990
(File No. 0-16397)
10.9 Applied Spectrum Incorporated by reference to Exhibit 10.19
Technologies, Inc. to the Company's 1990 Stock Option Plan.
1990 Stock Option Plan Form 10-K for the period ending
September 30, 1990 (File No. 0-16397)
10.10 Agreement dated August 31, Incorporated by reference to Exhibit 10.22
1990, between the Company to the Company's Form 10-K for the
and Digi-Voice Corporation, period ending September 30, 1990
as amended. (File No. 0-16397)
10.11 Agreement dated December 14, Incorporated by reference to Exhibit 10.23
1990, between the Company to the Company's Form 10-K for the
and Norwood Venture Corp. period ending September 30, 1990
as amended. (File No. 0-16397)
10.12 Agreement dated November 30, Incorporated by reference to Exhibit 10.17
1990, between the Company to the Company's Form 10-K for the
and Penril Corp. period ending September 30, 1991
(File No. 0-16397)
35
ITEM NO. DESCRIPTION METHOD OF FILING
10.13 Agreement dated January 1, Incorporated by reference to Exhibit 10.18
1991, between the Company to the Company's Form 10-K for the
and Memotec Datacom, Inc. period ending September 30, 1991
(File No. 0-16397)
10.14 Agreement dated January 1, Incorporated by reference to Exhibit 10.19
1991, between the Company to the Company's Form 10-K for the
and Memotec Datacom, Inc. period ending September 30, 1991
(File No. 0-16397)
10.15 Amendment dated March 13, Incorporated by reference to Exhibit 10.21
1991, to Agreement dated to the Company's Form 10-K for the
August 30, 1989, between period ending September 30, 1991
the Company and Digi-Voice (File No. 0-16397)
Corporation.
10.16 Amendment dated March 29, Incorporated by reference to Exhibit 10.22
1991, to the Agreement to the Company's Form 10-K for the
dated March 19, 1990 period ending September 30, 1991
between the Company and (File No. 0-16397)
Norwood Venture Corp.
10.17 Employment Agreement dated Incorporated by reference to Exhibit 10.24
April 25, 1991 between the to the Company's Form 10-K for the
Company and Edward Mackay. period ending September 30, 1991
(File No. 0-16397)
10.18 Amendment dated March 19, Incorporated by reference to Exhibit 10.27
1992, to the Agreement to the Company's Form 10-K for the
dated March 19, 1990 period ending September 30, 1992
between the Company and (File No. 0-16397)
Norwood Venture Corp.
10.19 Agreement dated June 30, Incorporated by reference to Exhibit 10.30
1992, between the Company to the Company's Form 10-K for the
and Data-Products of period ending September 30, 1992
New England, Inc. (File No. 0-16397)
36
ITEM NO. DESCRIPTION METHOD OF FILING
10.20 Employment Agreement dated Incorporated by reference to Exhibit 10.20
July 14, 1993, between the to the Company's Form 10-K for the
Company and Edward Mackay. period ending September 30, 1993
(File No. 0-16397)
10.21 Agreement dated August 19, Incorporated by reference to Exhibit 10.21
1993, between the Company to the Company's Form 10-K for the
and HT Communications, Inc. period ending September 30, 1993
(File No. 0-16397)
10.22 Agreement dated December 1, Incorporated by reference to Exhibit 0.22
1993, between the Company to the Company's Form 10-K for the
and HT Communications, Inc. period ending September 30, 1993
(File No. 0-16397)
10.23 Amendment to Employment Incorporated by reference to Exhibit 0.22
Agreement dated July 14, to the Company's Form 10-K for the
1993, between the Company period ending September 30, 1994
and Edward Mackay. (File No. 0-16397)
10.24 Agreement dated April 11, Incorporated by reference to Exhibit 0.24
1995, between the Company to the Company's Form 10-K for the
and HT Communications, Inc. period ending September 30, 1995
(File No. 0-16397)
10.25 Amendment dated April 28, Incorporated by reference to Exhibit 0.25
1995, to Agreement date to the Company's Form 10-K for the
August 30, 1989, between period ending September 30, 1995
the Company and Digi-Voice (File No. 0-16397)
Corporation.
11.1 Computation of per share Filed Herewith
earnings.
37
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: 12/29/97 APPLIED SPECTRUM TECHNOLOGIES, INC.
By /S/ Edward F. Mackay
------------------------------
Edward F. Mackay
Chief Executive Officer and
Chief Financial Officer
Pursuant to the requirements of the Securities and 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:
Dated: 12/29/97 By /S/ Edward F. Mackay
------------------------------
Edward F. Mackay
Chief Executive Officer and
Chief Financial Officer
Dated: 12/29/97 By /S/ Mark Littell
------------------------------
Mark Littell, Director
38