-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AjYGgliRYlxc0b+XYFp1CuvTdfQe7tY7JBAnXON0uMpuPyNaZ0JLWEtQc6zmhDqC XqY+6Dj2VfsLF76yCN4IYg== 0000950123-98-007649.txt : 19980817 0000950123-98-007649.hdr.sgml : 19980817 ACCESSION NUMBER: 0000950123-98-007649 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSE INTERNATIONAL LTD CENTRAL INDEX KEY: 0001017655 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 731479833 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28720 FILM NUMBER: 98690255 BUSINESS ADDRESS: STREET 1: 7633 EAST 63RD PL STREET 2: SUITE 220 CITY: TULSA STATE: OK ZIP: 74133 BUSINESS PHONE: 9184611667 MAIL ADDRESS: STREET 1: 7633 EAST 63RD PL STREET 2: SUITE 220 CITY: TULSA STATE: OK ZIP: 74133 10QSB 1 FORM 10-QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: MARCH 31, 1998 Commission File Number: 0-28720 SECURITIES RESOLUTION ADVISORS, INC. (Exact name of small business issuer as specified in its charter) ROSE INTERNATIONAL LTD. (Former name of small business issuer) DELAWARE 73-1479833 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 80 SEAVIEW BLVD., PORT WASHINGTON, NY 11050 (Address of principal executive office) 7633 E 63RD PLACE, SUITE 220, TULSA, OKLAHOMA 74133 (Former address of principal executive office) (516) 625-4040 (Issuer's telephone number, including area code) Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes...X.... No......... State the number of shares outstanding of each of the issuer's classes of common equity, as of the close of the period covered by this report. COMMON STOCK $0.01 PAR VALUE 6,525,000 Class Outstanding at March 31, 1998 Transitional Small Business Disclosure Format: Yes ; No X 2 SECURITIES RESOLUTION ADVISORS, INC. INDEX
Page No. --- PART I. Financial Information Item 1. Condensed Balance Sheets - 3 March 31, 1998 and December 31, 1997 Condensed Statements of Operations - 4 Three Months Ended March 31, 1998 and 1997 Condensed Consolidated Statement of Stockholders' Equity - 5 Three Months Ended March 31, 1998 Condensed Consolidated Statements of Cash Flows - 6-7 Three Months Ended March 31, 1998 and 1997 Notes to Condensed Consolidated Financial Statements - 8-11 Three Months Ended March 31, 1998 and 1997 Item 2. Management's Plan of Operation 12 PART II. Other information 13
2 3 SECURITIES RESOLUTION ADVISORS, INC. BALANCE SHEET
March 31, December 31, 1998 1997 (Unaudited) (Audited) ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,033 $ 1,316 Marketable equity securities 2,878 4,931 Receivables, net 3,250 -- Prepaid expenses and other assets -- 330 ------------ ------------ Total current assets 7,161 6,577 Property and equipment, net -- 10,022 Equity securities held for investment 3,000,000 3,000,000 Other 5,762 6,286 ------------ ------------ $ 3,012,923 $ 3,022,885 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 27,770 $ 17,428 Accrued liabilities -- 26 ------------ ------------ 27,770 17,454 STOCKHOLDERS' EQUITY Common stock 65,250 65,250 Paid-in capital 11,005,048 11,005,048 Retained earnings (deficit) (7,287,145) (7,266,867) ------------ ------------ 3,783,153 3,803,431 Stock subscription receivable (798,000) (798,000) ------------ ------------ Total stockholders' equity 2,985,153 3,005,431 ------------ ------------ $ 3,012,923 $ 3,022,885 ============ ============
See accompanying notes to financial statements 3 4 SECURITIES RESOLUTION ADVISORS, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31, 1998 1997 ----------- ----------- SALES AND REVENUES $ -- $ -- COST OF SALES -- -- ----------- ----------- GROSS PROFIT -- -- OTHER EXPENSE (INCOME) Selling, general and administrative expense 13,733 43,934 Interest expense 50 -- Loss (gain) from sale of assets 4,560 -- Unrealized loss (gain) on marketable equity securities 2,053 4,896 Interest and other income (118) (424) ----------- ----------- 20,278 48,406 ----------- ----------- EARNINGS BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS (20,278) (48,406) INCOME TAX EXPENSE (BENEFIT) -- -- ----------- ----------- EARNINGS BEFORE DISCONTINUED OPERATIONS (20,278) (48,406) DISCONTINUED OPERATIONS -- 88,017 ----------- ----------- NET EARNINGS (LOSS) $ (20,278) $ 39,611 =========== =========== NET EARNINGS (LOSS) PER SHARE $ (0.00) $ 0.01 =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING 6,525,000 6,525,000 =========== ===========
See accompanying notes to consolidated financial statements. 4 5 SECURITIES RESOLUTION ADVISORS, INC. STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
Stock Common Stock Paid-in Subscription Accumulated Shares Par Value Capital Receivable Deficit Total ----------- ----------- ----------- ----------- ----------- ----------- BALANCE, January 1, 1998 6,525,000 $ 65,250 $11,005,048 $ (798,000) $(7,266,867) $ 3,005,431 Net earnings (loss) (20,278) (20,278) ----------- ----------- ----------- ----------- ----------- ----------- BALANCE, March 31, 1998 6,525,000 $ 65,250 $11,005,048 $ (798,000) $(7,287,145) $ 2,985,153 =========== =========== =========== =========== =========== ===========
See accompanying notes to consolidated financial statements. 5 6 SECURITIES RESOLUTION ADVISORS, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, 1998 1997 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $(20,278) $ 39,611 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 933 915 Discontinued operations -- (88,017) Loss from sale of assets 4,560 Changes in assets and liabilities: Marketable equity securities 2,053 4,896 Receivables (3,250) 3,793 Prepaid and other assets 330 (1,833) Accounts payable and accrued liabilities 10,317 (5,163) -------- -------- Net cash provided by (used in) operating activities (5,335) (45,798) -------- -------- CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES Capital expenditures -- (2,258) Proceeds from sale of assets 5,052 Subsidiary repayment -- 2,040 -------- -------- Net cash provided by (used in) investing activities 5,052 (218) -------- -------- CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES -------- -------- Net cash provided by (used in) financing activities -- -- -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (283) (46,016) CASH AND CASH EQUIVALENTS, beginning of period (continuing operations) 1,316 49,881 -------- -------- CASH AND CASH EQUIVALENTS, end of period $ 1,033 $ 3,865 ======== ========
See accompanying notes to consolidated financial statements 6 7 SECURITIES RESOLUTION ADVISORS, INC. STATEMENTS OF CASH FLOWS, CONTINUED (UNAUDITED)
Three Months Ended March 31, 1998 1997 ---- ---- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Interest paid None None ================== ==================== Income taxes paid None None ================== ====================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES See accompanying notes to consolidated financial statements. 7 8 SECURITIES RESOLUTION ADVISORS, INC. NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES On July 8, 1998, Rose International Ltd. changed their name to Securities Resolution Advisors, Inc. as a result of the acquisition discussed in Note E below. The financial statements of Securities Resolution Advisors, Inc., formerly Rose International Ltd. include the accounts of Rose International Ltd. ("Rose Ltd.") (the "Company") and formerly included its wholly-owned subsidiaries, Rose Color, Inc. ("Rose Color") and SPS Alfachem, Inc. ("SPS") and the 80% owned subsidiary of Rose Color, JBW International, Inc. ("JBW"). Effective September 30, 1997, Rose Ltd. exchanged the common stock of Rose Color and SPS for three million common shares of International Imaging, Inc. (Imaging), which resulted in Rose Ltd. owning less than 20% of Imaging. The financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and include all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation. These financial statements have not been audited. The balance sheet at December 31, 1997 included in this report has been derived from the audited balance sheet. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. However, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report for the year ended December 31, 1997, which is included in the Company's Form 10-KSB. The financial data for the interim periods presented may not necessarily reflect the results to be anticipated for the complete year. Certain reclassifications of the amounts presented for the comparative period have been made to conform to the current presentation. B. MARKETABLE SECURITIES As of March 31, 1998, the Company has an investment in marketable equity securities, which are classified as trading securities. As of March 31, 1998 the cost of $14,682 exceeded the fair value of the securities by $11,804. C. COMMON STOCK AND COMMON STOCK OPTIONS On August 7, 1995 the Board of Directors of the Company authorized an Incentive Stock Option Plan (the "Plan") which for a term of ten years provides that one million shares of the Company's common stock be reserved for issuance to selected key employees and consultants. The Plan is to be administered by a compensation committee composed of two directors of the Company, and this committee may grant no more than three hundred thousand shares of common stock to any 8 9 one individual at a price based on the fair market value of the shares at the date of grant. The grant may be exercised over a ten year period, in not less than one thousand share lots and when exercised, the stock must be held for six months prior to sale. The options may be exercised only by the person to whom the option is granted and the Plan may be modified by the Board of Directors at any time. At March 31, 1998 the Company had granted options outstanding totaling 450,000 shares for ten years at an exercise price of $1.00 per share in accordance with the Plan, none of which had been exercised. On August 10, 1995 the Board of Directors adopted a 1995-1996 Nonstatutory Stock Option Plan for its officers, directors, key employees and consultants reserving 500,000 common shares for this option plan, which expired December 31, 1996. The options may be granted at prices determined by the compensation committee, which administers this plan, and may be exercised upon grant and paid for at the discretion of the Compensation Committee, with any unpaid amounts for shares received being evidenced by promissory notes. At September 30, 1997 the Company had outstanding grants which totaled 355,000 shares at an average exercise price of $2.11 per share, none of which had been exercised. Common stock options do not have an impact on primary earnings per share or fully-diluted earnings per share as the average trading price and the ending trading price has approximated or been less than the lowest exercise price of the common stock options. D. INCOME TAXES The Company follows SFAS No. 109, "Accounting for Income Taxes". Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. SFAS No. 109 requires that a valuation allowance be established to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred income taxes result primarily from temporary differences in recognizing net operating losses for tax and financial reporting purposes. Any future tax benefit of net operating loss carryforwards has been fully reserved due to the uncertainty of the benefits being realized. E. SUBSEQUENT EVENT Effective June 1, 1998, the Company acquired 82.01% of the outstanding common stock of The Accord Group, Inc. ("Accord") in exchange for 8,000,000 shares of the common stock of the Company. The transaction will be accounted for as a reverse acquisition with the historical results of Accord becoming the historical results of the Company. During the three months ended March 31, 1998, Accord had revenues of $112,638 and net income of $2,490. Per share earnings would have been zero. 9 10 ITEM 2: MANAGEMENT'S PLAN OF OPERATION Effective September 30, 1997, the Company exchanged their 100% interest in Rose Color and SPS for three million shares of the common stock of International Imaging, Inc., which resulted in the Company owning less than 20% of Imaging. The Company expects to hold their investment in Imaging for at least the next year, at which time they may elect to sell all or part of their investment to pursue other business opportunities. Until a future business venture is determined, the Company has eliminated their regular payroll and will utilize contract consultants to maintain their reporting requirements. Accordingly, it is anticipated that only nominal funding should be necessary for the next several months, which amounts should be available from debt financing. Management has determined that the Company's new business plan is primarily to seek one or more potential businesses, which may, in the opinion of management, warrant the Company's involvement. The Company recognizes that as a result of its limited financial, managerial or other resources, the number of suitable potential businesses, which may be available to it, will be extremely limited. In seeking to attain its business objective, the Company will not restrict its search to any particular industry. Rather, the Company may investigate businesses of essentially any kind or nature, including but not limited to, finance, high technology, manufacturing, service, sports, research and development, communications, insurance, brokerage, transportation and others. The Company does not intend to become an investment company or an investment advisor. Management's discretion is otherwise unrestricted, and it may participate in any business whatsoever that may, in the opinion of management, meet the business objectives discussed herein. As of March 31, 1998, the Company has not chosen the particular area of business in which it proposes to engage and has not conducted any market studies with respect to any business or industry. See Note E to the financial statements. The Company will not restrict its search to any specific industry (except as set forth above), but may acquire any entity or position in a company which is (i) in its preliminary or development state; or (ii) is a going concern. At this time it is impossible to determine the needs of the business in which the company may seek to participate, and whether such business may require additional capital, management, or may be seeking other advantages which the Company may offer. In other instances, possible business endeavors may involve the acquisition of or a merger with a company that does not need additional equity, but seeks to establish a public trading market for its securities. Businesses which seek the Company's participation in their operations may desire to do so to avoid what such businesses deem to be adverse factors related to undertaking a public offering. Such factors including substantial time requirements and legal costs, along with other conditions or requirements imposed by Federal and state securities laws. The analysis of potential business endeavors will be undertaken by or under the supervision of the Company's Directors. The Directors are comprised of individuals of varying business experiences, and management will rely on their own business judgment in formulating decisions as to the types of businesses that the Company may acquire or in which the Company may participate. It is quite possible that management will not have any business experience or expertise in the type of businesses engaged in by a company that may be investigated by the Company. In analyzing prospective businesses, management will consider such factors as available technical, financial and managerial resources; working capital and other financial requirements; such businesses' history of operations, if any, and prospects for the future; the nature of present and expected compensation; the quality and experience of management services which may be 10 11 available and the depth of that management; the potential for further research and development; risk factors; the potential for growth and expansion; the potential for profit; the perceived public recognition or acceptance of such businesses, products, services, trade or service marks; its name identification; and other relevant factors. While these factors will be considered, to a large extent a decision to participate in a specific business will be difficult, if not impossible, to analyze through the application of objective criteria. In many instances, the achievements of a specific business to date may not necessarily be indicative of its potential for the future because of various changing requirements in the marketplace, such as the ability to substantially shift marketing approaches, expand significantly or change product emphasis, change or substantially alter management, or other factors. On the other hand, the management of such companies may not have proven their abilities or effectiveness, or established the viability of the market, or the products or services which they propose to market. As such, the profitability of such a business may be unpredictable and might therefore subject the Company and its assets to substantial risks. As part of the Company's investigation of a business, management expects that it will meet personally with the target's management and personnel, visit and inspect the target's facilities, obtain independent analysis or verification of certain information provided, check references of the target's management and key personnel, and conduct other reasonable measures, to the extent that the Company's limited resources and management's technical expertise, if any, permit. Generally, the Company will analyze all available information and make a determination based upon a composite of available facts, without reliance upon a single factor as controlling. It is anticipated that any number of prospective businesses will be available to the Company from various sources, including its management, its professional advisors, securities broker dealers, venture capitalists members of the financial community, and others who may present unsolicited proposals. In some instances, the Company may publish notices or advertisements in financial or trade publications seeking potential business acquisitions. In certain circumstances, the Company may agree, in connection with an acquisition, to pay a finder's fee or other compensation to an investment banking firm or other person (who may or may not be affiliated with the Company) who submits to the Company a business in which the Company participates. 11 12 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - Not applicable (b) Reports on Form 8-K - None during the three months ended March 31, 1998. 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 thereunto duly authorized. SECURITIES RESOLUTION ADVISORS, INC. Date: August 12, 1998 By: /s/ Richard Singer II ------------------------ ------------------------------- Richard Singer II President and Principal Accounting Officer 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS AS OF MARCH 31, 1998 AND FOR THE THREE MONTH PERIOD THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 1998. 3-MOS DEC-31-1998 MAR-31-1998 1,033 2,878 3,250 0 0 7,161 0 0 3,012,923 27,770 0 0 0 65,250 2,919,903 3,012,923 0 0 0 0 13,733 0 0 (20,278) 0 (20,278) 0 0 0 (20,278) 0.00 0.00
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