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 Fiscal Year ended September 30, 1997 Commission File Number 2-31876
WORLDS INC.
-----------
(Exact Name of Registrant as Specified in its Charter)
New Jersey 22-1848316
---------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
15 Union Wharf, Boston, Massachusetts 02109
- ------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including Area Code: (617) 725-8900
-----------------
Securities registered pursuant to Section 12(b) of the Act:
None
----
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (par value $.001 per share)
----------------------------------------
Title of Class
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 twelve (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 ninety (90) days.
Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
registrant's best knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[ X ]
The aggregate market value of voting stock held by non-affiliates of the
Registrant: can not be determined because of the absence of an active trading
market for Registrant's securities.
The number of shares outstanding of Registrant's Common Stock as of December 15,
1997: 15,532,700.
PART I
ITEM 1. BUSINESS
Worlds Inc.'s (formerly Academic Computer Systems, Inc.) only former
business operations were previously conducted through its wholly-owned
subsidiary, Data Conversion, Inc., which was engaged in the operation of a key
punch service bureau in Palisades, New Jersey. This service bureau translated
financial and business records and transactions to computer-ready input. On
August 29, 1975, Data Conversion, Inc. suspended operations entirely and there
is no intention to resume them. Since that time, the Registrant has had no
operations and its only income has been in the form of interest and returns on
its investments including dividends and net gains on the buying and selling of
securities in its portfolio. During the fiscal year ended September 30, 1997,
the Registrant sold its entire investment portfolio to avoid becoming classified
as an investment company subject to regulation under the Investment Company Act
of 1940 and had its assets held in money market funds.
On December 3, 1997, the Registrant completed a merger whereby it
acquired all of the assets and operations of Worlds Inc. and Worlds Acquisition
Corp., both of which were Delaware corporations, and changed its name from
Academic Computer Systems, Inc. to Worlds Inc. As a result, the Registrant is
now engaged in the business of designing, developing and marketing
three-dimensional music oriented Internet sites on the World Wide Web and it
intends to produce interactive, three-dimensional music related web sites and
distribute access to these web sites on compact discs of various recording
artists via traditional retail record outlets, working in conjunction with major
record labels.
For more information regarding the Registrant's activities since the
end of its fiscal year on September 30, 1997, you are advised to obtain a copy
of the Registrant's Current Report on Form 8-K dated December 3, 1997 (the
"8-K").
ITEM 2. PROPERTIES
As of the close of its fiscal year ended September 30, 1997, the
Registrant did not own or lease any property.
ITEM 3. LEGAL PROCEEDINGS
As of the close of its fiscal year ended September 30, 1997, the
Registrant was not involved in any lawsuits.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
2
PART II
ITEM 5. MARKET PRICE OF REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The Registrant's common stock, par value $.001 per share ($.05 prior to
December 3, 1997), is registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934. Currently there is, and at all times during the fiscal
year ended September 30, 1997, there was no active market for the Registrant's
common stock.
As of September 30, 1997, there were approximately 150 record holders
of the Registrant's common stock.
Since its inception, the Registrant has not paid any dividends on its
common stock and has no current intention to do so in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The following summaries should be read in conjunction with the
Registrant's financial statements for the years ended September 30, 1997, 1996
and 1995, and the related notes and opinion of Lipner, Gordon & Co., LLP, CPAs,
with respect thereto, which appears elsewhere in this Report.
Year Ended September 30,
--------------------------------------
1997 1996 1995
---- ---- ----
Gross income $186,525 $31,436 $37,135
Income before provision for income taxes $158,958 $27,437 $33,434
Net income (after provisions for
Income taxes) $113,432 $24,263 $30,145
Total assets $613,175 $579,036
Total Shareholders' equity $562,408 $575,991
As stated in response to Item 1 above, the Registrant acquired by
merger an operating entity and, accordingly, the results stated above will not
be comparable or in any way indicative in any respect to the future financial
statements of the Registrant.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
In 1975, the operations of Data Conversion, Inc., the Registrant's
subsidiary, were suspended with no intention to resume such operations.
Decreased demand for such services and the operating losses sustained made this
necessary. Since such time, management has cut all expenses to an irreducible
minimum in order to conserve its capital. During the fiscal year ended September
30, 1997, the Registrant realized income from dividends and trading in its
investment portfolio and from interest. During the course
3
of the fiscal year, the Registrant liquidated its investment portfolio and
maintained its assets in money market funds.
As stated in response to Item 1 above, following the close of the
fiscal year, the Registrant acquired by way of merger the assets and operations
of Worlds Inc. and Worlds Acquisition Corp., both former Delaware corporations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are included herein commencing on page F-1.
The registrant is not required to provide supplementary financial information.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
OFFICERS AND DIRECTORS
The officers and directors of the Registrant as of the end of its most
recent fiscal year on September 30, 1997, are as follows:
Name Age Position
---- --- --------
Lawrence Burstein 54 President and Director
Steven Millner 36 Treasurer, Secretary and Director
John Cattier 65 Director
LAWRENCE BURSTEIN has been President and a Director of the Registrant
since May 21, 1997 when Unity Venture Capital Associates Ltd. ("Unity")
purchased approximately 50.02% of the Registrant's outstanding stock. Mr.
Burstein has been President of Unity since its inception in February 1996. For
approximately ten years prior thereto, Mr. Burstein was the President and
principal stockholder of Trinity Capital Corporation ("Trinity"), a private
investment banking concern which ceased operations upon the formation of Unity.
Mr. Burstein is a director of five public companies, being, respectively, THQ
Inc., UCSI Inc., Brazil Fast Food Corp., CAS Medical Systems, Inc. (a
manufacturer of blood pressure monitors and other medical products principally
for the neo-natal market) and The MNI Group Inc. (a developer and marketer of
specially formulated medical foods and pet products). Mr. Burstein received an
LL.B. from Columbia Law School.
4
STEVEN MILLNER has been Treasurer, Secretary and a Director of the
Registrant since May 21, 1997. Mr. Millner has been a partner of Dalessio
Millner & Leben, certified public accountants. Prior to 1989, Mr. Millner was
employed by BDO Seidman, certified accountants, as an audit manager. Mr. Millner
received a B.S. from Bentley College.
JOHN COTTIER has been a Director of the Registrant since May 21, 1997.
Mr. Cottier has been an independent consultant since January 1985. From 1957 to
December 1984, Mr. Cattier was associated with White Weld & Co., investment
bankers, serving as a general partner, and with Credit Suisse White Weld (which
subsequently became Credit Suisse First Boston), investment bankers, in various
capacities. Mr. Cottier, who was both a director and stockholder of Trinity for
at least five years prior to its cessation of operations, is a director of
Pacific Assets Trust PLC., a United Kingdom investment trust, and Chairman of
the Board of Directors of Heptagon Investments Limited, an investment company.
Mr. Cattier received a B.A. from Yale University.
BOARD OF DIRECTORS
Each director is elected at the Company's annual meeting of
stockholders and holds office until the next annual meeting of stockholders, or
until his successor is elected and qualified. The bylaws permit the Board of
Directors to fill any vacancy and the new director may serve until the next
annual meeting of stockholders or until his successor is elected and qualified.
Officers are elected by the Board of Directors and their terms of office are,
except to the extent governed by employment contracts, at the discretion of the
Board.
As indicated above, the 8-K contains information regarding the
Registrant's new management following the merger.
ITEM 11. EXECUTIVE COMPENSATION
Not applicable as no compensation of any kind was paid to any of the
Registrant's officers, directors or employees during the fiscal year ended
September 30, 1997.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater-than-ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the fiscal year ended September 30, 1997, no required
reports were not timely filed.
5
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of December 15, 1997, information
regarding the beneficial ownership of the Registrant's Common Stock based upon
the most recent information available to the Company for (i) each person known
by the Company to own beneficially more than five (5%) percent of its Company's
outstanding Common Stock, (ii) each of its officers and directors, and (iii) all
of its officers and directors as a group. Each stockholder's address is c/o the
Company, 15 Union Wharf, Boston, MA 02109.
Shares Owned Beneficially and of Record (1)
-------------------------------------------
Name No. of Shares (1) % of Total
- ---------------- ---------------- ----------
Michael J. Scharf (2) 1,900,000 12.23%
Thomas Kidrin (3) 1,600,000 10.30%
Kenneth A. Locker (4) -0- N/A
Steven A. Greenberg 4,500,000 28.97%
All Officers and Directors
as a Group (4 persons) 3,500,000 22.53%
(1) Includes shares issuable within 60 days upon the exercise of
all options and warrants. Shares issuable under option or
warrants are owned beneficially but not of record.
(2) Chairman.
(3) President, Chief Executive Officer, Secretary and a Director.
(4) Director.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
6
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) 1. and 2. Financial Statements and Schedules
The financial statements are listed in the Index to Financial
Statements on page F-1 and are filed as part of this annual report.
3. Exhibits
27 - Financial Data Schedule.
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the last quarter of the fiscal
year ended September 30, 1997. However, a Report on Form 8-K dated
December 3, 1997, containing important information regarding the
Registrant, was filed on December 16, 1997.
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
WORLDS INC.
By: /S/ Thomas Kidrin
------------------------------
Thomas Kidrin
President and CEO
Dated: 30th day of December, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below as of the 30th of December, 1997 by the
following persons on behalf of Registrant and in the capacities indicated.
/S/ Thomas Kidrin
- --------------------------- Date: December 30, 1997
Thomas Kidrin
President, CEO and Director
(Chief Financial/Accounting Officer)
/S/ Michael J. Scharf
- --------------------------- Date: December 30, 1997
Michael J. Scharf
Chairman
/S/ Kenneth A. Locker
- --------------------------- Date: December 30, 1997
Kenneth A. Locker
Director
8
ACADEMIC COMPUTER SYSTEMS, INC.
COMPARATIVE FINANCIAL STATEMENTS
--------------------------------
SEPTEMBER 30, 1997, 1996 AND 1995
Index to Financial Statements
-----------------------------
Page No.
--------
Financial Statements:
Independent Auditors' Report ................................ F-2
Balance Sheets at September 30, 1997 and 1996 ............... F-3
Statement of Income for the Years Ended
September 30, 1997, 1996 and 1995 ......................... F-4
Statement of Retained Earnings for
the Years Ended September 30, 1997, 1996 and
1995 ...................................................... F-5
Statement of Cash Flows for the Years Ended
September 30, 1997, 1996 and 1995 ......................... F-6
Notes to Financial Statements ............................... F-7, 8
Independent Auditors' Report on Schedules ................... F-9
Schedule I - Marketable Securities for the Years
Ended September 30, 1996 .................................. F-10, 11
Index to Financial Statements
F-1
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Academic Computer Systems, Inc.
We have audited the accompanying balance sheets of Academic Computers,
Inc. as of September 30, 1997 and 1996, and the related statements of income,
retained earnings, and cash flows for the years ended September 30, 1997, 1996
and 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Academic Computers,
Inc. as of September 30, 1997 and 1996 and the results of its operations and its
cash flows for the years then ended, and for the year ended September 30, 1995,
in conformity with generally accepted accounting principles.
/S/ LIPNER, GORDON & CO. LLP.
Great Neck, New York
December 23, 1997
F-2
ACADEMIC COMPUTER SYSTEMS, INC.
BALANCE SHEET
-------------
ASSETS
===============================
September 30,
1997 1996
-------------------------------
Current assets:
Cash and cash equivalents (Notes 1b and 2) $613,175 $167,657
Interest receivable - 2,770
Prepaid federal income tax - 418
-------- --------
Total current assets 613,175 170,845
Long-term assets:
Marketable securities (Note 3) - 408,191
-------- --------
$613,175 $579,036
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Federal income taxes payable $ 42,388 $ -
NJ corporation taxes payable 3,129 1,795
Accounts payable and accrued expenses 5,250 1,250
-------- --------
Total current liabilities 50,767 3,045
-------- --------
Commitments and contingencies (Note 4) - -
Deferred taxes payable (Note 5) - 38,437
Stockholders' equity:
Common stock, par value of $.05 per share;
authorized 1,250,000 shares; issued 910,000
shares at September 30, 1997 and 1996 45,500 45,500
Additional paid-in capital 312,571 312,571
Unrealized gain on securities reported at fair
value (Notes 3 and 5) - 88,578
Retained earnings 206,493 93,061
-------- --------
564,564 578,147
Less treasury stock - at cost (2,300 shares) ( 2,156) ( 2,156)
-------- --------
562,408 575,991
-------- --------
$613,175 $579,036
======== ========
The accompanying notes are an integral part hereof.
F-3
ACADEMIC COMPUTER SYSTEMS, INC.
STATEMENT OF INCOME
-------------------
Year Ended
September 30,
-----------------------------------------
1997 1996 1995
-------- -------- --------
Income (Note 3):
Interest $ 6,724 $ 8,690 $ 2,671
Dividends 6,465 22,746 25,348
Gain on sale of securities 173,336 - 9,116
-------- ------- -------
186,525 31,436 37,135
-------- ------- -------
Costs and expenses:
Operational costs, general and
administrative expenses 27,567 3,929 3,701
Interest expense - 70 -
-------- ------- -------
27,567 3,999 3,701
-------- ------- -------
Income before provision for income taxes 158,958 27,437 33,434
-------- ------- -------
Provision for income taxes:
Federal 43,638 2,442 2,795
State 1,888 372 494
-------- ------- -------
45,526 2,814 3,289
-------- ------- -------
Net income $113,432 $24,623 $30,145
======== ======= =======
Earnings per share (based on weighted
average of the number of shares
outstanding) $ .12 $ .03 $ .03
======= ======= =======
Average number of common shares
outstanding 907,700 907,700 907,700
======= ======= =======
The accompanying notes are an integral part hereof.
F-4
ACADEMIC COMPUTER SYSTEMS, INC.
STATEMENT OF RETAINED EARNINGS
------------------------------
Year Ended
September 30,
-----------------------------------------
1997 1996 1995
-------- -------- --------
Earnings at beginning $ 93,061 $68,438 $38,293
Net income 113,432 24,623 30,145
-------- ------- -------
Earnings at end $206,493 $93,061 $68,438
======== ======= =======
The accompanying notes are an integral part hereof.
F-5
ACADEMIC COMPUTER SYSTEMS, INC.
STATEMENT OF CASH FLOWS
-----------------------
Year Ended
September 30,
--------------------------------------------
1997 1996 1995
---------- ---------- ----------
Cash flows derived from operating activities:
Interest and dividends received $ 15,959 $ 29,637 $ 27,477
Cash paid to suppliers ( 23,567) ( 5,184) ( 2,950)
Income taxes paid ( 1,386) ( 6,171) ( 365)
---------- ---------- ----------
Net cash provided (used) by operating activities ( 8,994) 18,282 24,162
---------- ---------- ----------
Cash flows derived from investing activities:
Proceeds from sales/redemptions of securities 1,054,601 - 17,446
Purchases of securities ( 600,089) - ( 795)
---------- ---------- ----------
Net cash provided by investing activities 454,512 - 16,651
---------- ---------- ----------
Net increase in cash and cash equivalents 445,518 18,282 40,813
Cash and cash equivalents at beginning of year 167,657 149,375 108,562
---------- ---------- ----------
Cash and cash equivalents at end of year $ 613,175 $ 167,657 $ 149,375
========== ========== ==========
Reconciliation of net income to net cash provided (used) by
operating activities:
Net income $ 113,432 $ 24,623 $ 30,145
Adjustments to reconcile net income to net cash
provided by operations:
(Increase) decrease in interest
receivable 2,770 ( 2,002) ( 542)
(Increase) decrease in prepaid
federal income tax 418 ( 418) 128
Increase (decrease) in accounts
payable and accrued expenses 4,000 ( 1,000) 750
Increase in federal income taxes payable 42,388 - -
Increase (decrease) in taxes payable 1,334 ( 2,921) 2,797
(Gains) on sales/redemptions of securities ( 173,336) - ( 9,116)
---------- ---------- ----------
Net cash provided (used) by operating activities ($ 8,994) $ 18,282 $ 24,162
========== ========== ==========
Supplementary information:
Interest paid $ - $ - $ -
Federal income taxes paid 832 1,430 -
The accompanying notes are an integral part hereof.
F-6
ACADEMIC COMPUTER SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
---------------------------------
1. Statement of Significant Accounting Policies:
a) The Company's only income had been from interest and dividends
received on its investment portfolio. It records its investment income
on the accrual basis. There were no operating activities during the
periods of these statements.
b) Money market funds are considered to be cash equivalents.
c) Use of estimates - management uses estimates and assumptions in
preparing financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were
assumed in preparing the financial statements.
2. Concentration of Credit Risk:
As of September 30, 1997, the Company had $610,081 on deposit with the
Bank of New York. Funds deposited with a single financial institution are
insured for up to $100,000 in the aggregate by the Federal Deposit
Insurance Corporation (FDIC). Should the financial institution become
unable to meet its obligations, Academic Computer Systems, Inc. could
incur a loss of $510,081.
3. Marketable Securities:
For the years ended September 30, 1995 and thereafter, the Company has
adopted Statement of Financial Accounting Standards (SFAS) No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." Under
SFAS No. 115, debt and equity securities are classified into three
categories: trading, available-for-sale, and held-to-maturity.
Management determines the appropriate classification of its investments
at the time of purchase, and reevaluates such determination at each
balance sheet date. The Company has categorized its marketable securities
as available-for-sale. SFAS No. 115 requires available-for-sale
securities to be carried at fair value with unrealized gains and
unrealized losses reported as a separate component of shareholders'
equity. Realized gains and losses are determined on a specific
identification basis. A decline in market value of any available-for-sale
security below cost that is deemed other than temporary is charged to
earnings, resulting in the establishment of a new cost basis for the
security.
Marketable securities classified as available-for-sale securities at
September 30, 1996 are included in Schedule I.
At September 30, 1997, the Company had liquidated its investment in
marketable securities. Realized gains on the sale of marketable securities
amounted to $173,336 and are reflected in the statement of income.
4. Commitments and Contingencies:
The Company's income tax returns have not been audited by the Internal
Revenue Service.
F-7
ACADEMIC COMPUTER SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997, 1996 AND 1995
5. Deferred Taxes:
Temporary differences arise from unrealized gains on securities that are
reported as an adjustment to stockholders' equity for financial reporting
but are not recorded in the tax return until the securities are sold. The
Company uses the liability method for calculating the deferred tax
provision and charges the tax effect directly to stockholders' equity.
The deferred taxes relate solely to the available-for-sale securities,
and, as such, have no effect on the components of net income (see Note 2).
6. Subsequent Events:
On December 3, 1997, Worlds Inc. ("Worlds") merged with and into Worlds
Acquisition Corp. ("WAC"). Contemporaneously, WAC closed the first round
of a private placement of its common stock (the "Offering"), raising
gross proceeds of $3.8 million, and WAC merged with and into the Company,
an inactive corporation with approximately $600,000 of assets, all in the
form of cash or cash equivalents. Thereafter, the Company changed its
name to Worlds Inc. The merger of Worlds into WAC and the subsequent
merger of WAC with and into the Company are sometimes hereinafter
collectively referred to herein as the "Mergers" and the entity resulting
therefrom is sometimes hereinafter referred to as the "Combined Entity".
The terms of the Mergers called for the issuance, in exchange for all of
the previously outstanding shares of Worlds and WAC, of an aggregate of
14,625,000 shares of the Company's common stock distributed, as follows:
8,400,000 to the former shareholders of WAC; 2,000,000 to the former
shareholders of Worlds; 3,800,000 to the investors in WAC's financing;
and 425,000 as a financial advisory fee to International Academic Capital
Growth, Ltd. Prior to the Mergers, the Company had 907,700 shares of
Academic outstanding, which shares continue to remain outstanding and
held by the pre-Merger shareholders. The total issued and outstanding
shares of the Combined Entity after the Mergers is therefore 15,532,700
shares.
F-8
INDEPENDENT AUDITORS' REPORT ON SCHEDULES
-----------------------------------------
In connection with our audit of the financial statements of Academic
Computer Systems Inc. as of September 30, 1996, we also audited the supporting
schedule of marketable securities. In our opinion, this schedule presents
fairly, when read in conjunction with the related statements, the financial data
required to be set forth therein.
/S/ LIPNER, GORDON & CO. LLP.
Great Neck, NY
December 23, 1997
F-9
ACADEMIC COMPUTER SYSTEMS,INC.
SCHEDULE I - MARKETABLE SECURITIES
----------------------------------
SEPTEMBER 30, 1996
Number of
Shares Value Based on
or Units of Current Market
Principal Quotations Unrealized
Name of Issuer and Amount Cost/ At Gain/(Loss)
Title of Security Bonds and Adjusted Balance Sheet On
- ----------------- Notes Basis Date Securities
---------- ---------- ---------- ----------
Rapid American Corp. Sub.
Deb. 7% 1994 $10,000 $ 100 $ - ($ 100)
Metromedia International
Sub Deb. 9-1/2% 1998 -
(Formerly Actava Group Inc.) 9,000 6,100 8,944 2,844
Zenith Electronics Corp.
Conv. Sub. Deb. 6-1/4%
2011 20,000 8,117 16,750 8,633
Fedders Corp. Sub. Deb. Conv.
8-1/2% 2012 (Formerly NYCOR
Inc., CV EX PFD) 80,000 61,605 72,800 11,195
AM Annuity Group Inc. - common -
(Formerly STI Group Inc.) 508 shares 2,398 6,795 4,397
Barrett Resources Corp., New 2,000 shares 8,007 70,500 62,493
Fleet Financial Group Inc.
Depository SH Reptg 1/4
PFD. IV Pref. 2,000 shares 51,757 51,500 ( 257)
Chase Manhattan Corp. PFD
(Formerly Chemical Banking
Corp. 10.96 PFD) 1,000 shares 29,395 29,625 230
Barclays Bank PLC Amern Dep.
Shs. UTS SR D 1,000 shares 29,271 28,750 ( 521)
-------- -------- --------
Sub total 196,750 285,664 88,914
F-10
ACADEMIC COMPUTER SYSTEMS,INC.
SCHEDULE I - MARKETABLE SECURITIES
----------------------------------
SEPTEMBER 30, 1996
Number of
Shares Value Based on
or Units of Current Market
Principal Quotations Unrealized
Name of Issuer and Amount Cost/ At Gain/(Loss)
Title of Security Bonds and Adjusted Balance Sheet On
- ------------------ Notes Basis Date Securities
---------- ---------- ---------- ----------
Sub total (carried forward) $196,750 $285,664 $ 88,914
Williams Cos. Inc. $2.21 Cum.
Pfd. 1,000 shares 25,000 26,000 1,000
American Banknote Corp. (formerly
United States Banknote Corp.) 1,000 shares 5,238 4,625 ( 613)
Corestates Financial Corp. common
(formerly Constellation
Bancorporation) 413 shares 7,254 17,862 10,608
LTV Corp. New 59 shares 615 686 71
LTV Corp. New WTS Ser A
expire 6/28/98 24 warrants 57 27 ( 30)
Cyprus Amax Minerals common
(formerly Amax, Inc.) 500 shares 12,122 10,750 ( 1,372)
Alumax, Inc. common 500 shares 12,122 16,750 4,628
Amax Gold common 300 shares 2,226 1,687 ( 539)
Glendale Federal Bank common 2,000 shares 14,255 35,500 21,245
Greyhound Lines, Inc. common 2,560 shares 5,537 8,640 3,103
-------- -------- --------
$281,176 $408,191 $127,015
======== ======== ========
F-11