UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14f-1
INFORMATION STATEMENT
Pursuant to Section 14(f) of the
Securities Exchange Act of 1934
and Rule 14f-1 under the Exchange Act
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Applied Spectrum Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-16397 41-2185030
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number Identification No.)
65 Norwood Avenue, Upper Montclair, NJ 07043
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (973) 783-1117
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APPLIED SPECTRUM TECHNOLOGIES, INC.
65 Norwood Avenue
Upper Montclair, NJ 07043
INFORMATION STATEMENT
The Board of Directors of Applied Spectrum Technologies, Inc., a Delaware
corporation, is furnishing this information statement in connection with the
sale of certain shares of Applied Spectrum's common stock pursuant to a
securities purchase agreement ("Purchase Agreement") dated as of December 14,
2005, between KI Equity Partners III, LLC ("KI Equity"), a Delaware limited
liability company, and Norwood Venture Corp. ("Norwood Venture"), a Delaware
corporation and an approximately 77.3% stockholder of Applied Spectrum. Mark R.
Littell, our sole officer and director, is the President and controlling
stockholder of Norwood Venture. The Purchase Agreement provides that Mark R.
Littell shall resign his officer positions with Applied Spectrum effective as of
the closing date of the sale of the shares contemplated by the Purchase
Agreement ("Closing") and that Applied Spectrum shall, effective as of the
Closing, appoint Kevin R. Keating as a director, and the President, Treasurer
and Secretary of Applied Spectrum.
The Purchase Agreement further contemplates that Mark R. Littell will
continue as a director of the Company following the Closing until such time as
we comply with Section 14(f) of the Securities Exchange Act of 1934, as amended,
and Rule 14f-1 promulgated under the Exchange Act. This information statement is
being filed and mailed to stockholders on or about December 19, 2005. As such,
Mark R. Littell is expected to submit his resignation as a director of the
Company effective as of the expiration of the ten (10) day period following the
filing and mailing of this information statement. We will, to the extent
permitted by applicable law, secure the resignation of, or remove, the existing
directors and officers as set forth above so as to enable Kevin R. Keating to be
appointed as a director and officer in accordance with the Purchase Agreement
effective as of the Closing. Mark R. Littell has also indicated his intent to
resign as an officer effective on the Closing and as a director effective as the
expiration of the ten (10) day period following the filing and mailing of this
information statement.
This information statement is being furnished to the holders of record of
our outstanding shares of common stock on December 14, 2005. We anticipate that
this information statement will be mailed or furnished on or about December 19,
2005 to all stockholders of record on December 14, 2005. This information
statement is being provided pursuant to Section 14(f) of the Securities Exchange
Act of 1934 and Rule 14f-1 under the Exchange Act solely for informational
purposes and not in connection with a vote of our stockholders.
No action is required by the stockholders of Applied Spectrum in
connection with this information statement. However, Section 14(f) of the
Exchange Act of 1934 and Rule 14f-1 promulgated thereunder require the mailing
to Applied Spectrum's stockholders of record of the information set forth in
this information statement at least 10 days prior to the date a change in a
majority of Applied Spectrum's directors occurs (otherwise than at a meeting of
Applied Spectrum's stockholders). Accordingly, the change in a majority of
Applied Spectrum's directors will not occur until at least 10 days following the
filing and mailing of this information statement.
For purposes of this information statement, Applied Spectrum Technologies,
Inc. may be referred to herein as "Applied Spectrum", the "Company" or by "our",
"we" or "us".
PLEASE NOTE THAT THIS IS NOT A REQUEST FOR YOUR VOTE OR A PROXY STATEMENT,
BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE ACTION TO BE
TAKEN TO CHANGE THE BOARD OF DIRECTORS IN CONNECTION WITH A SECURITIES PURCHASE
AGREEMENT PROVIDING FOR THE SALE OF 77.3% OF THE OUTSTANDING SHARES OF COMMON
STOCK OF APPLIED SPECTRUM. APPLIED SPECTRUM IS NOT SOLICITING PROXIES IN
CONNECTION WITH THE MATTERS DESCRIBED IN THIS INFORMATION STATEMENT, AND NO VOTE
OR OTHER ACTION BY OUR STOCKHOLDERS IS REQUIRED TO BE TAKEN IN CONNECTION WITH
THIS INFORMATION STATEMENT.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
PLEASE NOTE THAT THIS IS NOT AN OFFER TO PURCHASE YOUR SHARES.
PROPOSED CHANGE IN CONTROL TRANSACTION
On December 14, 2005, Norwood Venture and KI Equity entered into the
Purchase Agreement, which provides that, at the Closing, Norwood Venture will
sell 2,282,562 shares of common stock, representing approximately 77.3% of our
outstanding shares of common stock, to KI Equity at a price of $175,000. The
closing of the transaction contemplated by the Purchase Agreement is contingent
on several factors, including but not limited to the delivery of various closing
documents and certificates, the resignation of our existing officers as of the
Closing, and resignation of our current sole director effective upon the
expiration of the ten-day period after the filing and mailing of this
information statement to our record stockholders.
VOTING SECURITIES
Our common stock is the only class of equity securities that is currently
outstanding and entitled to vote at a meeting of our stockholders. Each share of
common stock entitles the holder of the share to one vote. As of the date of
this information statement, there were 2,953,941 shares of our common stock
outstanding.
BUSINESS OF APPLIED SPECTRUM
Applied Spectrum is currently a shell company with nominal assets whose
sole business has been to identify, evaluate and investigate various companies
with the intent that, if such investigation warrants, a reverse merger
transaction be negotiated and completed pursuant to which Applied Spectrum would
acquire a target company with an operating business with the intent of
continuing the acquired company's business as a publicly held entity.
DIRECTORS AND OFFICERS
The following table sets forth the names, positions and ages of Applied
Spectrum's executive officers and directors. All of our directors serve until
the next annual meeting of stockholders or until their successors are elected
and qualify. Officers are elected by the board of directors and their terms of
office are, except to the extent governed by employment contract, at the
discretion of the board of directors.
Name Age Position
----------------------------- ----------- ------------------------------------
Mark R. Littell 54 Chief Executive Officer, Chief
Financial Officer and Director
Mark R. Littell has been the Chief Executive Officer, Chief Financial
Officer and a Director of Applied Spectrum since January 1998. Since May 1988,
Mr. Littell has been the President and controlling stockholder of Norwood
Venture Corp., a Small Business Investment Company ("SBIC"). Norwood Venture is
the controlling stockholder of Applied Spectrum.
COMMITTEES OF BOARD OF DIRECTORS
Audit Committee and Audit Committee Financial Expert
Applied Spectrum's board of directors functions as an audit committee and
performs some of the same functions as an audit committee including: (1)
selection and oversight of our independent accountant; (2) establishing
procedures for the receipt, retention and treatment of complaints regarding
accounting, internal controls and auditing matters; and (3) engaging outside
advisors. Applied Spectrum is not a "listed company" under SEC rules and is
therefore not required to have an audit committee comprised of independent
directors. Applied Spectrum's board of directors has determined that its members
do not include a person who is an "audit committee financial expert" within the
meaning of the rules and regulations of the SEC. Applied Spectrum's board of
directors has determined that each of its members is able to read and understand
fundamental financial statements and has substantial business experience that
results in that member's financial sophistication. Accordingly, the board of
directors believes that each of its members have the sufficient knowledge and
experience necessary to fulfill the duties and obligations that an audit
committee would have.
Code of Ethics
A code of ethics relates to written standards that are reasonably designed
to deter wrongdoing and to promote:
o Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o Full, fair, accurate, timely and understandable disclosure in
reports and documents that are filed with, or submitted to, the SEC
and in other public communications made by an issuer;
o Compliance with applicable governmental laws, rules and regulations;
o The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
o Accountability for adherence to the code.
Due to the limited scope of Applied Spectrum's current operations, Applied
Spectrum has not adopted a corporate code of ethics that applies to its
principal executive officer, principal accounting officer, or persons performing
similar functions.
Board Meetings; Nominating and Compensation Committees
Applied Spectrum's directors and officers do not receive remuneration from
Applied Spectrum unless approved by the Board of Directors or pursuant to an
employment contract. Applied Spectrum has no employment contracts currently in
place. Directors may be paid their expenses, if any, of attendance at such
meeting of the Board of Directors, and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated fixed compensation as
director. No such payment shall preclude any director from serving Applied
Spectrum in any other capacity and receiving compensation therefor. No
compensation has been paid to Applied Spectrum's directors for attendance at any
meetings during the last fiscal year.
Applied Spectrum is not a "listed company" under SEC rules and is
therefore not required to have a compensation committee or a nominating
committee. Applied Spectrum does not currently have a compensation committee.
Applied Spectrum's Board of Directors is currently comprised of only one member,
Mark R. Littell, who is also Applied Spectrum's sole officer acting as Chief
Executive Officer and Chief Financial Officer. Applied Spectrum has no
employees, and any compensation for its directors and officers must be approved
by the Board of Directors.
Applied Spectrum neither has a nominating committee for persons to be
proposed as directors for election to the Board of Directors nor a formal method
of communicating nominees from shareholders. Applied Spectrum does not have any
restrictions on shareholder nominations under its certificate of incorporation
or by-laws. The only restrictions are those applicable
generally under Delaware law and the federal proxy rules. Currently, the entire
Board of Directors decides on nominees, on the recommendation of the sole member
of the Board of Directors who is not independent. The Board of Directors will
consider suggestions from individual shareholders, subject to evaluation of the
person's merits. Stockholders may communicate nominee suggestions directly to
the sole Board member, accompanied by biographical details and a statement of
support for the nominees. The suggested nominee must also provide a statement of
consent to being considered for nomination. Although there are no formal
criteria for nominees, the Board of Directors believes that persons should be
actively engaged in business endeavors, have a financial background, and be
familiar with acquisition strategies and money management.
Because the management and directors of Applied Spectrum are the same
person, the Board of Directors has determined not to adopt a formal methodology
for communications from shareholders on the belief that any communication would
be brought to the Boards' attention by virtue of the co-extensive capacities
served by Mark R. Littell.
Conflicts of Interest
Certain conflicts of interest existed at September 30, 2005 and may
continue to exist between Applied Spectrum and its sole officer and director due
to the fact that he has other business interests to which he devotes his
attention. Each officer and director may continue to do so notwithstanding the
fact that management time should be devoted to the business of Applied Spectrum.
Certain conflicts of interest may exist between Applied Spectrum and its
management, and conflicts may develop in the future. Applied Spectrum has not
established policies or procedures for the resolution of current or potential
conflicts of interests between Applied Spectrum, its officers and directors or
affiliated entities. There can be no assurance that management will resolve all
conflicts of interest in favor of Applied Spectrum, and conflicts of interest
may arise that can be resolved only through the exercise by management their
best judgment as may be consistent with their fiduciary duties. Applied
Spectrum's management will try to resolve conflicts to the best advantage of all
concerned.
Indemnification
Under Delaware law and pursuant to our articles of incorporation and
bylaws, we may indemnify our officers and directors for various expenses and
damages resulting from their acting in these capacities. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to our officers or directors pursuant to those provisions, our counsel
has informed us that, in the opinion of the SEC, this indemnification is against
public policy as expressed in the Securities Act, and is therefore
unenforceable.
Section 16(a) Beneficial Ownership Reporting
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that directors, executive officers and persons who own more than 10% of the
outstanding common stock of certain reporting companies file initial reports of
ownership and reports of changes in ownership in such common stock with the
Securities and Exchange Commission ("SEC"). Officers, directors and stockholders
who own more than 10% of the outstanding common stock of certain reporting
companies are required by the SEC to furnish such companies with copies of all
Section 16(a) reports they file. Applied Spectrum is not required to comply with
Section 16(a). Accordingly, stock ownership information contained in this report
is based on what is known to Applied Spectrum.
DIRECTOR AND OFFICER COMPENSATION
The following Executive Compensation Chart highlights the compensation for
Applied Spectrum's executive officers. No other executive officers received
salary and bonus in excess of $100,000 for the prior three fiscal years ended
September 30, 2005, 2004 and 2003.
Long Term Compensation
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Annual Compensation Awards Payouts
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Securities
Name Other Restricted Underlying
and Annual Stock Options/ LTIP All Other
Principal Bonus Compensation Award(s) SARs (#) (2) Payouts Compensation
Position Year Salary ($) ($) ($) ($) ($) ($)
---------------------- ------- ------------ --------- ----------------- ------------ ------------- ----------- -----------------
Mark R. Littell (CEO 2005 $0 $0 $0 N/A N/A N/A N/A
and CFO) 2004 $0 $0 $0 N/A N/A N/A N/A
2003 $0 $0 $0 N/A N/A N/A N/A
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There was no other compensation paid to Mark R. Littell during the fiscal
year ended September 30, 2005 in his capacity as an officer or director of
Applied Spectrum. There were no option grants to Mark R. Littell during the
fiscal year ended September 30, 2005, and no options were exercised by Mark R.
Littell during the fiscal year ended September 30, 2005.
We did not pay any compensation to any director in the year ended
September 30, 2005.
NEW DIRECTORS AND OFFICERS
The Purchase Agreement provides that the current officers of Applied
Spectrum shall resign effective as of the Closing and that Applied Spectrum
shall, effective as of the Closing, appoint Mr. Kevin R. Keating as a director,
and the President, Treasurer and Secretary of Applied Spectrum. Effective on the
tenth (10th) day following the filing of this information statement with the SEC
and the mailing of the same to the record stockholders of Applied Spectrum, Mark
R. Littell shall resign as a director of Applied Spectrum. Mr. Keating has
consented to serve in these capacities.
Mr. Keating is an investment executive and for the past nine years has
been the Branch Manager of the Vero Beach, Florida, office of Brookstreet
Securities Corporation. Brookstreet is a full-service, national network of
independent investment professionals. Mr. Keating services the investment needs
of private clients with special emphasis on equities. For more than 35 years, he
has been engaged in various aspects of the investment brokerage business. Mr.
Keating began his Wall Street career with the First Boston Company in New York
in 1965. From 1967 through 1974, he was employed by several institutional
research boutiques where he functioned as Vice President Institutional Equity
Sales. From 1974 until 1982, Mr. Keating was the President and Chief Executive
Officer of Douglas Stewart, Inc., a New York Stock Exchange member firm. Since
1982, he has been associated with a variety of firms as a registered
representative servicing the needs of individual investors. Mr. Keating is 64
years of age.
To our knowledge, neither Mr. Keating nor any of his affiliates currently
beneficially owns any equity securities or rights to acquire any securities of
Applied Spectrum, and none of these persons has been involved in any transaction
with Applied Spectrum or any of its directors, executive officers or affiliates
that is required to be disclosed pursuant to the rules and regulations of the
SEC other than with respect to the transactions that have been described in this
information statement. To our knowledge, Mr. Keating is not currently a director
of, nor does he hold any position with, Applied Spectrum, nor does he have a
familial relationship with any director or executive officer of Applied
Spectrum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
We have set forth in the following table certain information regarding our
common stock beneficially owned as of December 14, 2005 for (i) each stockholder
we know to be the beneficial owner of 5% or more of our outstanding common
stock, (ii) each of our executive officers and directors, and (iii) all
executive officers and directors as a group. In general, a person is deemed to
be a "beneficial owner" of a security if that person has or shares the power to
vote or direct the voting of such security, or the power to dispose or to direct
the disposition of such security. A person is also deemed to be a beneficial
owner of any securities of which the person has the right to acquire beneficial
ownership within 60 days. To the best of our knowledge, all persons named have
sole voting and investment power with respect to such shares, except as
otherwise noted. At December 14, 2005, 2,953,941 shares of our common stock were
outstanding.
Number of Shares
Name Beneficially Owned* Percent of Shares
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Norwood Venture Corp. 2,282,562 77.3%
c/o Mark R. Littell
65 Norwood Avenue
Montclair, NJ 07043 (1)
Mark R. Littell 2,282,562 77.3%
65 Norwood Avenue
Montclair, NJ 07043 (2)
All Executive Officers and Directors as 2,282,562 77.3%
a group (one person)
* Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon the exercise of options or warrants currently exercisable or
convertible within 60 days, are deemed outstanding for computing the
percentage ownership of the person holding such options or warrants but
are not deemed outstanding for computing the percentage ownership of any
other person.
(1) Mark R. Littell is the President and controlling stockholder of Norwood
Venture Corp. and exercises voting and investment power over with respect
to the shares of common stock of Applied Spectrum owned by Norwood
Venture.
(2) Includes the 2,282,562 shares of Applied Spectrum common stock owned by
Norwood Venture over which Mark R. Littell has voting and investment
control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We anticipate that, in connection with the proposed sale by Norwood
Venture of certain shares of our common stock as contemplated by the Purchase
Agreement, Mark R. Littell and Norwood Venture will enter into an agreement
releasing Applied Spectrum from any and all claims they have against Applied
Spectrum.
Kevin R. Keating is the father of Timothy J. Keating, the majority member
of Keating Investments, LLC. Keating Investments, LLC is the managing member of
KI Equity Partners III, LLC, which is the party acquiring the controlling
interest in Applied Spectrum pursuant to the Purchase Agreement. Keating
Investments, LLC is also the managing member and 90% owner of Keating
Securities, LLC, a registered broker-dealer. Kevin R. Keating is not affiliated
with and has no equity interest in Keating Investments, LLC, KI Equity Partners
III, LLC or Keating Securities, LLC and disclaims any beneficial interest in the
shares of Applied Spectrum's common stock to be acquired by KI Equity Partners
III, LLC.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly
caused this information statement to be signed on its behalf by the undersigned
thereunto duly authorized in the city of Upper Montclair, New Jersey.
APPLIED SPECTRUM TECHNOLOGIES, INC.
Date: December 15, 2005 By: /s/ Mark R. Littell
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Mark R. Littell, Chief Executive Officer