Delaware
|
95-2639686
|
|
(STATE
OR OTHER JURISDICTION OF
|
(I.R.S.
EMPLOYER I.D. NO.)
|
|
INCORPORATION
OR ORGANIZATION)
|
5737
Kanan Road PMB 188,
|
Agoura
Hills, California 91301
|
|
(ADDRESS
OF PRINCIPAL EXECUTIVE OFFICES)
|
(ZIP
CODE)
|
December
31,
|
2007
|
2006
|
|||||
Working
capital (deficiency)
|
($4,948,000
|
)
|
($4,565,000
|
)
|
|||
Current
ratio
|
(.01
to 1
|
)
|
(.01
to 1
|
)
|
Year
First
|
||||||
Name
|
Age
|
Principal
Occupation
|
Became
Director
|
|||
Michael
P. Frawley
|
54
|
Chairman
of the Board and
|
1991
|
|||
President
of the Company
|
||||||
Chief
Executive Officer, Treasurer
|
||||||
Sheila
Callahan
|
25
|
Director
and Secretary
|
2007
|
|||
of
the Company
|
Name
and
Principal
Position
|
Year
|
Annual Compensation
|
|||||
Michael
P. Frawley
|
2007
|
$
|
-
|
||||
Chief
Executive Officer
|
2006 | $ | - | ||||
2005
|
$
|
1,080
|
Title
of Class
|
Name
and Address of Beneficial
Owners
|
Amount
and Nature of Percent of
Beneficial
Ownership (1)
|
|
||||
Common
Stock
|
|
Dr.
P. Joseph Frawley (2)
436
N. Ontare St.
Santa
Barbara, California
|
|
161,401
|
|
13.2
|
%
|
Common
Stock
|
|
Michael
P. Frawley
5737
Kanan Rd. PMB 188
Agoura
Hills, California
|
|
133,683
|
|
10.9
|
%
|
Common Stock
|
|
Mary
Louise Frawley
16161
Ventura Blvd., #347 Encino, California
|
|
140,353
|
|
11.5
|
%
|
Common
Stock
|
|
Eileen
Frawley Callahan
10910
Wellworth Ave., #102
Los
Angeles, California
|
|
99,747
|
|
8.2
|
%
|
Common
Stock
|
|
Dudley
Callahan
1824
E. Gardenia
Phoenix,
Arizona
|
|
0
|
|
0
|
%
|
Common
Stock
|
|
Sheila
Callahan
436
N. Ontare Rd.
Santa
Barbara California
|
|
0
|
|
0
|
%
|
|
|||||||
Common
Stock
|
|
Joan
Frawley Desmond
7106
44th
Street
Chevy
Chase, Maryland
|
|
105,976
|
|
8.7
|
%
|
Common
Stock
|
All
Directors and Executive
Offices
as group (2 Persons)
|
|
133,683
|
|
10.9
|
%
|
(1)
|
Except
as indicated otherwise in the following notes, shares shown as
beneficially owned are those as to which the named persons possess
sole
voting and investment power. Dr. P. Joseph Frawley, Mary Louise Frawley,
Eileen Frawley Callahan, Joan Frawley Desmond and Michael P. Frawley
each
possess an interest in common stock of the Company that is currently
held
in the estate or trust of their deceased father, Patrick Frawley,
Jr.
These shares have not been transferred to such individuals as of
the date
of this filing. If and when such shares are transferred to such
individuals, they will each hold an additional number of shares of
common
stock as follows: Dr. P. Joseph Frawley (2432 shares), Mary Louise
Frawley
(2433 shares), Eileen Frawley Callahan (2433 shares), Joan Frawley
Desmond
(2433 shares) and Michael P. Frawley (2432 shares). Each such individual
disclaims beneficial ownership of the shares held by Patrick Frawley,
Jr.
|
(2)
|
Dr.
P. Joseph Frawley’s holdings include 22,456 shares he holds as custodian
for his children, as to which he disclaims beneficial ownership.
|
1.
|
List
of Financial Statements:
|
Page Numbers
|
|
Independent
Auditors' Report
|
F1
|
||
Financial
Statements for the Years Ended December 31, 2006 and 2007
|
|||
Consolidated
Balance Sheets
|
F2-F3
|
||
Consolidated
Statements of Operations
|
F4
|
||
|
|||
Consolidated
Statement of Stockholders'
Deficit
|
F5
|
||
Consolidated
Statements of Cash Flows
|
F6
|
||
|
|||
Notes
to Consolidated Financial Statements
|
F7-F10
|
2. |
List
of Exhibits:
|
3.1
|
Registrant's
certificate of incorporation is incorporated herein by this reference
to
(A) Exhibit Item (3.1) to Registrant's Registration Statement No.
2-36536
on form S-1, (B) the name change amendment to said certificate of
incorporation under Section 1-02 of the Merger Agreement which is
Exhibit
A to the definitive proxy material for Registrant's June 16, 1977
annual
meeting of stockholders, filed under Regulation 14A, and (C) the
amendment
to certificate of incorporation which is Exhibit A to the definitive
proxy
material for Registrant's June 25, 1987 Annual Meeting of Stockholders,
filed under Regulation 14A.
|
3.2
|
Registrant's
bylaws, as amended to date are incorporated herein by reference to
Exhibit
Item (3) to Registrant's Annual Report on Form 10-K for the year
ended
December 31, 1980.
|
21.1
|
List
of Subsidiaries is incorporated herein by reference to Exhibit Item
(10)
to Registrant's Annual Report on Form 10-K for the year ended December
31,
1991.
|
31.1
|
Sarbanes-Oxley
Act section 302 Certification
|
31.2 |
Exhibit
302.1
|
(b) |
Reports
on Form 8-K:
|
a) |
A
required disclosure was erroneously omitted from the originally filed
Form
10-KSB.
Our internal review process was not adequate enough to recognize
this
omission.
|
b) |
We
did not maintain proper segregation of duties for the preparation
of our
financial statements. As
of December 31, 2007, the majority of the preparation of financial
statements was carried out by one person. Additionally, the Company
currently only has one officer having oversight on all
transactions.
|
a) |
We
will hire additional personnel and outside consultants to perform
various
layers of reviews of our
disclosures.
|
b) |
We
will hire additional personnel to assist with the preparation of
the
Company’s financial statements which will allow for proper segregation of
duties, as well as additional manpower for proper
documentation.
|
By:
|
/s/
Michael P. Frawley
|
Michael
P. Frawley, CEO and Chairman of the
Board
|
By:
|
/s/
Michael P. Frawley
|
Michael
P. Frawley, CEO and Chairman of the Board
|
|
(Principal
Executive, Financial and Accounting
Officer)
|
By:
|
/s/
Sheila Callahan
|
Sheila
Callahan, Vice President and
Secretary
|
2007
|
2006
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
(Note 1)
|
$
|
14,000
|
$
|
7,000
|
|||
Prepaid
expenses and other current assets
|
22,000
|
21,000
|
|||||
|
|||||||
Total
current assets
|
36,000
|
28,000
|
|||||
|
|||||||
Real
estate investments (Notes 1, 2, 3 and 5)
|
457,000
|
457,000
|
|||||
Investment
in partnership
|
16,000
|
16,000
|
|||||
|
|||||||
TOTAL
ASSETS
|
$
|
509,000
|
$
|
501,000
|
2007
|
2006
|
||||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|||||||
Current
liabilities:
|
|||||||
Notes
payable to related parties (Notes 3 and 5)
|
$
|
2,387,000
|
$
|
2,138,000
|
|||
Interest
payable to related parties
|
2,050,000
|
1,840,000
|
|||||
Deposits
|
374,000
|
374,000
|
|||||
Accounts
payable and accrued expenses
|
173,000
|
164,000
|
|||||
Environmental
reserve (Note 6)
|
-
|
77,000
|
|||||
Total
current liabilities
|
4,984,000
|
4,593,000
|
|||||
Long
term liabilities:
|
|||||||
Long
term note payable (Note 5)
|
160,000
|
-
|
|||||
Environmental
reserve(Note 6)
|
-
|
1,120,000
|
|||||
Total
long term liabilities
|
160,000
|
1,120,000
|
|||||
Total
liabilities
|
5,144,000
|
5,713,000
|
|||||
Commitments
and contingencies (Notes 5 and 6)
|
|||||||
Stockholders’
deficit:
|
|||||||
Preferred
stock, $1.00 par value, 1,000,000 shares authorized, no shares
issued
|
-
|
-
|
|||||
Common
stock, $1.00 par value, 6,000,000 shares authorized, 1,414,212 shares
issued
|
1,414,000
|
1,414,000
|
|||||
Capital
surplus
|
17,209,000
|
17,209,000
|
|||||
Accumulated
deficit
|
(22,497,000
|
)
|
(23,074,000
|
)
|
|||
(3,874,000
|
)
|
(4,451,000
|
)
|
||||
Less
common stock in treasury, 191,312 shares (at cost)
|
(761,000
|
)
|
(761,000
|
)
|
|||
Total
stockholders’ deficit
|
(4,635,000
|
)
|
(5,212,000
|
)
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
509,000
|
$
|
501,000
|
2007
|
2006
|
||||||
REVENUES
|
|||||||
Sale
of real estate
|
$
|
-
|
$
|
749,000
|
|||
Other
income
|
2,000
|
2,000
|
|||||
TOTAL
REVENUE
|
2,000
|
751,000
|
|||||
COSTS
AND EXPENSES
|
|||||||
Cost
of real estate sold
|
-
|
441,000
|
|||||
Selling,
general and administrative expenses
|
278,000
|
169,000
|
|||||
Interest
expense, net of interest income
(Notes 3 and 6)
|
254,000
|
227,000
|
|||||
TOTAL
COSTS AND EXPENSES
|
532,000
|
837,000
|
|||||
OPERATING
LOSS
|
(530,000
|
)
|
-
|
||||
Gain
on extinguishment of debt (Note 6)
|
1,107,000
|
(86,000
|
)
|
||||
NET
INCOME /(LOSS)
|
$
|
577,000
|
$
|
(
86,000
|
)
|
||
NET
INCOME/(LOSS) PER SHARE, COMMON
|
$
|
0.47
|
$
|
(0.07
|
)
|
||
FULLY
DILUTED
|
$
|
0.47
|
$
|
(0.07
|
)
|
||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
1,222,900
|
1,222,900
|
Common
Stock
|
Capital
|
Accumulated
|
Treasury
|
||||||||||||||||
Shares
|
Amount
|
Surplus
|
Deficit
|
Stock
|
Total
|
||||||||||||||
December
31, 2005
|
1,414,212
|
$
|
1,414,000
|
$
|
17,209,000
|
$
|
(22,988,000
|
)
|
$
|
(761,000
|
)
|
$
|
(5,126,000
|
)
|
|||||
Net
loss, 2006
|
-
|
-
|
-
|
(86,000
|
)
|
-
|
(86,000
|
)
|
|||||||||||
December
31, 2006
|
1,414,212
|
1,414,000
|
17,209,000
|
(23,074,000
|
)
|
(761,000
|
)
|
(5,212,000
|
)
|
||||||||||
Net
income, 2007
|
-
|
-
|
-
|
577,000
|
-
|
577,000
|
|||||||||||||
December
31, 2007
|
1,414,212
|
$
|
1,414,000
|
$
|
17,209,000
|
$
|
(22,497,000
|
)
|
$
|
(761,000
|
)
|
$
|
(4,635,000
|
)
|
2007
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income/(loss)
|
$
|
577,000
|
$
|
(86,000
|
)
|
||
Adjustments
to reconcile net income/(loss) to net cash provided by/(used in)
operating
activities:
|
|||||||
Environmental
reserve
|
(1,107,000
|
)
|
-
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Prepaid
expenses and other current assets
|
(1,000
|
)
|
3,000
|
||||
Real
estate investments
|
-
|
441,000
|
|||||
Accounts
payable and accrued liabilities
|
9,000
|
(123,000
|
)
|
||||
Interest
payable
|
210,000
|
189,000
|
|||||
Environmental
reserve
|
(90,000
|
)
|
(138,000
|
)
|
|||
TOTAL
ADJUSTMENTS
|
(979,000
|
)
|
372,000
|
||||
NET
CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES
|
(402,000
|
)
|
286,000
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Improvements
to real estate
|
-
|
(86,000
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Long-term
borrowings
|
160,000
|
-
|
|||||
Short-term
debt borrowings from related party
|
249,000
|
169,000
|
|||||
Repayment
of borrowings
|
-
|
(369,000
|
)
|
||||
NET
CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES
|
409,000
|
(200,000
|
)
|
||||
NET
CHANGE IN CASH
|
7,000
|
-
|
|||||
CASH,
BEGINNING OF YEAR
|
7,000
|
7,000
|
|||||
CASH,
END OF YEAR
|
$
|
14,000
|
$
|
7,000
|
2007
|
2006
|
||||||
Cash
paid during the year for:
|
|||||||
Income
taxes
|
$
|
4,000
|
$
|
6,000
|
|||
Interest
|
$
|
22,000
|
$
|
24,000
|
2007
|
2006
|
||||||
Net
operating loss carryforwards
|
$
|
3,121,000
|
$
|
4,714,000
|
|||
Gain
on sale of real estate
|
-
|
(105,000
|
)
|
||||
Bad
debt/land reserves
|
211,000
|
211,000
|
|||||
Toxic
waste accrual
|
-
|
407,000
|
|||||
Other
reserves
|
701,000
|
630,000
|
|||||
4,033,000
|
5,857,000
|
||||||
Less
valuation allowance
|
(4,033,000
|
)
|
(5,857,000
|
)
|
|||
|
$ | - |
$
|
-
|