FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________________ to ___________________
Commission file number: 0-28524
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HIREL HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 65-0666239
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
19599 N.E. 10TH AVENUE, SUITE A, NORTH MIAMI BEACH FLORIDA 33179
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 653-7090
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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 require- ments for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of September 5, 1996, 4,813,750
shares of $.01 par value common stock were outstanding.
<PAGE>
HIREL HOLDINGS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED).
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
PART II. OTHER INFORMATION
<PAGE>
ITEM 1: FINANCIAL STATEMENTS
HIREL HOLDINGS, INC. AND SUBSIDIARIES
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COMBINED BALANCE SHEET AS OF JUNE 30, 1996
[UNAUDITED]
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ASSETS:
CURRENT ASSETS:
Cash $ 449,912
Accounts Receivable [Net of Allowance for Doubtful Accounts
of $30,439] 683,138
Inventory 854,874
Other Current Assets 10,391
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TOTAL CURRENT ASSETS 1,998,315
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PROPERTY AND EQUIPMENT - NET 760,166
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OTHER ASSETS:
Loans Receivable - Related Parties 375,886
Deferred Offering Costs 312,940
Other Assets 76,804
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TOTAL OTHER ASSETS 765,630
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TOTAL ASSETS $ 3,524,111
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LIABILITIES AND STOCKHOLDER'S EQUITY:
CURRENT LIABILITIES:
Line of Credit 1,310,339
Accounts Payable 495,359
Due to Stockholder 195,000
Other Current Liabilities 145,944
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TOTAL CURRENT LIABILITIES 2,146,642
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LOAN PAYABLE - RELATED PARTY 10,036
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COMMITMENTS AND CONTINGENCIES --
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STOCKHOLDER'S EQUITY:
Preferred Stock - $.001 Par Value, 1,000,000 Shares Authorized,
None Issued or Outstanding --
Common Stock, $.001 Par Value, 24,000,000 Shares Authorized,
3,750,000 Shares Issued and Outstanding 3,750
Paid-in Capital 1,332,855
Retained Earnings 30,828
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TOTAL STOCKHOLDER'S EQUITY 1,367,433
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 3,524,111
============
See Notes to Combined Financial Statements.
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<TABLE>
<CAPTION>
HIREL HOLDINGS, INC. AND SUBSIDIARIES
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COMBINED STATEMENTS OF OPERATIONS
[UNAUDITED]
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
1 9 9 6 1 9 9 5 1 9 9 6 1 9 9 5
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET SALES:
Computer Equipment $ 5,834,427 $ 4,185,919 $ 12,497,056 $ 9,264,073
Computer Equipment - Related Party -- 633,562 -- 2,491,111
Fuel Injection Systems 665,954 -- 990,394 --
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TOTAL NET SALES 6,500,381 4,819,481 13,487,450 11,755,184
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COST OF GOODS SOLD:
Computer Equipment 5,551,124 4,618,934 11,729,878 11,342,443
Fuel Injection Systems 394,991 -- 573,586 --
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TOTAL COST OF GOODS SOLD 5,946,115 4,618,934 12,303,464 11,342,443
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GROSS PROFIT 554,266 200,547 1,183,986 412,741
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EXPENSES:
General and Administrative Expenses 435,353 119,868 877,154 240,110
Research and Development 71,124 -- 79,936 --
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TOTAL EXPENSES 506,477 119,868 957,090 240,110
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OPERATING INCOME 47,789 80,679 226,896 172,631
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OTHER INCOME [EXPENSE]:
Interest Expense (12,964) -- (63,901) --
Interest Income - Related Parties 7,645 -- 14,750 --
Loss on Sale of Asset -- -- (41,574) --
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TOTAL OTHER [EXPENSE] (5,319) -- (90,725) --
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INCOME BEFORE INCOME TAXES 42,470 80,679 136,171 172,631
INCOME TAXES 17,700 -- 17,700 --
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INCOME BEFORE PRO FORMA INCOME
TAX ADJUSTMENTS 24,770 80,679 118,471 172,631
PRO FORMA INCOME TAX
ADJUSTMENTS (7,700) 25,850 31,600 64,950
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PRO FORMA NET INCOME $ 32,470 $ 54,829 $ 86,971 $ 107,681
============= ============= ============ ============
PRO FORMA EARNINGS PER SHARE $ .01 $ .02 $ .02 $ .04
============= ============= ============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 3,750,000 2,750,000 3,750,000 2,750,000
============= ============= ============ ============
</TABLE>
See Notes to Combined Financial Statements.
4
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<TABLE>
<CAPTION>
HIREL HOLDINGS, INC. AND SUBSIDIARIES
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COMBINED STATEMENTS OF CASH FLOWS
[UNAUDITED]
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SIX MONTHS ENDED
JUNE 30,
1 9 9 6 1 9 9 5
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<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 118,471 $ 172,631
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Adjustments to Reconcile Net Income to Net Cash
[Used for] Provided by
Operating Activities:
Depreciation 51,653 2,953
Amortization 44,652 --
Loss on Sale of Asset 41,574 --
Provision for Losses on Accounts Receivable 20,439 940
Changes in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable (353,158) (55,951)
Inventory (453,008) 4,058
Other Current Assets (4,432) (1,636)
Increase [Decrease] in:
Accounts Payable (198,641) 46,089
Other Current Liabilities (46,520) (30,628)
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Total Adjustments (897,441) (34,175)
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NET CASH - OPERATING ACTIVITIES (778,970) 138,456
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INVESTING ACTIVITIES:
Purchase of Property and Equipment (11,611) (109)
Proceeds from Sale of Equipment 85,000 --
Loans Receivable - Related Party (152,782) --
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NET CASH - INVESTING ACTIVITIES (79,393) (109)
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FINANCING ACTIVITIES:
Increase in Deferred Offering Costs (339,328) --
Distributions (384,317) (265,000)
Advances from Line of Credit 3,970,052 --
Repayments on Line of Credit (3,320,519) --
Advances from Related Parties 268,283 449,584
Repayments to Related Parties (93,137) (399,234)
Proceeds from Equity Sales 649,000 --
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NET CASH - FINANCING ACTIVITIES 750,034 (214,650)
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NET [DECREASE] IN CASH (108,329) (76,303)
CASH - BEGINNING OF PERIODS 558,241 88,581
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CASH - END OF PERIODS $ 449,912 $ 12,278
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</TABLE>
See Notes to Combined Financial Statements.
5
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HIREL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS
[UNAUDITED]
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[1] BASIS OF PRESENTATION
The unaudited combined financial statements as of and for the period ended June
30, 1996 give retroactive effect to the acquisition by Hirel Holdings, Inc. [the
"Company"] of all of the outstanding common stock of Hirel Marketing, Inc. [an S
corporation] ["HMI"] and Hirel Technologies, Inc. ["HTI"] on July 22, 1996. HTI
is the successor to Hirel Technologies, Ltd. ["HTL"], a limited partnership. The
financial statements of the Company will be presented on a consolidated basis
commencing July 22, 1996. Prior to that date the separate results of HMI and HTI
[including HTL as predecessor from inception on October 24, 1995] have been
combined on a basis consistent with that of consolidated financial statements in
a manner similar to a pooling of interests and giving retroactive effect to the
issuance of 2,750,000 shares of the Company's common stock to the stockholders
of HMI, and 1,000,000 shares of the Company's common stock to the stockholders
of HTI. Additionally, the S corporation and partnership equity sections of HMI
and HTL as predecessor to HTI have been reclassified to additional paid-in
capital. No adjustment of assets to "fair value" have been recorded and all
intercompany balances and transactions were eliminated. The accompanying
combined financial statements will become the historical financial statements
upon issuance of financial statements for the period subsequent to July 22,
1996.
In opinion of management, the accompanying unaudited financial statements
included in the Form 10-QSB reflect all adjustments [consisting only of normal
recurring accruals] necessary to make the interim financial statements not
misleading. The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
The following pro forma unaudited information gives effect to the results the
Company would have reflected for three months and six months periods ended June
30, 1995 had the predecessor of HTL [Cutler Induction Systems, Inc.] been
included in the combined statements of operations.
<TABLE>
THREE MONTHS ENDED SIX MONTHS ENDED
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JUNE 30, 1995 JUNE 30, 1995
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<S> <C> <C>
Net Sales - Computer Equipment $ 4,819,481 $ 11,755,184
Net Sales - Fuel Injection Systems 346,377 487,145
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TOTAL NET SALES $ 5,165,858 $ 12,242,329
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NET LOSS $ (249,406) $ (615,953)
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NET LOSS PER SHARE $ (.07) $ (.16)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 3,750,000 3,750,000
- ------------------------------------------ ============= ============
</TABLE>
For further information, refer to the financial statements and footnotes
included in the Company's Form SB-2, filed July 22, 1996.
[2] INVENTORY
The components of inventory as of June 30, 1996 are as follows:
Raw Materials $ 243,146
Work-in-Process 15,515
Finished Goods 596,213
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TOTAL $ 854,874
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HIREL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS, SHEET #2
[UNAUDITED]
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[3] INCOME TAXES
Income taxes are provided, where appropriate, on historical earnings of each
combining company. Pro forma income tax adjustments are provided to reflect an
estimate of income tax expense had the combined companies been subject to
federal and state income taxes for each period presented.
[4] EARNINGS PER SHARE
Earnings per share is based on the weighted average number of common shares
outstanding for each period presented and gives retroactive effect to the
combination discussed in Note 1. The Company does not have any common stock
equivalents outstanding.
[5] SUBSEQUENT EVENT
On July 22, 1996, the Company realized net proceeds of approximately $5,200,000
through the sale of 1,063,750 shares of common stock.
. . . . . . . . . .
7
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ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED 1996 COMPARED TO THREE MONTHS ENDED 1995
The Combined Statement of Operations [Unaudited] for the three months
ended June 30, 1996 reflects Total Net Sales of $6,500,381, and Gross Profit of
$554,266. This resulted in a Gross Profit Margin of 8.5%. Income Before Income
Taxes was $42,470, and Pro Forma Net Income of $32,470. The Combined Statement
of Operations [Unaudited] for the three months ended June 30, 1995 reflected
Total Net Sales of $4,819,481 and Gross Profit of $200,547, resulting in a Gross
Profit Margin of 4.1%. Income Before Income Taxes for the three months ended
June 30, 1995 was $80,679, and Pro Forma Net Income was $54,829.
Any comparisons between the Combined Statement of Operations [Unaudited]
for the three months ended June 30, 1996 and the three months ended June 30,
1995 must made in light of the discussion that follows. The Combined Statement
of Operations [Unaudited] for the three months ended June 30, 1996 includes the
results from operations for both of its subsidiaries, Hirel Marketing, Inc. and
Hirel Technologies, Inc. The Combined Statement of Operations [Unaudited] for
the three months ended June 30, 1995 only includes the operations of HMI, and
does not include the operations of HTI, which did not commence business (through
a predecessor entity) until October 24, 1995. The sections below compare the
operations of HMI and HTI for the three months ended June 30, 1996 and June 30,
1995 separately.
HIREL MARKETING, INC.
Hirel Marketing, Inc. ("HMI") is the subsidiary of the Company that is a
distributor of microcomputer hardware, peripherals and related communications
products. Net sales increased by $1,015,000, which is an increase of 21% during
the second quarter 1996, as compared to the second quarter 1995. Gross Profit on
computer equipment sold increased by approximately $83,000, which is an increase
of over 41%. The Gross Profit margin for the second quarter 1996 was 4.86%,
which is an increase from the Gross Profit margin of 4.16% for the second
quarter 1995.
Management believes that much of this increase in Gross Profit and Gross
Profit Margin reflects the enhanced buying opportunities available to HMI as a
result of the line of credit that was available to HMI during the second fiscal
quarter of 1996 that was not available to HMI during the second fiscal quarter
of 1995. On June 21, 1995, HMI obtained a $1,000,000 line of credit. This line
of credit is used to finance letters of credit used by HMI to purchase
inventory. The line of credit allows HMI the option of paying upon presentation
or financing the inventory purchases for up to 90 days. The line of credit
carries interest at the Citibank prime rate [8.5% at June 30, 1996] plus 2% to a
maximum of 18%. The line of credit is subject to renewal annually is
collateralized by all corporate assets and is guaranteed by Vincent Montelione.
The line of credit was increased to $2,000,000 on December 26, 1995. As of June
30, 1996, borrowings under the line of credit were $1,310,339, as compared to $0
as of June 30, 1995. Letters of credit which have not yet been
9
<PAGE>
presented for payment, are included on the financial statements under the
caption "Accounts Payable," and totaled $437,349 as of June 30, 1996, as
compared to $0 as of June 30, 1995. The interest expense associated with the
line of credit was $12,964 for the three months ended June 30, 1996. Management
intends to continue to seek favorable opportunities to purchase inventory using,
where appropriate, financing available through the line of credit.
In the second quarter 1996, total General and Administrative Expenses
attributable to HMI were $205,192. This increase of approximately $85,000 in
General and Administrative Expenses is primarily attributable to the
amortization of the loan origination costs and bank charges associated with the
line of credit (approximately $31,000) and increases in salaries and payroll
taxes (approximately $37,000).
During the quarter ended June 30, 1996, a private placement was
successfully completed whereby $500,000 was raised as additional stockholders
equity. This additional stockholders equity was obtained in large part to offset
the costs incurred in connection with the initial public offering of the
Company, which was completed on July 22, 1996. As of June 30, 1996, total
deferred offering costs were $312,940.
Income Before Income Taxes attributable to the operations of HMI
decreased from $80,679 to $72,792 for the fiscal quarter ended June 30, 1995, as
compared to June 30, 1996. This decrease is primarily the result of the
increased General and Administrative Expenses during the fiscal quarter ended
June 30, 1996. After taking into consideration certain non-recurring
amortization expenses, Management believes that HMI is continuing to grow and
remain profitable consistent with its business objectives.
HIREL TECHNOLOGIES, INC.
Hirel Technologies, Inc. ("HTI"), through its predecessor entity, Hirel
Technologies, Ltd. ("HTL") began operations on October 24, 1995. HTI is a
subsidiary of the Company that develops and sells fuel injection systems,
related components and other products designed to enhance the performance of
gasoline powered engines For the fiscal quarter ended June 30, 1996, HTI had
total revenue of $665,954, of which $385,260 came from original equipment
manufacturer ("OEM") customers and the remaining $280,694 resulted from sales to
after market purchasers. A single OEM customer accounted for approximately 44%
of revenues for the fiscal quarter ended June 30, 1996, and although the
disruption or loss of that customer may have a material adverse effect on the
total revenues of HTI, Management believes that the relationship with this and
other OEM customers will strengthen and broaden in the future.
Total General and Administrative Expenses for the fiscal quarter ended
June 30, 1996 totaled $230,161, and consisted primarily of salaries and payroll
taxes of approximately $110,000. Research and Development Expenses incurred
during the fiscal quarter ended June 30, 1996 were $71,124. Management believes
that HTI will continue to incur Research and Development Expenses as it
endeavors to develop new products and enhancements of existing products that are
consistent with
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the current product line. The loss from operations for the fiscal quarter ended
June 30, 1996, was $30,322.
While the quarter ended June 30, 1996 reflects the operations of HTI,
the comparative quarter ended June 30, 1995, does not reflect the operations of
Cutler Induction Systems, Inc., a Florida corporation ("Cutler") that originally
developed the intellectual property rights acquired by HTL from Cutler and that
is related to HTL by certain common beneficial ownership. For a complete
discussion of the acquisition of certain property rights by HTL and certain
issues related thereto, please see the Registration Statement (Form SB-2) as
filed with the Securities and Exchange Commission and effective as of July 22,
1996. As noted in footnote 1 of the Combined Financial Statements, had the
results of Cutler been included in the statement of operations for HTI for the
fiscal quarter ended June 30, 1995, the loss from operations would have been
$193,594. Net sales of Fuel Injection Systems for that period were $346,377, as
compared to $665,954 sold by HTI during the fiscal quarter ended June 30, 1996.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
The Combined Statement of Operations [Unaudited] for the six months
ended June 30, 1996 reflects Total Net Sales of $13,487,450, and Gross Profit of
$1,183,986. This resulted in a Gross Profit Margin of 8.7%. Income Before Income
Taxes was $136,171, and Pro Forma Net Income of $86,971. The Combined Statement
of Operations [Unaudited] for the six months ended June 30, 1995 reflected Total
Net Sales of $11,755,184 and Gross Profit of $412,741, resulting in a Gross
Profit Margin of 3.5%. Income Before Income Taxes for the six months ended June
30, 1995 was $172,631, and Pro Forma Net Income was $107,681.
As noted previousely, any comparisons between the Combined Statement of
Operations [Unaudited] for the six months ended June 30, 1996 and the six months
ended June 30, 1995 must made in light of the discussion that follows. The
Combined Statement of Operations [Unaudited] for the six months ended June 30,
1996 includes the results from operations for both HMI and HTI. The Combined
Statement of Operations [Unaudited] for the six months ended June 30, 1995 only
includes the operations of HMI, and does not include the operations of HTI. The
sections below compare the operations of HMI and HTI for the six months ended
June 30, 1996 and June 30, 1995 separately.
HIREL MARKETING, INC.
Net Sales of computer equipment were $12,497,056 for the six months
ended June 30, 1996, which reflects an increase of approximately $740,000 or
6.3% as compared to the six months ended June 30, 1995. The Gross Profit Margin
for the six months ended June 30, 1996 increased to 6.1%, as compared to 3.5%
for the six months ended June 30, 1995. Management believes that this increase
in Gross Profit Margin was, in part, reflective of enhanced buying opportunities
as a result
11
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of the availability of the line of credit, which is more fully described above.
The interest expense associated with the line of credit was $63,901 for the six
months ended June 30, 1996.
General and Administrative Expenses for the six months ended June 30,
1996 totaled $450,340, as compared to $240,110 of General and Administrative
Expenses incurred during the six months ended June 30, 1995. The increase in
General and Administrative Expenses was primarily attributable to the increase
in payroll and related employee taxes resulting from the increase in Net Sales
(approximately $80,000), as well as increases in rent and telephone expenses
(approximately $23,000). Further, HMI incurred certain loan orientation fees in
connection with obtaining the $1,000,000 line of credit referenced above, as
well as in connection with the increase in the line of credit to $2,000,000. The
total amount of the loan origination fees and related bank charges (and included
under General and Administrative Expenses) charged to operations during the six
months ended June 30, 1996 was $78,084.
Income before Income Taxes attributable to HMI for the six months ended
June 30, 1996 was $274,100, as compared to $172,631 for the six months ended
June 30, 1995, an increase of 58.8%.
HIREL TECHNOLOGIES, INC.
As previously noted, HTI (through its predecessor HTL) began operations
on October 24, 1995. For the six months ended June 30, 1996, HTI had total sales
of $990,394 in Fuel Injection Systems, of which $561,660 came from OEM customers
and $428,734 were from sales to after market purchasers. The Gross Profit
attributable to such systems was $416,808, a Gross Profit margin of 42%. The
General and Administrative Expenses for HTI during the six months ended June 30,
1996 totaled $426,814, and Research and Development Expenses during that time
totaled $79,936 (substantially all of which were incurred in the second quarter
of 1996). The General and Administrative Expenses consisted primarily of salary
and payroll taxes of $232,156, rent of $50,345, and depreciation of $45,990. The
total loss of HTI for the six months ended June 30, 1996, was $137,929, of which
$96,355 was the loss from operations and interest expense, and $41,574 was the
loss from the sale of a capital asset.
As noted previously, the Pro Forma Combined Statement of Operations
[unaudited] for the six month period ended June 30, 1995, does not reflect the
operations of Cutler Induction Systems, Inc. As set forth in footnote 1, had the
operations of Cutler been included in the statement of operations for HTI for
the six months ended June 30, 1995, the loss before income taxes would have been
$788,584. This compares to the loss before income taxes of HTI for the six
months ended June 30, 1996 of $137,929.
LIQUIDITY AND CAPITAL RESOURCES
Cash balances at June 30, 1996 were $449,912, an increase from the cash
balance of $12,278 at June 30, 1995. This increase as reflected on the Combined
Statement of Cash Flows [unaudited] is primarily the result of the following:
12
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Net cash used for operating activities was $778,970 for the six months
ended June 30, 1996, compared to net cash generated from operating activities of
$138,456 for the same period in 1995. This change is primarily attributable to
the increases in accounts receivable of $353,158 and inventory of $453,008, and
a decrease in accounts payable of $198,641.
Net cash used in investing activities was $79,393 for the six months
ended June 30, 1996, due largely to an increase in loans receivable-related
party of $152,782. This was partially offset by proceeds from the sale of
equipment of $85,000. There were insignificant investing activities for the same
six months ended June 30, 1995.
Net cash provided by financing activities totaled $750,034 for the six
month period ending June 30, 1996, as compared to a net use of cash from
financing activities of $214,650 at June 30, 1995. This change is the result of
proceeds from draws under the line of credit in excess of repayments on the same
line of $649,533, proceeds from equity sales of $649,000, and net related party
advances of $175,146. Net cash provided by financing activities decreased as a
result of distributions of $384,000 and expenses of $339,328 associated with the
public offering (which subsequently occurred on July 22, 1996).
HMI continues to maintain a $2,000,000 short-term line of credit with a
financial institution. Amounts outstanding under the line were $1,310,339 as of
June 30, 1996. HMI intends to repay the outstanding borrowings under the line
through normal conversion of its short-term trade assets. The Company was not
dependent upon trade terms for material, supplies and other working capital
needs incurred during the six months ended June 30, 1996.
IMPACT OF INFLATION
Inflation has not been a major factor in the Company's business since
inception. There can be no assurances that this will continue.
13
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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
Not applicable
Item 2. CHANGES IN SECURITIES.
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
Not applicable
Item 5. OTHER INFORMATION.
Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
Not applicable
14
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SIGNATURE
In accordance with requirements of the Exchange Act, the Issuer caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HIREL HOLDINGS, INC.
(Registrant)
By: /s/ VINCENT MONTELIONE
------------------------------
Vincent Montelione, President
Dated September 4, 1996
15
