UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended - September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-28772
SLOAN ELECTRONICS, INC.
(Name of Small Business Issuer in its charter)
Delaware 35-1990559
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1751 Stickney Pt,. Rd, Sarasota FL 34231
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(941)349-6583
2527 Monterey St. Sarasota FL 34231
(Former name, former address and former fiscal year if changed since
last report)
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 requirements for the past 90
days. YES [x] NO [ ]
As of September 30, 1998, the Registrant has outstanding
10,635,249 shares of Common Stock, $.001 par value.
Documents Incorporated by Reference
1. Form 10-KSB/A, filed with the Securities and Exchange
Commission on April 7, 1998.
2. Form 10-QSB, for the first quarter 1998 filed with
the Securities and Exchange Commission on May 15, 1998.
3. Form 10-QSB/A, for the second quarter 1998 filed
with the Securities and Exchange Commission on August 21, 1998.
<PAGE>
THIS QUARTERLY REPORT CONTAINS STATEMENTS WHICH CONSTITUTE
FORWARDLOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THESE STATEMENTS APPEAR IN A NUMBER OF
PLACES IN THIS QUARTERLY REPORT AND INCLUDE STATEMENTS REGARDING THE
INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY, WITH RESPECT TO
(I)THE COMPANY'S PRODUCT DEVELOPMENT AND FINANCING PLANS, (II) TRENDS
AFFECTING THE COMPANY'S FINANCIAL CONDITION OR RESULTS OF OPERATIONS,
(III)THE IMPACT OF COMPETITION AND (IV)THE EXPANSION OF CERTAIN
OPERATIONS. ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF
FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS.
Sloan Electronics, Inc.
Form 10-QSB
Quarterly Report, period ended September 30, 1998
<TABLE>
<CAPTION>
INDEX
page number
PART I Financial Information
<S> <C>
Item 1. Financial Statements
Accountants' Compilation Report 2
Balance Sheets 3
Statements Of Operations 4
Statement Of Changes In Stockholders' Equity 5
Statements Of Cash Flows 6
Item 2. Management's discussion and analysis of
financial conditions and results of operations. 7
Part II. Other Information
</TABLE>
<PAGE>
Oct. 28, 1998
TO THE BOARD OF DIRECTORS
Sloan Electronics, Inc.
Sarasota, Florida
We have compiled the accompanying balance sheets of Sloan Electronics,
Inc., as of September 30, 1998 and December 31, 1997, the related
statement of changes in stockholders' equity for the periods then
ended, and the statements of operations for the three and nine month
periods ended September 30, 1998 and 1997 and cash flows for the nine
month periods ended September 30, 1998 and 1997 in accordance with
Statements on Standards for Accounting and Review Services issued by
the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management. We
have not audited or reviewed the accompanying financial statements
and, accordingly, do not express an opinion or any other form of
assurance on them.
Management has elected to omit substantially all of the disclosures
required by generally accepted accounting principles. If the omitted
disclosures were included in the financial statements, they might
influence the user's conclusions about the Company's financial
position, results of operations, and cash flows. Accordingly, these
financial statements are not designed for those who are not informed
about such matters.
Bobbitt, Pittenger & Company, P.A.
Certified Public Accountants
<PAGE>
Part I Financial Information
Item 1. Financial Statements
SLOAN ELECTRONICS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30 Dec. 31
1998 1997
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $26,667 $ 3,936
Accounts receivable 45,906 89,732
Inventory 20,545 10,151
Due from officer 33,565 33,565
_______ ________
TOTAL CURRENT ASSETS 126,683 137,384
PROPERTY AND EQUIPMENT
Computer equipment 4,638 3,735
Less accumulated depreciation (2,544) (1,848)
________ _______
2,094 1,887
OTHER ASSETS AND INTANGIBLES
Research and development, (less accumulated
amortization of $31,973 and $21,315) 39,076 49,735
Deferred offering costs, (less accumulated
accumulated amortization of $30,243 and 41,040 49,897
$21,385) _______ ______
80,118 99,632
$ 208,880 $ 238,903
========= =========
</TABLE>
See accountants' compilation report.
<PAGE>
<TABLE>
<CAPTION>
Sept. 30 Dec.31,
1998 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 118,456 $ 124,586
Accrued expenses 21,530 21,530
_________ _______
TOTAL CURRENT LIABILITIES 139,986 146,116
Interest payable 54,319 36,384
Due to stockholders 160,000 160,000
Due to other 15,000 15,000
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value
20,000,000 shares authorized
none issued or outstanding
Common stock, $.001 par value,
80,000,000 shares authorized,
shares issued and outstanding,
10,635,249 at Sept. 30, 1998
and 9,189,699 at Dec. 31, 1997 280,240 278,792
Paid-in capital 392,577 165,942
Retained earnings (deficit) (833,227) (563,331)
________ _______
TOTAL STOCKHOLDERS' EQUITY (160,410) (118,597)
________ _______
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY (DEFICIT) $ 208,895 $ 238,903
========== =========
</TABLE>
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS NINE MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
SEPT 30 1998 SEPT 30 1998 SEPT 30 1997 SEPT 30 1997
<S> <C> <C> <C> <C>
REVENUE $74,892 37,006 99,786 57,661
COST OF GOODS SOLD 40,596 20,672 101,554 65,593
_______ _______ _______ _______
GROSS PROFIT 34,296 16,334 (1,768) (7,932)
EXPENSES
Selling 1,058 88 17,689 4,879
General & administrative 303,134 104,614 205,276 78,340
_______ _______ _______ _______
304,192 104,702 222,965 80,219
NET LOSS (269,896) (88,368) (224,733) (88,151)
========= ========= ========= ========
NET LOSS PER COMMON SHARE $(.027) (.008) (.068) (.027)
</TABLE>
See accountants' compilation report.
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Common Stock Paid-in Retained
Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
BALANCE,
Dec 31, 1997 9,187,389 $278,792 $165,942 $(563,331) $(118,597)
Prior period
adjustment 2,310 2 (2)
_________ ________ ________ __________ _________
Restated balance
Dec. 31, 1997
9,189,699 278,794 165,940 (563,331) (118,597)
SALE OF COMMON
STOCK 225,000 225 64,775 65,000
Stock issued
for services 110,550 111 10,889 11,000
Stock subscribed
in connection with
private placement
offering
1,000,000 1,000 99,000 100,000
Stock issued upon
conversion of
note payable 110,000 110 51,973 52,083
NET LOSS (269,896) (269,896)
_______ ______ ______ ________ ________
BALANCE,
Mar 31, 1998
10,635,249 $280,240 $392,577 $(833,227) $(160,410)
</TABLE>
See accountants' compilation report.
<PAGE>
SLOAN ELECTRONICS, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
<TABLE>
<CAPTION>
Sept 30,
1998 1997
CASH FLOWS USED BY OPERATING ACTIVITIES
<S> <C> <C>
NET LOSS $(269,896) $(224,733)
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED BY OPERATING ACTIVITIES
Depreciation and amortization 25,485 12,908
Noncash disbursements 11,000
Accrued interest converted to stock (2,083)
Decrease in accounts receivable 43,826 6,786
Increase/Decrease in inventory (10,394) 15,188
(Decrease)increase in accounts payable
and accrued expenses ( 7,239) 91,174
Increase in interest payable 17,935 5,094
_______
NET CASH USED BY OPERATING ACTIVITIES (191,366) (93,583)
_______ _______
CASH FLOWS USED BY INVESTING ACTIVITIES
Purchase of property and equipment (903)
_______
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 165,000 20,000
Borrowings from an individual 50,000 50,000
_______ ________
NET CASH PROVIDED BY FINANCING ACTIVITIES 215,000 70,000
_______ ________
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 22,731 (23,583)
CASH AND CASH EQUIVALENTS,
beginning of period 3,936 25,867
CASH AND CASH EQUIVALENTS,
end of period $ 26,667 $ 2,284
======== ======
SUPPLEMENTAL DISCLOSURE:
Non cash financing activities:
Issuance of common stock for services $ 11,000 $ 8,500
========= =======
Conversion of npte payable to
commom stock 52,083
=========
Interest paid $ 562
========
</TABLE>
See accountants' compilation report.
<PAGE>
Part I. Item 2. Description of business and management's discussion
GENERAL
Sloan Electronics, Inc. (the "Company") designs, manufacturers and
markets electronic monitoring equipment primarily for the criminal
justice industry and the long-term health care industry. The Company
markets its house arrest monitoring equipment through its in-house
marketing department, and currently distributes its products
through national service providers. The Company's medical division
has distribution agreements with Response USA, a distributor of
personal emergency response systems and with King Alarm, a security
product distributor.
The Company's revenue consist primarily from product sales. Based
on a written agreement, the Company will receive recurring payments
from Response USA based on a percentage of their service revenue.
During third quarter of 1998 the Company did not generate any
revenue from recurring payments.
MAS Acquisition I Corp. (the "Company"), was incorporated on July 31,
1996 in the State of Delaware, to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and
acquisitions. On December 5, 1997, pursuant to the terms of an
Agreement of Merger (the "Agreement") between the Company and Sloan
Electronics, Inc. ("Sloan"), Sloan has merged into the Company and the
Company has changed its name to Sloan Electronics, Inc. Pursuant to the
terms of the merger Agreement, 3,561,500 shares of Common Stock of
Sloan was converted into 8,227,070 shares of Common Stock of the
Company at the conversion rate of 2.31. In addition, the Company has
accepted the return of, and cancelled, 7,680,083 shares of Common Stock
issued to MAS Financial Corp. and issued 91,102 shares of Common Stock
as finder's fee, which was paid by MAS Financial Corp.
PRODUCTS
The Company offers a full range of electronic monitoring equipment for
the criminal justice system's house arrest corrections programs and for
the medical industry's long-term health care providers. The Company
strikes a balance between its ability to provide solid, state-of-the-
art, high-quality products and its ability to retail these products at
the lower end of the industry's pricing spectrum.
The concept behind the Company's product line is that each product is
able to stand alone, without after-market equipment such as door
sensors or additional custom wiring, yet each product is integratable
with anumber of pre-existing computer software programs. This
philosophy of integration makes the Company's SEI Alert products and
Wander Watch products more attractive to institutional consumers.
<PAGE>
The SEI Alert 24 Single Offender Based System. A tamper-proof
transmitter is custom-fitted and attached to an offender's ankle. This
anklet is waterproof and designed to be worn at all times. A home-based
receiver is placed in a central location within a residence, and a
range setting is selected. In the event that the anklet is removed, or
that the person wearing it strays outside the predetermined range, the
event is recorded, time and date stamped, and sent to an outside
monitoring station within 60 seconds' time. The current industry
average time window is over 8 minutes.
The SEI Alert 24 Half-Way House Multi-Residence System. Each person
paroled to a half-way house is fitted with an anklet transmitter. The
receiver then monitors the movements of each client within the pre-
determined parameter of the half-way house and records any and all
violations. This system can work as a stand-alone measure with the
current data sent via a telephone line to monitoring station, or can
also work as an in-house employee monitoring station. The system is
designed to monitor from 1 to 50 offenders.
The SEI Alert 24 Drive-By Transmitter Detector. This device is
designed for use by parole officers, probation officers or security
officers. This mobile surveillance system allows an officer to check
up on a house arrest client simply by driving past this person's
residence, work place or school. The system detects and displays the
ID of a particular offender by interfacing with that person's anklet
transmitter. The receiver unit time an date stamps the information
collected, and it can also upload this information to a central
computer.
The SEI Alert 24 Chain Gang / Work Release Departure Alert System. Each
inmate is fitted with an anklet transmitter. A single guard mans the
portable programmable receiver unit which alerts the officer in the
event that an offender, or group of offenders, leaves the general area.
This system is currently available for sale.
The Wander Watch Single Patient System. A custom fitted, tamper-proof
anklet is attached to a patient's leg. It is completely waterproof
and designed to be worn at all times, including bathing and swimming.
The micro-transmitter in the anklet sends a coded silent radio signal
to the home receiver, which in turn measures the strength of those
signals
and calculates the distance the patient is from the base unit. An alarm
will sound when the patient travels beyond the selected range or if the
anklet is removed.
The Wander Watch Multi-Patient Wander Alert System.
A computer-based system specifically designed for placement within a
medical facility, the Multi-Patient Alert System is able to notify a
care giver in the event of a patient departure from a long-term
healthcare facility. It was originally configured to monitor the
movements of 1 to 25 patients. Unlike most wander alert systems
installed in a medical facility, the Wander Watch system stands alone
and does not require custom electrical wiring, installation of door
sensors or the use of door barrier detection equipment.
<PAGE>
Fleet Watch Alert 24. This radio frequency reporting system allows a
company to passively keep tract of its fleet vehicle traffic. Every
time a fleet vehicle drives onto or off the company property, the
event is date and time stamped automatically. This enables a company
to keep track of employee hours, vehicle use and vehicle status
instantly. The Fleet Watch computerized base unit is fully
integratable with other computer software, allowing the unit to
generate vehicle status reports on demand. No longer is it necessary
for a company to assign an employee the duty of physically counting
each vehicle on the lot. Fleet Watch is being evaulated in field
conditions by the Sarasota County, Florida, Transportation
Deptartment.
Nurse Call Alert 24. A wireless nurse call system with a 500 resident
capacity, which can be installed in less than 30 minutes. This system
utilizes fail-safe technology, provides coverage of any sized facility,
outputs usage reports and provides for a complete audit trail. The
system's advanced features include an automatic signal check, low
battery reporting and an optional range extender. The system can
function as a nurses' call network or it can complement an optional
paging system to direct staff to medical emergencies in a more timely
and efficient manner. This system is currently available for field
trials.
The SEI Alert 24 Automated Check In System. A kiosk for the criminal
justice industry to facilitate the "day reporting" of criminals on
probation or parole. Client is verified using hand print technology,
listens to a specific message from the parole officer and replies using
a telephone handset and tone pad. The system can collect restitution
money and issues a receipt to the offender showing check in details and
payments. The system interfaces with a computer that can generate
various reports. As a case management tool it assists a parole officer
in managing the growing number of inmates released into supervision
programs. It is currently in filed trial in Washington state for the
Department of Corrections. The Company is pursuing license agreements
with prospective customers.
INDUSTRY BACKGROUND
The Corrections Industry. The United States currently locks up a
greater share of its residents than any other nation. According to the
US Department of Justice there were 3.5 million people on probation or
parole at year end 1995, and the estimated 5.5 million total in the
correctional population equals 2.8% of US adults and is growing at 4.5%
per year. As of June 30, 1995, there were 1,004,608 state prison
inmates, up 9.1%, and 99,466 federal inmates, up 6.1%. The annual
average increase in the prison population since 1980 has been 8.7% per
year.
The Criminal Justice System regards house arrest as an acceptable
alternative to incarceration for its nonviolent segment of the prison
population, and as a better way to monitor violent criminals once they
are paroled to a half-way house facility. The public's insistance on
increased law enforcement along with their reluctance to fund
additional prisions also makes house arrest using electronic assisted
monitoring systems an increasingly attractive alternative to
incarceration.
<PAGE>
The Medical Industry. A patient's compulsive desire to wander about is
a symptom of dementia, which often accompanies Alzheimer's Disease.
Biologically, this is caused by physical changes in the brain.
Oftentimes the patient acts out of routine, such as the repetitive
action of getting ready to leave for work every day. Sometimes the
patient just feels tense or trapped and wants to escape his
environment. Until recently, standard medical practice was to heavily
sedate these patients, or to restrain a patient to a chair or bed to
keep them from wandering. Today, hospitals and institutions maintain
separate facilities to enable them to better deal with patients who
demonstrate a compulsive desire to wander about. However, the huge
costs associated with institutionalized care, along with its impersonal
nature, make at-home care an important option for many families. Of the
4 million currently diagnosed with Alzheimer's, 3 million live at home,
cared for by family, visiting aides, and nurses supplied by the
estimated 18,000 at-home care agencies which are projected to grow 30%
every two years. The Sloan electronic Wander Watch Alert 24 systems are
designed to help at-home caregivers and institutions safeguard patients
prone to wandering.
The US Administration on Aging projects as many as 14.3 million
Alzheimer's cases by 2040. The Company believes that the long-term
healthcare segment of the medical industry is growing at an increasing
rate. The Sloan Electronice Wander Watch Alert 24 Multi-Patient system
is designed for long term care facilities. The Company also believes
that the home-care segment of the healthcare market is growing at a
steady rate. The Wander Watch Alert 24 Single Patient System is
specifically designed to meet the needs of the more than 3 million
Alzheimer's patients and patients with related medical disorders, who
are cared for at home.
BUSINESS STRATEGY
The Company's business strategy is based on establishing a market share
within the criminal justice house arrest industry and within the
healthcare industry. By Incorporating better, more cost-effective
technology into its SEI Alert 24 product line and its Wander Watch
products, the Company believes that its products are among the best
currently available in these two industries.
Management has defined the Company's role as that of primarily a
research, development and manufacturing entity. Management plans to
continue to market directly to the criminal justice industry, while
relying on distributors such as KingAlarm and Response USA to market
its Wander Watch healthcare product line.
High-Quality Image. The Company believes that within the house arrest
industry, the Company has built a reputation for developing and
manufacturing one of the best, cost-effective and user-friendly
systems on the market.
<PAGE>
The Wander Watch products and the SEI Alert 24 products reflect the
Company's commitment to quality. The Company pursues the highest
standards in its design, component selection, assembly and appearance
of its products. The Company recognizes that product dependability and
reliability are highly significant to the Company's continued success.
Therefore, quality control plays an important role in the Company's
business strategy.
Focus on Private Residence. The Wander Watch product line and the SEI
Alert 24 product lines are both specifically designed to be used in a
private home, apartment or townhouse. Ease-of-use and stand-alone
features inherent to both products give the Company a competitive
advantage in these areas.
The Wander Watch Single Patient System is both affordable and easy to
install. The receiver unit plugs into a standard outlet. Unlike most
competitive products, this is all that is required to install and
operate the products; doors do not need to be wired with sensors. There
are no wires or barriers associated with the products. This stand-alone
concept runs contrary to the current industry thinking. Management
believes that this concept is one of the reasons that makes the
Company's product line more attractive to the consumers.
Customer Service and Support. Sloan Electronics believes that its
relationship with its dealers and its consumers has contributed
significantly to its past success and should continue to enhance its
future prospects. The Company's ability to upgrade its equipment in the
field not only gives the Company a competitive advantage within the
industry, but also allows it to focus on up-selling and upgrading its
product line.
PRODUCT DESIGN AND DEVELOPMENT
The Company is continuously engaging in electronic component research,
design, experimentation and development, all of which are essential to
maintaining a competitive advantage in the market place. The overall
product development is managed and directed by Paul Sloan, President of
the Company. In addition, on project-by-project basis, a product
development team is assembled from personnel within the Company and may
include personnel outside the Company as well.
The Company's product development team is responsible for developing
working designs of all approved product concepts using computer-aided
design systems, and for coordinating all modeling and initial
prototyping. The in-house testing department evaluates all prototypes.
The Company then creates the full documentation to build its products
and designs all of its circuitry artwork. Complete product
specifications and blue-printed product designs are then sent to
Kimchuk Inc., which prints the circuit-boards, assembles, tests,
performs quality control inspections to rigid standards, packages and
finally drop-ships the Company's products to its distributors or
directly to its customers.
<PAGE>
The Company believes that investment in product development, and its
relationship with Kimchuk, enables it to reduce prototype development
time substantially. The Management believes that this shortened lead
time enhances the Company's ability to place new products in
distribution, which strengthens its competitive position.
SALES AND MARKETING
The Company's marketing strategy varies based upon each product line.
With regard to the criminal justice house arrest market, the Company
plans to continue aggressively markets its SEI Alert 24 products to
independent service providers and to municipalities which monitor and
administer their own house arrest programs. The Company has licensed
its Wander Watch Alert 24 single patient departure alert system for
exclusive distribution to the long term health care industry to
Response USA, a major company in the PERS (Personal Emergency Response
System) industry. Response USA leases Wander Watch Alert 24 single
patient systems on a monthly basis to individual users and to home care
agencies. The Company has turned over distribution of the Wander Watch
Alert24 single patient departure alert systems for exclusive sales to
the security industry to KingAlarm, a major independent distributor of
security and related low voltage products. Marketing strategies and
distribution decisions concerning other products are
handled on a product-by-product basis.
SEI Alert 24 Products. The criminal justice house arrest market is
dominated by two manufacturers who, along with retailing their
products, are also contract service providers who compete in the
security industry. These manufacturers have developed proprietary
software which is not currently integratable with standard, existing
security company protocol. Their software are not as effective or user-
friendly as security industry software. However, these manufacturers
look upon this proprietary software as a way to shut small security
companies out of a lucrative market.
Based on current trends, management believes that within 5 years, 80%
of the municipalities who currently monitor their own house arrest
program will get out of the business. Independent security contractors
will be competing directly against these two manufacturers for service
contracts. The Company is in the position to market its fully
integratable home incarceration system to these security providers,
thus leveling the playing field within the house arrest industry.
<PAGE>
The Wander Watch Products. The Company views its corporate role as that
of developer, designer and manufacturer. To that end, the Company has
negotiated and signed contracts with Response USA and King Alarm to
distribute its Wander Alert detection equipment. Response USA leases
the systems to individuals and home care agencies and offers central
station monitoring of the Wander Watch Alert 24 units for an additional
monthly fee. The company has a recurring revenue sharing arrangement
with Response USA. To date, the Company has not received any income
from recurring monthly fees. Response USA has four regional offices
servicing all 50 states and markets to home care agencies, hospitals,
adult day care facilities, as well as individuals. Response USA
receives payment for the Wander Watch system both from end users and
various state and local agencies. Currently reimbursements include
Milwaukee, Pennsylvania, Department of Aging waiver program, Rhode
Island Department of Aging, partial reimbursement from local
California programs and partial reimbursement from New York local
programs. Reimbursement is pending in Massachusetts, and Response USA
is seeking other state and local agencies to approve the systems for
reimbursement. There is no assurance that other reimbursements will be
obtained or those in place will continue. Response USA also receives
referrals from the National Alzheimer Association and participates in
their Safe Return program. King Alarm has name recognition throughout
the security industry, and is a major supplier for security experts
and consultants, with ten regional warehouse sales centers. King
Alarm sponsors over 200 New Horizons technical and sales training
seminars annually, and hosts the King Alarm Expo, a two-day trade
exposition annually.
Advertising. The Company has advertised in trade publications specific
to the markets it manufacturers products for, and in journals which
test its products and publish company-by-company product comparisons.
The Company is constantly seeking out innovative ways to build name
recognition within the industries in which it competes, as well as to
create public awareness for its product line. The Company maintains a
web site at www.seialert24.com .
COMPETITION
The Company competes in a number of niche markets, which the Company
believes will continue to grow.
House Arrest Market. The Company's competitors within the criminal
justice market include BI Incorporated and Strategic Technologies, Inc.
Although all of the Company's manufacturing house arrest products base
their products on the same principals, management believes that the
Company has competitive advantages over its competitors within this
industry.
<PAGE>
1. the SEI Alert 24 product line uses a 900 MHz spread spectrum radio
frequency rather than the standard 300 MHz frequency. This difference
in technology is similar to the technological differences which exist
between cordless phones. Phones using 900 MHz radio frequencies are far
superior to those less expensive models which experience interference
problems due to the fact that they operate at 300 MHz frequency.
2. the SEI Alert 24 products have an exclusive low range setting on the
receiver unit, which ensures that house arrest means house arrest and
not neighborhood arrest. With other systems, an offender could wander
the neighborhood and still not trip the distance setting on the base
unit. The industry standard low range setting is a 150 foot perimeter.
SEI's low range setting is between 40 and 60 feet.
3. With competitors' equipment, the "window" from the time an offender
steps outside the range setting until he is detected as being outside
the range setting varies from 6 to 30 minutes. With some systems, an
offender is able to leave his residence for that period of time and
return undetected. The SEI Alert 24 system greatly improves performance
and offers an exclusive 1 minute radio frequency window.
4. The SEI Alert 24 anklet transmitter is tamper resistant. No tamper
system currently available is 100% tamper proof or false alarm proof;
however, the SEI Alert 24 system is the most reliable on the market
when it comes to false alarms. A false alarm necessitates a physical
inspection of the anklet transmitter by a monitoring officer;
therefore, this fact is viewed as a major selling point among security
providers.
5. The SEI Alert 24 product line has been designed to allow security
companies access to one of the fastest growing segments of the
industry: electronic home incarceration. The use of abusive pricing
policies and proprietary software, software which makes the security
industries central station equipment incompatible, have worked together
to keep small independent contractors out of the market. Using the
Company's products, these security companies are now able to compete
with BI Incorporated and Strategic Technologies for municipal contracts
on an even footing. Unlike other manufacturers, the Company does not
compete against its customers in the contract monitoring business.
Long-Term Healthcare Market. The Company's competition in this market
includes WanderGuard, Code Alert, Watchmate and Secure Care Products.
All of these companies utilize proximity sensing technology, which
requires that a patient wearing a low powered transmitter which sends a
weak signal. A receiver is mounted at each door. When a patient
approaches the door, an alarm sounds and the door magnetically locks.
The Company's Wander Watch Alert 24 technology has a competitive
advantage over the industry's proximity-sensing systems since it
requires no additional wiring of door sensors and it provides a higher
level of patient security.
<PAGE>
1. With competitive products, the transmitter attached to a patient has
no removal alert (an inherent part of the Wander Watch systems). These
transmitters are attached with a hospital ID type band. Common behavior
for an Alzheimer's patient, or other patients suffering from dementia,
is to try to remove everything from their bodies. The Wander Watch
anklet, if removed, activates an alarm at the receiver unit.
2. Proximity-sensing technology requires the installation of barriers,
door sensors and magnetic locks. Prices per door range from $2,500 to
over $5,000, with the average facility having anywhere between four and
ten doors. Automatic door locks also create problems with existing fire
alarms and fire regulations, for in the event of a fire, the proximity
technology needs to be deactivated.
3. The Wander Watch system utilize 900 MHz spread spectrum radio
frequency technology, a tamper-resistant anklet transmitter with a
tamper alarm, and sells its products at a price below that charged by
the competition.
The Fleet Watch Alert 24. The Fleet Watch system is another unique
product of the Company. The Company believes that no other company
offers a fully integratable passive monitoring system for fleet
vehicles. This system is able to generate full vehicle status reports
on demand, confirm employee hours of vehicle operation and continuously
monitor the comings and goings of fleet vehicles. This tamper resistant
monitoring system installs in less than 30 minutes, ends unapproved
vehicle use and provides a complete audit trail and other necessary
usage reports for each vehicle in a company's fleet. This unit has been
successfully tested on a fleet of concrete trucks, and will be field
evaulauted by the Sarasota FL xxxxx.
The Nurse Call Alert 24. A fully supervised 900 MHz spread spectrum
wireless nurse call system is yet another innovation by the Company.
The Company believes that this system is among the best wireless
security system available, with unique features such as automatic
signal check and low battery reporting. With the systems optional
range extenders, any sized facility may be monitored. Another unique
integratable option is the paging system which assists in quicker
response times by staff.
MANUFACTURING AND ASSEMBLY
The Company manufacture all of its products in the USA. Kimchuk Inc.,
the Company's primary contract manufacturer has many years of
experience as an electronics manufacturer and designer. Kimchuk
manufacturers over 500 different products at its four plants located
through out the east coast.
The Company's relationship with Kimchuk allows it to reduce its
production costs, to reduce its final testing costs and to reduce its
personnel costs. The Company designs all of its products with automatic
insertion and automatic testing in mind. This attention to detail
enables Kimchuk to manufacture and assemble the Company's products in
the most cost-efficient manner, while maintaining accuracy in circuit
board production and error-free transfer and component connections.
<PAGE>
Product Warranties. The Company supports its products with a limited 1-
year warranty which covers all defects in materials or workmanship. the
Company will repair or replace defective units without charge to the
consumers for labor or materials. The Company's service department acts
as liaison between the customer and Kimchuk and works aggressively to
resolve any and all problems a customer may have with any of its
products. The Company has not experienced a material level of product
warranty claims for breakage or
other defects.
FUTURE PRODUCTS
The Company continues to look for new ideas for development of new
products. The Company believes that new products could represent
substantial new business for the Company.
GOVERNMENT REGULATION
The Company's facilities are subject to numerous federal, state and
local laws and regulations designed to protect the environment from
waste emissions and hazardous substances. The Company is also subject
to the Federal Occupational Safety and Health Act and other laws and
regulations effecting the safety and health of employees in the
administrative and manufacturing areas of its facilities. The Company
believes that is is in compliance in all material aspects with all
applicable environmental and occupational safety regulations. The
Company's radio frequency anklet transmitter are subject to FCC
(Federal Communications Commission) regulations, as are all radio
frequency devices. The Company has obtained type approval #HCQ3B6WWT
for the anklet transmitter and its products are in compliance with FCC
rules Part 15.
YEAR 2000
The Company's products and operations are year 2000 compliant.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS.
The following discussion should be read in conjunction with the
information contained in the financial statements of the Company, and
the Notes thereto appearing elsewhere herein, and in conjunction with
the Balance Sheet at December 31, 1997 and Income Statement for the
year ended December 31, 1997 contained in the Company's Annual Report
10-KSB and in conjunction with the quarterly 10-QSB reports for the
periods ended March 31, 1998 and June 30, 1998, incorporated herein
by reference, and is qualified in its entirety by reference to such
financial statements.
RESULTS OF OPERATIONS
A majority of the Company's revenues are derived from sales of
electronic monitoring devices to the long term health care and
criminal justice industry. Sales revenues are recognized when
the products are shipped.
Operating revenues decreased by $20,655 (35%) for the quarter
ended September 30, 1998 as compared to the quarter ended September 30,
1997. The decrease is due in part to a major distributor (Response
USA) taking delivery of approximately 500 units of WanderWatch Alert
24 systems in December of 1997 in anticipation of their future needs.
Gross profit for the third quarter of 1998 increased to $16,334
compared to ($7932) for the third quarter of 1997. The increase is due
in part to better margins in this quarter due to manufacturing
efficiency, and higher costs of manufacture in the third quarter of
1997 due to start up costs and a percentage of sales of spares and
parts, which have a lower markup.
Selling, general and administrative expenses were $104,614 in the
first quarter of 1998, compared to $80,219 for the third quarter of
1997. This represents an increase of 30% over selling, general and
administrative expenses for the third quarter of 1997. The increase
is in part due to increased insurance costs, interest costs,
professional fees, commissions, and contract services and expenses
involved with the merger of Sloan Electronics Inc. (FL) with MAS
Acquisition I Corp., becoming Sloan Electronics Inc. (DE). Sales and
marketing expenses declined from $4,879 for the quarter ended
September 30, 1997 to $88 for the third quarter of 1998, for a
decrease of 99%. Sales and marketing expenses declined due to the
Company's strategy to grow by working closely with major distributors
who absorb sales and marketing costs. General and administrative
expenses rose from $74,340 for the third quarter of 1997 to $104,702
in the third quarter of 1998, representing an increase of 40%. The
increase in general and administrative expenses was caused by
increased insurance costs, interest costs, professional fees and
contract services and are in part due to expenses involved with the
merger of Sloan Electronics Inc. (FL) with MAS Acquisition I Corp.,
becoming Sloan Electronics Inc. (DE).
The net loss for the quarter ending September 30, 1998 was
$88,368, or $0.008 per share based on 10,635,249 shares outstanding,
as compared to a net loss for the first quarter of 1997 of $88,151, or
$0.027 per share. The net loss for the period is primarily attributed
to insufficient level of revenue generated by the Company.
LIQUIDITY AND CAPITAL RESOURCES.
Net cash provided from financing activities was $215,000 for the
nine months ended September 30, 1998, raised through private placement
of common stock and borrowing.
The Company has no material commitments for capital expenditures
during the next quarter and believes that its current cash and working
capital position and future income from operations will be sufficient
to meet its cash and working capital needs.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities
On July 22, 1998 the Board of Directors approved the repeal of Article
I Amendment item "8. Preemptive Rights" from the Bylaws of the Company.
This amendment allowed for shareholders to maintain percentage of
ownership by purchasing additional shares in the event that more stock
of the same class were issued by the corporation.
Item 3. Defaults.
None
Item 4. Submission Of Matters To A Vote Of Security Holders.
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EX 3.(ii) Bylaws as Amended July 22, 1998
EX 27 Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
Signatures
In accordance with the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SLOAN ELECTRONICS, INC.
Dated November 12, 1998
By: /s/ Paul Sloan
Paul Sloan
President and CEO
By: /s/ Larry Provost
Larry Provost
Chairman and CFO
<PAGE>
BY - LAWS
OF
Sloan Electronics, Inc.
ARTICLE I
1. Share Certificates. Certificates in such form as may be
determined by the Board of Directors shall be delivered, representing
all shares to which Shareholders are entitled. Certificates shall be
consecutively numbered and shall be entered in the books of the
Corporation as they are issued. Each certificate shall state on the
face thereof that the Corporation is organized under the laws of the
State of Delaware, the holder's name, the number and class of shares,
the par value of such shares or a statement that such shares are
without par value, and such other matters as may be required by law.
They shall be signed by the President or a vice-president and either
the Secretary or Assistant Secretary or such other Officer or Officers
as the Board of Directors designates, and may be sealed with the Seal
of the Corporation or a facsimile thereof. If any certificate is
countersigned by a transfer agent, or an assistant transfer agent, or
registered by a registrar (either of which is other than the
Corporation or an employee of the Corporation), the signature of any
such Officer may be a facsimile thereof.
Shares both treasury and authorized but unissued may be
issued for such consideration (not less than par value) and to such
persons as the Board of Directors determines from time to time. Shares
may not be issued until the full amount of the consideration, fixed as
provided by law, has been paid. In addition, Shares shall not be
issued or transferred until such additional conditions and
documentation as the Corporation (or its transfer agent, as the case
may be) shall reasonably require, including without limitation, the
delivery with the surrender of such stock certificate or certificates
of proper evidence of succession, assignment or other authority to
obtain transfer thereof, as the circumstances may require, and such
legal opinions with reference to the requested transfer as shall be
required by the Corporation (or its transfer agent) pursuant to the
provisions of these Bylaws and applicable law, shall have been
satisfied.
2. FRACTIONAL SHARE INTERESTS OR SCRIP. The corporation may, when
necessary or desirable in order to effect share transfers, share
distributions or reclassifications, mergers, consolidations or
reorganizations, issue a fraction of a share, make arrangements or
provide reasonable opportunity for any person entitled to a fractional
interest in a share to sell such fractional interest or to purchase
such additional fractional interests as may be necessary to acquire a
full share, pay in cash the fair value of fractions of a share as of
the time when those entitled to receive such fractions are determined,
or issue scrip in registered or bearer form, over the manual or
facsimile signature of an officer of the corporation or its agent,
which shall entitle the holder to receive a certificate for a full
share upon the surrender of such scrip aggregating a full share. A
certificate for a fractional share shall, but scrip shall not unless
otherwise provided therein, entitle the holder to exercise voting
rights, to receive dividends thereon and to participate in any of the
assets of the corporation in the event of liquidation.
<PAGE>
The Board of Directors may cause scrip to be issued subject to the
condition that it shall become void if not exchanged for certificates
representing full shares before a specified date, or subject to the
condition that the shares for which scrip is exchangeable may be sold
by the corporation and the proceeds thereof distributed to the holders
of scrip, or subject to any other conditions which the Board of
Directors may deem advisable. Such conditions shall be stated or
fairly summarized on the face of the certificate.
3. SHARE TRANSFERS. Upon compliance with any provisions
restricting the transferability of shares that may be set forth in the
Articles of Incorporation, these By-Laws, or any written agreement in
respect thereof, transfers of shares of the corporation shall be made
only on the books of the corporation by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation, or with a
transfer agent or a registrar and on surrender of the certificate or
certificates for such shares properly endorsed and the payment of all
taxes thereon, if any. Except as may be otherwise provided by law, the
person in whose name shares stand on the books of the corporation shall
be deemed the owner thereof for all purposes as regards the
corporation; provided that whenever any transfer of shares shall be
made for collateral security, and not absolutely, such fact, if known
to the Secretary of the corporation, shall be so expressed in the entry
of transfer. The corporation shall refuse to register any transfer of
securities unless made in accordance with the registration or exemptive
provisions of the Securities Act, or in accordance with Regulation S.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment
of any dividend, or in order to make a determination of shareholders
for any other purpose, the Board of Directors of the corporation may
provide that the stock transfer books shall be closed for a stated
period but not to exceed, in any case, sixty days. If the stock
transfer books shall be closed for the purpose of determining the
shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in
any case to be not more than sixty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the
particular action, requiring such determination of shareholders, is to
be taken. If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to notice
or to vote at a meeting of shareholders, or shareholders entitled to
receive payment of a dividend, the date on which notice of the meeting
is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the
record date for the determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, the
determination shall apply to any adjournment thereof, unless the Board
of Directors fixes a new record date under this section for the
adjourned meeting.
<PAGE>
5. MEANING OF CERTAIN TERMS. As used herein in respect of the
right to notice of a meeting of shareholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu
of a meeting, as the case may be, the term "share" or "shares" or
"shareholder" or "shareholders" refers to an outstanding share or
shares and to a holder or holders of record of outstanding shares when
the corporation is authorized to issue only one class of shares, and
said reference is also intended to include any outstanding share or
shares and any holder or holders of record of outstanding shares of any
class upon which or upon whom the Articles of Incorporation confer such
rights where there are two or more classes or series of shares or upon
which or upon whom the General Corporation Act confers such rights
notwithstanding that the Articles of Incorporation may provide for more
than one class or series of shares, one or more of which are limited or
denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
- - TIME. The annual meeting shall be held on the date fixed from time
to time by the directors. A special meeting shall be head on the date
fixed from time to time by the directors except when the General
Corporation Act confers the right to call a special meeting upon the
shareholders.
- - PLACE. Annual meetings and special meetings
shall be held at Croton-on-Hudson, NY or at such place within or
without the State of Florida as shall be stated in the notice of any
such meeting.
- - CALL. Annual meetings may be called by the directors or the
President or the Secretary or by any officer instructed by the
directors or the President to call the meeting. Special meetings may
be called in like manner or by the holders of at least one-tenth of the
shares.
- - NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written notice
stating the place, day and hour of the meeting and, in case of a
special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten days (or not less than any
such other minimum period of days as may be prescribed by the General
Corporation Act) nor more than sixty days before the date of the
meeting, either personally or by first class mail, by or at the
direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder. The notice of any annual or
special meeting shall also include, or be accompanied by, any
additional statements, information, or documents prescribed by the
General Corporation Act. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer books of
the corporation, with postage thereon prepaid.
<PAGE>
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and
place to which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, and at the adjourned meeting any
business may be transacted that might have been transacted on the
original date of the meeting. If, however, the Board of Directors
shall fix a new record date for the adjourned meeting, notice of the
adjourned meeting shall be given each shareholder of record on the new
record date. Whenever any notice is required to be given to any
shareholder, a waiver thereof in writing signed by him, whether before
or after the time stated therein, shall be the equivalent to the giving
of such notice. Attendance of a shareholder at a meeting shall
constitute a waiver of notice of the meeting, except where the
shareholder attends the meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
- - VOTING LIST. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten
days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting or any adjournment
thereof, with the address of and the number and class and series, if
any, of shares held by, each. Such list, f or a period of ten days
prior to such meeting, shall be kept on file at the registered office
of the corporation in the State of Florida, at the principal place of
business of the corporation or at the office of the transfer agent or
registrar of the corporation and shall be subject to inspection by any
shareholder at any time during usual business hours. Such list shall
also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder at any time
during the meeting. The original stock transfer books shall be prima
facie evidence as to who are the shareholders entitled to examine such
list or transfer books or to vote at any meeting of shareholders.
- - CONDUCT OF MEETING. Meetings of the shareholders shall be presided
over by one of the following officers in the order of seniority and if
present and acting - the Chairman of the Board, if any, the Vice
Chairman of the Board ' if any, the President, a Vice President, or, if
none of the foregoing is in office and present and acting, by a
chairman to be chosen by the shareholders. The Secretary of the
corporation, or in his absence, an Assistant Secretary, shall act as
secretary of every meeting, but, if neither the Secretary nor an
Assistant Secretary is present, the Chairman of the meeting shall
appoint a secretary of the meeting.
- - PROXY REPRESENTATION. Every shareholder or his duly authorized
attorney-in-fact may authorize another person or persons to act for him
by proxy in all matters in which a shareholder is entitled to
participate, whether for the purposes of determining his presence at a
meeting, or whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a
meeting, or otherwise. Every proxy shall be signed by the shareholder
or by. his duly authorized attorney-in-fact, and filed with the
Secretary of the corporation. No proxy shall be valid after eleven
months from the date thereof, unless otherwise provided in the proxy.
Except as may otherwise be provided by the General corporation Act, any
proxy may be revoked.
<PAGE>
- - QUORUM. A majority of the shares shall constitute a quorum.
- - VOTING. Except as the General Corporation Act, the Articles of
Incorporation, or these By-Laws shall otherwise provide, the
affirmative vote of the majority of the shares represented at the
meeting, a quorum being present, shall be the act of the shareholders.
After a quorum has been established at a shareholders I meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders at the meeting below the number required for a quorum,
shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
7. WRITTEN ACTION. Any action required to be taken or which may
be taken at a meeting of the shareholders may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all of
the shareholders and shall be filed with the Secretary of the
corporation. Less than all shareholders may act in like manner upon
compliance with the provisions of Section 607.394 of the General
Corporation Act.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS GENERALLY - COMPENSATION. All corporate powers shall
be exercised by or under the authority of, and the business and affairs
of the corporation shall be managed under the direction of its Board of
Directors. The Board may fix the compensation of directors.
2. QUALIFICATIONS AND NUMBER. Each director shall be a natural
person of full age. A director need not be a shareholder, a citizen of
the United States, or a resident of the State of Florida. The initial
Board of Directors shall consist of one (amended to five 9/95) persons,
which is the number of directors fixed in the Articles of
Incorporation, and which shall be the fixed number of directors until
changed. The number of directors may be increased or decreased by an
amendment of these By-Laws or by the directors or shareholders, but no
decrease in the number of directors shall have the effect of
shortening the term of any incumbent director. The number of directors
shall never be less than one. The full Board of Directors shall
consist of the number of directors fixed herein.
3. ELECTION AND TERM. The initial Board of Directors shall
consist of the directors named in the Articles of Incorporation, each
of whom shall hold office until the first annual meeting of
shareholders and until his successor has been elected and qualified or
until his earlier resignation, removal from office or death.
Thereafter, each director who is elected at an annual meeting of
shareholders, and any director who is elected in the interim to fill a
vacancy or a newly created directorship, shall hold office until the
next succeeding annual meeting of shareholders and until his successor
has been elected and qualified or until his earlier resignation,
removal from office or death. In the interim between annual meetings
of shareholders or of special meetings of shareholders called for the
election of directors, any vacancies in the Board of Directors,
including vacancies created by reason of an increase in the number of
directors, and including vacancies resulting from the removal of
<PAGE>
directors by the shareholders which have not been filled by said
shareholders" may be filled by the affirmative vote of a majority of
the remaining directors, although less than a quorum exists.
4. MEETINGS.
- - TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as
soon after its election as the directors may conveniently assemble.
- - PLACE. Meetings shall be held at such place within or without the
State of Florida as shall be fixed by the Board.
- - CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by the
Chairman of the Board, if any,, the Vice Chairman of the Board, if any,
or the President, or by any two directors.
- - NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required
for regular meetings for which the time and place have been fixed.'
Written, oral, or any other mode of notice of the time and place shall
be given for special meetings in sufficient time for the convenient
assembly of the directors thereat. The notice or waiver of notice of
any meeting need not specify the business to be transacted or the
purpose of the meeting. Any requirement of furnishing a notice shall
be waived by any director who signs a waiver of notice before or after
the meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting and a waiver of any and all objections
to the place of the meeting, the time of the meeting, or the manner in
which it has been called or convened, except when a director states, at
the beginning of the meeting, any objection to the transaction of
business because the meeting is not lawfully called or convened.
- - QUORUM AND ACTION. A majority of the full Board of Directors shall
constitute a quorum except as may be otherwise provided in the Articles
of Incorporation. Except as herein otherwise provided, and except as
may be otherwise provided by the General Corporation Act or the
Articles of Incorporation, the act of the Board shall be the act of a
majority of the directors present at a meeting at which a quorum is
present.
Members of the Board of Directors may participate in a meeting of said
Board by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting
can hear each other at the same time, and participation by such means
shall be deemed to constitute presence in person at a meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and
place. Notice of any such adjourned meeting shall be given to the
directors who were not present at the time of the adjournment and,
unless the time and place of the adjourned meeting are announced at the
time of the adjournment, to the other directors.
<PAGE>
- - CHAIRMAN OF THE MEETING. Meetings of the Board of Directors shall be
presided over by the following directors in the order of seniority and
if present and acting the Chairman of the Board, if any, the Vice
Chairman of the Board, if any, the President, or any other director
chosen by the Board.
5. REMOVAL OF DIRECTORS. At a meeting of shareholders called
expressly for that purpose, the entire Board of Directors or any
individual director may be removed from office with or without cause by
the vote of the shareholders holding at least a majority of the shares.
In case the entire Board or any one or more directors be so removed,
new directors may be elected at the same meeting.
6. COMMITTEES. Whenever the number of directors shall consist of
three or more, the Board of Directors, may, by resolution adopted by a
majority of the full Board, designate from among its members an Executive
Committee and one or more other committees, each of which, to the extent
provided in the resolution, shall have and may exercise all of the
authority of the Board of Directors except such authority as may not be
delegated under the General Corporation Act.
7. WRITTEN ACTION. Any action required to be taken at a meeting of
directors, or any action which may be taken at a meeting of directors or
of a committee thereof, if any, may be taken without a meeting if a
consent in writing, setting forth the action so to be taken, shall be
signed by all of the directors or all of the members of the committee, as
the case may be.
8. INDEMNIFICATION.
(a) The Corporation shall have the right to indemnify, to purchase
indemnity insurance for, and to pay and advance expenses to, Directors,
Officers and other persons who are eligible for, or entitled to, such
indemnification, payments or advances, in accordance with and subject to
the provisions of Delaware law, to the extent such indemnification,
payments or advances are either expressly required by such provisions or
are expressly authorized by the Board of Directors within the scope of
such provisions. The right of the Corporation to indemnify such persons
shall include, but not be limited to, the authority of the Corporation to
enter into written agreements for indemnification with such persons.
(b) Subject to the provisions of the General Corporation Law of
Delaware and any amendments thereto, a Director of the Corporation shall
not be liable to the Corporation or its shareholders for monetary damages
for an act or omission in the Director's capacity as a Director, except
that this provision does not eliminate or limit the liability of a
Director to the extent the Director is found liable for:
(1) a breach of the Director's duty of loyalty to the Corporation
or its shareholders;
(2) an act or omission not in good faith that constitutes a breach of
duty of the Director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;
<PAGE>
(3) a transaction from which the Director received an improper benefit,
whether or not the benefit resulted from an action taken within the
scope of the Directors office; or
(4) an act or omission for which the liability of a Director is
expressly provided by an applicable statute.
ARTICLE III
OFFICERS
The corporation shall have a President, a Secretary, and a Treasurer,
each of whom shall be elected by the directors from time to time, and
may have one or more Vice Presidents and such other officers and
assistant officers and agents as may be deemed necessary, each or any
of whom may be elected or appointed by the directors or may be chosen
in such manner as the directors shall determine. Any two or more
offices may be held by the same person.
Unless otherwise provided in the resolution of election or appointment,
each officer shall hold office until the meeting of the Board of
Directors following the next annual meeting of shareholders and until
his successor has been elected and qualified.
The officers and agents of the corporation shall have the authority and
perform the duties in the management of the corporation as determined
by the resolution electing or appointing them, as the case may be.
The Board of Directors may remove any officer or agent whenever in its
judgment the best interests of the corporation will be served thereby.
ARTICLE IV
REGISTERED OFFICE AND AGENT - SHAREHOLDERS RECORD
The address of the initial registered office of the corporation and the
name of the initial registered agent of the corporation, whose address
is the same as that of the registered office is set forth in the
original articles of incorporation.
The corporation shall keep at its registered office in the State of
Florida or at its principal place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving the
names and addresses of all shareholders and the number, class and
series, if any, of the shares held by each shareholder and shall keep
on file at said registered office the voting list of shareholders for a
period of at least ten days prior to any meeting of shareholders.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words
and/or figures as the Board of Directors shall determine or the law
require.
<PAGE>
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject
to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
The Board of Directors shall have power to adopt, alter, amend or
repeal the By-Laws. Any provisions for the classification of directors
for staggered terms shall be authorized by the Articles of
Incorporation or by specific provisions of a By-Law adopted by the
shareholders. By-Laws adopted by the Board of Directors or by the
shareholders may be repealed or changed and new By-Laws may be adopted
by the shareholders. The shareholders may prescribe in any By-Law made
by them that such By-Law shall not be altered, amended or repealed by
the Board of Directors.
I HEREBY CERTIFY that the foregoing is a full, true and correct
copy of the By-Laws of Sloan Electronics Inc., a corporation
of the State of Delaware, as in effect on the date hereof.
WITNESS my hand and the seal of the corporation.
Dated: 7/22/98
/s/ Larry Provost
Secretary
(SEAL)
AMMENDMENT:
SHAREHOLDERS' RESOLUTION TO AMMEND BYLAWS
Sloan Electronics, Inc.
RESOLVED: The Bylaws of of Sloan Electronics, Inc. known as
Article II be amended to allow for 5 members to the Board of Directors.
The undersigned, Larry Provost, certifies that I am the duly appointed
Secretary of Sloan Electronics, Inc. Corporation and that the above is
a true and correct copy of a resolution duly adopted at a Meeting of
the shareholders thereof, convened and held in accordance with law and
the Bylaws of said Corporation on Dec. 9, 1995, and that such
resolution is now in full force and effect.
IN WITNESS THEREOF, I have affixed my name as Secretary
of Sloan Electronics, Inc. Corporation and have attached the seal
of Sloan Electronics, Inc. Corporation to this resolution.
Dated:Dec. 9, 1995
/s/ Larry Provost
Secretary
(SEAL)
<PAGE>
AMMENDMENT:
SHAREHOLDERS' RESOLUTION
ON BOARD OF DIRECTORS' AUTHORITY TO AMEND BYLAWS
Sloan Electronics, Inc.
RESOLVED, that the Board of Directors of Sloan Electronics, Inc.
Corporation is hereby granted the authority to amend, alter, add to,
repeal, rescind or change in any other way any and all of the Bylaws of
this Corporation as the Board of Directors shall deem fit and proper,
and such authority shall not require either any action or consent by of
from the shareholders of the Sloan Electronics, Inc. Corporation; and
it is
FURTHER RESOLVED, that the shareholders are to retain the right to
revoke the above grant of authority to the directors. Such revocation
shall be made by a resolution adopted by the holders of a majority of
the Sloan Electronics, Inc. Corporation's stock entitled to vote at a
duly convened meeting of shareholders. Unless and until such
revocation action is taken by the shareholders, the shareholders shall
not exercise their power, under Article VII of the Bylaws to amend,
alter, add to, repeal, rescind or change in any way the Bylaws of the
Sloan Electronics, Inc. Corporation.
The undersigned, Larry Provost, certifies that I am the duly appointed
Secretary of Sloan Electronics, Inc. Corporation and that the above is
a true and correct copy of a resolution duly adopted at a Meeting of
the shareholders thereof, convened and held in accordance with law and
the Bylaws of said Corporation on Dec. 9, 1995, and that such
resolution is now in full force and effect.
IN WITNESS THEREOF, I have affixed my name as Secretary of Sloan
Electronics, Inc. Corporation and have attached the seal of Sloan
Electronics, Inc. Corporation to this resolution.
Dated:Dec. 9, 1995
/s/ Larry Provost
Secretary
(SEAL)
<TABLE> <S> <C>
<C> <S>
<PAGE>
<ARTICLE>5
<LEGEND>
This schedule contains summary financial information extracted from
the Balance Sheet at September 30, 1998 and Income Statement for the
quarter ended September 30, 1998 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 26,667
<SECURITIES> 0
<RECEIVABLES> 45,906
<ALLOWANCES> 0
<INVENTORY> 20,545
<CURRENT-ASSETS> 126,683
<PP&E> 4,638
<DEPRECIATION> 2,544
<TOTAL-ASSETS> 208,895
<CURRENT-LIABILITIES> 139,986
<BONDS> 0
0
0
<COMMON> 280,240
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 208,895
<SALES> 37,006
<TOTAL-REVENUES> 30,006
<CGS> 20,672
<TOTAL-COSTS> 104,702
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (88,386)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (88,386)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
