<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-QSB
[x] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2000
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No Fee Required)
For the transition period from ________ to ________
Commission File Number: 0-22413
UNIVEC, INC.
(Name of Small Business Issuer in its charter)
Delaware 11-3163455
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) (Identification No.)
22 Dubon Court, Farmingdale, New York 11735
(Address of Principal Executive Offices)
(631) 777-2000
(Issuers Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address, and Former Fiscal Year,
If Changed Since Last Report)
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 November 9, 2000, the Issuer had 6,255,746 shares of Common Stock,
$0.001 par value, outstanding.
Transitional Small Business Disclosure Format:
Yes No X
----- -----
<PAGE>
UNIVEC, INC. AND SUBSIDIARY
FORM 10-QSB
INDEX
PART 1. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
BALANCE SHEET - September 30, 2000 3
STATEMENT OF OPERATIONS - Three months and nine months
ended September 30, 2000 and 1999 4
STATEMENT OF CASH FLOWS - Nine months ended
September 30, 2000 and 1999 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS 11
ITEM 2 CHANGES IN SECURITIES 11
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 5 OTHER INFORMATION 12
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1: Consolidated Financial Information
UNIVEC, Inc. and Subsidiary
Consolidated Balance Sheet
September 30, 2000
------------------
ASSETS:
Current assets:
Cash $ 57,064
Accounts receivable 351,905
Inventory 619,621
Equipment for sale 76,833
Other current assets 160,298
-----------
Total current assets 1,265,721
Fixed assets, net 1,510,057
Other assets 56,067
-----------
Total assets $ 2,831,845
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $ 932,006
Current portion of capitalized lease obligations 173,846
Deferred payroll-officers 279,027
Loans payable-current 183,327
Deposit payable 160,000
-----------
Total current liabilities 1,728,206
Loans payable 238,852
Capitalized lease obligation 228,435
-----------
Total liabilities 2,195,493
-----------
STOCKHOLDERS' EQUITY:
Preferred stock $.001 par value; 4,995,500 authorized;
issued and outstanding: none
Series A 8% Cumulative convertible preferred stock,
$.001 par value; authorized: 2,500 shares; issued
and outstanding: 2,072 shares (aggregate liquidation
value: $2,553,220) 2
Series B 5% cumulative convertible preferred stock,
$.001 par value; authorized: 1,000 shares; issued and
outstanding: 227 shares (aggregate liquidation value:
$291,429) 1
Series C 5% cumulative convertible preferred stock,
$.001 par value; authorized: 1,000 shares; issued and
outstanding: 250 shares (aggregate liquidation
value: $270,556) 1
Common stock $.001 par value; authorized: 75,000,000
shares; issued and outstanding: 6,245,746 6,245
Additional paid-in capital 7,575,967
Accumulated deficit (6,945,864)
------------
Total stockholders' equity 636,352
------------
Total liabilities and stockholders' equity $ 2,831,845
============
See accompanying notes to consolidated financial statements.
<PAGE>
UNIVEC, Inc. and Subsidiary
Consolidated Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
Three months Nine months ended
ended September 30, September 30,
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 647,204 $ 471,731 $ 2,137,945 $ 1,763,720
----------- ----------- ----------- -----------
Expenses:
Cost of product sales 551,014 423,360 1,828,607 1,542,131
Marketing 161,546 118,015 427,671 550,611
Product development 18,618 15,086 52,860 107,076
General and administrative 283,728 303,433 790,853 806,736
Interest expense, net 19,017 60,290 40,782 68,852
----------- ----------- ----------- -----------
Total operating expense 1,033,923 920,184 3,140,773 3,075,406
----------- ----------- ----------- -----------
Operating loss (386,719) (448,453) (1,002,828) (1,311,686)
Loss on sale of equipment (794,244)
----------- ----------- ----------- -----------
Net loss (386,719) (448,453) (1,797,072) (1,311,686)
Dividends attributable to
preferred stock (48,744) (52,440) (150,617) (156,383)
Dividends attributable to
preferred stock resulting
from discount from
beneficial conversion
feature (18,260)
----------- ----------- ----------- -----------
Loss attributable to
common stockholders $ (435,463) $ (500,893) $(1,947,689) $(1,486,329)
=========== =========== =========== ===========
Share information:
Basic net loss per share $ (.07) $ (.13) $ (.37) $ (.40)
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding 5,855,114 3,788,653 5,228,891 3,707,482
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
UNIVEC, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
--------------------------
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,797,072) $(1,311,686)
Adjustments to reconcile net loss to net cash
used in operating activities:
Loss on sale of equipment 794,244
Depreciation and amortization 265,063 332,983
Issuance of shares and options for services 15,000
Increase (decrease) in cash from:
Accounts receivable 243,679 (279,561)
Inventory 13,281 216,119
Equipment for sale (76,833)
Other current assets and other assets 166,535 (15,622)
Accounts payable and accrued expenses (85,665) 469,159
Deferred payroll-officers 93,163
Deposit payable 160,000
----------- -----------
Net cash used in operating activities (208,605) (588,608)
----------- -----------
Cash flows from investing activities:
Purchases of fixed assets (net of capital
lease obligations of $435,000 in 2000) (10,367) (46,910)
----------- -----------
Cash flows from financing activities:
Proceeds from sale of equipment (net of expenses
of $74,223) 360,777
Proceeds from sale of preferred stock, net of expenses 209,990
Proceeds from loans payable 343,805
Payment of loans payable (127,971)
Payments of capitalized lease obligations (86,410) (32,649)
----------- -----------
Net cash provided by financing activities: 146,396 521,146
----------- -----------
Net decrease in cash (72,576) (114,372)
Cash, beginning of period 129,640 131,181
----------- -----------
Cash, end of period $ 57,064 $ 16,809
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
UNIVEC, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
1. Nature of Operations:
Univec, Inc. (Company) produces, markets, and licenses technology of
medical products, primarily syringes, and resells medical devices on a global
basis.
2. Summary of Significant Accounting Policies:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
of the consolidated financial position, results of operations and cash flows for
the interim periods presented have been included. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements of Univec, Inc. together with Management's Discussion and Analysis
included in the Company's Form 10-KSB for the year ended December 31, 1999.
Interim results are not necessarily indicative of the results for a full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Net Loss Per Share:
Basic net loss per share was computed based on the weighted average number
of shares outstanding during the three and nine months ended September 30, 2000
and 1999. Dilutive net loss per share has not been presented because it was
anti-dilutive.
4. Stockholders' Equity:
During July, August and September 2000, 50 , 50 and 75 shares of Series B
Preferred Stock were converted into 118,511, 175,438 and 228,588 shares of
common stock at prices of $.42, $.285 and $.328, per share, respectively.
During the quarter the Company agreed to issue 30,000 shares of common stock
to a consultant for services valued at $15,000.
In August 2000, the Company's stockholders ratified an amendment to the
Certificate of Incorporation of the Company to increase the authorized common
stock of the Company from 25,000,000 to 75,000,000 shares.
<PAGE>
In September 2000, the Company agreed to issue 15,000 shares of common stock
to a consultant to provide financial marketing services valued at $7,500.
In September 2000, the Company agreed to issue 30,000 shares of common stock
to an employee as additional compensation valued at $15,000.
5. Options:
In August 2000, the Company's stockholders adopted an amendment to the
Company's stock option plan, providing for an additional 2,250,000 shares of
common stock, including 250,000 shares reserved for an Industrial and Scientific
Advisory Committee to be formed as necessitated by the Company, to be issued
under the Plan.
During the period July through September 2000, a vendor exercised its option
to purchase an aggregate of 30,000 shares of common stock, at $.15, per share,
in exchange for reductions in a loan payable to the vendor. In November 2000,
the vendor exercised its options to purchase an additional 10,000 shares of
common stock at $.15, per share.
In August 2000, the Company issued 120,000 options to purchase common stock
to a consultant to provide marketing services valued at $2,500.
6. Litigation:
In August 2000, an action was commenced against the Company alleging patent
infringement in connection with the Company's locking syringe. The action seeks
a permanent injunction restraining the Company from infringing, damages, treble
damages, attorney fees, and costs of the action. Although the action is in its
early stage, the Company believes the claim is without merit, is defending the
matter and, together with counsel, does not believe the outcome of this matter
will have a material effect on the Company.
7. Licensing Agreements:
On August 2, 2000, the Company entered into a license agreement providing
for the non-exclusive, worldwide use of certain of the Company's patents for the
manufacture, use and marketing of syringes for a twelve year period, providing
for royalties on production and certain minimum sales. The Company will also
sell the licensee certain equipment necessary to manufacture these syringes
under the license for approximately $1,500,000. As of September 30, 2000, the
Company has received a deposit of $160,000 on the sales price.
On August 16, 2000, the Company entered into a license agreement providing
for the non-exclusive, worldwide use of the Company's patents for the
manufacture, use and marketing of its auto-disable syringes through the period
any patents are still in effect, providing for royalties on sales. The Company
will also sell the licensee certain equipment to manufacture these syringes for
$644,000, payable substantially all upon acceptance of the equipment. The
Company has warranted the equipment for one year from acceptance and is required
to provide continuing technical assistance throughout the license and
manufacturing periods. As of September 30, 2000, the Company has received
letters of credit of $611,800 against the sales price.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
Condensed Consolidated Results of Operations
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------------ -----------------------------------
2000 1999 change 2000 1999 change
--------- ---------- ------- ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 647,204 $471,731 37% $2,137,945 $1,763,720 21%
Cost of Sales 551,014 423,360 30% 1,828,607 1,542,131 19%
--------- ---------- ----------- -----------
Gross Margin 96,190 48,371 99% 309,338 221,589 40%
Marketing Expense 161,546 118,015 37% 427,671 550,611 (22%)
Product Development 18,618 15,086 23% 52,860 107,076 (51%)
General and
Administrative 283,728 303,433 (6%) 790,853 806,736 (2%)
Interest Expense, Net 19,017 60,290 (68%) 40,782 68,852 (41%)
--------- ---------- ----------- -----------
Operating Loss (386,719) (448,453) (14%) (1,002,828) (1,311,686) (24%)
Loss on Sale of Assets (794,244)
--------- ---------- ----------- -----------
Net Loss ($386,719) ($448,453) (14%) ($1,797,072) ($1,311,686) 37%
========= ========= ========== ===========
</TABLE>
As illustrated in the table above, product sales for the three and nine
months ended September 30, 2000 increased by $175,473 (37%) and $374,225 (21%)
over the comparable three and nine month periods ended September 30, 1999. This
increase is the result of successfully negotiating new contracts for product
during 2000. Product sales consisted primarily of the 1cc locking clip syringe,
a difficult-to-reuse syringe. All syringes were either produced in the Company's
own production facility in New York or by its Portuguese and Korean contract
manufacturers. The Company has increased its production capacity by contracting
with a manufacturer located in Korea to supply syringes for existing contracts.
As of September 30, 2000, the Company had a balance of syringes remaining
to be shipped under a contract during the remainder of 2000, of approximately
$335,000 and other in-house sales orders for approximately $260,000 were shipped
in October 2000.
<PAGE>
As a result of the June 1999 licensing agreement and the FDA approval in July
2000 of the sliding sheath syringe designed to protect health care workers,
Univec anticipates manufacturing and marketing this syringe during the fourth
quarter of 2000. The FDA also approved the Company's two-piece syringe in June
2000. The introduction of these new products is expected to increase sales and
broaden the Company's customer base, including a domestic market.
In August 2000, the Company entered into two license agreements granting the
non-exclusive, worldwide license to manufacture and market the Company's
auto-disable syringe. The Company will also sell to the licensees certain
equipment necessary for production for an aggregate sales price of approximately
$2,144,000. Upon completion of the sales transactions, the Company will
recognize revenue on the sales of equipment, receive royalties from the
production and sales of the product by the licensees and have the right to
purchase products from the licensees, all of which is anticipated to occur in
the first quarter of 2001.
Gross margin for the three months ended September 30, 2000 increased to 15%
from 10% in the comparable 1999 period. This increase is primarily the result of
increased utilization of production facilities in Portugal and Korea to fill
sales orders, and a decrease in depreciation expense, offset in part by an
increase in freight-in and insurance. The gross margin for the nine months ended
September 30, 2000 increased slightly to 14% from 13% in the comparable 1999
period. The cost of goods sold for the three months ending September 30, 2000
increased by $127,654 (30%) in correlation with the 37% increase in sales for
the period. This increase was also due to increased freight-in costs and
insurance costs, offset in part by a decrease in depreciation expense. Gross
margin on the sales of finished product purchased from the Portuguese or Korean
manufacturer is significantly higher than for products produced at the Company's
New York facility. Production capacity of the Long Island, New York facility has
not been fully utilized resulting in historically higher cost of sales. The
Company anticipates continuing to obtain additional sources of production at
more favorable costs, resulting in increased gross margins.
Marketing costs for the three months ended September 30, 2000 increased
$43,531 (37%) over the comparable three month period for 1999. Effective July
2000, the Company increased sales staff personnel to develop a domestic market
for both existing products and the new sliding sheath syringe and the two-piece
syringe. Marketing costs will also involve travel necessary to generate new
sales contracts. The decrease in marketing costs of $122,940 (22%) for the nine
month period ended September 30, 2000 as compared to the nine month period ended
September 30, 1999, was primarily the result of decreases in inventory storage
and freight out, offset in part by an increase in wages for selling personnel
and travel and entertainment expenses.
Product development expense for the three month period ended September 30,
2000 increased by $3,532 (23%) over the comparable period for 1999, primarily as
a result of increased legal patent fees. Product development expense for the
nine months ended September 30, 2000 decreased by $54,216 (51%) over the
comparable 1999 period. This decrease was the result of reductions in patent
legal expense and engineering consulting expenses.
General and administrative costs for the three and nine month period ended
September 30, 2000 decreased $19,705 (6%) and $15,883 (2%), respectively, as
compared to the 1999 periods. These decreases are primarily the result of
decreases in securities maintenance and directors and officers insurance
expense, offset in part by an increase in professional fees. This decrease in
general and administrative costs reflects management's continuing effort to
reduce costs.
Interest expense, net decreased by $41,273 and $28,070 during the three and
nine months ending September 30, 2000, respectively, as compared to the 1999
periods. These decreases are the result of less financing fees in 2000.
<PAGE>
Operating loss for the three and nine months ending September 30, 2000,
decreased by $61,734 and $308,858, respectively, as compared to 1999. The
decrease for the three month period is primarily the result of the increase in
sales combined with the decrease in interest expense, offset in part by the
increase in cost of goods sold. The decrease in operating loss for the nine
month period is due primarily to the substantial decreases in marketing and
product development expenses.
Net loss for the nine month period ending September 30, 2000, increased by
$485,386 over the comparable 1999 period, primarily as a result of the loss of
$794,244 on the sale and leaseback of equipment during the first quarter of
2000, partially offset by the decrease in operating loss.
Liquidity and Capital Resources
The Company's working capital deficit increased from $103,051 at December 31,
1999, to a deficit of $462,485 at September 30, 2000, primarily resulting from
decreases in accounts receivable and cash.
Net cash used in operating activities decreased by $380,003 for the nine
months ended September 30, 2000, primarily due to a decrease in the loss from
operations in 2000, as compared to 1999.
Net cash provided by financing activities decreased by $374,750 during the
nine month period ending September 30, 2000 resulting from the net proceeds from
the sale of the equipment in 2000 being less than the proceeds of both the sale
of Series C Preferred Stock and loans payable in 1999.
Based on the performance for the three quarters of 2000 which included
receipt of the proceeds from the sale of equipment, the FDA approvals, increased
marketing of the sliding sheath syringe, and the patent license agreements,
together with anticipated increased sales of the locking clip syringe, the
Company anticipates a positive cash flow for the year ended December 31, 2000.
The Company is continuing to seek additional equity financing which will
dilute existing shareholders. As a result of the delisting of the Company's
common stock from the Nasdaq SmallCap Market, the Company's ability to raise
equity financing has been hampered.
The Company has actively pursued legislative changes both in the United
States and worldwide for the use of safety syringes. Recently the United States
has enacted The Needlestick Safety and Prevention Act which requires the use of
safer devices to protect health care workers from sharp injuries.
Forward Looking Statements
Except for the historical information contained herein, the matters
discussed in this report are forward-looking statements that involve risks and
uncertainties, including the Company's ability to market its sliding sheath
syringe in the United States domestic market, the Company's ability to realize
lower production costs through the use of contract manufacturers and the
Company's need for additional financing and other risks detailed from time to
time in the Company's Securities and Exchange Commission reports.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
In August 2000, an action was commenced in the U.S. District Court, Southern
District of New York by BMD Technology, LLC, against the Company alleging patent
infringement in connection with the Company's locking syringe. The action seeks
a permanent injunction restraining the Company from infringing the plaintiff's
patent, damages, treble damages, attorney fees, and costs of the action.
Although the action is in its early stage, the Company believes the claim is
without merit, is defending the matter and, together with counsel, does not
believe the outcome of this matter will have a material effect on the Company.
There has been no further activity on the litigation matters commenced in
April 2000.
Item 2. Changes in Securities
In August 2000, the Company's shareholders ratified an amendment to the
Certificate of Incorporation of the Company to increase the authorized common
stock of the Company from 25,000,000 shares to 75,000,000 shares.
The Company agreed to issue 45,000 shares of its common stock to consultants
in reliance upon the exemption afforded by Section 4(2) of the Securities Act of
1933. The Company did not employ any form of general solicitation or advertising
and the purchasers were sophisticated individuals capable of evaluating the
merits and risks of the purchase of the shares.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Univec, Inc. for the year ending
December 31, 1999, was held on August 24, 2000, to consider and vote upon (i) a
proposal to elect Joel Schoenfeld, Dr. Alan H. Gold, John Frank, Richard Mintz,
Marla Manowitz, and Dr. Andrew Rosenberg as directors, (ii) a proposal to
approve the adoption of the Company's 2000 Stock Option Plan, (iii) a proposal
to approve an amendment to the Certificate of Incorporation of the Company to
increase the authorized common stock of the Company from 25,000,000 shares to
75,000,000 shares and (iv) to ratify the appointment of Most Horowitz & Co.,
LLP, as the Company's auditors for the years ending December 31, 1998, 1999 and
2000. The number of votes cast for and against each of the foregoing proposals,
the number of abstentions and the number of broker non-votes where applicable
are set forth below.
(i) Proposals to Elect Directors:
For Withhold Authority
Joel Schoenfeld 3,597,390 49,007
Alan H. Gold, M.D. 3,597,490 48,907
John Frank 3,597,490 48,907
Marla Manowitz 3,597,490 48,907
Richard Mintz 3,597,490 48,907
Andrew Rosenberg, M.D. 3,597,490 48,907
(ii) Proposal to Approve the Adoption of the Company's 2000 Stock Option Plan:
For Against Abstain Broker Non-votes
1,139,464 165,084 18,474 2,323,375
<PAGE>
(iii) Proposal to Amend the Certificate of Incorporation to increase the
authorized Common Stock of the Company from 25,000,000 shares to 75,000,000
shares:
For Against Abstain
3,479,809 151,088 13,500
(iv) Proposal to Ratify the Selection of Most Horowitz & Company, LLP as
the Company's Auditors.
For Against Abstain
3,568,647 39,275 38,475
Broker Non-votes represent shares for which brokers are prohibited from
exercising discretionary authority on behalf of beneficial owners who have not
provided voting instructions. Broker Non-votes are not included in the vote
totals, but are counted for determining the presence of a quorum.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 3 Certificate of Incorporation as amended
Exhibit 15 Letter on unaudited financial information
Exhibit 27 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the three
months ending September 30, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNIVEC, INC.
Dated: November 9, 2000 By: /s/ Alan Gold
----------------------------------
Alan Gold
Chief Executive Officer
Dated: November 9, 2000 By: /s/ Marla Manowitz
----------------------------------
Marla Manowitz
Chief Financial Officer
<PAGE>
Exhibit 3 Certificate of Incorporation as Amended
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
UNIVEC, INC.
Adopted in accordance with the provisions of
Section 242 of the General Corporation Law
of the State of Delaware
I, Flora Schoenfeld, Secretary of Univec, Inc., a corporation
organized and existing under the laws of the State of Delaware (the
"Corporation"), do hereby certify as follows:
FIRST: The original Certificate or Incorporation was filed in the
Office of the Secretary of the State of Delaware on October 4, 1996. The
Original Certificate of Incorporation was restated and amended by the Restated
Certificate of Incorporation filed April 14, 1997 (the "Restated Certificate of
incorporation").
SECOND: Paragraph No. 4 of the Corporation's Restated Certificate of
Incorporation is hereby amended by changing the first sentence to read as
follows:
The total number of shares of capital stock which the Corporation shall
have authority to issue is 80,000,000 shares, of which 5,000,000 shares shall be
designated as preferred stock each having a par value of $0.001 per share (the
"Preferred Stock"), and 75,000,000 shares shall be designated as common stock,
each having a par value of $0.001 per share (the "Common Stock").
THIRD: On August 24, 2000, an annual meeting of the stockholders of the
Corporation was duly called and held, upon notice in accordance with the General
Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
FOURTH: This amendment has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Dated: August 29, 2000
/s/ Flora Schoenfeld
-------------------------
Flora Schoenfeld, Secretary
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
UNIVEC, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation")
is UNIVEC, Inc., which is the name under which the Corporation was originally
incorporated. The date of filing of the original Certificate of Incorporation of
the Corporation with the Secretary of State was October 7, 1996.
2. Pursuant to the Article 4 of the Certificate of Incorporation, by
Certificate of Designation filed with the Secretary of State on December 31,
1996 in accordance with Section 151 of the General Corporation Law, the
Corporation authorized a series of preferred stock designated Series A 8%
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock").
3. This Restated Certificate of Incorporation restates and amends the
Certificate of Incorporation of the Corporation to eliminate the redemption
provisions of the Series A Preferred Stock.
4. The Restated Certificate of Incorporation has been duly adopted by
unanimous written consent in lieu of a meeting of the Board of Directors of the
Corporation in accordance with the provisions of Sections 141(f), 242 and 245 of
the General Corporation Law of the State of Delaware and by holders of all of
the outstanding Series A Preferred Stock and the holders of a majority of each
other class of outstanding stock entitled to vote hereon as a class by written
consent given in accordance with Section 228 of the General Corporation Law of
the State of Delaware. Written notice pursuant to Section 228 has been given to
those stockholders of the Corporation who have not consented in writing to this
action.
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
UNIVEC, INC.
1. The name of the corporation is UNIVEC, Inc. (the "Corporation").
2. The address of the registered office of the Corporation in Delaware
is 1013 Centre Road, City of Wilmington, County of New Castle, Delaware 19805.
The name of the corporation's registered agent at that address is Corporation
Service Company.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "General Corporation Law").
4. The total number of shares of capital stock which the Corporation
shall have authority to issue is 30,000,000 shares, of which 5,000,000 shares
shall be designated as preferred stock, each having a par value of $0.001 per
share (the "Preferred Stock"), and 25,000,000 shares shall be designated as
common stock, each having a par value of $0.001 per share (the "Common Stock").
The Board of Directors of the Corporation is hereby expressly vested with
authority by resolution or resolutions to authorize the issuance of shares of
Preferred Stock in one or more series, from time to time, with each such series
to have such designations, powers, preferences, and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors of the Corporation, subject to the limitations prescribed by law and
in accordance with the provisions hereof. The authority of the Board of
Directors with respect to each such series shall include, but not be limited to,
the determination or fixing of the following:
(i) The distinctive designation and number of shares
comprising such series, which number may (except where
otherwise provided by the Board of Directors in creating such
series) be increased or decreased (but not below the number of
shares then outstanding) from time to time by like action of
the Board of Directors;
(ii) The dividend rate of such series, the conditions
and time upon which such dividends shall be payable, the
relation that such dividends shall bear to the dividends
payable on any other class or classes of stock or series
thereof, or any other series of the same class, and whether
such dividends shall be cumulative or non-cumulative;
(iii) The conditions upon which the shares of such
series shall be subject to redemption by the Corporation and
the times, prices and other terms and provisions upon which
the shares of the series may be redeemed;
(iv) Whether or not the shares of the series shall be
subject to the operation of a retirement or sinking fund to be
applied to the purchase or redemption of such shares and, if
such retirement or sinking fund be established, the annual
amount thereof and the terms and provisions relative to the
operation thereof;
(v) Whether or not the shares of the series shall be
convertible into or exchangeable for shares of any other class
or classes, with or without par value, or of any other series
of the same class, and, if provision is made for conversion or
exchange, the times, prices, rates, adjustments, and other
terms and conditions of such conversion or exchange;
(vi) Whether or not the shares of the series shall
have voting rights, in addition to the voting rights provided
by law, and, if so, the terms of such voting rights;
<PAGE>
(vii) The rights of the shares of the series upon the
distribution of the assets of the Corporation in the event of
the liquidation, dissolution, or winding up of the affairs of
the Corporation, whether voluntary or involuntary; and
(viii) Any other powers, preferences and relative
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of the
shares of such series, as the Board of Directors may deem
advisable and as shall not be inconsistent with the provisions
of the Certificate of Incorporation.
The holders of shares of the Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board of Directors, out of
funds legally available for the payment of dividends, dividends (if any) at the
rates fixed by the Board of Directors for such series, and no more, before any
cash dividends shall be declared and paid, or set apart for payment, on the
Common Stock with respect to the same dividend period.
The holders of shares of the Preferred Stock of each series shall be
entitled upon liquidation or dissolution or upon the distribution of the assets
of the Corporation to such preferences as provided in the resolution or
resolutions creating such series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the holders of
the Common Stock. Whenever the holders of shares of the Preferred Stock shall
have been paid the full amounts to which they shall be entitled, the holders of
the Common Stock shall be entitled to share ratably in all assets of the
Corporation remaining.
By Certificate of Designation filed with the Secretary of State on
December 31, 1996, in accordance with Section 151 of the General Corporation
Law, the Corporation has authorized a series of preferred stock designated
Series A 8% Cumulative Convertible Preferred Stock (the "Series A Preferred
Stock"), consisting of 2,500 shares, par value $0.001 per share, having the
following preferences and rights, qualifications, limitations and restrictions:
1. Dividend Rights.
---------------
1.1 The holders of shares of Series A Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds legally available for payment of dividends, (i) cumulative
dividends at the rate of $80 per share per annum (the "Series A Preferred
Dividend"), which dividends shall accrue and be cumulative from the date of
issuance, payable at the option of the Company in cash, in additional shares of
Series A Preferred Stock, or a combination thereof. The number of additional
shares of Series A Preferred Stock to be issued in payment of cumulative
dividends shall be determined based upon the liquidation preference ($1,000) of
the Series A Preferred Stock, so that .08 of a share of Series A Preferred Stock
would be issued for each $80 of cumulative cash dividends.
1.2 Dividends shall cease to accrue on shares of Series A
Preferred Stock that are redeemed pursuant to Paragraph 4 hereof as of the date
fixed for such redemption.
1.3 So long as any shares of Series A Preferred Stock are
outstanding, no dividends shall be paid or declared and set apart for payment,
nor shall any other distribution be made, on the Common Stock, or on any other
stock junior to the Series A Preferred Stock as to dividends (other than
dividends payable in Common Stock or other stock junior to Series A Preferred
Stock both as to dividends and distribution upon liquidation), unless dividends
on Series A Preferred Stock for the current dividend period and all past
dividend periods shall have been paid or declared and set apart for payment.
1.4 So long as any shares of Series A Preferred Stock are
outstanding, no shares of any stock on a parity with or junior to Series A
Preferred Stock shall be purchased, redeemed or otherwise acquired by the
Corporation or by any subsidiary, nor shall any funds be set aside or made
available for any purchase, retirement or sinking fund for the purchase or
redemption of any stock on a parity with or junior to Series A Preferred Stock,
unless dividends on the Series A Preferred Stock for the current dividend period
and all past dividend periods shall have been paid or declared and set apart for
payment.
1.5 Subject to the foregoing provisions, such dividends
(payable in cash, property or stock junior to Series A Preferred Stock) as may
<PAGE>
be determined by the Board of Directors may be declared and paid from time to
time on the shares of any stock junior to Series A Preferred Stock, without any
right of participation therein by the holders of Series A Preferred Stock.
1.6 Accrued and unpaid dividends on Series A Preferred
Stock shall not bear interest.
1.7 In case dividends on the Series A Preferred Stock for
any dividend period in which they are payable are not paid in full, all shares
of Series A Preferred Stock and all shares of any other series of Preferred
Stock ranking as to dividends on a parity with Series A Preferred Stock shall
participate ratably in the payment of dividends for such period in proportion to
the full amounts of dividends for such period to which they are respectively
entitled.
2. Liquidation Rights.
------------------
2.1 In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary
(each of which is hereinafter referred to as a "Liquidation"), the holders of
shares of Series A Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders an amount per share equal to $1,000, plus accrued but unpaid
dividends, before any distribution shall be made to the holders of Common Stock
or any other stock junior to Series A Preferred Stock as to the distribution of
assets upon Liquidation. If upon Liquidation the Corporation's assets are not
sufficient to pay in full the amounts so payable to the holders of shares of
Series A Preferred Stock and the holders of any other series of Preferred Stock
ranking on a parity as to the distribution of assets on Liquidation with shares
of Series A Preferred Stock, all shares of Series A Preferred Stock and of such
other series of Preferred Stock shall participate ratably in the distribution of
assets in proportion to the full amounts to which they are respectively
entitled.
2.2 For the purpose of this Paragraph 2, a consolidation
or merger of the Corporation with any other corporation, or the sale, transfer
of lease of all or substantially all of its assets, shall not constitute or be
deemed a Liquidation.
3. Redemption
----------
Shares of Series A Preferred Stock are not subject to
redemption.
4. Status of Series A Preferred Stock Reacquired.
----------------------------------------------
Shares of Series A Preferred Stock which have been
issued and reacquired in any manner shall (upon
compliance with applicable provisions of the laws of the State of Delaware), be
deemed to be cancelled and have the status of authorized and unissued shares of
the class of Preferred Stock issuable in series undesignated as to series and
may be redesignated and reissued.
5. No Voting Rights.
----------------
Holders of Series A Preferred Stock shall have no voting
rights, except as may be required by law.
<PAGE>
6. Conversion Rights.
-----------------
6.1 Upon the terms and in the manner hereinafter set
forth in this Paragraph 6, any holder of shares of the Series A Preferred Stock
may, at the option of such holder, at any time and from time to time after the
earlier of (i) September 30, 1999 and (ii) the second anniversary of the date
upon which the Securities and Exchange Commission declares effective under the
Securities Act of 1933, as amended, a registration statement for an underwritten
public offering of the Corporation's Common Stock, convert each share of Series
A Preferred Stock into 222.22 shares of Common Stock (the "Conversion Rate"), as
adjusted and readjusted from time to time in accordance with this Paragraph 6.
6.1.2 In order to convert shares of Series A Preferred
Stock into Common Stock, the holder thereof shall (i) surrender the certificate
or certificates for such shares of Series A Preferred Stock, duly endorsed to
the Corporation or in blank, to the Corporation at its principal office or at
the office of the agency maintained for such purposes, (ii) give written notice
to the Corporation at such office that such holder elects to convert such shares
of Series A Preferred Stock, and (iii) state in writing therein the name or
names in which such holder wishes the certificate or certificates for shares of
Common Stock to be issued. Each conversion shall be deemed to have been effected
at the close of business on the date on which the Corporation or such agency
shall have received such surrendered Series A Preferred Stock certificate(s),
and the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the record holder or holders of the shares represented
thereby on such date. As soon as practicable after such conversion, the
Corporation shall issue or deliver at such office to the holder for whose
account such shares of Series A Preferred Stock were so surrendered, or to such
holder's nominee or nominees, certificates (bearing such legend(s) as may be
required under applicable securities laws) for the number of full shares of
Common Stock to which such holder shall be entitled, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the closing price per share of the Common Stock on
the principal exchange on which it is then listed, or if it is not so listed,
the mean between the closing bid and ask prices per share for such stock, as
reported by NASDAQ, The National Quotation Bureau, Incorporated, or other
similar service, in each instance as of the close of business on the date of
such conversion.
6.1.3 No accrued but unpaid dividends shall be paid on
shares of Series A Preferred Stock converted, except that no holder shall be
prejudiced, by reason of conversion, in his rights to recover dividends declared
and unpaid, if the payment date of the dividends declared preceded the date of
conversion.
6.2 The conversion rate shall be subject to adjustment
from time to time as follows: in case the Corporation shall at any time pay a
stock dividend in its Common Stock (other than on the Series A Preferred Stock),
or in case the Corporation shall at any time either subdivide or combine the
outstanding shares of Common Stock, the conversion rate shall immediately be
proportionately adjusted. In case of any capital reorganization or any
reclassification of the capital stock of the Corporation or in case of the
consolidation or merger of the Corporation with or into another corporation or
the sale of all or substantially all of the assets of the Corporation as or
substantially as an entirety to another corporation, each share of Series A
Stock shall thereafter be convertible into the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock of the Corporation then deliverable upon conversion of such share of
Series A Preferred Stock would have been entitled upon such reorganization,
reclassification, consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interests thereafter of the holders of the shares of Series A Preferred
Stock, to the end that the provisions set forth herein (including provisions
with respect to changes in and other adjustments of the conversion rate) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the conversion of
the shares of Series A Preferred Stock.
6.3 No adjustment in the conversion rate shall be
required unless such adjustment (and any other adjustments which by reason of
this Paragraph 6.3 are not required to be made) would not, if made, entitle the
holders of all then outstanding shares of Series A Preferred Stock upon
<PAGE>
conversion thereof to receive additional shares of Common Stock equal in the
aggregate to one percent (1%) or more of the total issued and outstanding shares
of Common Stock. All calculations under this Paragraph 6.3 shall be made to the
nearest one one-hundredth (1/100) of a share.
6.4 Whenever the conversion rate is adjusted as herein
provided, an officer of the Corporation shall compute the adjusted conversion
rate in accordance with the foregoing provisions and shall prepare a written
instrument setting forth such adjusted conversion rate and showing in detail the
facts upon which such adjustment is based, and a copy of such written instrument
shall forthwith be mailed to each holder of record of the Series A Preferred
Stock, and made available for inspection by the stockholders of the Corporation.
6.5 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of the shares of
Series A Preferred Stock, the full number of shares of Common Stock then
deliverable upon the conversion of all shares of Series A Preferred Stock then
outstanding, and such shares shall be listed, subject to notice of issuance, on
any stock exchange(s) on which outstanding shares of Common Stock may then be
listed.
6.6 The Corporation will pay and all taxes that may be
payable in respect of the issuance or delivery of shares of Common Stock on
conversion of shares of Series A Preferred Stock pursuant hereto. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series A Preferred
Stock so converted were registered, and no such issue or delivery shall be made
unless and until the person requesting such issue has paid to the Corporation
the amount of any such tax, or has established, to the satisfaction of the
Corporation, that such tax has been paid or is not payable.
7. Exclusion of Other Rights. Except as may otherwise be
required by law, the shares of Series A Preferred Stock shall not have any
preferences or relative, participating, optional or other special rights other
than those specifically set forth in this Restated Certificate of Incorporation
of the Corporation, as amended.
8. Headings of Subdivisions. The headings of the
various subdivisions hereof are for convenience of reference only and shall not
affect the interpretation of any of the provisions hereof.
9. Severability of Provisions. If any right, preference
or limitation of the Series A Preferred set forth in Restated Certificate of
Incorporation, may be amended from time to time) is invalid, unlawful, or
incapable of being enforced by reason of any rule of law or public policy, all
other rights, preferences and limitations set forth in this Restated Certificate
of Incorporation (as so amended) which can be given effect without the invalid,
unlawful or unenforceable right, preference or limitation shall, nevertheless,
remain in full force and effect, and no right, preference or limitation herein
set forth shall be deemed dependent upon any other such right, preference or
limitation unless so expressed herein.
5. The election of the Board of Directors need not be by written
ballot.
6. The Corporation shall indemnify, and hold harmless, to the fullest
extent permitted by Section 145 of the General Corporate Law, as amended from
time to time ("Section 145"), any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (each, a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director or officer of the Corporation (each, an
"Eligible Indemnitee"), against all liability and loss suffered and expenses
reasonably incurred by such person in connection with a proceeding initiated by
him only if the proceeding was authorized by the Board of Directors. In
addition, the Corporation may indemnify and hold harmless, to the fullest extent
permitted by Section 145, any other person who was or is made or is threatened
to be made a party or is otherwise involved in any proceeding by reason of the
fact that he, or an officer, director or a person for whom he is the legal
representative, is or was an employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust,
<PAGE>
enterprise or non-profit entity (each, a "Permitted Indemnitee"), including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person in connection with such
proceeding. If the Corporation elects to indemnify a Permitted Indemnitee for
liability and loss suffered and expenses reasonably incurred by such person in
connection with a proceeding, its obligation to indemnify such person shall be
reduced by the amount of any indemnity payments received by the Permitted
Indemnitee from any other corporation, partnership, joint venture, trust,
enterprise or non-profit entity on behalf of whom he was acting at the request
of the Corporation and as a result of which he became a party to or was
otherwise became involved in the proceeding.
The Corporation shall pay the expenses incurred by any Eligible
Indemnitee in investigating or defending any proceeding in advance of its final
disposition (unless the proceeding is of a nature for which advancement of
expenses is not permitted by Section 145), but only upon receipt of an
undertaking from the Eligible Indemnitee to repay all amounts advanced if it is
ultimately determined that the Eligible Indemnitee is not entitled to be
indemnified under Section 145, this Article or otherwise. In addition, the
Corporation may pay the expenses incurred by any Permitted Indemnitee in
defending any proceeding in advance of its final disposition (unless the
proceeding is of a nature for which advancement of expenses is not permitted by
Section 145), but only upon receipt of an undertaking from the Permitted
Indemnitee to repay all amounts advanced if it is ultimately determined that the
Permitted Indemnitee is not entitled to be indemnified under Section 145, this
Article or otherwise.
If a claim for indemnification or payment of expenses under this
Article is not paid in full within sixty days after a written claim therefor has
been received by the Corporation, the claimant may file suit to recover the
amount of such claim and, if successful in whole or in part, shall be entitled
to be paid the expenses of prosecuting such claim. In any such action, the
Corporation shall have the burden of proving that the claimant was not entitled
to the requested indemnification or payment of expenses under Section 145, this
Article or otherwise.
The rights conferred on any person by this Article shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, any provision of the By-laws of this Corporation, any
agreement, any vote of stockholders or disinterested directors or otherwise.
The Corporation shall have the power to purchase and maintain insurance
on behalf of any Eligible Indemnitee or Permitted Indemnitee against any
liability asserted against him and incurred by him for actions undertaken on
behalf of the Corporation in his capacity, or arising out of his status with the
Corporation, whether or not the Corporation would have had the power to
indemnify him against such liability under this Article or otherwise.
Any amendment or repeal of the foregoing provisions of this Article
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
7. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law, as the same exists
or hereafter may be amended, or (iv) for any transaction from which the director
derived an improper personal benefit. If the General Corporation Law hereafter
is amended to authorize the further elimination or limitation of the liability
of directors, then the liability of a director of the Corporation, in addition
to the limitation of personal liability provided herein, shall be limited o\to
the fullest extent permitted by the amended General Corporation law. Any repeal
or modification of this Article by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time of such repeal
or modification.
8. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
<PAGE>
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code on the application
of trustees in dissolution or any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
9. All the powers of this Corporation, insofar as the same may be
lawfully vested by this Certificate of Incorporation in the Board of Directors,
are hereby conferred upon the board of directors of this Corporation. In
furtherance and not in limitation of that power, the Board of Directors shall
have the power to make, adopt, alter, amend and repeal from time to time By-laws
of this Corporation, subject to the right of the stockholders entitled to vote
with respect thereto to adopt, alter, amend and repeal By-laws made by the Board
of Directors.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Joel Schoenfeld, its Chairman of the Board and Chief Executive Officer
and attested to by Flora Schoenfeld, its Secretary, this 14th day of April 1997.
By: /s/ Joel Schoenfeld
--------------------------------------
Joel Schoenfeld
Chairman of the Board and
Chief Executive Officer
Attest:
/s/ Flora Schoenfeld
----------------------
Flora Schoenfeld
Secretary
Board of Directors
Univec, Inc.
Farmingdale, NY
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
We have reviewed the accompanying consolidated balance sheet of Univec,
Inc. and Subsidiary as of September 30, 2000, and the accompanying consolidated
statements of operations and cash flows for the three months and nine months
then ended. These interim financial statements are the responsibility of the
company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the interim financial statements taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim consolidated financial statements in
order for them to be in conformity with generally accepted accounting
principles.
November 7, 2000 /s/ Most Horowitz & Company, LLP
-----------------------------
Most Horowitz & Company, LLP
