United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
- ---------------------------------------- --------------------------------------
For the Quarterly Period Ended Commission File Number:
August 31, 1999 0-24075
- ---------------------------------------- --------------------------------------
NBG RADIO NETWORK, INC.
(Exact name of small business issuer as specified in its charter)
- ---------------------------------------- --------------------------------------
Nevada 88-0362102
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
- ---------------------------------------- --------------------------------------
- ---------------------------------------- --------------------------------------
520 SW Sixth Avenue, Suite 750
Portland, Oregon 97204
(Address of principal executive offices) (Zip Code)
- ---------------------------------------- --------------------------------------
(503) 802-4624
(Issuer's telephone number, including area code)
Check whether the issuer (1) 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 [ ]
The registrant has one class of Common Stock with 12,148,293 shares
outstanding as of October 4, 1999.
Transitional Small Business Issuer Disclosure Format (check one):
Yes [ ] No [X].
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NBG RADIO NETWORK, INC.
(formerly Nostalgia Broadcasting Corporation)
BALANCE SHEETS
ASSETS
<TABLE>
August, 31 November 30
(Unaudited) (Audited)
-------------------------------------- -- -----------------
1999 1998 1998
------------------- ---------------- --------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,695,949 $2,414,202 1,855,666
Barter exchange receivables 212,914 206,616 241,678
Accounts receivable, net of allowance for
Doubtful accounts of $1,200 in 1999 and 1998 1,049,588 884,558 1,175,330
Loan receivable 167,200 - -
Related-party receivable 14,462 16,840 14,462
Inventory 29,628 - -
Deferred tax asset - 468 -
------------------- ---------------- --------------
Total current assets 3,169,741 3,522,684 3,287,136
------------------- ---------------- --------------
PROPERTY AND EQUIPMENT, net of accumulated depreciation 197,507 129,774 136,171
AVAILABLE FOR SALE SECURITIES 500,000 -
DEPOSITS 3,050 3,250 3,250
PROGRAMMING RIGHTS, net of amortization 748,750 - -
COVENANT NOT TO COMPETE, net of amortization 693,051 - -
GOODWILL, net of amortization 1,149,258 606,500 587,750
------------------- ---------------- --------------
Total assets $ 6,461,357 $4,262,208 $4,014,307
=================== ================ ==============
</TABLE>
<PAGE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 193,070 $ 157,091 176,202
Accrued liabilities 9,171 44,249 67,886
Program contracts payable 510,167 - -
Barter exchange payables - - -
Pre-paid advertising revenue 500,000 - -
Current portion of long-term debt 1,171 153,084 245,248
------------------- ---------------- ---------------
Total current liabilities 1,213,579 354,424 489,336
------------------- ---------------- ---------------
OTHER LIABILITIES
Long-term debt, net of current portion - 354,590 240,000
Deferred income tax liability 9,789 10,327 9,789
---------------- ---------------- ---------------
Total other liabilities 9,789 364,917 249,789
------------------- ---------------- ---------------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 20,000,000 shares
authorized; 12,148,293 and 10,091,694 shares
issued and outstanding at August 31, 1999
and 1998, respectively 12,148 10,091 10,490
Additional paid-in-capital 6,699,214 3,804,921 3,930,212
Retained deficit (1,299,714) (84,533) (484,763)
Stock subscription receivable (173,659) (187,612) (180,757)
------------------- ---------------- ---------------
Total stockholders' equity 5,237,989 3,542,867 3,275,182
------------------- ---------------- ---------------
Total liabilities and stockholders' equity $ 6,461,357 $4,221,697 $4,014,307
=================== ================ ===============
</TABLE>
See Accompanying Notes
<PAGE>
NBG RADIO NETWORK, INC.
(formerly Nostalgia Broadcasting Corporation)
STATEMENTS OF OPERATIONS
<TABLE>
THREE MONTHS ENDED NINE MONTHS ENDED
AUGUST 31 (Unaudited) AUGUST 31 (Unaudited)
----------------------------------------------------------------------
1999 1998 1999 1998
----------------- ------------------- ---------------- ---------------
<S> <C> <C> <C> <C>
REVENUES
Advertising income $ 633,183 $ 517,764 $ 1,560,395 $ 1,884,264
Kiosk income 107,503 - 291,848 -
Programming and studio income 18,585 - 18,585 -
Interest income 770 3,363 11,045 6,822
----------------- ------------------- ---------------- ---------------
Total revenues 760,041 521,127 1,881,873 1,891,086
DIRECT COSTS 26,850 53,198 103,383 350,671
COST OF GOODS SOLD 90,816 - 222,723 -
----------------- ------------------- ---------------- ---------------
GROSS MARGIN 642,375 467,929 1,555,767 1,540,415
----------------- ------------------- ---------------- ---------------
GENERAL AND ADMINISTRATIVE EXPENSES
Wages and employee benefits 371,011 126,795 769,976 352,501
Talent fees 184,620 86,469 330,791 171,735
Travel and entertainment 41,679 75,973 121,687 116,082
Consulting and professional 87,768 56,160 246,219 89,958
Advertising 23,785 80,837 58,182 120,639
Depreciation and amortization 60,226 30,907 154,488 77,084
Postage and printing 105,778 25,888 161,172 70,275
Rent 25,792 12,222 61,905 36,530
Interest 990 43,041 2,641 56,134
Office supplies 29,372 14,997 69,110 27,095
Telephone 28,241 11,651 63,529 21,171
Other expenses 108,310 47,537 331,018 200,004
----------------- ------------------- ---------------- ---------------
Total general and administrative expenses 1,067,572 612,477 2,370,718 1,339,208
----------------- ------------------- ---------------- ---------------
Net income (loss) before provision for income taxes (425,197) (144,548) (814,951) 201,207
Provision for income taxes - - - -
----------------- ------------------- ---------------- ---------------
Net income (loss) $ (425,197) $ (144,548) $(814,951) $ 201,207
================= =================== ================ ===============
Basic loss per share of common stock $ (0.04) $ (0.03) $ (0.07) $ 0.02
================= =================== ================ ===============
Weighted average number of shares outstanding 11,272,205 5,712,749 10,907,535 9,409,407
================= =================== ================ ===============
</TABLE>
See Accompanying Notes
<PAGE>
NBG RADIO NETWORK, INC.
(formerly Nostalgia Broadcasting Corporation)
STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
STOCK
ADDITIONAL RETAINED SUBSCRIPTION
COMMON STOCK PAID-IN DEFICIT RECEIVABLE TOTAL
CAPITAL
--------------------------- ------------- ------------ -------------- -----------
SHARES AMOUNT
----------- ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, November 30, 1997 1,110,000 1,110 493,363 (285,740) - 208,733
Issuance of common shares for 232,250 232 337,968 - (180,757) 157,443
Services
Issuance of common shares for 220,220 220 120,020 - - 120,240
Cancellation of notes
payable
Private placement of common 750,000 750 1,999,250 - - 2,000,000
Stock
Exercise of options and 1,184,430 1,184 986,605 - - 987,789
warrants
3 for 1 stock split 6,993,800 6,994 (6,994) - - -
Net loss for the year - - - (199,023) - (199,023)
----------- ------------ ------------- ------------ -------------- ------------
BALANCE, November 30, 1998 10,490,700 $ 10,490 $ 3,930,212 $ (484,763) $ (180,757) $3,275,182
Issuance of common shares for 350,000 350 1,266,650 - - 1,267,000
acquisition
Exercise of options and 1,307,593 1,308 1,502,352 (814,951) 7,098 689,459
warrants
----------- ------------ ------------- ------------ -------------- ------------
BALANCE, August 31, 1999 12,148,293 $ 12,148 $ 6,699,214 $(1,299,714) $ (173,659) $5,231,641
=========== ============ ============= ============ ============== ============
</TABLE>
See Accompanying Notes
<PAGE>
NBG RADIO NETWORK, INC.
(formerly Nostalgia Broadcasting Corporation)
STATEMENTS OF CASH FLOWS
<TABLE>
NINE MONTHS ENDED
AUGUST 31
(Unaudited)
-----------------------------------------
1999 1998
------------------- ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income or (Loss) $ (814,951) $ 201,207
Adjustments to reconcile net loss to cash from operating activities:
Depreciation and amortization 154,488 77,084
Changes in assets and liabilities:
Barter exchange receivables 28,764 (206,616)
Accounts receivable 125,742 (670,673)
Related-party receivables - (2,500)
Loan receivable (167,200) -
Stock subscription receivable 7,098 (187,612)
Inventory (29,628) -
Securities available for sale 500,000 -
Deposits 200 (3,250)
Accounts Payable 16,868 12,949
Program contracts payable 510,167 -
Accrued liabilities (58,715) (64,163)
------------------- ------------------
Net cash from operating activities 272,833 (843,574)
------------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Issuance of common stock $ 2,770,660 $ 3,320,539
Acquisition of investment securities (500,000) -
Goodwill from subsidiary acquisition (656,027) 14,441
Covenant not to compete from subsidiary acquisition (721,093) -
Acquisition of programming rights (748,750) -
Acquisition of property and equipment (93,263) (58,330)
------------------- ------------------
Net cash from investing activities 51,527 3,276,650
------------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (484,077) (131,567)
------------------- ------------------
Net cash from financing activities (484,077) (131,567)
------------------- ------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (159,717) 2,301,509
CASH, beginning of year 1,855,666 112,693
------------------- ------------------
CASH, end of year $ 1,695,949 $ 2,414,202
=================== ==================
</TABLE>
<PAGE>
NBG RADIO NETWORK, INC.
(formerly Nostalgia Broadcasting Corporation)
STATEMENTS OF CASH FLOWS
<TABLE>
NINE MONTHS ENDED AUGUST 31
(Unaudited)
-----------------------------------------
1999 1998
------------------- ------------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 2,641 $ 56,134
------------------- ------------------
Cash paid for income taxes $ - $ -
------------------- ------------------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Issuance of common stock for subsidiary acquisition $1,267,000 $ -
------------------- ------------------
Issuance of common stock for long term debt $ - $ 120,240
------------------- ------------------
Issuance of common stock for services, net of stock subscription
Receivable $ 22,323 $ -
------------------- ------------------
</TABLE>
See Accompanying Notes
<PAGE>
NBG RADIO NETWORK, INC.
(formerly Nostalgia Broadcasting Corporation)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY
Nostalgia Broadcasting Corporation) was organized under the laws of
the State of Nevada on March 27, 1996. In January 1998,
shareholders of Nostalgia Broadcasting Corporation approved its
name change to NBG Radio Network, Inc. (the Company). The Company
is involved in the acquisition, creation, and syndication of
national radio programming. Substantially all operations are
conducted from the Company's headquarters in Portland, Oregon.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The interim consolidated financial statements include the accounts
of NBG Radio Network, Inc. and its wholly owned subsidiaries, NBG
Solutions, Inc. and NBG Travel Exclusives, Inc., after elimination
of inter-company transactions and balances.
The interim financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The financial
information included in this interim report has been prepared by
management without audit by independent public accountants who do
not express an opinion thereon. The Company's annual report will
contain audited financial statements. In the opinion of management,
all adjustments, including normal recurring accruals necessary for
fair presentation of results of operations for the interim periods
included herein have been made. The results of operations for the
nine months ended August 31, 1999 are not necessarily indicative of
results to be anticipated for the year ending November 30, 1999.
Certain amounts for 1998 have been restated to conform with the
1999 presentation.
NOTE 3 - EARNINGS PER COMMON SHARE
Earnings per common share is calculated by dividing net income by
the weighted average shares outstanding. Weighted average shares
outstanding consists of common shares outstanding and common stock
equivalents attributable to outstanding stock options and warrants.
The weighted average number of shares and common share equivalents
have been adjusted to give retroactive effect to the 3 for 1 stock
split in July 1998.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
- -----------------------------------------------------------------
Forward Looking Statements
- --------------------------
The information set forth below relating to matters that are not
historical facts are "forward looking statements" within the meaning of Section
21E of the Securities Exchange Act of 1934 and involve risks and uncertainties
which could cause actual results to differ materially from those contained in
such forward looking statements. Such risks and uncertainties include, but are
not limited to, the following:
o A decline in national and regional advertising
o Preference by customers of other forms of advertising such as newspapers
and magazines, outdoor advertising, network radio advertising, yellow page
directories and point of sale advertising
o Loss of executive management personnel
o Ability to maintain and establish new relations with radio stations
o Ability to predict public taste with respect to entertainment programs
Three months and nine months ended August 31, 1999 and 1998
- -----------------------------------------------------------
Reference is made to Item 6, "Management's Discussion and Analysis or Plan
of Operation" included in the Company's annual report on Form 10-KSB/A for the
year ended November 30, 1998, as amended, on file with the Securities and
Exchange Commission. The following discussion and analysis pertains to the
Company's results of operations for the three-month and nine-month periods ended
August 31, 1999, compared to the results of operations for the three-month and
nine-month periods ended August 31, 1998, and to changes in the Company's
financial condition from November 30, 1998 to August 31, 1999.
REVENUES. Total revenues for the three months ended August 31, 1999 were
$760,041 compared to total revenues of $521,127 for the same period in 1998,
representing an increase of $238,914, or 46%. The increase in total revenue for
the third quarter is due to the increased number of radio stations airing the
Company's programs and the acquisition on new programs. Total revenues for the
nine months ended August 31, 1999 were $1,881,873 compared to total revenues of
$1,891,086 for the same period in 1998, representing a decrease of $9,213 or 1%.
The small decrease in total revenues for the nine months ended August 31, 1999,
was principally due to transitioning from a blend of cash and barter sales in
the first nine months of 1998 to almost exclusively cash sales in the first nine
months of 1999. The internal development of new radio programs and the
partnering with other radio programmers has allowed the Company to increase the
number of cash customers. Barter sales usually generate higher spot rates than
cash sales typically do. However, by focusing on cash sales, the Company hopes
to develop long-term relationships with customers.
In the third quarter of 1998, $307,758 of the $521,127 in total revenues,
or 59%, was barter transactions. However, in the third quarter of 1999, $37,445
of the $760,041 in total revenues, or 5%, was barter transactions. Thus, cash
sales for the third quarter of 1999 increased $509,227, or
<PAGE>
239% as compared to the same period in 1998. For the nine months ended August
31, 1998, $1,277,602 of the $1,891,086 in total revenues, or 68%, was barter
transactions. For the nine months ended August 31, 1999, $37,445 of the
$1,881,873 in total revenues, or 2%, was barter transactions. As a result, for
the nine months ended August 31, 1999, cash revenues increased $1,230,944, or
201%, compared to the same period in 1998. The Company anticipates that 90% of
total revenues for the year will consist of cash sales.
DIRECT COSTS. Direct costs for the three months ended August 31, 1999 and
1998 were $26,850 and $53,198, respectively, representing a decrease of $26,348,
or 50%. For the nine months ended August 31, 1999 and 1998, direct costs were
$103,383 and $350,671, representing a decrease of $247,288 or 71%. Direct costs
consist primarily of commissions paid to advertising agencies. The decrease in
direct costs for the third quarter of 1999, as well as for the nine months ended
August 31, 1999, was primarily due to an increase in the number of clients that
do not charge an advertising agency commission.
COST OF GOODS SOLD. Cost of goods sold represents direct costs for the
production of the Company's Kiosk marketing and label system. Cost of goods sold
for the three months ended August 31, 1999 was $90,816 or 84% of Kiosk sales.
Cost of goods sold for the nine months ended August 31, 1999 was $222,723 or 76%
of Kiosk sales. Cost of goods sold as a percentage of total revenues has
increased due to a new label product the Company introduced in the second
quarter that contains smaller profit margins than the Kiosk systems The Company
did not offer the Kiosk marketing system in 1998.
GROSS MARGIN. Gross margin for the three months ended August 31, 1999 was
$642,375, an increase of $174,446, or 37%, compared to the same period in 1998.
The increase in the dollar amount of gross margin during the third quarter of
1999 was principally due to the Company increasing the number of advertising
clients not charging an agency commission to the Company and an increase in
total revenues of $238,914. Gross margin for the nine months ended August 31,
1999 was $1,555,767, an increase of $15,352, or 1%, compared to the same period
in 1998. The increase in gross margin for the nine months ended August 31, 1999
was principally due to the increased number of advertisers not charging the
Company an agency commission.
Gross margin for the third quarter of 1999 was 85% of total revenues
compared to 90% of total revenues for the same period in 1998. The reason for
the decrease in gross margin as a percentage of total sales was due to the new
label product the Company introduced in the second quarter that has lower profit
margins than the Kiosk integration systems the Company currently produces. Gross
margin for the nine months ended August 31, 1999 was 83% of total revenues
compared to 81% of total revenues for the same period in 1998. The reason for
the increase in gross margin as a percentage of total revenues was primarily due
to the Company increasing margins on radio sales. With the addition of new
programming and the continued development of its current programming, the
Company has been able to increase advertising rates and decrease the cost of
sales. The higher margins on radio sales were partially offset by a decrease in
gross margins on Kiosk and label sales.
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the three months ended August 31, 1999 was $1,067,572, representing an
increase of $455,095, or 74%, over the same period in 1998. General and
administrative expenses for the nine months ended August 31, 1999 was
$2,370,718, representing an increase of $1,031,510, or 77%, over the same period
in 1998. The increases were primarily due to increased costs associated with the
growth of the Company. The Company acquired Mtek Technical Services, Inc. in
January of 1999. As a result of the acquisition, the Company has doubled staff
size and office space. As a result of this growth, for the three months ended
August 31, 1999 wages and employee benefits increased $244,216, or 193%, rent
increased $13,570, or 111%, telephone expenses increased $16,590, or 142%, and
office supply expense increased $14,375, or 96%, compared to the same period in
1998. In addition, postage and printing for the three months ended August 31,
1999 increased 79,890, or 309%, compared to the same period in 1998, primarily
due to the printing and mailing of the Company's quarterly travel magazine to
over 10,000 travel agents across the United States.
Also, as the Company develops and acquires new programming, the Company
has signed high profile hosts for its programs. This has resulted in talent fees
increasing $98,151, or 114%, during the third quarter of 1999 compared to the
same period in 1998. For the nine months ended August 31, 1999, wages and
employee benefits increased $417,475, or 118%, rent increased $25,375, or 69%,
telephone expenses increased $42,358, or 200%, and office supply expense
increased $42,015, or 155%. The Company incurred $28,419 in amortization expense
during the third quarter of 1999 and $66,311 for the nine months ended August
31, 1999 as a result of the purchase of Mtek Technical Services, Inc. in January
1999. Management expects general and administrative expenses to continue to grow
as the Company attempts to aggressively pursue the acquisition of new
programming and the development of existing programs.
INCOME TAXES. Due to loss carryforwards, there was no provision for income
taxes during the three months and nine months ended August 31, 1999 and 1998.
NET LOSS AND EARNINGS PER SHARE. Net loss for the three months ended
August 31, 1999 was $425,197, or $.04 per share, compared to a net loss of
$144,548, or $0.03 per share, for the same period in 1998. Net loss for the nine
months ended August 31, 1999 was $814,951, or $0.03 per share, compared to net
income of $201,207, or $0.02 share, for the same period in 1998. The loss for
1999 was mainly due to increased amortization expense, professional fees, office
expenses, and employee benefits.
Earnings per share, which includes the dilutive effects of options and
warrants to purchase common stock, are based upon 12,148,293 and 10,091,694
shares outstanding on August 31, 1999 and 1998, respectively. The Company
declared a three for one stock split in June of 1998 payable to all shareholders
or record as of July 31, 1998. Per share earnings for the first three quarters
of 1998 were adjusted to reflect the stock split.
Liquidity and Capital Resources
- -------------------------------
Historically, the Company has financed its cash flow requirements through
cash flows generated from operations and financing activities. The Company's
working capital at August 31, 1999 was $1,695,949 compared to $2,414,202 at
August 31, 1998.
<PAGE>
In June 1998 the Company completed a private placement of 250,000 units at
$2.00 per unit. Each unit consisted of one share of common stock and one warrant
to purchase one share of common stock, exercisable immediately. The warrants are
exercisable for $2.25 from June 1998 to January 31, 2000. The warrants then
become exercisable for $2.50 after February 1, 2000 and expire on July 31, 2001.
The Company received proceeds of $500,000 from the private placement.
In July 1998 the Company completed a second private placement of 500,000
units at $3.00 per unit. Each unit consisted of one share of common stock and
one warrant to purchase one share of common stock, exercisable immediately. The
warrants are exercisable at $3.50 and expire on July 31, 1999. The Company
received proceeds of $1,500,000 from the private placement.
The Company declared a three for one stock split in June of 1998 payable
to all shareholders or record as of July 31, 1998. The offerings discussed above
and the warrant prices indicated do not reflect the stock split.
The Company had a note payable to ITEX Corporation with an outstanding
balance of $478,596 as of February 28, 1999. The original balance of the note
was $600,000. The terms of the note require the Company to pay $120,000 per
annum plus interest calculated at 6%. The term of the note was five years and
the last payment was scheduled to be made on May 5, 2001. The balance of the
note plus accrued interest of $27,430 was paid off on May 4, 1999. The Company
does not currently have any long term debt.
Management believes that its available cash together with operating
revenues will be sufficient to fund the Company's working capital requirements
through November 30, 2001. The Company's management further believes it has
sufficient liquidity to implement its expansion and acquisition strategies.
Year 2000
- ---------
The Year 2000 issue exists because many computer programs use two digit
date fields to define the applicable year rather than four digit date fields.
Because of this, computer equipment and software (sometimes referred to as
"information technology" or "IT") and devices with embedded technology
(sometimes referred to as "non-IT") that are time-sensitive may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations, including,
among other things, production delays or breakdowns, a temporary inability to
process transactions, send invoices, or engage in other normal business
activity. Incomplete or untimely resolution of the Year 2000 issue by the
Company or important suppliers or customers of the Company could have a
materially adverse effect on the Company's business, financial condition or
results of operations.
The Company's approach to the Year 2000 issue is discussed below. In
discussing the Year 2000 issue, the Company necessarily makes certain forward
looking statements. There can be no assurance that actual results will not
differ materially from the projections contained in the forward looking
statements. Factors which may cause actual results to differ materially include,
but are not limited to:
o failure of Company personnel and outside consultants to properly assess and
address the Company's Year 2000 issues,
<PAGE>
o inaccurate or incomplete responses to questionnaires sent to third parties
or inaccurate disclosure by third parties regarding the Year 2000 issue,
o failure to address Year 2000 issue with all vendors, including utility
vendors, and customers,
o infrastructure failures, such as disruptions in the supply of electricity,
gas, water or communications services, or major institutions, such as the
government and banking systems, and
o failure of the Company to accurately predict the costs to address the Year
2000 issue or the lost revenues related to interruption in the Company's or
its customers' businesses.
State of Readiness. The Company, in conjunction with outside consultants,
has made an assessment of the effect of the Year 2000 issue on its IT and non-IT
systems. The Company has identified certain modifications to its IT systems
which are necessary to address the Year 2000 issue and has fully implemented
those modifications. The Company has determined there are no necessary
modifications to its non-IT systems. Based on this assessment and implementation
of the modifications discussed above, the Company believes its IT systems and
non-IT systems will properly recognize calendar dates beginning in the year
2000.
In addition, the Company has evaluated, through conversations and
questionnaires sent to its critical vendors and customers, the IT systems of
most of its outside vendors and customers. The Company has received responses
from approximately 90% of its vendors and 75% of its customers. The Company does
not expect to receive all of the remaining responses in time to correct any
problems which may be identified in such responses. The Company has, however,
received replies from what the Company considers to be its critical vendors and
customers. Based on the responses received to date, the Company does not believe
the Year 2000 issue will have a material adverse effect on the Company.
Costs to Address Year 2000 Issue. To date, the Company has incurred costs
of approximately $7,500 and the Company estimates its total cost to become Year
2000 compliant will be approximately $10,000. Accordingly, the Company expects
the costs to address the Year 2000 issue will not have a material adverse
financial impact on the Company's financial condition or results of operations.
However, there can be no assurance that additional remediation and costs will
not be identified, especially since the Company has not received responses from
all third parties.
Risks of the Company's Year 2000 Issue. The most reasonably likely worst
case scenario for the Company would involve an extended shutdown in production
and/or lost revenue caused by interruption in the Company's customers'
businesses. The Company is unable to quantify the effect of such scenario.
However, the Company has identified its critical vendors and customers and does
not believe that any such vendors or customers represent a significant risk.
Company's Contingency Plan. Based on the Company's assessment of the Year
2000 issue, the Company has not developed and does not intend to develop a
contingency plan to address the reasonably likely worst case scenario.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) An Annual Meeting of Stockholders was held on July 27, 1999.
(b) John A. Holmes, III, Peter Jacobsen, Dick Versace, Steven R. Sears
and Christopher J. Miller were elected as directors of the Company.
(c) The only matter voted upon at the Annual Meeting of Stockholders
was the election of directors. The results of the election were as
follows:
- --------------------- ----------- ------------------ ------------- ------------
Nominee Votes For Votes Against or Abstentions Broker
Withheld Nonvotes
- --------------------- ----------- ------------------ ------------- ------------
John A. Holmes, III 6,268,938 0 0 0
- --------------------- ----------- ------------------ ------------- ------------
Peter Jacobsen 6,268,938 0 0 0
- --------------------- ----------- ------------------ ------------- ------------
Dick Versace 6,268,938 0 0 0
- --------------------- ----------- ------------------ ------------- ------------
Steven R. Sears 6,208,938 60,000 0 0
- --------------------- ----------- ------------------ ------------- ------------
Christopher J. Miller 6,208,938 60,000 0 0
- --------------------- ----------- ------------------ ------------- ------------
(d) None.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
Exhibit Number Description of Exhibit
-------------- ----------------------
3.2 Amended and Restated Bylaws of NBG Radio Network, Inc.
27 Financial Data Schedule
(b) No reports on form 8-K were required to be filed during the quarter ended
August 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NBG RADIO NETWORK, INC.,
a Nevada corporation
Date: October 14, 1999 By: /s/ John J. Brumfield
--------------------------------------------
John J. Brumfield, Chief Financial Officer
Vice President, Finance
(Principal Financial and Accounting Officer)
AMENDED AND RESTATED BYLAWS
OF
NBG RADIO NETWORK, INC.
(Effective June 1, 1999)
Article I
Offices
Section 1. Registered Office. The registered agent and office of the
Corporation shall reside or be located in the State of Nevada.
Section 2. Other Offices. The Corporation may also have an office or
offices other than said registered office at such place or places, either within
or without the State of Nevada, as the Board of Directors shall from time to
time determine or the business of the Corporation may require.
Article II
Meetings of Stockholders
Section 1. Place of Meetings. All meetings of the stockholders for the
election of directors or for any other purpose shall be held at any such place,
either within or without the State of Nevada, as shall be designated from time
to time by the Board of Directors and stated in the notice of meeting or in a
duly executed waiver thereof.
Section 2. Annual Meeting. The annual meeting of the stockholders shall be
held at such other date and time as shall be designated from time to time by the
Board of Directors and stated in the notice of meeting or in a duly executed
waiver thereof. At such annual meeting, the stockholders shall elect, by a
plurality vote, a Board of Directors and transact such other business as may
properly be brought before the meeting. If for any reason, directors are not
elected by consent of the stockholders in lieu of a meeting or at the annual
meeting, they may be elected at any special meeting of the stockholders which is
called and held for that purpose.
Section 3. Special Meetings. Special meetings of the stockholders, unless
otherwise prescribed by statute, may be called at any time by the Board of
Directors or the Chairman of the Board, if one shall have been elected, or the
President.
Section 4. Notice of Meetings. Except as otherwise expressly required by
statute, written notice of each meeting of the stockholders stating the date,
place and hour of the meeting, and the purpose or purposes for which the meeting
is called, shall be given to each stockholder of record entitled to vote thereat
not less than ten (10) or more than sixty (60) days before the date of the
meeting. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice. Notice shall be given personally
or by mail and, if by mail, shall be sent in a postage prepaid envelope,
addressed to the stockholder at his address as it appears on
1 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
the records of the Corporation. Notice by mail shall be deemed given at the
time when the same shall be deposited in the United States mail, postage
prepaid. Notice of any meeting shall not be required to be given to any person
who attends such meeting, except when such person attends the meeting in person
or by proxy 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, or who, either before or after the meeting, shall submit a
signed written waiver of notice, in person or by proxy. Neither the business to
be transacted at, nor the purpose of, an annual or special meeting of
stockholders need be specified in any written waiver of notice.
Section 5. List of Stockholders. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city, town or village where
the meeting is to be held, which place shall be specified in the notice of
meeting, or, if not specified, at the place where the meeting is to be held. The
list shall be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. Unless the statute, the Articles of Incorporation or
these Bylaws provide for different proportions, the holders of a majority of the
voting power, which includes the voting power that is present in person or by
proxy, regardless of whether the proxy has authority to vote on all matters, of
the issued and outstanding stock of the Corporation entitled to vote thereat,
constitutes a quorum for the transaction of business at all meetings of
stockholders. If, however, such quorum shall not be present or represented by
proxy at any meeting of stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented by proxy.
Section 7. Voting Power. Unless the statute, the Articles of Incorporation
or the Bylaws provide for different proportions, when a quorum is present at any
meeting, action by the stockholders on a matter other than the election of
directors is approved if the number of votes cast in favor of the action exceeds
the number of votes cast in opposition to the action. Unless otherwise elected
pursuant to Nevada law, directors must be elected at the annual meeting of the
stockholders, by a plurality of the votes cast at the election.
Section 8. Adjournments. At an adjourned meeting at which a quorum shall be
present or represented by proxy, any business may be transacted which might have
been transacted at the meeting as originally called. If the adjournment is for
more than thirty days, or, if after adjournment a new record date is set, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 9. Organization. At each meeting of the stockholders, the Chairman
of the Board, if one shall have been elected, or in his absence or if one shall
not have been elected, the President shall act as chairman of the meeting. The
Secretary, or in his absence or inability to
2 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
act, the person whom the chairman of the meeting shall appoint secretary of the
meeting, shall act as secretary of the meeting and keep the minutes thereof.
Section 10. Order of Business. The order of business at all meetings of the
stockholders shall be as determined by the chairman of the meeting.
Section 11. Voting. Except as otherwise provided by statute or the Articles
of Incorporation, each stockholder of record of the Corporation is entitled at
each meeting of the stockholders to one vote for each share of stock of the
Corporation standing in his name on the record of stockholders of the
Corporation:
(a) on the date fixed pursuant to the provisions of Section 6 of
Article V of these Bylaws as the record date for the determination of the
stockholders who shall be entitled to notice of and to vote at such meeting; or
(b) if no such record date shall have been so fixed, then at the close
of business on the date next preceding the day on which notice thereof shall be
given, or, if notice is waived, at the close of business on the date next
preceding the day on which the meeting is held.
Section 12. Proxies. Each stockholder entitled to vote at any meeting
of the stockholders may designate another person or persons to act as a proxy or
proxies. If any stockholder designates two or more person to act as proxies, a
majority of those persons present at the meeting, or, if one is present, then
that one has and may exercise all of the powers conferred by the stockholder
upon all of the person so designated unless the stockholder provides otherwise.
Without limiting the manner in which a stockholder may authorize another person
or persons to act for him as a proxy, the following constitute valid means by
which a stockholder may grant such authority:
(a) A stockholder may execute a writing authorizing another person or
persons to act for him as proxy.The proxy may be limited to action on designated
matters. Execution may be accomplished by the signing of the writing by the
stockholder or his authorized officer, director, employee or agent or by causing
the signature of the stockholder to be affixed to the writing by any reasonable
means, including, but not limited to, a facsimile signature.
(b) A stockholder may authorize another person or person to act for
him as proxy by transmitting or authorizing the transmission of a telegram,
cablegram or other means of electronic transmission to the person who will be
the holder of the proxy or to a firm which solicits proxies or like agent who is
authorized by the person who will be the holder of the proxy to receive the
transmission. Any such telegram, cablegram or other means of electronic
transmission must either set forth or be submitted with information from which
it can be determined that the telegram, cablegram or other electronic
transmission was authorized by the stockholder. If it is determined that the
telegram, cablegram or other electronic transmission is valid, the person
appointed by the corporation to count the votes of stockholders and determine
the validity or proxies and ballots or other persons making those determinations
must specify the information upon which they relied.
3 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
No such proxy is valid after the expiration of 6 months from the date of
its creation unless it is coupled with an interest, or unless the stockholder
specifies in it the length of time for which it is to continue in force, which
may not exceed 7 years from the date of its creation. Subject to theses
restriction, any proxy properly created is not revoked and continues in full
force and effect until another instrument or transmission revoking it or a
properly created proxy bearing a later date is filed with or transmitted to the
secretary of the Corporation or another person or persons appointed by the
Corporation to count the votes of stockholders and determine the validity of
proxies and ballots.
Any such proxy shall be delivered to the secretary of the meeting at or
prior to the time designated in the order of business for so delivering such
proxies.
Unless required by statute, or determined by the chairman of the
meeting to be advisable, the vote on any question need not be by ballot. On a
vote by ballot, each ballot shall be signed by the stockholder voting, or by his
proxy, if there be such proxy, and shall state the number of shares voted.
Section 13. Inspectors. The Board of Directors may, in advance of any
meeting of stockholders, appoint one or more inspectors to act at such meeting
or any adjournment thereof. If any of the inspectors so appointed shall fail to
appear, the chairman of the meeting shall, or if inspectors shall not have been
appointed, the chairman of the meeting may, appoint one or more inspectors. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors
shall determine the number of shares of capital stock of the Corporation
outstanding and the voting power of each, the number of shares represented at
the meeting, the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the results, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the chairman of the meeting, the inspectors shall make a report in
writing of any challenge, request or matter determined by them and shall execute
a certificate of any fact found by them. No director or candidate for the office
of director shall act as an inspector of an election of directors. Inspectors
need not be stockholders.
Section 14. Action by Consent. Unless otherwise provided in the Articles of
Incorporation or the Bylaws, any action required or permitted to be taken at a
meeting of the stockholders may be taken without a meeting if a written consent
thereto is signed by stockholders holding at least a majority of the voting
power, except that if a different proportion of voting power is required for
such an action at a meeting, then that proportion of written consents is
required.
Section 15. Participation by Telephone or Similar Method. Unless otherwise
restricted by the Articles of Incorporation or the Bylaws, stockholders may
participate in a meeting of the stockholders by means of a telephone conference
or similar method of communication by which all persons participating in the
meeting can hear each other. Participation by such means shall constitute
presence in person at a meeting.
4 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Article III
Board of Directors
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors. The Board
of Directors may exercise all such authority and powers of the Corporation and
do all such lawful acts and things as are not by statute or the Articles of
Incorporation directed or required to be exercised or done by the stockholders.
Section 2. Number and Qualifications. Each director must be a natural
person who is at least 18 years of age. A director need not be a stockholder or
a resident of the State of Nevada. The number of directors constituting the
whole board shall be such number as may be fixed from time to time by action of
the stockholders or of the directors, or, if the number is not so fixed, the
number shall be at least one (1) or no more than nine (9). The number of
directors may be increased or decreased by action of the stockholders or the
directors.
Section 3. Place of Meetings. Meetings of the Board of Directors shall
shall be held at such place or places, within or without the State of Nevada, as
the Board of Directors may from time to time determine or as shall be specified
in the notice of any such meeting.
Section 4. Annual Meeting. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of the stockholders,
on the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
other time or place (within or without the State of Nevada) as shall be
specified in a notice thereof given as hereinafter provided in Section 7 of this
Article III.
Section 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such time and place as the Board of Directors may fix. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held on that
day shall be held at the same hour on the next succeeding business day. Notice
of regular meetings of the Board of Directors need not be given except as
otherwise required by statute or these Bylaws.
Section 6. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board, if one shall have been elected, or by
two or more directors of the Corporation or by the President.
Section 7. Notice of Meetings. Notice of each special meeting of the Board
of Directors (and of each regular meeting for which notice shall be required)
shall be given by the Secretary as hereinafter provided in this Section 7, in
which notice shall be stated the time and place of the meeting. Except as
otherwise required by these Bylaws, such notice need not state the purpose of
such meeting. Notice of each such meeting shall be mailed, postage prepaid, to
each director, addressed to him at his residence or usual place of business, by
first-class mail, at least two days before the day on which such meeting is to
be held, or shall be sent addressed to him at such place by telegraph, cable,
telex, telecopier or other similar means, or be delivered to
5 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
him personally or be given to him by telephone, or other similar means, at least
twenty-four hours before the time at which such meeting is to be held. Notice of
any such meeting need not be given to any director who shall, either before or
after the meeting, submit a signed waiver of notice or who shall attend such
meeting, except when he shall attend 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.
Section 8. Quorum and Manner of Acting. A majority of the entire Board of
Directors shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, and, except as otherwise expressly required
by statute or the Articles of Incorporation or these Bylaws, the act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. In the absence of a quorum at any
meeting of the Board of Directors, a majority of the directors present thereat
may adjourn such meeting to another time and place. Notice of the time and place
of any such adjourned meeting shall be given to the directors unless such time
and place were announced at the meeting at which the adjournment was taken, in
which case such notice shall only be given to the directors who were not present
thereat. At any adjourned meeting at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
called. The directors shall act only as a Board and the individual directors
shall have no power as such.
Section 9. Organization. At each meeting of the Board of Directors, the
Chairman of the Board, if one shall have been elected, or, in the absence of the
Chairman of the Board or if one shall not have been elected, the President (or,
in his absence, another director chosen by a majority of the directors present)
shall act as chairman of the meeting and preside thereat. The Secretary, or, in
his absence, any person appointed by the chairman shall act as secretary of the
meeting and keep the minutes thereof.
Section 10. Resignations. Any director of the Corporation may resign at any
time by giving written notice of his resignation to the Corporation. Any such
resignation shall take effect at the time specified or, if the time when it
shall become effective shall not be specified therein, immediately upon its
receipt. Unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 11. Vacancies. Any vacancy in the Board of Directors, including
those caused by an increase in the number of directors, may be filled by the
vote of a majority of the remaining directors, though less than a quorum. Unless
otherwise provided in the Articles of Incorporation, when one or more directors
give notice of his or their resignations to the Board, effective at a future
date, the Board may fill the vacancy or vacancies to take effect when the
resignation or resignations become effective, each director so appointed to hold
office during the remainder of the term of office of the resigning director or
directors.
Section 12. Removal of Directors. Except as otherwise provided by the
Articles of Incorporation or statute, any director may be removed from office by
the vote of stockholders representing not less than two-thirds of the voting
power of the issued and outstanding stock entitled to voting power.
6 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Section 13. Compensation. The Board of Directors shall serve without
compensation, unless otherwise determined by the Board of Directors. The Board
of Directors, without regard to personal interest, may establish the
compensation of directors for services in any capacity. Directors will be
reimbursed for expenses incurred for services rendered to the Corporation.
Section 14. Committees. Unless otherwise provided in the Articles of
Incorporation, the Board of Directors may designate one or more committees
(including any executive committee) which, to the extent provided in the
resolution or resolutions or in the Bylaws, have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the Corporation to be
affixed to all papers on which the Corporation desires to place a seal. The
committee or committees must have such name or names as may be stated in the
Bylaws or as may be determined from time to time by resolution adopted by the
Board of Directors. Each committee must include at least one director of the
Corporation and the Board of Directors may appoint natural persons who are not
directors to serve on any committee. The Board of Directors may designate one or
more persons as alternate members of any committee, who may replace any absent
member at any meeting of the committee. Each such committee shall serve at the
pleasure of the Board of Directors. Each committee shall keep regular minutes of
its meetings and report the same to the Board of Directors.
Section 15. Action by Consent. Unless restricted by the Articles of
Incorporation, any action required or permitted to be taken by the Board of
Directors or any committee thereof may be taken without a meeting if all members
of the Board of Directors or such committee consent in writing to the adoption
of a resolution authorizing the action. The resolution and the written consents
thereto by the members of the Board of Directors or such committee shall be
filed with the minutes of the proceedings of the Board of Directors or such
committee.
Section 16. Participation by Telephone or Similar Method. Unless restricted
by the Articles of Incorporation, any one or more members of the Board of
Directors or any committee thereof may participate in a meeting of the Board of
Directors or such committee by means of a telephone conference or similar method
of communication by which all persons participating in the meeting can hear each
other. Participation by such means shall constitute presence in person at a
meeting.
Section 17. Restrictions on Transactions Involving Interested Directors or
Officers. A contract or other transaction is not void or voidable solely
because: (a) the contract or transaction is between the Corporation and (i) one
or more of its directors or officers; or (ii) another corporation, firm or
association in which one or more of its directors or officers are directors of
officers or are financially interested; or (b) a common or interested director
or officer (i) is present at the meeting of the Board of Directors or a
committee thereof which authorized or approves the contract or transaction; or
(ii) joins in the execution of a written consent which authorizes or approves
the contract or transaction; or (c) the vote or votes of a common or interested
director are counted for the purpose of authorizing or approving the contract or
transaction, if one of the following circumstances exists:
7 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
(a) The fact of the common directorship, office or financial interest
is known to the Board of Directors or committee, and the Board or committee
authorizes, approves or ratifies the contract or transaction in good faith by a
vote sufficient for the purpose without counting the vote or votes of the common
or interested director or directors; or
(b) The fact of the common directorship, office or financial interest
is known to the stockholders, and they approve or ratify the contact or
or transaction in good faith by a majority vote of stockholders holding a
majority of the voting power. The votes of the common or interested directors
directors or officers must be counted in any such vote of stockholders.
(c) The fact of the common directorship, office or financial interest
is known to the director or officer at the time the transaction is brought
before the Board of Directors of the Corporation for action.
(d) The contract or transaction is fair as to the Corporation at the
time it is authorized or approved.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies a contract or transaction, and if the votes of
the common or interested directors are not counted at the meeting, then a
majority of the disinterested directors may authorize, approve or ratify a
contract or transaction.
Article IV
Officers
Section 1. Number and Qualifications. The officers of the Corporation shall
be appointed by the Board of Directors and shall nclude the President, the
Secretary and the Treasurer, and may include the Chairman of the Board, one or
more Vice Presidents, assistant secretaries and assistant treasurers and such
other officers and agents as may be deemed necessary. All officers must be
natural persons and any natural person may hold two or more offices. Each
officer shall hold office until the first meeting of the Board of Directors
following the next annual meeting of the stockholders, and after the expiration
of this term until a successor is chosen or until his resignation or removal
before the expiration of his term. A failure to elect officers does not require
the Corporation to be dissolved. Any vacancy occurring in an office of the
Corporation by death, resignation, removal or otherwise, must be filled as the
Bylaws provide, or in the absence of such a provision by the Board of Directors.
Section 2. Resignations. Any officer of the Corporation may resign at any
time by giving written notice of his resignation to the Board of Directors or
the President or the Secretary. Any such resignation shall take effect at the
time specified therein or, if the time when it shall become effective shall not
be specified therein, immediately upon its receipt. Unless otherwise specified
therein, the acceptance of any such resignation shall not be necessary to make
it effective.
Section 3. Removal. Any officer of the Corporation may be removed, either
with or without cause, at any time, by the Board of Directors at any meeting
thereof.
8 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Section 4. Chairman of the Board. The Chairman of the Board shall preside
at all meetings of the Board of Directors and shall perform such other duties as
from time to time may be prescribed by the Board.
Section 5. The President. The President shall be the chief executive
officer of the Corporation and, subject to the control of the Board of
Directors, in general and shall supervise, direct and control the business and
affairs and the other officers (except the Chairman of the Board) of the
Corporation. In the absence of the Chairman of the Board, or if a Chairman of
the Board has not been elected, the President shall preside at each meeting of
the Board of Directors or the stockholders. The President shall perform all
duties incident to the office of President and chief executive officer and such
other duties as may from time to time be assigned to him by the Board of
Directors.
Section 6. Vice-Presidents. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Board of Directors or
the President. At the request of the President or in his absence or in the event
of his inability or refusal to act, the Vice-President, or if there shall be
more than one, the Vice-Presidents in the order determined by the Board of
Directors (or if there be no such determination, then the Vice-Presidents in the
order of their election), shall perform the duties of the President, and, when
so acting, shall have the powers of and be subject to the restrictions placed
upon the President in respect of the performance of such duties.
Section 7. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds and
securities of the Corporation;
(b) keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation;
(c) deposit all moneys and other valuables to the credit of the Corporation
in such depositaries as may be designated by the Board of Directors or pursuant
to its direction;
(d) receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and supervise the investments of
its funds, taking proper vouchers therefor;
(f) render to the Board of Directors, whenever the Board of Directors may
require, an account of the financial condition of the Corporation; and
(g) in general, perform all duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the Board of
Directors.
9 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Section 8. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the purpose,
the minutes of all meetings of the Board of Directors, the committees of the
Board of Directors and the stockholders;
(b) see that all notices are duly given in accordance with the provisions
of these Bylaws and as required by law;
(c) be custodian of the records and the seal of the Corporation and affix
and attest the seal to all certificates for shares of the Corporation (unless
the seal of the Corporation on such certificates shall be a facsimile, as
hereinafter provided) and affix and attest the seal to all other documents to be
executed on behalf of the Corporation under its seal (if any);
(d) see that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly kept and
filed; and
(e) in general, perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the Board of
Directors.
Section 9. The Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties as from time to time may be
assigned by the Board of Directors.
Section 10. The Assistant Secretary. The Assistant Secretary, or if there
shall be more than one, the Assistant Secretaries in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties as from time to time may be
assigned by the Board of Directors.
Section 11. Officers' Bonds or Other Security. If required by the Board of
Directors, any officer of the Corporation shall give a bond or other security
for the faithful performance of his duties, in such amount and with such surety
or sureties as the Board of Directors may require.
Section 12. Compensation. The compensation of the officers of the
Corporation for their services as such officers shall be fixed from time to time
by the Board of Directors. An officer of the Corporation shall not be prevented
from receiving compensation by reason of the fact that he is also a director of
the Corporation.
10 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Article V
Shares etc.
Section 1. Share Certificates. Except as provided in Section 2 of this
Article, each stockholder of the Corporation is entitled to have a certificate,
in such form as shall be approved by the Board of Directors and signed by
officers or agents designated by the Corporation, certifying the number of
shares of the Corporation owned by him. The certificates representing shares
shall be signed in the name of the Corporation by the President or a
Vice-President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer and sealed with the seal of the Corporation, if any (which
seal may be a facsimile, engraved or printed); provided, however, that where any
such certificate is countersigned or authenticated by a transfer agent or
transfer clerk, or the registrar of the Corporation, then a facsimile of the
signatures of the officers, the transfer agent or transfer clerk or the
registrar of the Corporation may be printed or lithographed upon the certificate
in lieu of the actual signature. If any officer or officers who have signed, or
whose facsimile signature or signatures have been used on, any certificate or
certificates for stock cease to be an officer or officers of the Corporation,
whether because of death, resignation or other reason, before the certificate or
certificates have been delivered by the Corporation, the certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed the certificate or
certificates, or whose facsimile signature or signatures have been used thereon,
had not ceased to be an officer of officers of the Corporation.
Section 2. Uncertificated Certificates. In lieu of certificates, the
Corporation may issue uncertificated shares of some or all of the shares of any
or all of its classes or series. The issuance of uncertificated shares has no
effect on existing certificates for shares until surrendered to the Corporation,
or on the respective rights and obligations of the stockholders. Unless
otherwise provided by a specific statute, the rights and obligations of the
stockholders, are identical whether or not their shares of stock are represented
by certificates. Within a reasonable time after the issuance or transfer of
shares without certificates, the Corporation shall send the stockholder a
written statement containing the information required on the certificates
pursuant to Section 1 above. At least annually thereafter, the Corporation shall
provide to stockholders of record, a written statement confirming the
information contained in the informational statement previously sent pursuant to
this Section.
Section 3. Transfer of Shares. Transfer of shares of the Corporation shall
be made on the records of the Corporation only upon authorization by the
registered holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary or with a transfer agent,
and on surrender of the certificate or certificates for such shares properly
endorsed or accompanied by a duly executed stock transfer power and the payment
of all taxes thereon. The person in whose names shares shall stand on the record
of stockholders of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation. Whenever any transfer of shares shall be
made for collateral security and not absolutely and written notice thereof shall
be given to the Secretary or to a transfer agent, such fact shall be noted on
the records of the Corporation.
11 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Section 4. Transfer Agents and Registrars. The Board of Directors may
appoint, or authorize any officer or officers to appoint, one or more transfer
agents and one or more registrars and may require all certificates for shares of
stock to bear the signature of any of them.
Section 5. Regulations. The Board of Directors may make such additional
rules and regulations, not inconsistent with these Bylaws, as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the Corporation.
Section 6. Fixing of Record Date. The Board of Directors may fix, in
advance, a date not more than sixty (60) nor less than ten (10) days before the
date then fixed for the holding of any meeting of the stockholders or before the
last day on which the consent or dissent of the stockholders may be effectively
expressed for any purpose without a meeting, as the time as of which the
stockholders entitled to notice of and to vote at such meeting or whose consent
or dissent is required or may be expressed for any purpose, as the case may be,
shall be determined, and all persons who were stockholders of record of voting
shares at such time, and no others, shall be entitled to notice of and to vote
at such meeting or to express their consent or dissent, as the case may be. The
Board of Directors may fix, in advance, a date not more than sixty (60) nor less
than ten (10) days preceding the date fixed for the payment of any dividend or
the making of any distribution or the allotment of rights to subscribe for
securities of the Corporation, or for the delivery of evidence of rights or
evidences of interests arising out of any change, conversion or exchange of
shares or other securities, as the record date for the determination of the
stockholders entitled to receive any such dividend, distribution, allotment,
rights or interests, and in such case only the stockholders of record at the
time so fixed shall be entitled to receive such dividend, distribution,
allotment, rights or interests.
Section 7. Lost, Destroyed or Mutilated Certificates. The holder of any
certificate representing shares of the Corporation shall immediately notify the
Corporation of any loss, destruction or mutilation of such certificate, and the
Corporation may issue a new certificate in the place of any certificate
theretofore issued by it which the owner thereof shall allege to have been lost
or destroyed or which shall have been mutilated. The Board of Directors may, in
its discretion, require such owner or his legal representatives to give to the
Corporation a bond in such sum, limited or unlimited, and in such form and with
such surety or sureties as the Board of Directors in its absolute discretion
shall determine, to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss of destruction of any such
certificate, or the issuance of such new certificate.
Article VI
Indemnification
To the fullest extent permitted by law, the Corporation may indemnify
its officers, directors, employees and agents, including on the terms, to the
extent, and subject to the condition prescribed by statute and by such rules and
regulations, not inconsistent with statute, as the Board of Directors may in its
discretion impose in general or particular cases or classes of cases, (a) the
Corporation may indemnify any person who was or is a party, or is threatened to
be made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, except an
action by or in the right of the Corporation, by reason of the fact that he is
or was a director, officer, employee or agent of the Corporation,
12 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorney's fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interest of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful; or (b)
the Corporation may indemnify any person who was or is a party, or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in favor by reason of the
fact that he is or was a director, officer, 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, partnership, joint
venture, trust or other enterprise, against expenses, including amounts paid in
settlement and attorney's fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interest of the Corporation; provided, indemnification may not be
made for any claim, issue or matter as to which such a person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom
to be liable to the Corporation or for amounts paid in settlement to the
Corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
To the extent any director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in (a) and (b) above, or in defense of
any claim, issue or matter therein, the Corporation shall indemnify him against
expenses, including attorney's fees, actually and reasonably incurred by him in
connection with the defense.
Article VII
General Provisions
Section 1. Dividends. Subject to statute and the Articles of Incorporation,
dividends or distributions upon the shares of the Corporation may be declared by
the Board of Directors at any regular or special meeting. Dividends may be paid
in cash, in property or in shares of the Corporation, unless otherwise provided
by statute or the Articles of Incorporation.
Section 2. Reserves. Before payment of any dividend, there may be set aside
out of any funds of the Corporation available for dividends such sum or sums as
the Board of Directors may, from time to time, in its absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation or
for such other purpose as the Board of Directors may think conducive to the
interests of the Corporation. The Board of Directors may modify or abolish any
such reserves in the manner in which it was created.
Section 3. Seal. The seal of the Corporation, if any, shall be in such form
as shall be approved by the Board of Directors.
13 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
<PAGE>
Section 4. Fiscal Year. The fiscal year-end of the Corporation shall be
November 30 or such other date as the Board of Directors may determine.
Section 5. Checks, Notes Drafts, Etc.. All checks, notes, drafts or other
orders for the payment of money of the Corporation shall be signed, endorsed or
accepted in the name of the Corporation by such officer, officers, person or
persons as from time to time may be designated by the Board of Directors or by
an officer or officers authorized by the Board of Directors to make such
designation.
Section 6. Execution of Contracts Deeds, Etc. The Board of Directors may
authorize any officer or officers, agent or agents, in the name and on behalf of
the Corporation to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such authority
may be general or confined to specific instances.
Section 7. Voting of Stocks in Other Corporations. Unless otherwise
provided by resolution of the Board of Directors, or the President, from time to
time, may (or may appoint one or more attorneys or agents to) cast the votes
which the Board of Directors may be entitled to cast as a stockholder or
otherwise in any other corporation, any of whose shares or securities may be
held by the Corporation, at meetings of the holders of the shares or other
securities of such other corporation, or to consent in writing to any action by
any such other corporation. In the event one or more attorneys or agents are
appointed, the President may instruct the person or persons so appointed as to
the manner of casting such votes or giving such consent. The President may, or
may instruct the attorneys or agents appointed to, execute or cause to be
executed in the name and on behalf of the Corporation and under its seal or
otherwise, such written proxies, consents, waivers or other instruments as may
be necessary or proper in the premises.
Article VIII
Amendments
These Bylaws may be amended or repealed or new Bylaws may be adopted at
any annual or special meeting of stockholders at which time a quorum is present
or represented, by the vote of the holders of shares entitled to vote in the
election of directors provided that notice of the proposed amendment or repeal
or adoption of new Bylaws is contained in the notice of such meeting. These
Bylaws may also be amended or repealed or new Bylaws may be adopted by the Board
at any regular or special meeting of the Board of Directors. Bylaws adopted by
the Board of Directors may be amended or repealed by the stockholders.
14 - Amended and Restated Bylaws
(NBG Radio Network, Inc.)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOUND IN THE COMPANY'S REPORT ON FORM 10-QSB FOR THE
QUARTER ENDED AUGUST 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001059366
<NAME> NBG Radio Network, Inc.
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> AUG-31-1999
<EXCHANGE-RATE> 1
<CASH> 1,695,949
<SECURITIES> 0
<RECEIVABLES> 1,445,364
<ALLOWANCES> 1,200
<INVENTORY> 29,628
<CURRENT-ASSETS> 3,169,741
<PP&E> 294,399
<DEPRECIATION> 96,892
<TOTAL-ASSETS> 6,461,357
<CURRENT-LIABILITIES> 1,213,579
<BONDS> 0
0
0
<COMMON> 12,148
<OTHER-SE> 6,699,214
<TOTAL-LIABILITY-AND-EQUITY> 6,461,357
<SALES> 107,503
<TOTAL-REVENUES> 760,041
<CGS> 90,816
<TOTAL-COSTS> 117,666
<OTHER-EXPENSES> 1,066,582
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 990
<INCOME-PRETAX> (425,197)
<INCOME-TAX> 0
<INCOME-CONTINUING> (425,197)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (425,197
<EPS-BASIC> (.04)
<EPS-DILUTED> (.03)
</TABLE>
