SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
/ X / QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended February 28, 1997
(3rd Quarter fiscal 1997)
/ X / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
For the transition period from ________ to ______________
Commission file number 1-4676
THE BETHLEHEM CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Pennsylvania 24-0525900
- ---------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
25th and Lennox Streets, P.O. Box 348, Easton, PA 18044-0348
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(610) 258-7111
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report.
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
Number of shares outstanding of the issuer's classes of common stock
as of February 28, 1997: 1,938,520.
Transitional Small Business Disclosure Format:
Yes / / No /X/
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
10.1 Promissory Note of the Registrant issued to Universal
Process Equipment, Inc. in the principal amount of $225,000,
dated February 28, 1997.
10.2 Letter to Registrant from Royal Bank of Canada confirming
the credit facility, dated March 5, 1997.
27 Financial Data Schedule.
b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months
ended February 28, 1997.
However, on March 11, 1997, a Form 8K was filed and on March
25, 1997 a Form 8KA was filed to report a Change in the
Company's Certifying Accountant on March 6, 1997. On that
date The Board of Directors of the Company terminated the
engagement of Sobel & Company LLC Certified Public
Accountants as the independent auditors of the Company and
appointed BDO Seidman LLP as the independent auditors of the
Company for the fiscal year ending May 31, 1997.
-2-
<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.
THE BETHLEHEM CORPORATION
(Registrant)
By: /s/ Alan H. Silverstein
------------------------------------
Alan H. Silverstein, President,
Director and Chief Executive Officer
/s/ Antoinette L. Martin
-------------------------------------
Antoinette L. Martin, Vice President,
Finance
(Principal Financial and Accounting
Officer)
Dated: April 24, 1997
-3-
PROMISSORY NOTE
Robbinsville, New Jersey February 28, 1997
FOR VALUE RECEIVED, the undersigned, THE BETHLEHEM CORPORATION, with
offices at 25th and Lennox Streets, Easton, Pennsylvania 18044 (hereinafter
referred to as "Maker"), hereby promises to pay to the order of UNIVERSAL
PROCESS EQUIPMENT, INC., a New Jersey corporation, with offices at 1180 Route
130 South, Robbinsville, New Jersey 08691 (hereinafter referred to as "Payee"),
the sum of TWO HUNDRED AND TWENTY-FIVE THOUSAND DOLLARS ($225,000), plus
interest at the rate of two and one half (2 1/2 percent) over prime (as defined
in Chase Bank of New York Prime Rate), in lawful money of the United States of
America. All sums due hereunder are payable at Robbinsville, New Jersey, or at
such other place as Payee hereof shall specify by written notice to Maker, in
the following manner:
1. By payments of interest only per month, commencing one month
from the date hereof, and additional payments of interest only
each month thereafter for a total of twelve (12) months.
2. By payment of the Two Hundred and Twenty-Five Thousand Dollars
($225,000) balance one year from the date hereof, or upon sale
of specific equipment purchased as part of the Caswan
transaction.
This Note may be prepaid at any time, in whole or in part, without
premium or penalty, at the option of the Maker.
If this Note is placed in the hands of an attorney for collection after
default, or if it is collected through bankruptcy or other judicial proceeding,
Maker agrees to pay reasonable attorneys fees in an amount equal to twenty
percent (20%) of the outstanding balance and other costs incurred by the holder
thereof.
The Maker hereof, and all endorsers and guarantors, hereby waive
presentment, protest, demand and notice of protest, dishonor and non-payment of
the Note.
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed
by its appropriate corporate officers the day and year set forth above.
ATTEST: THE BETHLEHEM CORPORATION
/s/ Harold Bogatz /s/ Antoinette Martin
- ----------------------- ---------------------
, Secretary Antoinette Martin,
V.P. of Finance
March 5, 1997
The Bethlehem Corporation
25th & Lennox Streets
Easton, PA
18045
ATTENTION: ALAN SILVERSTEIN
Dear Sirs:
RE: CREDIT FACILITIES
Further to our discussions, we are pleased to confirm the availability of the
credit facilities described in this letter (the "Credit Facility"), subject to
the following terms and conditions. Should you find the following terms and
conditions of the Credit Facility to be acceptable, please acknowledge by
signing and returning the duplicate copy of this letter by March 15, 1997 after
which date our offer will expire.
BORROWER: The Bethlehem Corporation (the "Borrower")
LENDER: Royal Bank of Canada (the "Bank") through its branch of
account ("Branch of Account") at 12th Floor, 335 - 8th Ave.
S.W., Calgary, AB T2P 1C9
AMOUNT: Segment (1) - $425,000 available by way of Prime Based Loans.
PURPOSE: Segment (1) Assist with the buy-out of fixed assets of
Caswan Environmental Services Inc. ("the
Assets")
INTEREST
RATES: Segment (1)
Prime Based Loans: Prime + 1.50% per annum
The Borrower shall pay the Bank interest on all Prime Based
Loans in the currency in which such loans are denominated. The
Borrower shall pay such interest monthly in arrears at the
applicable rates per annum set out above calculated on a daily
basis on the outstanding amount of such loans and based on the
actual number of days elapsed in the period for which such
interest is payable. Such interest shall be payable on the
last day of each month or on such other day in each month as
may be specified by the Bank from time to time.
<PAGE>
REPAYMENT: All amounts outstanding under this Credit Facility are PAYABLE
ON DEMAND and the following repayment provisions are in
addition to (and not in substitution for) the Bank's right to
make such demand at any time.
REDUCING CREDIT FACILITY SEGMENT
Amounts outstanding under Segment (1) shall be repaid in
consecutive monthly principal instalments of $7,085 plus
interest commencing April 1, 1997. Amounts repaid may not be
reborrowed.
Pay-out in full by March 1, 1999
REPORTING
REQUIREMENTS: The Borrower shall immediately report the sale or relocation,
with particulars, of any and all Assets being acquired.
Additionally and under the direction of Ernst & Young the
former Caswan Assets are to be viewed and catalogued on a
quarterly basis. the costs of such examinations are to be
covered by the Borrower.
SPECIAL
PROVISIONS: The Special Provisions contained in Schedule "A" attached
hereto form part of this Agreement.
EVIDENCE OF
INDEBTEDNESS: The Bank shall maintain on the records of the Branch of
Account accounts evidencing the Borrower's liability to the
Bank in respect of amounts outstanding by the Borrower to the
Bank under this Agreement. The Bank shall record the amounts
outstanding under this Agreement, all payments made from time
to time in respect thereof and all other amounts becoming due
to the Bank under this Agreement which remain unpaid when due.
The Bank's accounts constitute, in the absence of manifest
error, PRIMA FACIE evidence of the indebtedness of the
Borrower to the Bank pursuant to this Agreement.
AUTOMATIC
DEBIT: The Borrower authorizes and directs the Bank to automatically
debit, by mechanical, electronic or manual means, the bank
accounts of the Borrower for all amounts payable under this
Agreement, including but not limited to the repayment of
principal and the payment of interest, fees and all charges
for the keeping of such bank account.
PREPAYMENTS: Subject to any provisions to the contrary which are contained
in this Agreement or any other agreement entered into by the
Borrower with respect to amounts outstanding hereunder,
amounts outstanding may be prepaid at any time without
penalty.
<PAGE>
COVENANTS: The Borrower, by accepting this Agreement, covenants with the
Bank that:
(1) it will pay duly and punctually all amounts due
hereunder;
(2) it will deliver to the Bank such financial and other
information as the Bank may reasonably request from
time to time, including but not limited to the
following:
(a) Audited financial statements of the Borrower
within 120 days after each fiscal year end;
(3) it will promptly pay when due all business, income and
other taxes properly levied on its operations and
property and remit all statutory employee deductions
when due;
(4) it will insure and keep insured all properties
(including equipment) against loss or damage by fire
and other causes and will, at the request of the Bank,
have the Bank named as a loss payee on its insurance
policies and provide the Bank with evidence of same;
(5) it will immediately apply 120% of the appraised value,
with such value being determined as per the Trustee's
appraisal dated June 24, 1996, towards Segment (1) of
any Assets removed from the Province of Alberta or
disposed of to a third party;
All covenants contained herein shall remain in force for the
benefit of the Bank at all times before, on and after the
making of advances hereunder and/or the taking of security
pursuant hereto.
ENVIRONMENTAL
PROVISIONS: The Borrower confirms that it has disclosed to the Bank all
environmental matters which could have a material effect on
the financial condition or operations of the Borrower and its
subsidiaries. The Borrower will keep the Bank fully informed
of all such matters and will comply (and will ensure its
subsidiaries comply) in all material respects with applicable
environmental laws and any environmental permits which may
govern its operations. The Bank shall have the right to make
good faith inquiries with governmental agencies regarding
environmental matters affecting the Borrower and its
subsidiaries and, upon reasonable notice to the Borrower, the
Bank (and its consultants) shall have the right to enter the
premises of the Borrower and its subsidiaries to carry out
such environmental reviews as the Bank in its sole discretion
deems advisable.
<PAGE>
PERFORMANCE
OF COVENANTS: If the Borrower fails to perform any covenant hereunder, the
Bank may, in its sole discretion, perform any such covenant
and expend such money as may be necessary for purposes
thereof. Any such expenditure so made by the Bank shall be
repaid by the Borrower on demand and shall bear interest at
the rate and in the manner set forth hereunder for Prime Based
Loans under Segment (1) from the date the Bank makes such
expenditure until and including the date the Bank is repaid.
COLLATERAL NEW SECURITY:
SECURITY:
The Borrower agrees to provide to the Bank, in form and
substance satisfactory to the Bank, the following
documentation (the "Security") which the Borrower hereby
acknowledges will be held by the Bank in connection with this
Credit Facility:
- General Security Agreement with a fixed charge
covering the Assets
Where security has been listed above under a specific Segment
of the Credit Facility, the Bank will discharge such security
upon repayment of amounts outstanding under that Segment
provided the Borrower is not then in default under any
obligation to the Bank whether arising hereunder or in any
other document. Listing security under a specific Segment of
the Credit Facility does not limit the Bank's right to enforce
that security in respect of any obligations of the Borrower to
the Bank whether arising hereunder or in any other document.
CONDITIONS
PRECEDENT: The obligation of the Bank to make available any advance under
Segment 1) of the Credit Facility is conditional upon the
receipt in form and substance satisfactory to the Bank of:
(a) a duly executed copy of this Agreement;
(b) duly executed copies of the Security;
(c) duly executed banking authorizations;
(d) an opinion from the Borrower's counsel as to
corporate capacity and authority to enter in to this
agreement and the General Security Agreement and the
proper execution of this Agreement and the General
Security Agreement;
The obligation of the Bank to make available the Credit
Facility is subject to the Bank being satisfied, at the time
of advance, that a material adverse change in the financial
condition or operation of the Borrower has not occurred, that
the Borrower is not in default hereunder, and that no stay of
proceedings against the Borrower or its property is then in
effect.
<PAGE>
GENERAL
INDEMNITY: The Borrower shall indemnify the Bank from and against all
losses, damages, expenses and liabilities which the Bank may
sustain or incur as a consequence of any default by the
Borrower under any provision of this Agreement or as a
consequence of any environmental matter, whether existent now
or in the future, which affects the property of the Borrower
or its subsidiaries.
OTHER
CONDITIONS: TAX GROSS-UP
The Borrower shall make all loan payments without set-off or
counterclaim, free and clear of, and without deduction for or
on account of any tax. If any tax is deducted or withheld from
any payments, Borrower shall promptly remit to Royal Bank the
equivalent of the amounts so deducted or withheld, together
with the relevant official receipts or other evidence
satisfactory to the Royal Bank evidencing payment to the
appropriate taxing authority of each such tax as applicable,
with the intent being that Royal Bank shall receive the full
amount which would have been received by it had no such
deduction or withholding been made.
JUDGEMENT CURRENCY
If for the proposes of obtaining judgement in any court in any
jurisdiction with respect to this Agreement it becomes
necessary to convert into the currency of such jurisdiction
(herein called the "Judgment Currency") any amount due
hereunder in any currency other than the Judgement Currency,
then such conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which
judgement is given. For such purpose "rate of exchange" means
the spot rate at which the Bank, on the relevant date at or
about 12:00 o'clock noon (Toronto time), would be prepared to
sell a similar amount of such currency in Toronto, Ontario
against the Judgement Currency. In the event that there is a
change in the rate of exchange prevailing between the Business
Day before the day on which the judgement is given and the
date of payment of the amount due, the Borrower shall, on the
date of payment, pay such additional amounts (if any) as may
be necessary to ensure that the amount paid on such date is in
the amount in the Judgement Currency which when converted at
the rate of exchange prevailing on the date of payment is the
amount then due under this Agreement in such other currency.
Any additional amount due from the Borrower under this section
shall be due as a separate debt and shall not be effected by
judgement being obtained for any other sums due under or in
respect of the Agreement.
<PAGE>
CHOICE OF LAW
This Agreement, regardless of where executed, shall be subject to, governed by
and construed in accordance with the laws of the Province of Alberta including
the Federal Law of Canada applicable therein. The parties here to agree hereby
that the courts of Alberta shall have exclusive jurisdiction to settle any
disputes in connection with this agreement and each submits to the exclusive
jurisdiction of such courts for all purposes in connection with this agreement.
PAYMENTS: References herein to "$" means Canadian Dollars.
RENEWAL: The Credit Facility is available from time to time at the
Bank's sole discretion and is subject to review by the Bank at
any time.
EXPENSES: All legal costs, fees and expenses incurred in connection with
the preparation, negotiation, documentation and operation of
the Credit Facility, including the enforcement of the Bank's
rights under each document delivered in connection with the
Credit Facility will be for the account of the Borrower and
shall be payable on the basis of a solicitor and his own
client costs.
OTHER CREDIT
FACILITIES: The Borrower confirms that, except for this Credit Facility,
and the credit facilities available to the Borrower under a
credit agreement dated 23 April 1997, there are at the present
time no other credit facilities available to the Borrower from
the Bank.
Yours truly,
ROYAL BANK OF CANADA
N.D. Sharp,
Account Manager
Agreed to and Accepted this
_________ day of ______________________, 19____.
THE BETHLEHEM CORPORATION
Per: _________________________
Title: _______________________
<PAGE>
SCHEDULE "A" TO A LETTER AGREEMENT DATED 1997 APRIL 23 BETWEEN ROYAL BANK OF
CANADA AND THE BETHLEHEM CORPORATION
SPECIAL PROVISIONS
PROVISIONS APPLICABLE TO PRIME BASED LOANS
The term "Prime Based Loans" means Prime rate based loans in Canadian Dollars
made by the Bank to the Borrower. The term "Prime" means the annual rate of
interest announced from time to time by the Bank as being its reference rate
then in effect for determining interest rates on Canadian Dollar commercial
loans in Canada.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED FEBRUARY 28, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> FEB-28-1997
<CASH> 49
<SECURITIES> 0
<RECEIVABLES> 6,319
<ALLOWANCES> 135
<INVENTORY> 2,961
<CURRENT-ASSETS> 9,404
<PP&E> 9,692
<DEPRECIATION> 7,233
<TOTAL-ASSETS> 14,797
<CURRENT-LIABILITIES> 8,902
<BONDS> 0
<COMMON> 969
0
0
<OTHER-SE> (1,815)
<TOTAL-LIABILITY-AND-EQUITY> 14,797
<SALES> 4,077
<TOTAL-REVENUES> 4,077
<CGS> 2,852
<TOTAL-COSTS> 985
<OTHER-EXPENSES> 50
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 148
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 142
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 142
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
