<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Radiant Technology Corporation
- -------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Registrant
- ---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:Set forth the amount on which the filing
fee is calculated and state how it was determined.
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
_________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________
3) Filing Party:
__________________________________________
4) Dated Filed:
__________________________________________
__________________________
1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
RADIANT TECHNOLOGY CORPORATION
1335 South Acacia Avenue
Fullerton, California 92831
____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
July 23, 1997
1:00 p.m.
____________________
Notice is hereby given that the Annual Meeting of Shareholders of Radiant
Technology Corporation will be held at 1335 South Acacia Avenue, Fullerton,
California 92831, on Thursday, July 23, 1997, at 1:00 p.m. to consider and
vote upon:
1. The election of a Board of Directors consisting of five (5)
directors. The Proxy Statement which accompanies this Notice includes
the names of the nominees to be presented by the Board of Directors for
election; and
2. The transaction of such other business as may properly come
before the Annual Meeting.
The Board of Directors has fixed the close of business on May 29, 1997 as
the record date for determination of shareholders entitled to notice of, and
to vote, at the Annual Meeting. To assure that your shares will be
represented at the Annual Meeting, please mark, sign, date and promptly
return the accompanying proxy card in the enclosed envelope. You may revoke
your proxy at any time before it is voted.
Shareholders are cordially invited to attend the meeting in person.
Please indicate on the enclosed proxy whether you plan to attend the meeting.
Shareholders may vote in person if they attend the meeting even though they
have executed and returned a proxy.
By Order of the Board of Directors,
/s/ Mercy Gingrich
Mercy Gingrich
Secretary
Dated: June 9, 1997
<PAGE>
RADIANT TECHNOLOGY CORPORATION
____________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
____________________
INTRODUCTION
This Proxy Statement is furnished by the Board of Directors of Radiant
Technology Corporation, a California corporation, (the "Company") in
connection with the solicitation of proxies for use at the Annual Meeting of
Shareholders to be held on July 23, 1997 and at any adjournments thereof.
The Annual Meeting has been called to consider and vote upon the election of
five (5) Directors and to consider such other business as may properly come
before the Annual Meeting. This Proxy Statement and the accompanying Proxy
are being sent to shareholders on or about June 9, 1997.
PERSONS MAKING THE SOLICITATION
The Proxy is solicited on behalf of the Board of Directors of the Company.
The original solicitation will be by mail. Following the original
solicitation, the Board of Directors expects that certain individual
shareholders will be further solicited through telephone or other oral
communications from the Board of Directors. The Board of Directors does not
intend to use specially engaged employees or paid solicitors. The Board of
Directors intends to solicit proxies for shares which are held of record by
brokers, dealers, banks or voting trustees, or their nominees, and may pay
the reasonable expenses of such record holders for completing the mailing of
solicitation materials to persons for whom they hold shares. All
solicitation expenses will be borne by the Company.
TERMS OF THE PROXY
The enclosed Proxy indicates the matter to be acted upon at the Annual
Meeting and provides boxes to be marked to indicate the manner in which the
shareholder's shares are to be voted with respect to such matter. By
appropriately marking the boxes, a shareholder may specify whether the
proxies shall vote for or against or shall be without authority to vote the
shares represented by the Proxy. The Proxy also confers upon the proxies
discretionary voting authority with respect to such other business as may
properly come before the Annual Meeting.
If the Proxy is executed properly and is received by the proxies prior to
the Annual Meeting, the shares represented by the Proxy will be voted. Where
a shareholder specifies a choice with respect to the matter to be acted upon,
the shares will be voted in accordance with such specification. Any Proxy
which is executed in such a manner as not to withhold authority to vote for
the election of the specified nominees as directors (see "Matter To Be Acted
Upon -- Election of Directors") shall be deemed to confer such authority. A
Proxy may be revoked at any time prior to its exercise by giving written
notice of the revocation thereof to Mercy Gingrich, Secretary, Radiant
Technology Corporation, 1335 South Acacia Avenue, Fullerton, California
92831, by attending the meeting and electing to vote in person, or by a duly
executed proxy bearing a later date.
-1-
<PAGE>
VOTING RIGHTS AND REQUIREMENTS
VOTING SECURITIES
The securities entitled to vote at the Annual Meeting consist of all of
the issued and outstanding shares of the Company's common stock, no par value
per share. The close of business on May 29, 1997 has been fixed by the Board
of Directors of the Company as the record date. Only shareholders of record
as of the record date may vote at the Annual Meeting. As of the record date,
there were 1,867,638 issued and outstanding shares of the Company's common
stock to vote at the Annual Meeting and approximately 419 holders of record
of the Company's common stock.
CUMULATIVE VOTING
Each shareholder of record as of the record date will be entitled to one
vote for each share of the Company's common stock held as of the record date.
Cumulative voting is permitted in the election of directors. Every
shareholder complying with certain conditions set forth below may cumulate
votes and give one candidate a number of votes equal to the number of
directors to be elected (five) multiplied by the number of votes to which the
shareholder's shares are normally entitled, or distribute the shareholder's
votes on the same principle among the candidates as the shareholder thinks
fit. Under California law, a shareholder can cumulate votes only if the
candidate's names have been placed in nomination prior to the voting and the
shareholder has given notice at the meeting prior to voting of the
shareholders' intention to cumulate the shareholder's votes. If any one
shareholder has given such notice, all shareholders may cumulate their votes
for candidates in nomination.
Discretionary authority to invoke cumulative voting and to cumulate votes
represented by Proxies is solicited by the Board of Directors because, in the
event nominations are made in opposition to the nominees of the Board of
Directors, it is the intention of the persons named as proxies in the
enclosed Proxy to cumulate votes represented by Proxies for individual
nominees in accordance with their best judgment allocated among as many of
the five nominees of the Board of Directors as possible, unless such
authority is withheld as to any nominee. In that event, those votes will be
cumulated for the remaining nominees of the Board of Directors.
If cumulative voting is invoked by any shareholder in accordance with
California law, shareholders who attend the meeting and vote in person will
be entitled to personally exercise their right to cumulate votes among the
nominees for director. However, because a shareholder who votes by Proxy
grants the proxies discretionary authority to cumulate votes, the proxies and
not the shareholder who has executed a Proxy will have the sole authority to
cumulate votes, unless the shareholder revokes the Proxy and votes in person
at the meeting.
QUORUM
The presence at the Annual Meeting of the holders of a number of shares of
the Company's common stock and proxies representing the right to vote shares
of the Company's common stock in excess of one-half of the number of shares
of the Company's common stock outstanding as of the record date will
constitute a quorum for transacting business.
-2-
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of May 29, 1997, with
respect to the ownership of the Company's common stock by: (i) each person
known by the Company to be the beneficial owner of more than 5% of the
Company's common stock; (ii) by each director; (iii) by each nominee for
director; and (iv) by all officers and directors of the Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner(1) Beneficial Ownership(2) of Class
Lawrence R. McNamee 983,890(3) 44.4%
Joseph S. Romance 154,329(4) 8.2%
Carson T. Richert 177,587 9.5%
Peter D. Bundy 10,000(5) 0.5%
Robert B. Thompson 10,000(5) 0.5%
Raymond Kruzek 122,813 6.6%
Roger Horsburgh 147,813(6) 7.8%
Mercy Gingrich 140,286(7) 7.4%
All Directors and Officers
as a group (7 persons) 1,746,718(8) 76.3%
_______________
(1) The address of each named person is 1335 South Acacia Avenue,
Fullerton, California 92831.
(2) Unless otherwise indicated, each person has sole voting and investment
power over the common stock shown as beneficially owned, subject to community
property laws where applicable and the information contained in footnotes to
this table.
(3) Includes 346,666 shares issuable pursuant to stock options all of which
are currently exercisable.
(4) Includes 138,434 shares held in joint tenancy in a living trust with
his wife, over which Mr. Romance may be deemed to have shared investment
power, an aggregate of 5,895 shares owned by his immediate family, and 10,000
shares issuable pursuant to presently exercisable stock options.
(5) Includes 10,000 shares issuable pursuant to presently exercisable stock
options.
(6) Includes 25,000 shares issuable pursuant to presently exercisable stock
options.
(7) Includes 30,000 shares issuable pursuant to presently exercisable stock
options.
(8) Includes 421,666 shares issuable pursuant to presently exercisable
stock options.
Since the beginning of the Company's last fiscal year, a change in control
of the Company has occurred. As a part of the Company's plan of
reorganization, upon the Company's emergence from bankruptcy in February
1996, (i) the Company's common stock outstanding at the time of the
bankruptcy were diluted on a 1 for 30 basis, (ii) 380,818 and 571,277 shares
of the Company's common stock were issued to Lawrence R. McNamee and
Operation Phoenix, respectively in satisfaction of $150,000 and $200,000
loans made by them, respectively, to the Company and (iii) employees who
volunteered labor between January and April 1995 were issued 380,818 shares
of the Company's common stock. Operation Phoenix is a partnership of which
directors, officers and employees of the Company and an outside investor were
partners.
-3-
<PAGE>
MATTERS TO BE ACTED UPON
ITEM 1: ELECTION OF DIRECTORS
DIRECTORS
The Company's Bylaws give the Board the power to set the number of
directors at no less than three nor more than seven. The size of the
Company's Board is currently set at five. The directors so elected will
serve until the next Annual Meeting of Shareholders. Five (5) directors are
to be elected at the Annual Meeting to be held on July 23, 1997. All of the
nominees are currently directors of the Company. The Board knows of no
reason why any nominee for director would be unable to serve as a director.
In the event that any of them should become unavailable prior to the Annual
Meeting, the proxy will be voted for a substitute nominee or nominees
designated by the Board of Directors, or the number of directors may be
reduced accordingly.
The following table sets forth the name and age of each nominee for
director, the year he was first elected a director and his position(s) with
the Company.
NAME AGE DIRECTOR SINCE POSITION(S) HELD
- ---- --- -------------- ----------------
Lawrence R. McNamee 65 1991 Chairman of the Board and
Chief Executive Officer
Carson T. Richert 57 1972 President and Director
Joseph S. Romance 65 1972 Director
Peter Bundy 64 1995 Director
Robert B. Thompson 60 1996 Director
LAWRENCE MCNAMEE joined the Company in September 1990 and was elected
Chairman of the Board of Directors in March 1991. Mr. McNamee has 14 years
prior experience in working as a consultant with companies in turnaround
management.
CARSON T. RICHERT was a founder of the Company and has been a director
since its incorporation in 1972. Mr. Richert was Vice President - Marketing
of the Company from 1972 until 1981 when he was elected Executive Vice
President. Mr. Richert was elected President in August 1990. Carson T.
Richert and Joseph S. Romance are first cousins.
JOSEPH S. ROMANCE was a founder of the Company and was the Chairman of the
Board of Directors from the Company's incorporation 1972 until March of 1991.
From 1972 to October 1980 and again from July 1981 to February 1988, he also
served as President. Joseph S. Romance and Carson T. Richert are first
cousins.
PETER D. BUNDY was elected to the Board of Directors in January 1995.
Mr. Bundy is an investor and consultant. His expertise is in marketing. He
was a partner with Howard Hirsh Group, a designer and manufacturer of several
apparel lines. Prior to that he was a Vice President of Associated
Department Stores.
ROBERT B. THOMPSON was elected to the Board of Directors in July 1996.
Mr. Thompson is Vice Chairman and a Director of InspecTech, Inc., a company
engaged in the business of providing and franchising building inspection
services in connection with the transfer of real property. Mr. Thompson is
also an investor and consultant with expertise in the banking industry. Mr.
Thompson has previously served as President of Western Federal Bank in
California.
-4-
<PAGE>
The executive officers of the Company as of May 29, 1997 who are not also
a directors are as follows:
MERCY GINGRICH, the Secretary of the Company, age 55, who has been the
Secretary of the Company since September 1990. Ms. Gingrich joined the
Company in June 1990 and has held positions of Administrative Assistant and
Director of Human Resources within the Company.
ROGER T. HORSBURGH, the Controller of the Company, age 57, joined the
Company in March 1993. Previously he was a consultant to several businesses
providing accounting services. Prior thereto, Mr. Horsburgh was Director of
Finance for Irvin Industries from 1990 to 1992 with full financial
responsibilities. From 1972 through 1989, Mr. Horsburgh was Controller for
Edcliff Industries where he was responsible for preparing financial reports
for commercial and government contracts.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the fiscal year ended September 30, 1996, there were four meetings
of the Board of Directors. No director was absent from more than one
meeting. In addition, a number of actions were taken with the unanimous
written consent of the directors. The Board of Directors does not have a
standing nominating committee. Nominating functions are performed by the
entire Board of Directors. Joseph S. Romance and Peter D. Bundy, the
Company's two outside directors, serve on the Company's audit committee and
compensation committee. Both committee members attended the one compensation
and audit committee meeting held during the fiscal year ended September 30,
1996.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
The following table sets forth the compensation (cash and non cash), for
the Chief Executive Officer and all the executive officers who earned in
excess of $100,000 per annum during any of the Company's last three fiscal
years.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------- --------------------
Securities
Res Underlying
Stock Stock
Name and Fiscal Other Annual Awards Options LTIP All Other
Principal Position Year Salary Bonus($) Compensation($) ($) (#) Payouts($) Compensation
- --------------------- ------ ------ -------- --------------- ---- ---- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence R. McNamee 1996 $98,800 - $4,090(1) - - - -
Chairman of the Board 1995 $98,800 - - - - - -
and Chief Executive 1994 $61,700 - - - - - -
Officer
</TABLE>
_______________
(1) Other compensation consists of 113,598 shares of common stock issued in
accordance with the Company's plan of reorganization at a value of $.036 per
share for unpaid wages.
-5-
<PAGE>
1991 NONSTATUTORY STOCK OPTION PLAN
On April 30, 1991, the Company adopted the 1991 Incentive Stock Option
Plan and the 1991 Non Statutory Stock Option Plan (together the "1991 Plan")
which provides for the granting of (i) incentive stock options pursuant to
section 422A of the Internal Revenue Code of 1986, as amended, to key
employees and (ii) nonstatutory stock options to key employees, directors and
consultants to the Company. Under the 1991 Plan, options for up to 1,000,000
shares may be granted.
Under the 1991 plan, the following options which were previously granted
to officers and directors remain outstanding and are currently exercisable:
Officers Shares Price Expire
-------- ------ ----- ------
Mercy Gingrich 10,000 $.375 12/97
10,000 $.3125 2/98
10,000 $.0625 12/00
Roger Horsburgh 25,000 $.3125 2/98
The 1991 Plan is administered by the Board of Directors or by a committee
appointed by the Board, which determines the terms of options granted,
including the exercise price, the number of shares subject to the options,
and the terms and conditions of exercise. No option granted under the 1991
Plan is transferable by the optionee other than by will or the laws of
descent and distribution, and each option is exercisable during the lifetime
of the optionee and only by such optionee.
The exercise price of all stock options granted under the 1991 Plan must
be at least equal to the fair market value of such shares on the date of the
grant, and the maximum term of each option may not exceed ten years. With
respect to any participant who owns stock possessing more than 10% of the
voting rights of the Company's outstanding capital stock, the exercise price
of any stock option must be not less than 110% of the fair market value on
the date of the grant and the maximum term of such option may not exceed five
years.
OPTION GRANTS
During fiscal 1995, each of the Company's three outside directors were
granted options to purchase 20,000 shares of common stock of the Company at
an exercise price equal to $.48 per share, the fair market value of the
shares on the date of the option grant. One-half of the options became
exercisable immediately and the remaining one-half of the options become
exercisable on September 30, 1997.
-6-
<PAGE>
OPTION EXERCISE AND FISCAL YEAR-END VALUES
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND OPTION VALUES AT SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options "In-the-Money" Options at
at September 1996(#) September 1996($)(1)
------------------------- ----------------------------
Shares Acquired on Value
Name Exercise (Shares) Realized($) Exercisable Unexercisable Exercisable(2) Unexercisable
- ---- ----------------- ----------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence R. McNamee - - 346,666 - $166,400 -
</TABLE>
____________________
(1) Options are "in-the-money" at the fiscal year end if the fair
market value of the underlying securities on such date exceeds the
exercise or base price of the option.
(2) The fair market value of unexercised "in-the-money" options was
based on trading prices for the Company's shares at September 30, 1996.
The Company's common stock is thinly traded and it is not possible to
determine the accuracy of this fair market value projection.
DIRECTOR COMPENSATION
Directors who are not directly employed by the Company receive a fee of
$250 quarterly for their attendance at board meetings. All directors are
reimbursed for expenses connected with attendance at the meetings of the
Board of Directors.
EMPLOYMENT AGREEMENT
Lawrence R. McNamee is employed under a renewable one year employment
agreement commencing January 1, 1991 pursuant to which he is entitled to earn
an annual salary of $156,000. Pursuant to the Employment Agreement,
Mr. McNamee was granted options to purchase 275,350 shares which aggregated
10% of the outstanding shares of the Company's common stock. The option
price varied according to the date of grant. All of the options granted
pursuant to the Employment Agreement expired without exercise on various
dates during calendar year 1996.
OTHER MANAGEMENT TRANSACTIONS WITH THE COMPANY
In April 1994, Lawrence R. McNamee and Operation Phoenix, a partnership of
which directors, officers and employees and an outside investor were
partners, loaned the Company $150,000 and $200,000, respectively, bearing
interest at the rate of 10% per annum due in June 1995. As a part of the
Company's reorganization, these loans were converted to common stock. On
February 20, 1996, upon conversion of the loan, the Company issued 380,818
shares to Mr. McNamee and 571,277 shares to the participants in Operation
Phoenix, some of whom were directors and/or officers of the Company.
-7-
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The executive compensation philosophy of the Company is to (i) attract and
retain qualified management to run the business efficiently and guide the
Company's growth in both existing and new markets throughout the country,
(ii) establish a link between management compensation and the achievement of
the Company's annual and long-term performance goals, and (iii) recognize and
reward individual initiative and achievement.
BASE SALARIES
Base salaries for new management employees are based primarily on the
responsibilities of the position and the experience of the individual, with
reference to the competitive marketplace for management talent, which is
measured in terms of executive compensation offered by comparable companies
in related businesses.
STOCK OPTIONS
The Company has granted stock options to its Chief Executive Officer as
part of his employment agreement. The option exercise prices were equal to
the fair market value of the Company's common stock on the grant date and the
options are fully vested. The exercise price of the options was subsequently
adjusted as described under the caption "Employment Agreement" above. No
options have been exercised to date. Because the amount of compensation
which will be realized from these options is directly related to the price of
the Company's stock, this form of compensation is directly related to the
performance of the Company and the results of its operations.
CONCLUSION
Through the option described above, a significant portion of the Company's
Chief Executive Officer's compensation is linked directly to Company
performance. The Compensation Committee will continually review all
compensation practices and make changes as appropriate.
Sincerely,
Joseph S. Romance
Robert B. Thompson
Peter D. Bundy
COMPENSATION COMMITTEE
-8-
<PAGE>
ITEM 2: OTHER MATTERS
Except for the matter referred to in the accompanying Notice of Annual
Meeting, management does not intend to present any matter for action at the
Annual Meeting and knows of no matter to be presented at the meeting that is
a proper subject for action by the shareholders. However, if any other
matters should properly come before the meeting, it is intended that votes
will be cast pursuant to the authority granted by the enclosed Proxy in
accordance with the best judgment of the person or persons acting under the
Proxy.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for the fiscal year ended
September 30, 1996 were Cacciamatta Accountancy Corporation, Independent
Public Accountants. A representative of that firm is expected to be present
at the meeting and will be available to make a statement or respond to
appropriate questions.
ANNUAL REPORT
The annual report to shareholders covering the Company's fiscal year ended
September 30, 1996 is being mailed to shareholders with this Proxy Statement.
The Company's annual report on Form 10-K under the Securities Exchange Act of
1934 for the year ended September 30, 1996, including the financial
statements and schedules thereto, which the Company has filed with the
Securities and Exchange Commission will be made available to beneficial
owners of the Company's securities upon request. The annual report does not
form any part of the material for the solicitation of the Proxy.
SHAREHOLDER PROPOSALS
All shareholder proposals that are intended to be presented at the 1997
Annual Meeting of shareholders and to be included in the proxy materials for
that meeting must be received by the Company's Secretary not later than
February 6, 1998.
REQUEST TO RETURN PROXIES PROMPTLY
A Proxy is enclosed for your use. Please mark, date, sign and return the
Proxy at your earliest convenience. The Proxy requires no postage if mailed
in the United States in the postage-paid envelope provided. A prompt return
of your Proxy will be appreciated.
By Order of the Board of Directors,
/s/ Mercy Gingrich
Mercy Gingrich,
Secretary
Fullerton, California
June 9, 1997
<PAGE>
RADIANT TECHNOLOGY CORPORATION PROXY - 1996 ANNUAL MEETING
Solicited on behalf of the Board of Directors for the Annual Meeting
July 23, 1997
The undersigned, a shareholder of Radiant Technology Corporation, a
California corporation, appoints Mercy Gingrich and Karen Nicolai Winnett or
either of them, his, her or its true and lawful agents and proxies, each with
full power of substitution, to vote all the shares of stock that the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of Radiant Technology Corporation to be held at its
corporate office, 1335 South Acacia Avenue, Fullerton, California 92831, on
Thursday, July 23, 1997, at 1:00 p.m., and any adjournment thereof, with
respect to the following matters which are more fully explained in the Proxy
Statement of the Company dated June 9, 1997 receipt of which is acknowledged
by the undersigned:
ITEM 1: ELECTION OF DIRECTORS.
______ FOR all nominees ______ WITHHOLD AUTHORITY
(Except as listed below.) (As to all nominees.)
Nominees: Lawrence R. McNamee, Carson T. Richert, Joseph S. Romance,
Peter D. Bundy and Robert B. Thompson.
Instruction: To withhold authority to vote for any individual nominee(s),
write that nominee's name in the space provided below.
_____________________________________________
ITEM 2: OTHER MATTERS. The Board of Directors at present knows of no
other matters to be brought before the Annual Meeting.
This proxy will be voted in accordance with the instructions given. If no
direction is made, the shares represented by this proxy will be voted FOR the
election of the directors nominated by the Board of Directors and will be
voted in accordance with the discretion of the proxies upon all other matters
which may come before the Annual Meeting.
DATED:____________________________, 1997
____________________________________________
Signature of Shareholder
____________________________________________
Signature of Shareholder
PLEASE SIGN AS YOUR NAME APPEARS ON THE PROXY
Trustees, Guardians, Personal and other Representatives, please indicate
full titles.
IMPORTANT: PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE
<PAGE>
RTE radiant technology corporation
1996
ANNUAL REPORT
TO SHAREHOLDERS
An OTC Publicly Traded Company
<PAGE>
PREFACE
- -------
Fiscal year 1996 was a significant year for the Company. Few companies
emerge from bankruptcy in a position of strength as has Radiant Technology
Corporation. The backlog has increased along with most other assets while
the Company achieved a significant reduction in debt. The Company is moving
in early fiscal 1997 to newer facilities in order to enhance future
production and customer service requirements. The Company is positioning
itself for continued growth over the next several years.
SALES
- -----
During the fiscal years ended September 30, 1996, 1995, and 1994, the
Company's revenues were derived from sales of the following products:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
$ % $ % $ %
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Conveyorized Infrared
Ovens and Furnaces 3,574,400 86 3,382,400 84 1,579,200 71
Field Service & Parts 598,200 14 640,800 16 640,100 29
Total 4,172,600 100 4,023,200 100 2,219,300 100
CONVEYORIZED INFRARED OVENS AND FURNACES. The Company manufacturers
precision temperature controlled conveyorized infrared ovens and furnaces
for sale primarily to manufacturers of electronic components and assemblies.
Furnaces may operate up to 1000?C.
The nature and high intensity of the infrared heat produced in these
furnaces permit a high rate of heat absorption by the electronic parts
processed through them, making them more adaptable to the exacting
tolerances and high-speed heating requirements of certain industrial users.
Since these ovens and furnaces can be brought up to operating temperatures
in a shorter time span, operating at a faster conveyor belt speed, require
less floor space and use less electric energy, operating costs are
significantly lower than conventional ovens and furnaces.
The Company's infrared ovens and furnaces have a variety of industrial
uses, including drying and curing coating on precision electronic circuitry
and control components, soldering surface mounted device assemblies, drying
and firing thick film on hybrid micro circuits and solar cells,
semiconductors, large area flat panel displays, and multi-chip modules.
During fiscal 1996, one customer, Dow Chemical, contributed a total of
19% to the Company's net sales. No other customer was the source of more
than 10% of the Company's net sales. There has been no consistent
repeatability of the same major customer from year to year.
Sales of ovens and furnaces are made throughout the world direct to
customers and through a network of sales representatives and are shipped
directly from the Fullerton, California plant.
PRINCIPAL MARKETS. In fiscal year 1996 the principal markets for the
Company's products were the NAFTA Countries, the Pacific Rim and Europe. The
Company's products are also sold in India, and the Middle East area.
EXPORT SALES. During the 1996 fiscal year, export sales accounted for
approximately $1,065,600 or 26% of net sales, compared to $1,572,700 or 39%
in fiscal 1995 and $979,400 or 44% in fiscal 1994.
-1-
<PAGE>
MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTER
- -------------------------------------------------------------------------
The Company's common stock is quoted by the National Quotation Bureau,
Inc. ("NQBI") on the "Pink Sheets". The table below sets forth the
representative high and low bid prices for the common stock during each
calendar period indicated. The Quotations represent interdealer prices
without adjustments for retail mark-ups, mark-downs or commissions and
consequently do not necessarily reflect actual transactions.
Stock Price
- -----------
HIGH LOW
----------------------
1996
1st Quarter...... * *
2nd Quarter...... * *
3rd Quarter...... .625 .188
4th Quarter...... 1.50 .313
1995
1st Quarter...... $.02 $.015
2nd Quarter...... .02 .015
3rd Quarter...... .15 .015
4th Quarter...... .02 .015
* No trading in this quarter due to trading suspension relative to
the reverse stock split processing as outlined in the reorganization plan.
Holders of shares of Common Stock are entitled to receive such dividends,
if any, as may be declared by the Board of Directors of the Company out of
funds legally available therefore and, upon the liquidation, dissolution or
winding up of the Company are entitled to share ratably in all net assets
available for distribution to such share holders. The Company has never paid
any dividends. The Company had an agreement not to declare any dividends
without the consent of the Bank under a prior loan arrangement. Although no
such agreement continues to exist, it is anticipated that all earnings, if
any, will be retained for development of working capital to grow the
business of the Company and there is no present intention to declare
dividends in the foreseeable future.
SHAREHOLDERS OF RECORD: As of September 30, 1996, the number of recorded
holders of the Company's Common Stock was 419.
HISTORY AND PROFITS
- -------------------
Radiant Technology Corporation was incorporated in the State of
California in 1972.
Fiscal Year 1995 was profitable with Sales of approximately $4,023,000.
The Company reported extraordinary income of $632,849 in the form of debt
forgiveness and net income of $548,018. Fiscal Year 1996 continued to be
profitable with Sales of approximately $4,172,600. As in Fiscal Year 1995,
the Company reported additional extraordinary income of $223,691 related to
debt forgiveness and net income of $445,481. The emergence from bankruptcy
during February 1996 strengthened the Balance Sheet as a result of both
converting insider financing of $350,000 in Notes Payable to Equity and the
settlement with the balance of creditors in accordance with the Plan for
Reorganization. The Company elected to utilize a "Fresh Start" approach
allowable when emerging from bankruptcy.
Adoption of "Fresh Start Reporting" resulted in the following:
1. Fixed Assets increased by $177,000 and Patents by $50,000.
2. Capital stock was reduced by $2,257,000. The accumulated deficit of
$2,484,000 was eliminated.
-2-
<PAGE>
The following table summarizes certain selected financial data of the
Company :
Operating Data
- --------------
(in thousands)
Year Ended September 30
---------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Net Sales $4,173 $4,023 $2,219 $3,916 $3,938
Income (loss) from
Continuing Operations 222 (85) (656) 101 (928)
Total Assets 2,524 1,775 1,413 2,041 2,199
Long-term debt 0 0 0 0 0
Per Share Information
Income(loss) from
Continuing Operations .18 (.44) (3.47) .53 (4.87)
Cash Dividends 0 0 0 0 0
-3-
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Stockholders
Radiant Technology Corporation
We have audited the accompanying balance sheets of Radiant Technology
Corporation as of September 30, 1996 and 1995 and the related statements of
operations, stockholders' deficit and cash flows for each of the years in
the three year period ended September 30, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Radiant Technology
Corporation as of September 30, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period
ended September 30, 1996, in conformity with generally accepted accounting
principles.
/s/ CACCIAMATTA ACCOUNTANCY CORPORATION
CACCIAMATTA ACCOUNTANCY CORPORATION
Irvine, California
December 3, 1996
-4-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Balance Sheets
September 30,
--------------------------
1996 1995
--------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 610,128 $ 379,936
Accounts receivable 759,123 576,284
Inventories 640,846 582,097
Other 5,900 14,468
------------ ------------
Total current assets 2,015,997 1,552,785
Property and equipment 444,445 204,001
Other 63,930 18,288
------------ ------------
$ 2,524,372 $ 1,775,074
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 174,760 $ 46,634
Accrued liabilities 314,638 397,084
Customer deposits 446,485 211,085
Post-petition notes payable - 350,000
Subject to compromise - 273,400
------------ -----------
Total current liabilities 935,883 1,278,203
------------ -----------
Commitments and contingencies - -
Stockholders' equity:
Preferred stock - -
Capital stock 1,143,008 2,981,195
Retained earnings (deficit) 445,481 ( 2,484,324)
------------ -----------
Total stockholders' equity 1,588,489 496,871
------------ -----------
$ 2,524,372 $ 1,775,074
============ ===========
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
</TABLE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
Statements of Operations
<CAPTION>
Year Ended September 30,
------------------------------------------
1996 1995 1994
------------------------------------------
<S> <C> <C> <C>
Net sales $ 4,172,575 $ 4,023,203 $ 2,219,260
Cost of sales 2,545,246 2,548,852 1,832,210
------------ ------------ ------------
Gross profit 1,627,329 1,474,351 387,050
------------ ------------ ------------
Operating expenses:
Selling, general and administrative 1,089,438 885,257 524,218
Research and development 264,954 239,569 -
------------ ------------ ------------
Total operating expenses 1,354,392 1,124,826 524,218
------------ ------------ ------------
Operating income (loss) 272,937 349,525 ( 137,168)
------------ ------------ ------------
Other expense:
Interest 10,020 37,231 44,355
Write down of inventory - - 232,000
------------ ------------ ------------
Total other expense 10,020 37,231 276,355
------------ ------------ ------------
Income (loss) before reorganization
expenses, provision for income taxes
and extraordinary item 262,917 312,294 ( 413,523)
------------ ------------ ------------
Reorganization expenses:
Provision for bankruptcy claims - 373,130 130,827
Professional fees 40,327 87,395 111,250
------------ ------------ ------------
40,327 460,525 242,077
------------ ------------ ------------
Income (loss) before provision for
income taxes and extraordinary item 222,590 ( 148,231) ( 655,600)
Provision (benefit) for income taxes 800 ( 63,400) 800
------------ ------------ ------------
Income (loss) before extraordinary item 221,790 ( 84,831) ( 656,400)
Extraordinary item:
Gain on extinguishment of debt, net
of taxes of $64,200 in 1995 223,691 632,849 -
------------ ------------ ------------
Net income (loss) $ 445,481 $ 548,018 ($ 656,400)
============ ============ ============
Income (loss) per share:
Before extraordinary item $ .18 ($ .44) ($ 3.45)
Extraordinary item .19 3.32 -
------------ ------------ ------------
Net income (loss) $ .37 $ 2.88 ($ 3.45)
============ ============ ============
Shares used in computing net income
(loss) per share 1,209,405 190,409 190,409
============ ============ =============
The accompanying notes are an integral part of these financialstatements.
-6-
</TABLE>
<PAGE>
<TABLE>
RADIANT TECHNOLOGY CORPORATION
Statements of Stockholders' Equity (Deficit)
Years Ended September 30, 1996, 1995 and 1994
<CAPTION>
(Accumulated
Deficit) Stockholders'
Capital Stock Retained Equity
Shares Amount Earnings (Deficit)
-------- ---------- ------------- ----------------
<S> <C> <C> <C> <C>
Balance, September 30, 1993 190,409 $2,981,195 ($2,375,942) $ 605,253
Net loss - - ( 656,400) ( 656,400)
----------- ----------- ------------ -----------
Balance, September 30, 1994 190,409 2,981,195 ( 3,032,342) ( 51,147)
Net income - - 548,018 548,018
----------- ----------- ------------ -----------
Balance, September 30, 1995 190,409 2,981,195 ( 2,484,324) 496,871
Issuance of shares -
Bankruptcy reorganization
McNamee loan 380,818 175,051 - 175,051
Operation Phoenix loan 571,227 229,172 - 229,172
Creditors and original shareholders 380,818 3,900 - 3,900
Employees 380,818 13,709 - 13,709
Other 90,750 36,300 - 36,300
Repurchase of shares ( 127,202) ( 38,989) - ( 38,989)
Application of fresh start accounting - (2,257,330) 2,484,324 226,994
Net Income - - 445,481 445,481
----------- ----------- ------------ -----------
Balance, September 30, 1996 1,867,638 $1,143,008 $ 445,481 $1,588,489
=========== =========== ============ ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
-7-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Statements of Cash Flows
Year Ended September 30,
------------------------------------
1996 1995 1994
------------------------------------
Cash flows from operating activities
Net income (loss) $ 445,481 $ 548,018 ($ 656,400)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain on forgiveness of debt ( 223,691) ( 632,849) -
Issuance of stock as compensation 13,709 - -
Bad debt expense 55,000 23,500 7,500
Depreciation and amortization 100,236 131,422 151,094
Inventory obsolescence 53,000 - 232,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable ( 201,539) ( 296,271) ( 105,840)
Inventories ( 111,749) ( 84,897) 158,191
Other assets 9,398 22,825 ( 21,218)
Increase (decrease) in:
Accounts payable 128,126 - ( 216,069)
Accrued expenses ( 28,223) - ( 401,650)
Customer deposits 235,400 - -
---------- ---------- ----------
Net cash provided (used) by
operating activities before
reorganization items 475,148 ( 288,252) ( 852,392)
---------- ---------- ----------
Changes in reorganization items:
Increase (decrease) in liabilities:
Not subject to compromise - 446,985 376,042
Subject to compromise ( 45,809) - 342,026
---------- ---------- ----------
Net change in reorganization items ( 45,809) 446,985 718,068
---------- ---------- ----------
Net cash provided (used) by
operating activities 429,339 158,733 ( 134,324)
---------- ---------- ----------
Cash flows from investing activities
Capital expenditures ( 160,158) ( 48,183) ( 1,033)
---------- ---------- ----------
(continued)
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Statements of Cash Flows (Continued)
Year Ended September 30,
------------------------------------
1996 1995 1994
------------------------------------
Cash flows from financing activities
Repurchase of common stock ($ 38,989) $ - $ -
Net borrowings from related
parties (post petition) - - 350,000
Principal reductions on short-term debt - - ( 187,926)
---------- ---------- ----------
Net cash provided (used) by
financing activities ( 38,989) - 162,074
---------- ---------- ----------
Net increase in cash 230,192 110,550 26,717
Cash and cash equivalents,
beginning of year 379,936 269,386 242,669
---------- ---------- ----------
Cash and cash equivalents, end of year $ 610,128 $ 379,936 $ 269,386
========== ========== ==========
Supplemental disclosures of cash flow information and non-cash investing and
financing activities:
1996 1995 1994
-----------------------------
Cash paid during the year for:
Interest $ - $ - $ 14,501
Income taxes $ 800 $ 13,369 $ -
In 1994, short term debt was reduced by $233,800 when Bank of America seized
the accounts receivable collateralizing the line of credit.
In 1996, as a part of the bankruptcy plan, debt and accrued interest of
$404,223 and payables of $3,900 were retired through the issuance of common
stock.
In 1996 the Company issued common shares with a value of $36,300 to purchase
accounts receivable originally seized by Bank of America during the
bankruptcy proceedings.
Upon emergence from bankruptcy the Company applied fresh-start accounting,
resulting in an increase in fixed assets and patents, the elimination of
accumulated deficit and a reduction in the capital stock, as follows:
Fixed assets $ 176,994
Patents 50,000
Capital stock 2,257,330
Retained Earnings ( 2,484,324)
-------------
$ -
=============
The accompanying notes are an integral part of these financial statements
-9-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
September 30, 1996
1. Summary of significant accounting policies
- ----------------------------------------------
Nature of Operations
- --------------------
Radiant Technology Corporation (the Company) is engaged in the manufacturing
and marketing of infrared conveyorized ovens and furnaces used by the
microcircuit manufacturing industry.
All the Company's operations are located in California. Sales to entities
located outside the United States totaled $1,065,600, $1,572,700 and
$979,400 in 1996, 1995 and 1994, respectively. Of these amounts, sales to
Pacific Rim countries were $538,100, $1,037,400 and $243,300 and sales to
European countries were $311,600, $207,100 and $258,100 in 1996, 1995 and
1994, respectively. Sales to NAFTA countries were $215,900, $328,200 and
$477,600 in 1996, 1995 and 1994, respectively.
During 1996, as percentages of net sales, the Company's largest customer
provided 19 percent, while in 1995 the Company's largest customer provided
14 percent. In 1994 no customer provided more than 10 percent of net sales.
Concentrations of Credit Risk
- -----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and trade
receivables. The Company's cash is in high credit quality banks, which
limits the Company's exposure to loss from concentration.
The Company's trade receivables are concentrated within three industries.
To minimize the risk of loss, the Company routinely assesses the financial
strength of its customers, and may require a substantial downpayment prior
to commencing machine production.
Fair Value of Financial Instruments
- -----------------------------------
The carrying value of cash, receivables and accounts payable approximates
fair value due to the short maturity of these instruments. None of the
financial instruments are held for trading purposes.
Cash and Equivalents
- --------------------
For purposes of the statement of cash flows, cash equivalents include time
deposits, certificates of deposit, and all highly liquid debt instruments
with original maturities of three months or less.
Inventories
- -----------
Inventories include material, direct labor and manufacturing overhead and
are priced at the lower of cost (first-in, first-out) or market.
-10-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
1. Summary of significant accounting policies (continued)
- ----------------------------------------------------------
Property and Equipment
- ----------------------
Property and equipment are recorded at cost. The cost and related
accumulated depreciation and amortization of property and equipment retired
or sold are removed from the accounts, and any gains or losses are included
in income. The Company follows the policy of capitalizing expenditures that
significantly increase the life of the asset and charging ordinary
maintenance and repairs to operations as incurred.
Depreciation and amortization are provided over the estimated useful lives
of the assets using the straight-line method as follows:
Description Life
----------- ----
Machinery and equipment 10 years
Vehicles 10 years
Leasehold improvements 5 years
Office furniture & fixtures 5 years
Product development software 3 years
Customer Deposits
- -----------------
The Company often requires a deposit from customers before beginning work on
a furnace. It is the Company's policy to record the deposit as a receivable
with a corresponding deferred liability at the time a sale order is written.
When the deposit is received, the receivable is relieved.
Earnings Per Share
- ------------------
The computation of earnings per common share in each year is based on the
weighted average number of common shares outstanding. When dilutive, stock
options and warrants are included as share equivalents using the treasury
stock method. As part of the bankruptcy reorganization plan, all current
shares were converted to new shares. See Note 2.
Income Taxes
- ------------
Effective October 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (FAS 109).
Under the provisions of FAS 109, an entity recognizes deferred tax assets
and liabilities for temporary differences between the financial reporting
basis and the tax basis of its assets and liabilities. Deferred tax assets
are reduced by a valuation allowance when deemed appropriate. The
measurement of deferred tax assets and liabilities is based on provisions of
the enacted tax law; the effects of future changes in tax laws or rates are
not anticipated. Under FAS 109, measurement is computed using applicable
current tax rates (34% for 1995 and 1994). Prior year taxes have been
computed using APB 11, Accounting for Income Taxes. The change in
accounting principle had no material effect on the 1994 financial
statements.
-11-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
1. Summary of significant accounting policies (continued)
- ----------------------------------------------------------
New accounting pronouncement
- ----------------------------
The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standard No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, which requires the determination and disclosure of
compensation costs implicit in stock option grants or other stock rights.
Under the employee transaction provisions, companies are encouraged, but not
required, to adopt the fair value of accounting for employee stock-based
transactions. Companies are also permitted to continue to account for such
transactions under Accounting Principles Board Opinion No. 25 (APB 25),
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, but would be required to disclose,
in a note to the financial statements, pro forma net earnings and, if
presented, earnings per share as if the Company had adopted SFAS No. 123.
The Company will continue to account for employee stock-based compensation
under APB No. 25. The additional disclosures will be presented in fiscal
1997.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Reclassification of Prior Year Amounts
- --------------------------------------
Certain items in the 1994 and 1995 financial statements have been
reclassified to conform with the 1996 presentation.
2. Bankruptcy proceedings
- --------------------------
On November 12, 1993 the Company filed petition for relief under Chapter 11
of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the
Central District of California. Under Chapter 11, certain claims against the
Debtor in existence prior to the filing of the petitions for relief under
the federal bankruptcy laws are stayed while the Debtor continues business
operations as Debtor-in-possession. Additional claims may arise subsequent
to the filing date resulting from rejection of executory contracts,
including leases, and from the determination by the court (or agreed to by
parties in interest) of allowed claims for contingencies and other disputed
amounts. Claims secured against the Debtor's assets ("secured claims") also
are stayed, although the holders of such claims are secured primarily by
liens on the Debtor's property, plant, and equipment. All claims are
reflected in the September 30, 1995 balance sheet as "subject to
compromise".
-12-
page>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
2. Bankruptcy proceedings (continued)
- --------------------------------------
The Bankruptcy Court confirmed the plan of Reorganization on August 3, 1995
and the bankruptcy was dismissed on February 20, 1996. The plan called for
the following:
- - Existing outstanding common shares at the time of bankruptcy were diluted
30:1. Upon this reverse stock split, the shareholders in this class were
given the option to redeem all their new shares for $.20 per share.
Shareholders left with 5 or fewer shares after the reverse split were
subject to automatic repurchase.
- - Unsecured general creditors with claims in excess of $300 were given the
option to either a) convert to equity by accepting a pro-rata portion of
380,818 shares of common stock or b) accept cash equivalent to 15 percent of
their allowed claims. If option a) was selected, the pro-rata share was
determined by claims allowed, not by the number of creditors electing this
option. Any of the 380,818 shares not distributed because the creditors
elected option b) were distributed to existing shareholders who did not
elect to receive cash for their shares. As a result 370,647 shares were
distributed to existing shareholders.
- - Unsecured general creditors with claims of $300 or less were paid in
full.
- - Lawrence McNamee received 380,818 shares of common stock as payment for
his post-petition loan and related accrued interest totaling $177,051.
- - Operation Phoenix, a general partnership consisting of Company employees,
received 571,227 shares of common stock as payment for a post-petition loan
and related accrued interest totaling $229,172.
- - Employees who agreed to take no wages during the shutdown period and
agreed to reduced wages for a period of two years were awarded 380,818
shares of common stock.
Total debt forgiven was $920,740. The Company accounted for the
reorganization using fresh-start reporting. Accordingly all assets and
liabilities were restated at the date of dismissal to reflect their
reorganization value, which approximates fair value at the date of
reorganization. Independent appraisals were used to determine the fair
value of assets. The book value of fixed assets were increased by $176,000
and patents by $50,000. Accumulated deficit of $2,484,324 was eliminated
with a corresponding net reduction in capital stock.
While prior year financial statement information is presented to satisfy
regulatory requirements, this presentation should not be viewed as a
continuum because the 1996 financial statements are those of a different
reporting entity prepared using a different basis of accounting, and
therefore, are not comparable to those of prior periods.
3. Accounts receivable
- ------------------------
1996 1995
---------- ----------
Trade receivables $ 845,123 $ 607,284
Less: allowance for doubtful accounts ( 86,000) ( 31,000)
---------- ----------
$ 759,123 $ 576,284
========== ==========
-13-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
4. Inventories
- ---------------
1996 1995
---------- ----------
Raw materials $ 394,176 $ 407,149
Work in process 425,670 300,948
---------- ----------
819,846 708,097
Less: allowance for obsolescence ( 179,000) ( 126,000)
---------- ----------
$ 640,846 $ 582,097
========== ==========
5. Property and equipment
- --------------------------
1996 1995
---------- ----------
Machinery and equipment $ 288,935 $1,001,234
Leasehold improvements 125,408 125,408
Office furniture and equipment 31,873 291,969
Vehicles 15,050 37,761
Computer software 136,090 537,750
---------- -----------
597,356 1,994,122
Accumulated depreciation and amortization ( 152,911) (1,790,121)
---------- -----------
$ 444,445 $ 204,001
========== ===========
6. Accrued liabilities
- -----------------------
1996 1995
---------- -----------
Payroll and related items $ 77,364 $ 71,207
Commissions 64,973 88,261
Warranties 40,000 40,000
Professional fees 24,500 128,686
Moving expenses 90,000 -
Other 17,801 68,930
---------- -----------
$ 314,638 $ 397,084
========== ===========
7. Postpetition notes payable
- ------------------------------
1996 1995
---------- -----------
Loan payable-officer, 10%, secured by
contract rights, inventory and equipment. $ - $ 150,000
Loan payable-officers and employees, 10%,
secured by accounts receivable, all
patents and a second position to
equipment on the officer loan above. - 200,000
---------- -----------
$ - $ 350,000
========== ===========
-14-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
8. Income taxes
- ----------------
1996 1995 1994
---------- ---------- ----------
Currently payable:
Continuing operations
Federal $ 68,600 ($ 50,400) $ -
State 20,700 ( 13,000) 800
Benefit of NOL carryforward ( 88,500) - -
---------- ---------- ----------
800 ( 63,400) 800
---------- ---------- ----------
Extraordinary item:
Federal 69,000 215,200 -
State 20,800 58,900 -
Benefit of NOL carryforward ( 89,800) ( 274,100) -
---------- ---------- -----------
- - -
---------- ---------- -----------
$ 800 ($ 63,400) $ 800
========== ========== ===========
The Company's deferred tax assets, which have been offset entirely by
valuation allowances, comprise the following at September 30, 1996 and 1995:
Federal California
---------- ------------
1996
- ----
Loss carryforwards $1,930,200 $ 341,100
Temporary differences - -
---------- -----------
1,930,200 341,100
Applicable tax rate X 34% X 9.3%
---------- -----------
656,268 31,722
Valuation allowance ( 656,268) ( 31,722)
---------- -----------
Deferred tax assets $ - $ -
========== ===========
Federal California
---------- ------------
1995
- ----
Loss carryforwards $2,375,700 $ 786,600
Temporary differences - -
---------- -----------
2,375,700 786,600
Applicable tax rate X 34% X 9.3%
---------- -----------
807,738 73,154
Valuation allowance ( 807,738) ( 73,154)
---------- -----------
Deferred tax assets $ - $ -
========== ===========
Federal investment credit and other general business credit carryforwards
total $35,600 and $105,500, respectively, and expire at various dates
through 2003. Net operating loss carryforwards expire at various dates
through 2009.
The valuation account has been reduced by approximately $192,900 in 1996 to
account for the use of loss carryforwards to offset current taxes.
-15-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
9. Commitments and contingencies
- ---------------------------------
Lease
- -----
The Company subleases a building under a month-to-month agreement which
requires payments of $11,000 per month, including property taxes and fire
insurance.
In November 1996 the Company signed a five year lease on a building in
Fullerton California. Base monthly rent will be $10,600 commencing March
1997. Minimum future lease payments under non-cancelable operating leases
for each of the next five years and in the aggregate are:
Year ending September 30,
1997 $ 74,200
1998 127,200
1999 127,995
2000 136,740
2001 136,740
Subsequent to 2001 56,975
-----------
Total $ 659,850
===========
Rental expense for 1996, 1995 and 1994 was $121,000, $96,942 and $95,733,
respectively.
Environmental matters
- ---------------------
The Company, like others in similar businesses, is subject to extensive
Federal, state and local environmental laws and regulations. Although
company environmental policies and practices are designed to ensure
compliance with these laws and regulations, future developments and
increasingly stringent regulation could require the company to make
unforeseen environmental expenditures.
10. Stockholders' equity
- -------------------------
Preferred stock
- ---------------
At September 30, 1996 and 1995 there were 5,000,000 authorized shares of
preferred stock, of which no shares were issued and outstanding.
Common stock
- ------------
The Company has authorized 24,000,000 shares of no par value common stock.
At September 30, 1996 and 1995 1,867,638, and 190,409, shares, respectively,
were issued and outstanding.
Stock split
- -----------
As a part of the plan of reorganization, the Board of Directors authorized a
1 for 30 reverse stock split, effective October 1, 1995. All references in
the accompanying financial statements to the number of common shares and
per-share amounts for 1995 and 1994 have been restated to reflect the
reverse stock split.
-16-
page>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
10. Stockholders' equity (continued)
- -------------------------------------
Warrants
- --------
As a result of a successful private placement, an investment banking firm
was issued stock warrants to purchase up to 8,000 shares of the company's
capital stock at $12.00 per share. None of the warrants, which became
exercisable at June 30, 1992, have been exercised. The warrants expire in
August 1997.
Employee Stock Option Plans
- ---------------------------
Incentive and non-statutory
- ---------------------------
The Company adopted an incentive and non-statutory stock option plan which
provides for granting options to key employees and officers. Under the
plan, options up to 1,000,000 shares may be granted at a price not less than
the fair market value of such shares on the date of grant, and the maximum
term of each option may not exceed ten years. With respect to any
participant who owns stock possessing more than 10% of the voting rights of
the Company's outstanding capital stock, the exercise price of any stock
option must be not less than 110% of the fair market value on the date of
grant and the maximum term may not exceed five years.
Non-statutory director options
- ------------------------------
On September 30, 1996, the Company granted 20,000 non-statutory options to
each of the five board members. The options vest fifty percent at the end
of one year with the balance vesting at the end of year two, and the options
expire three years after vesting. The option price was $0.48 per share
which was equal to fair market value at the date of grant.
Lawrence McNamee
- ----------------
On January 1, 1991, the Company and its chairman, Lawrence McNamee, executed
a one year employment agreement wherein Mr. McNamee was granted six blocks
of options totaling 276,360 options and amounting to 10% of the outstanding
shares. The option price varied according to the date of grant. The
employment agreement provided that in the event that the Company issued any
additional (or repurchased existing) shares of common stock (excluding
shares issued or issuable pursuant to Mr. McNamee's employment agreement),
the number of options issued to Mr. McNamee should be automatically and
proportionately adjusted so as to preserve the ratio of ten percent of the
outstanding common stock. On September 10, 1992, Mr. McNamee was granted
additional options totalling 346,680 to preserve his 10 percent ratio.
Under certain conditions, Mr. McNamee may be issued additional options in an
amount equal to five percent of the outstanding options and warrants
excluding those belonging to Mr. McNamee. The exercise price of any
dditional options issued would be the fair market value of the stock on the
date of grant. This adjustment provision of Mr. McNamee's employment
agreement is referred to as the "Adjustment" clause. All 623,040 of Mr.
McNamee's options were outstanding at September 30, 1996, 1995 and 1994, at
option prices ranging from $.075 to $0.375. Subsequent to September 30,
1996, 276,360 of these options expired.
Mr. McNamee also holds option to acquire 326,666 shares at $0.075 per share
which were issued to Mr. McNamee in lieu of salary owed to him in 1992.
-17-
<PAGE>
RADIANT TECHNOLOGY CORPORATION
Notes to Financial Statements
10. Stockholder's equity (continued)
- -------------------------------------
Option activity
- ---------------
A summary of stock option activity follows:
Number of Option Price
Shares Per Share
--------- ---------------
Outstanding at September 30, 1994 765,006 $0.0625 - $0.50
Granted -
Canceled/terminated -
Outstanding at September 30, 1995 765,006 $0.0625 - $0.50
Granted 267,723 $0.036 - $0.48
Canceled/terminated ( 308,715) $0.075 - $0.50
--------- ---------------
Outstanding at September 30, 1996 724,014 $0.036 - $0.50
=========
Exercisable at September 30, 1996 724,014 $0.036 - $0.50
=========
11. Employee benefit plan
- --------------------------
The Company's 401(K) Plan was re-activated during fiscal year 1996. All
employees are eligible as long as they are 21 years of age and have
completed one year of employment. The plan provides for Contributions by
the Company in such amounts as management may determine. No expense was
charged to operations for the year ended September 30, 1996.
-18-
<PAGE>
BOARD OF DIRECTORS COUNSEL
- ----------------- -------
Lawrence R. McNamee Bruck & Perry
Chairman of the Board and 500 Newport Center Drive
Chief Executive Officer Suite 700
Newport Beach, CA 92660
Carson T. Richert
President REGISTRAR AND TRANSFER AGENT
----------------------------
Peter D. Bundy
Investor-Consultant U.S. Stock Transfer Corporation
1745 Gardena Avenue
Joseph S. Romance Second Floor
Consultant Glendale, CA 91204
Mr. Robert B. Thompson
Investor-Consultant
OFFICERS
Lawrence R. McNamee,
Chairman of the Board and
Chief Executive Officer
Carson T. Richert
President
Raymond G. Kruzek, PhD
Vice President
Roger T. Horsburgh, CPA
Corporate Controller
Mercy Gingrich
Corporate Secretary
AUDITORS
Cacciamatta Accountancy Corporation
19100 Von Karman Avenue
Third Floor
Irvine, CA 92612
The financial statements and related notes which appear herein have been
reported to the Securities and Exchange Commission.
A copy of Form 10-K will be made available without charge to beneficial
owners of stock upon your written request to the company at the following
address:
Radiant Technology Corporation
Shareholder Relations
1335 South Acacia Avenue
Fullerton, CA 92831
