UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File Number: 0-1665
EXTECH CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 36-2476480
(State or other jurisdiction (I.R.S Employer
of incorporation or organization) Identification No.)
90 Merrick Avenue, East Meadow, New York 11554
(Address of principal executive offices) (Zip Code)
(516) 794-6300
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. (X) Yes ( ) No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. ( )Yes ( ) No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
5,591,367 shares as of July 14, 1997
This document consists of 10 sequentially numbered pages.
<PAGE>
INDEX
EXTECH CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet - June 30, 1997
(Unaudited)
Condensed Consolidated Statements of Operations - Six months ended
June 30, 1997 and 1996 (Unaudited)
Condensed Consolidated Statements of Operations - Three months
ended June 30, 1997 and 1996 (Unaudited)
Condensed Consolidated Statements of Cash Flows - Six months
ended June 30, 1997 and 1996 (Unaudited)
Notes to Condensed Consolidated Financial Statements Six
months ended June 30, 1997 and 1996 (Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30, 1997
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,471,626
Accounts receivable 36,537
Notes and other receivables 43,844
Inventories 4,818
Prepaid expenses and
other current assets 12,628
------
Total current assets 1,569,453
---------
PROPERTY AND EQUIPMENT, net 139,975
-------
OTHER ASSETS:
Operating equipment, net 11,198
Deposits 5,000
-----
Total other assets 16,198
------
$ 1,725,626
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,066
Accrued expenses 48,153
Debentures payable 154,200
Accrued taxes payable 14,993
----------
Total current liabilities 222,412
-------
MINORITY INTEREST 560
---
OTHER LONG TERM LIABILITIES: 59,883
------
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value;
authorized, 10,000,000 shares;
issued and outstanding,
5,591,367 shares 55,914
Capital in excess of par 5,264,950
Deficit (3,878,093)
----------
1,442,771
---------
$ 1,725,626
==============
See notes to condensed consolidated financial statements.
3
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EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six months ended
June 30,
1997 1996
Revenues:
Rooms $ 512,635 $ 506,162
Other 9,273 12,391
Interest 30,200 15,041
--------- ---------
Total revenues 552,108 533,594
--------- ---------
Costs and expenses:
General, administrative
and sundry 259,612 207,687
Departmental 149,256 151,507
Depreciation and amortization 25,926 25,832
Energy costs 11,366 7,311
Lease rentals 100,695 101,231
Marketing 11,610 13,200
Property operation
and maintenance 12,483 10,426
Provision for bad debt 600 1,200
--------- ---------
571,548 518,394
Net (loss) income $ (19,440) $ 15,200
========= =========
Income per common share:
Net (loss) income $ (.01) $ .01
======== =========
Weighted average number of common
shares outstanding 5,591,367 2,866,092
========== ==========
See notes to condensed consolidated financial statements.
4
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EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
June 30,
1997 1996
Revenues:
Rooms $ 205,164 $ 204,551
Other 4,135 5,728
Interest 16,940 8,854
--------- ---------
Total revenues 226,239 219,133
--------- ---------
Costs and expenses:
General, administrative
and sundry 145,137 106,618
Departmental 68,922 70,725
Depreciation and amortization 13,106 12,845
Energy costs 6,459 2,676
Lease rentals 38,964 39,046
Marketing 4,412 5,409
Property operation
and maintenance 6,642 5,861
Provision for bad debt 300 600
--------- ---------
283,942 243,780
Net (loss) $ (57,703) $ (24,647)
========= ========
Income per common share:
Net (loss) $ (.01) $ (.01)
========= ========
Weighted average number of common
shares outstanding 5,591,367 3,340,818
========= =========
See notes to condensed consolidated financial statements.
5
<PAGE>
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended
June 30,
1997 1996
Cash flows from operating activities:
Net (loss) income $ (19,440) $ 15,200
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation and amortization 25,926 25,832
Provision for bad debts 600 1,200
Decrease (increase) in assets:
Accounts receivable 13,454 21,539
Inventories 1,582 1,005
Prepaid expenses and other
current assets 109,851 (8,189)
Notes receivable 38,012 (30,648)
Other assets (1,669) 1,844
Deposits ( 5,000) (10,000)
Increase (decrease) in liabilities:
Accounts payable 3,092 (926)
Accrued expenses (75,473) (15,854)
Accrued taxes payable 14,993 12,335
Claims withheld 59,883 -0-
-------- ------
Net cash provided by
operating activities 165,811 13,338
-------- -------
Cash flows from investing activities:
Purchases of property and equipment (12,306) (4,476)
--------- ---------
Net cash (used in)
investing activities: (12,306) (4,476)
--------- ----------
Cash flows from financing activities:
Proceeds from issuance of stock -0- 800,000
----- ---------
Net cash provided by financing
activities -0- 800,000
----- --------
Net increase in cash and cash
equivalents 153,505 808,862
Cash, beginning of period 1,318,121 644,956
----------- ---------
Cash, end of period $1,471,626 $ 1,453,818
========== ===========
See notes to condensed consolidated financial statements.
6
<PAGE>
EXTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)
1. The Condensed Consolidated Balance Sheet as of June 30, 1997, the Condensed
Consolidated Statements of Operations for the three and six months ended
June 30, 1997 and 1996 and the Condensed Consolidated Statements of Cash
Flows for the six months ended June 30, 1997 and 1996 have been prepared by
the Company without audit. In the opinion of the Company, the accompanying
unaudited condensed consolidated financial statements contain all
adjustments necessary to present fairly its financial position as of June
30, 1997, results of operations for the three and six months ended June 30,
1997 and 1996 and cash flows for the six months ended June 30, 1997 and
1996. This report should be read in conjunction with the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1996.
2. The results of operations and cash flows for the six months ended June 30,
1997 are not necessarily indicative of the results to be expected for the
full year.
7
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EXTECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Results of Operations:
The Company's net loss for the six months ended June 30, 1997 was $19,440 as
compared to a net income of $15,200 for the six months ended June 30, 1996. The
total revenues for the six months ended June 30, 1997 was $18,514 higher than
for the six months ended June 30, 1996. However, the additional revenues were
offset by $51,925 of additional general, administrative and sundry expenses.
These additional costs were primarily from increased professional fees
associated with certain contemplated business acquisitions and from additional
officer compensation.
Liquidity and Capital Resources:
As of June 30, 1997, the Company had $1,471,626 in cash and cash equivalents and
a working capital surplus of $1,347,041. As of December 31, 1996, the Company
had $1,318,121 in cash and cash equivalents and a working capital surplus of
$1,299,647. The increase in cash and cash equivalents was primarily the result
of cash generated from operating activities for the first quarter of 1997,
including the receipt of $77,652 in royalty payments during the first quarter of
1997 (which royalty payments were recognized as revenue in 1996), and the
receipt of $28,735 in payments from Robeson Industries Corp. pursuant to a
certain promissory note.
The increase in working capital was primarily the result of the increase in cash
and cash equivalents and the reclassification of $59,883 of certain disputed
rental obligations of the Company's wholly-owned subsidiary, IAH, Inc., as long
term liabilities, rather than as accrued expenses.
The Company did not have any material commitments for capital expenditures as of
June 30, 1997; however, the Company is continuing to explore business
opportunities in connection with the acquisition and/or operation of a sports
franchise. No definitive arrangements are currently in place and no assurances
can be given that any such transaction will be entered into.
8
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3(a) Certificate of Incorporation,
as amended 1
3(b) By-laws, as amended
27 Financial Data Schedule
(b) Reports on Form 8-K
None
- --------
1 Denotes document filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1993 and incorporated herein by
reference.
9
<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.
EXTECH CORPORATION
Dated: August 13, 1997 By:/s/ Morton L. Certilman
-----------------------
MORTON L. CERTILMAN
President (Chief Operating Officer and
Principal Financial Officer)
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<PAGE>
EXTECH CORPORATION
BY-LAWS
ARTICLE I
OFFICES
Section 1. The principal office shall be in the City of Wilmington, County
of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places both
within and without the State of Delaware as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of directors
shall be held in the City of Chicago, State of Illinois, at such place as may be
fixed from time to time by the board of directors. Meetings of stockholders for
any other purpose may be held at such time and place, within or without the
State of Delaware, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year 1976,
shall be held on the fourth Thursday of September if not a legal holiday, and if
a legal holiday, then on the next secular day following, at 11:00 A.M., at which
they shall elect a board of directors by a plurality vote (as provided in
Section 10 of this Article II), and transact such other business as may properly
be brought before the meeting.
Section 3. Written notice of the annual meeting shall be given to each
stockholder entitled to vote thereat at least ten days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every election of
directors, a complete list of the stockholders entitled to vote at said
election, 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, during ordinary business hours, for a period
of at least ten days prior to the election, either at a place within the city,
town or village where the election is to be held and which place shall be
specified in the notice of the meeting, or, if not specified, at the place where
said meeting is to be held, and the list shall be produced and kept at the time
and place of election during the whole time thereof, and subject to the
inspection of any stockholder who may be present.
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Section 5. Special meeting of the stockholders, for any purpose or
purposes, unlessotherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purposes or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting of stockholders, stating the
time, place and object thereof, shall be given to each stockholder entitled to
vote thereat, at least five days before the date fixed for the meeting.
Section 7. Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have 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. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 9. When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or represented
by proxy shall decide any question brought before such meeting, unless the
question is one upon which by express provision of the statutes or of the
certificate of incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
Section 10. Each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period,
and, except where the transfer books of the corporation have been closed or a
date has been fixed as a record date for the determination of its stockholders
entitled to vote, no share of stock shall be voted on at any election for
directors which has been transferred on the books of the corporation within
twenty days next preceding such election of directors. At all elections of
directors of the corporation each stockholder having voting power shall be
entitled to exercise the right of cumulative voting as provided in the
certificate of incorporation.
Section 11. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provisions of the statutes or of the certificate of incorporation, the meeting
and vote of stockholders may be dispensed with, if all the stockholders who
would have been entitled to vote upon the action if such meeting were held,
shall consent in writing to such corporate action being taken.
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<PAGE>
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole board
shall be three (3). The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, and the directors so
chosen shall hold office until the next annual election and until their
successors are duly elected and shall qualify, unless sooner displaced.
Section 3. The business of the corporation shall be managed by its board of
directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the certificate of
incorporation or by those by-laws directed or required to be exercised or done
by the stockholders.
MEETING OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected board of directors shall
be held immediately following the close of the annual meeting at the place of
the holding of said annual meeting. No notice of any such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event such meeting is not
held at such time and place, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the board of directors, or as shall be specified in a written waiver
signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held without
notice at such time and at such place as shall from time to time be determined
by the board.
Section 7. Special meetings of the board may be called by the chairman of
the board or the president on two days' notice to each director, either
personally or by mail or by telegram; special meetings shall be called by the
president or secretary in like manner and on like notice on the written request
of two directors.
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Section 8. At all meetings of the board a majority of the directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the board of directors, except as may be otherwise specifically provided by
statute or by the certificate of incorporation. If a quorum shall not be present
at any meeting of the board of directors the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of incorporation
or these by-laws, any action required or permitted to be taken at any meeting of
the board of directors or of any committee thereof may be taken without a
meeting, if prior to such action a written consent thereto is signed by all
members of the board or such committee, as the case may be, and such written
consent is filed with the minutes of proceeding of the board or committee.
COMMITTEES OF DIRECTORS
Section 10. There shall be established an executive committee consisting of
the chairman of the board, the vice chairman of the board, the president, the
executive vice-president of the corporation and such other members as may be
designated by resolution passed by a majority of the whole board, which
committee shall be responsible for the management of the business and affairs of
the corporation, subject to the direction of the board of directors. The board
of directors may, by resolution passed by a majority of the whole board,
designate one or more additional committees, each committee to consist of two or
more directors of the corporation, which, to the extent provided in the
resolution, shall have and may exercise the powers of the board of directors in
the management of the business and affairs of the corporation and may authorize
the seal of the corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the board of directors.
Section 11. Each committee shall keep regular minutes of its meetings and
report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 12. The directors may be paid their expenses, if any, of attendance
at each meeting of the board of directors and may be paid a fixed sum for
attendance at each meeting of the board of directors and such salary or other
compensation as directors, as the board by resolution may determine. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
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<PAGE>
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in writing and
delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the provisions
of the statutes or of the certificate of incorporation or of these by-laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated herein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a president, a secretary and a treasurer. The board of
directors may also choose vice-presidents, and one or more assistant secretaries
and assistant treasurers. Two or more offices may be held by the same person,
except that where the offices of president and secretary are held by the same
person, such person shall not hold any other office.
Section 2. The board of directors at its first meeting after each annual
meeting of stockholders shall choose a president from among the directors, and
shall choose a secretary and a treasurer, neither of whom need be a member of
the Board.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers of the corporation shall be fixed
by the board of directors.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.
PRESIDENT
Section 6. The president shall be the chief executive officer of the
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corporation. He shall preside at all meetings of the board of directors, be a
member of the executive committee and shall see that all orders and resolutions
of the board of directors are carried into effect. He shall have the power to
execute on behalf of the corporation bonds, mortgages and other contracts and
instruments requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
EXECUTIVE VICE PRESIDENT
Section 7(a). The executive vice president shall be in charge of over-all
operations of and be chief operating officer of the corporation and shall report
directly to the president and the board of directors as to such operations. In
the absence or disability of the president, he shall perform the duties and
exercise the powers of the president and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE VICE PRESIDENTS
Section 7(b). The vice president, or if there shall be more than one, the
vice presidents in the order determined by the board of directors, shall, in the
absence or disability of the executive vice president, perform the duties and
exercise the powers of the executive vice president and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
SECRETARY AND ASSISTANT SECRETARIES
Section 8. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall keep in safe custody
the seal of the corporation and, when authorized by the board of directors,
affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of an assistant secretary.
Section 9. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 10. The treasurer shall have the custody of the corporate funds and
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securities and shall keep full and accurate accounts of receipts and
disbursements in books and belongings to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the board of directors,
Section 11. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 12. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 13. The assistant treasurer, or if there shall be more than one,
the assistant treasurers in the order determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may form time to time
prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
president or a vice president and the treasurer or an assistant treasurer, or
the secretary or an assistant secretary of the corporation, certifying the
number of shares owned by him in the corporation.
Section 2. Where a certificate is signed (1) by a transfer agent or an
assistant transfer agent or (2) by a transfer clerk acting on behalf of the
corporation and a registrar, the signature of any such president, vice
president, treasurer, assistant treasurer, secretary or assistant secretary may
be facsimile. In case any officer or officers who have signed, or whose
facsimile signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the corporation.
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LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 5. The board of directors may close the stock transfer books of the
corporation for a period not exceeding fifty days preceding the date of any
meeting of stockholders or the date for payment of any dividend or the date for
the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect or for a period of not exceeding fifty days
in connection with obtaining the consent of stockholders for any purpose. In
lieu of closing the stock transfer books as aforesaid, the board of directors
may fix in advance a date, not exceeding fifty days preceding the date of any
meeting of stockholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and in
such case such stockholders and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights, or
to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the corporation after any such record date fixed as
aforesaid.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
-8-
<PAGE>
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the certificate of incorporation, if any, may be declared by
the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. 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
directors from time to time, in their 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 directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting, and
at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demand for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
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<PAGE>
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 7. The corporation shall to the full extent permitted by Section
145 of the Delaware General Corporation Law, as amended from time to time,
indemnify all persons whom it may indemnify pursuant thereto. The
indemnifications authorized hereby shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under or through
any agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in the official capacity of those seeking indemnification and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
persons. The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of Section 145.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered or repealed at any regular meeting
of the stockholders or of the board of directors or at any special meeting of
the stockholders or of the board of directors if notice of such alteration or
repeal be contained in the notice of such special meeting, or by written consent
of the board of directors pursuant to the provisions of Section 9 of Article III
of these by-laws.
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<PAGE>
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<ARTICLE> 5
<LEGEND>I
The schedule contains summary financial information extracted from the
financial Statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Jun-30-1997
<EXCHANGE-RATE> 1
<CASH> 1,471,626
<SECURITIES> 0
<RECEIVABLES> 80,381
<ALLOWANCES> 0
<INVENTORY> 4,818
<CURRENT-ASSETS> 1,569,453
<PP&E> 139,975
<DEPRECIATION> 25,926
<TOTAL-ASSETS> 1,725,626
<CURRENT-LIABILITIES> 222,412
<BONDS> 0
0
0
<COMMON> 55,914
<OTHER-SE> 5,264,950
<TOTAL-LIABILITY-AND-EQUITY> 1,442,771
<SALES> 0
<TOTAL-REVENUES> 552,108
<CGS> 0
<TOTAL-COSTS> 571,548
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (19,440)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,440)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,440)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
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