SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
AMENDMENT NO. 1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the three month period ended SEPTEMBER 30, 1996.
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-11685-NY
RADYNE CORP.
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(Exact name of registrant as specified in its charter)
NEW YORK
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(State or other jurisdiction of incorporation or organization)
11-2569467
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(IRS EMPLOYER IDENTIFICATION NO.)
5225 South 37th Street, Phoenix, AZ 85040
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(Address of principal executive offices)
602-437-9620
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(Registrant's Telephone number)
Indicate by check mark whether the registrant (1) 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 period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
YES [X] NO [_]
Indicate by check mark whether the registrant filed all documents and reports
required to be filed by Section 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 [X] NO [_]
The registrant had 18,748,605 shares of its common stock, par value $.002,
outstanding as of October 31, 1996.
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PART I - FINANCIAL INFORMATION
RADYNE CORP.
CONDENSED BALANCE SHEETS
SEPT. 30, JUNE 30,
Item 1 - ASSETS 1996 1996
----------- ---------
(Unaudited) (Audited)
CURRENT ASSETS:
Cash and Temporary Cash Investments $ 437,950 $ 971
Accounts Receivable, less allowance
of $32,829 and $13,000, respectively 489,369 283,871
Inventories 1,580,776 1,150,669
Prepaid and Other Current Assets 16,934 20,426
----------- -----------
Total Current Assets 2,525,029 1,455,937
IMPROVEMENTS AND EQUIPMENT, Net of accumulated
depreciation of $92,705 and $62,405 respectively 589,375 571,927
OTHER ASSETS:
Designs and Drawings - Net of accumulated
amortization of $418,619 and $361,529 respectively 1,179,720 1,236,810
Deposits 8,012 8,012
----------- -----------
Total Assets $ 4,302,136 $ 3,272,686
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Temporary Bank Overdraft $ -0- $ 12,898
Accounts Payable-Trade 431,412 452,533
Accounts Payable to Affiliate 220,447 -0-
Accrued Liabilities 459,328 400,966
Current Portion Long-Term Debt and
Capitalized Lease Obligations 27,620 77,831
Loan from Bank - Short Term 1,700,000 -0-
Loan from Affiliate 4,550,000 4,594,696
----------- -----------
Total Current Liabilities 7,388,807 5,538,924
Long-Term Debt and capitalized lease obligations 128,157 130,414
----------- -----------
STOCKHOLDERS' EQUITY:
Common Stock, $.002 par value, 20,000,000
shares authorized, 18,748,605 shares
issued and outstanding 37,501 37,501
Additional Paid-In Capital 555,800 555,800
Accumulated (Deficit) (3,808,129) (2,989,953)
----------- -----------
Total Stockholders' Equity (3,214,828) (2,396,652)
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,302,136 $ 3,272,686
=========== ===========
The accompanying notes are an integral part of these financial statements.
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RADYNE CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
SEPT. 30, SEPT. 30,
1996 1995
--------- ---------
NET SALES $ 1,292,646 $ 1,296,792
COST AND EXPENSES:
Cost of Sales 1,052,385 775,652
Selling, general and administrative 507,578 403,231
Research and development 438,599 160,095
------------ ------------
Total Costs and Expenses 1,998,562 1,338,978
INCOME (LOSS) FROM OPERATIONS (705,916) (42,185)
INTEREST EXPENSE NET OF INTEREST INCOME 112,260 28,956
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (818,176) (71,141)
PROVISION FOR INCOME TAXES -0- -0-
------------ ------------
NET INCOME (LOSS) $ (818,176) $ (71,141)
============ ============
NET INCOME (LOSS) PER COMMON SHARE (.044) (.004)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 18,748,605 18,650,084
============ ============
The accompanying notes are an integral part of these financial statements.
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RADYNE CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
SEPT. 30, SEPT. 30,
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (818,176) $ (71,141)
Adjustment to reconcile net income (loss)
to net cash flows provided by (used
in) operating activities:
Depreciation and Amortization 87,390 67,005
(Increase) Decrease in operating assets:
Accounts Receivable (205,498) (82,350)
Inventories (430,108) 442,518
Prepaid and Other 3,492 38,384
Increase (Decrease) in operating
liabilities:
Accounts Payable 186,428 (486,819)
Accrued Liabilities 58,363 (187,327)
----------- ---------
Total Adjustments (299,933) (208,589)
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (1,118,109) (279,730)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (47,748) (92,756)
----------- ---------
NET CASH USED IN INVESTING ACTIVITIES (47,748) (92,756)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowing 1,700,000 -0-
Payments on Long Term Debt (52,468) (43,301)
Loans from Affiliates (44,696) 347,614
----------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,602,836 304,313
----------- ---------
NET INCREASE IN CASH 436,979 90,257
CASH, BEGINNING OF YEAR 971 2,109
----------- ---------
CASH, END OF PERIOD $ 437,950 $ 92,366
=========== =========
The accompanying notes are an integral part of these financial statements.
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RADYNE CORP.
Notes to Financial Statements
(Information for SEPTEMBER 30, 1996 and SEPTEMBER 30, 1995 is Unaudited)
1. Business
Radyne Corp. (the "Company") was incorporated on November 25, 1980 and
commenced operations on May 22, 1981. The Company designs,
manufactures and sells products, systems and software used for the
transmission and reception of data over satellite and cable
communications networks.
2. Summary of Significant Accounting Policies
(a) Basis of presentation
The interim financial statements furnished reflect all adjustments
which are, in the opinion of management, necessary to a fair statement
of financial position as of September 30, 1996 and June 30, 1996 and
the results of operations and cash flows for the three months ended
September 30, 1996 and September 30, 1995. Such adjustments are of a
normal recurring nature. The financial statements should be read in
conjunction with the summary of significant accounting policies and
notes to financial statements included in the Company's Form 10-KSB
for the year ended June 30, 1996.
The results of operations for the interim period are not necessarily
indicative of the results to be expected for the full year.
(b) Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market value including material, direct labor and overhead costs.
(c) Improvements and Equipment
Improvements and equipment are stated at cost. Expenditures for
repairs and maintenance are charged to operations as incurred, and
improvements which extend the useful lives of the assets are
capitalized. Depreciation and amortization of improvements and
equipment are computed using the straight-line method based on the
following useful lives:
Improvements And Equipment 7 years
Furniture and fixtures 7 years
Leasehold improvements 5 years
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RADYNE CORP.
Notes to Financial Statements
(Information for SEPTEMBER 30, 1996 and SEPTEMBER 30, 1995 is Unaudited)
(d) Research and Development
Expenditures for research and development are charged to operations in
the period incurred.
(e) Taxes on Income
The Company follows the liability method of accounting for income
taxes, as prescribed by Statement No. 109 of the Financial Accounting
Standards Board.
(f) Per Share Data
Earnings (loss) per share of common stock were computed by dividing
net income (loss) by the weighted average number of shares of common
stock outstanding during each of the periods presented.
3. Reorganization
On April 28, 1994, Radyne Corp. (the Predecessor Company) filed a
petition for relief under Chapter 11 of the federal bankruptcy laws in
the United States Bankruptcy Court for the Eastern District of New
York.
The Predecessor Company received approval from the Bankruptcy Court to
pay certain of its pre-petition obligations, employee wages and
benefits. Tax claims were rescheduled for payment in equal quarterly
installments of $8,720, with interest at 7%, over six years.
On December 16, 1994, the Bankruptcy Court confirmed the Predecessor
Company's Plan of Reorganization effective at the close of business on
December 16, 1994.
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RADYNE CORP.
Notes to Financial Statements
(Information for SEPTEMBER 30, 1996 and SEPTEMBER 30, 1995 is Unaudited)
4. Inventories
Inventories consist of the following:
SEPT. 30, JUNE 30,
1996 1996
--------- --------
Raw Materials and components $ 279,702 $ 626,525
Work in process 1,080,309 307,391
Finished Goods 335,765 293,660
----------- -----------
Sub Total 1,695,776 1,227,576
Less Valuation Allowance (115,000) (76,907)
----------- -----------
Total $ 1,580,776 $ 1,150,669
=========== ===========
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RADYNE CORP.
Notes to Financial Statements
(Information for SEPTEMBER 30, 1996 and SEPTEMBER 30, 1995 is Unaudited)
5. Improvements and Equipment
Improvements and Equipment consist of the following:
SEPT. 30, JUNE 30,
1996 1996
--------- --------
Office Equipment $ 7,812 $ 7,812
Manufacturing Equipment 466,269 434,050
Computers and Software 207,999 192,470
--------- ---------
682,080 634,332
Less: accumulated depreciation
and amortization (92,705) (62,405)
--------- ---------
$ 589,375 $ 571,927
========= =========
6. Accrued Liabilities
Accrued liabilities consist of the following:
SEPT. 30, JUNE 30,
1996 1996
--------- --------
Payroll and vacation $124,320 $153,894
Warranty Reserve 124,775 109,775
Professional fees 71,625 77,125
Other 138,608 60,172
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$459,328 $400,966
======== ========
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7. Borrowings
On August 12, 1996, all of the outstanding shares of Engineering and
Technical Services, Inc. ("ETS"), the Company's indirect controlling
shareholder, were acquired by Stetsys US, Inc., an indirect subsidiary of
Singapore Technologies Pte Ltd ("STPL"), a corporation organized under the
laws of the Republic of Singapore. On that date, Singapore Technologies
Electronics Pte Ltd, a subsidiary of STPL, made a loan to the Company in
the amount of $4,500,000 repayable on February 10, 1997 with interest at
the rate of 8% per annum. The proceeds of this loan were used, together
with $504,000 of the Company's cash, to repay the Company's indebtedness to
ETS. In addition, STPL guaranteed a new $2,000,000 line of credit for the
Company provided by Bank of America NT&SA. As of September 30, 1996, the
Company had drawn down $1,700,000 under this line of credit, with
maturaties ranging from February 14, 1997 to March 24, 1997 and interest
rates of 6.3375% per annum on $1,200,000 and 6.4% on $500,000.
8. Related Party Transactions
In July of 1995, the Company's manufacturing operations were
transferred to ETS, then the beneficial owner of 90.67% of the Company's
common stock, pending the Company's relocation to Phoenix. At the time,
$163,770 of inventory and $119,367 of machinery and equipment was exchanged
for a reduction in the Company's indebtedness to ETS. During the quarter
ended September 30, 1996, in recognition of the completion of the move to
Phoenix and increase in staffing, the Board determined that the Company
should resume direct manufacturing. To this end, the Company repurchased
$22,100 of machinery and equipment from ETS during the quarter and
purchased $347,000 of inventory from ETS, which ETS had acquired and/or
processed in the ordinary course of fulfilling purchase orders from the
Company and which the Company was obligated to purchase from ETS. However,
as the Company's products were undergoing constant improvement, the Company
considered it necessary to treat $70,000 of such inventory as obsolete and
another $20,000 thereof as slow-moving. Ongoing product development
rendered another $90,000 of this inventory obsolete during the subsequent
quarter.
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RADYNE CORP
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
The Company's assets have increased from $3,272,686 at June 30, 1996
to $4,302,136 at September 30, 1996, while the Company's liabilities have
increased from $5,669,338 at June 30, 1996 to $7,516,964 at September 30,
1996. The decrease in net assets (assets minus liabilities) of $818,176
relates to the Company's net loss for the three month period ending
September 30, 1996.
Results of operations for the three month period ended September 30,
1996 compared to the fiscal quarter ended September 30, 1995, are as
follows:
The Company's net sales decreased .3% to $1,292,646 during the period
ended September 30, 1996 from $1,296,792 during the quarter ended September
30, 1995.
The Company's cost of sales as a percentage of sales increased to 81%
during the period ended September 30, 1996 from 60% during the fiscal
quarter ended September 30, 1995. $90,000 in the Company's cost of sales
(7% of sales) was as a result of a charge, taken against indirect cost of
goods sold, to set up a reserve for inventory which was purchased from ETS
under an agreement whereby the Company's manufacturing operations were
moved to Phoenix from ETS' facilities in Melbourne, FL. The charge
reflected the cost of inventory which was rendered "Excess and Slow Moving"
as a result of design changes made by the Company and incorporated into its
products to enhance their capabilities. Start-up costs associated with the
delivery of new products to the market place accounted for the balance of
the increase in costs. (See Item 1, Notes to the Financial Statements, note
8 above).
Selling, general and administrative costs increased to $507,578 during
the current period from $403,231 during the fiscal quarter ended September
30, 1995. Contributing to the Company's increased level of expenses for the
period was an increase in the Company's base organizational and
manufacturing capacity as a result of increased orders taken during the
period.
Research and development expenditures increased to $438,599 during the
period ended September 30, 1996 from $160,095 during the period ended
September 30, 1995. The prior year's lower level of R&D effort was mainly
due to the inability of the Company to
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finance the investment needed in this industry to stay abreast of the
technology curve.
Net interest expense increased from $28,956 in the quarter ended
September 30, 1995 to $112,260 in the current period due to an increase in
the Company's debt.
Based on the increases in costs and expenses outlined above, the
Company experienced a net loss of ($818,176) during the period ended
September 30, 1996 as compared with a net loss of ($71,141) during the
quarter ended September 30, 1995.
The Company's new-orders-booked (Bookings) increased 201% to
$3,579,183 for the period ended September 30, 1996 from $1,190,441 for the
quarter ended September 30, 1995. This increase was primarily due to the
introduction of certain new product lines to the market during the period.
The Company's level of unfilled-orders-to-ship (Backlog) increased
324% to $3,725,575 at September 30, 1996 from $878,453 at September 30,
1995 primarily due to the increased Bookings referred to above.
Typically, the Company must ship its backlog within 90 days to
maintain "on-time" delivery schedules.
The Company anticipates that it will be able to handle this large
increase in orders while substantially maintaining this delivery schedule.
This is expected to result in a significant increase in net sales from the
quarter ended September 30, 1996 to the quarter ended December 31, 1996.
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Liquidity and Capital Resources
The Company's working capital deficit was ($4,863,778) at September
30, 1996; an increase of $780,791 from ($4,082,987) at June 30, 1996. The
increase in the deficit was due primarily to $1,700,000 of new bank
borrowings, and an approximately $200,000 increase in accounts payable,
partially offset by increases of approximately $437,000 in cash and cash
equivalents, $206,000 in accounts receivable and $430,000 in inventories.
Net cash used in operating activities was $1,118,109 for the three
months ended September 30, 1996, as compared to $279,730 used in the three
months ended September 30, 1995. The principal causes for the difference
were the increased operating loss and the increases in inventories and
accounts receivable, partially offset by increases in accounts payable and
accrued liabilities. Management considers these differences to be
consistent with the introduction of new products and the increases in
Bookings and Backlog discussed above.
Cash used in investing activities, consisting of additions to
equipment, amounted to $47,748 for the quarter ended September 30, 1996, or
approximately $45,000 less than the amount expended during the quarter
ended September 30, 1995 for this purpose. The Company anticipates capital
expenditures of not more than an additional $210,000 for the remainder of
calendar 1996, which will be financed from the Company's operations and
borrowings.
The Company derived net cash from financing activities of $1,602,836
and $304,313, respectively, during the quarter ended September 30, 1996 and
the quarter ended September 30, 1995, with the difference resulting from
greater net borrowings during the current period.
As a result of the foregoing, the Company increased its cash balances
by $436,979 and $90,257, respectively, for the three months ended September
30, 1996 and the three months ended September 30, 1995.
A bank line of credit, in the amount of $2,000,000, was established
for the Company with Bank of America NT&SA, Asian Banking Unit, by Stetsys
US, Inc., the new beneficial owner of 90.67% of the Company's outstanding
stock. As of the end of the period reported herein, the Company had drawn
down $1,700,000 of the available funds. This is a demand loan, bearing
interest at the rates ranging from 6.3375% to 6.4%, guaranteed by an
affiliate of Stetsys US, Inc. (See Item 1, Note 7)
The Company borrowed $4,500.000 (plus $50,000 in accrued interest)
from Singapore Technologies Electronics Pte Ltd, a
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related company, the proceeds from which were used to pay down the loan
payable to ETS. An additional $504,000 of the Company's cash was used to
pay the balance of the ETS loan. The Company has been, and is expected to
remain, dependent on its principal shareholder for capital needs to fund
operating and investing activities.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibit Description
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3(i) Restated Certificate of Incorporation
3(ii) By-Laws, as Amended and Restated
27 Financial Data Schedule
(b) Report on Form 8-K. A report on Form 8-K was filed on August 23, 1996
(electronic confirming copy accepted September 24, 1996) relating to Item 1
(change in control of registrant), Item 5 (change in number and identity of
directors) and Item 8 (change in fiscal year).
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: March 6, 1997 RADYNE CORP.
By: /s/ Robert C. Fitting
-----------------------------------
Robert C. Fitting
President
By: /s/ Garry D. Kline
-----------------------------------
Garry D. Kline
Acting Chief Financial Officer
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EXHIBIT 3(i)
RESTATED CERTIFICATE OF INCORPORATION
OF
RADYNE CORPORATION
Under Section 807 of the Business Corporation Law
Pursuant to the provisions of Section 807 of the Business
Corporation Law, the undersigned, being the President and the Secretary of the
corporation, hereby certify as follows:
FIRST: The name of the corporation is: Radyne Corp.
SECOND: The date when the certificate of incorporation was filed by
the Department of State is the 25th day of November, 1980.
THIRD: The certificate of incorporation is amended to effect the
following amendments:
1. Paragraph SECOND of the certificate of incorporation, relating to
the purpose for which the corporation is formed, is hereby amended to read as
follows:
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"SECOND: The purpose for which the Corporation is formed is to
engage in any lawful act or activity for which corporations
may be organized under the Business Corporation Law of the
State of New York; provided, however, that the Corporation is
not formed to engage in any act or activity requiring the
consent or approval of any state official, department, board,
agency or other body without such consent or approval first
being obtained."
2. Paragraph FIFTH of the certificate of incorporation, relating to
the elimination of shareholder's preemptive rights, is hereby added, reading as
follows:
"FIFTH: No holder of shares of the corporation of any class
shall be entitled as such, as a matter of right, to subscribe
for, purchase or receive any shares of the Corporation of any
class, or any securities convertible into, exchangeable for,
or carrying a right or option to purchase its shares of any
class, whether now or hereafter authorized and whether issued,
sold or offered for sale by the Corporation for cash or other
consideration or by way of dividend, split of shares or
otherwise."
3. Paragraph SIXTH of the certificate of incorporation, regarding
the designation of the Secretary of State as agent upon whom any process against
the corporation may be served, is hereby amended to read as follows:
"SIXTH: The Secretary of State is designated as agent of the
Corporation upon which process against it may be served. The
post office address to which the Secretary of State shall mail
a copy of any process against the Corporation served upon him
is c/o John B. Wade, III, Brock, Fensterstock, Silverstein,
McAuliffe & Wade, LLC, 153 East 53rd Street, 56th Floor, New
York, New York 10022."
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4. The number of issued shares of the corporation's common stock,
par value $.002 per share, is hereby amended from 18,798,605 to 3,759,721 on a 5
for 1 basis. The authorized and unissued shares of the corporation's common
stock, par value $.002 per share, is hereby amended from 1,201,395 to
16,240,279, an increase of 15,038,884.
The text of the certificate of incorporation, as amended heretofore,
is hereby restated as further amended to read as herein set forth in full:
"FIRST: The name of the Corporation is: Radyne Corp.
SECOND: The purpose for which the Corporation is formed is to
engage in any lawful act or activity for which corporations
may be organized under the Business Corporation Law of the
State of New York; provided, however, that the Corporation is
not formed to engage in any act or activity requiring the
consent or approval of any state official, department, board,
agency or other body without such consent or approval first
being obtained.
THIRD: The office of the Corporation in the State of New York
shall be located in the County of Suffolk.
FOURTH: The Corporation shall be authorized to issue twenty
million (20,000,000) shares of common stock, par value $.002
per share.
FIFTH: No holder of shares of the Corporation of any class
shall be entitled as such, as a matter of right, to subscribe
for, purchase or receive any shares of the Corporation of any
class, or any securities convertible into, exchangeable for,
or carrying a right or option to purchase its shares of any
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class, whether now or hereafter authorized and whether issued,
sold or offered for sale by the Corporation for cash or other
consideration or by way of dividend, split of shares or
otherwise.
SIXTH: The Secretary of State is designated as agent of the
Corporation upon which process against it may be served. The
post office address to which the Secretary of State shall mail
a copy of any process against the Corporation served upon him
is c/o John B. Wade, III, Brock, Fensterstock, Silverstein,
McAuliffe & Wade, LLC, 153 East 53rd Street, 56th Floor, New
York, New York 10022.
SEVENTH: A director of the Corporation shall not be personally
liable to the Corporation or its shareholders for damages for
any breach of duty as a director; provided that, except as
hereinafter provided, this Article SEVENTH shall neither
eliminate nor limit liability: (a) if a judgment or final
adjudication adverse to the director establishes that (i) the
director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law, (ii) the
director personally gained in fact a financial profit or other
advantage to which the director was not legally entitled, or
(iii) the director's acts violated Section 719 of the New York
Business Corporation Law; or (b) for any act or omission prior
to the effectiveness of this Article SEVENTH. If the
Corporation hereafter may by law be permitted to further
eliminate or limit the personal liability of directors, then
pursuant hereto the liability of a director of the Corporation
shall, at such time, automatically be further eliminated or
limited to the fullest extent permitted by law. Any repeal of
or modification to the provisions of this Article SEVENTH
shall not adversely affect any right or protection of a
director of the Corporation existing pursuant to this Article
SEVENTH immediately prior to such repeal or modification.
EIGHTH: The Corporation may, to the fullest extent permitted
by Section 721 through 726 of the Business Corporation Law of
New York, indemnify any and all directors and officers whom it
shall have power to indemnify under the said sections from and
against any and all of the expenses, liabilities or other
matters referred to in or covered by such section of the
Business Corporation Law, and the
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indemnification provided for herein shall not be deemed
exclusive of any other rights to which the persons so
indemnified may be entitled under any By-Law, agreement, vote
of shareholders or disinterested directors or otherwise, both
as to action in his/her official capacity and as to action in
another capacity by holding such office, and shall continue as
to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and
administrators of such a person."
FOURTH: This restatement of the certificate of incorporation was
authorized by an affirmative vote of the holders of a majority of all
outstanding shares entitled to vote thereon, at a meeting of shareholders
subsequent to the affirmative vote of the board of directors of the corporation.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 8th day of
January, 1997.
RADYNE CORP.
/s/ ROBERT C. FITTING
----------------------------
Robert C. Fitting, President
/s/ GARRY KLINE
----------------------------
Garry Kline, Secretary
5
EXHIBIT 3(ii)
BY-LAWS
of
RADYNE CORPORATION
ARTICLE I - OFFICES
The principal office of the corporation shall be at such location as the
directors shall from time to time determine. The corporation may also have
offices at such other places within or without the State of New York as the
board may from time to time determine or the business of the corporation may
require.
ARTICLE II - SHAREHOLDERS
1. PLACE OF MEETINGS.
Meetings of shareholders shall be held at the principal office of the
corporation or at such place within or without the State of New York as the
board shall authorize.
2. ANNUAL MEETING.
An annual meeting of shareholders for the purpose of electing directors
and of transacting such other business as may come before it shall be held each
year at such date, time and place, either within or without the State of New
York, as may be specified by the board of directors.
3. SPECIAL MEETINGS.
Special meetings of the shareholders may be called by the board or by the
president and shall be called by the president or the secretary at the request
in writing of a majority of the board or at the request in writing by
shareholders owning a majority in amount of the shares issued and outstanding.
Such request shall state the purpose or purposes of the proposed meeting.
Business transacted at a special meeting shall be confined to the purposes
stated in the notice.
4. FIXING RECORD DATE.
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For the purpose of determining the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or to express
consent to or dissent from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action, the board shall
fix, in advance, a date as the record date for any such determination of
shareholders. Such date shall not be more than fifty nor less than ten days
before the date of such meeting, nor more than fifty days prior to any other
action. If no record date is fixed it shall be determined in accordance with the
provisions of law.
5. NOTICE OF MEETINGS OF SHAREHOLDERS.
Written notice of each meeting of shareholders shall state the purpose or
purposes for which the meeting is called, the place, date and hour of the
meeting and unless it is the annual meeting, shall indicate that it is being
issued by or at the direction of the person or persons calling the meeting.
Notice shall be given either personally or by mail to each shareholder entitled
to vote at such meeting, not less than ten nor more than fifty days before the
date of the meeting. If action is proposed to be taken that might entitle
shareholders to payment for their shares, the notice shall include a statement
of that purpose and to that effect. If mailed, the notice is given when
deposited in the United States mail, with postage thereon prepaid, directed to
the shareholder at his address as it appears on the record of shareholders, or,
if he shall have filed with the secretary a written request that notices to him
be mailed to some other address, then directed to him at such other address.
6. WAIVERS.
Notice of meeting need not be given to any shareholder who signs a waiver
of notice, in person or by proxy, whether before or after the meeting. The
attendance of any shareholder at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of such
meeting, shall constitute a waiver of notice by him.
7. QUORUM OF SHAREHOLDERS.
Unless the certificate of incorporation provides otherwise, the holders of
a majority of the shares entitled to vote thereat shall constitute a quorum at a
meeting of shareholders for the transaction of any business, provided that when
a specified item of business is required to be voted on by a class or classes,
the holders of a majority of the shares of such class or classes shall
constitute a quorum for the transaction of such specified item of business.
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When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any shareholders.
The shareholders present may adjourn the meeting despite the absence of a
quorum.
8. PROXIES.
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after expiration of eleven months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the shareholder executing it, except as otherwise provided by law.
9. QUALIFICATION OF VOTERS.
Every shareholder of record shall be entitled at every meeting of
shareholders to one vote for every share standing in his name on the record of
shareholders, unless otherwise provided in the certificate of incorporation.
10. VOTE OF SHAREHOLDERS.
Except as otherwise required by statute or by the certificate of
incorporation;
(a) directors shall be elected by a plurality of the votes cast at a
meeting of shareholders by the holders of shares entitled to vote in the
election;
(b) all other corporate action shall be authorized by a majority of the
votes cast.
11. WRITTEN CONSENT OF SHAREHOLDERS.
Any action that may be taken by vote may be taken without a meeting on
written consent, setting forth the action so taken, signed by the holders of all
the outstanding shares entitled to vote thereon or signed by such lesser number
of holders as may be provided for the in the certificate of incorporation.
ARTICLE III - DIRECTORS
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1. BOARD OF DIRECTORS.
Subject to any provision in the certificate of incorporation the business
of the corporation shall be managed by its board of directors, each of whom
shall be at least 18 years of age and need not be shareholders.
2. NUMBER OF DIRECTORS.
The number of directors shall be between three and ten. When all of the
shares are owned by less than three shareholders, the number of directors may be
less than three but not less than the number of shareholders.
3. ELECTION AND TERM OF DIRECTORS.
At each annual meeting of shareholders, the shareholders shall elect
directors to hold office until the next annual meeting. Each director shall hold
office until the expiration of the term for which he is elected and until his
successor has been elected and qualified, or until his prior resignation or
removal.
4. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than quorum exists, unless otherwise
provided in the certificate of incorporation. Vacancies occurring by reason of
the removal of directors without cause shall be filled by vote of the
shareholders unless otherwise provided in the certificate of incorporation. A
director elected to fill a vacancy caused by resignation, death or removal shall
be elected to hold office for the unexpired term of his predecessor.
5. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
shareholders or by action of the board. Directors may be removed without cause
only by vote of the shareholders.
6. RESIGNATION.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
or such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
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<PAGE>
7. QUORUM OF DIRECTORS.
Unless otherwise provided in the certificate of incorporation, a majority
of the entire board shall constitute a quorum for the transaction of business or
of any specified item of business.
8. ACTION OF THE BOARD.
Unless otherwise required by law, the vote of a majority of the directors
present at the time of the vote, if a quorum is present at such time, shall be
the act of the board. Each director present shall have one vote regardless of
the number of shares, if any, which he may hold.
9. PLACE AND TIME OF BOARD MEETINGS.
The board may hold its meetings at the office of the corporation or at
such other places, either within or without the State of New York, as it may
from time to time determine.
10. REGULAR ANNUAL MEETING.
A regular annual meeting of the board shall be held immediately following
the annual meeting of shareholders at the place of such annual meeting of
shareholders.
11. NOTICE OF MEETINGS OF THE BOARD, ADJOURNMENT.
(a) Regular meetings of the board may be held without notice at such time
and place as it shall from time to time determine. Special meetings of the board
shall be held upon notice to the directors and may be called by the president
upon three days notice to each director either personally or by mail or by wire;
special meetings shall be called by the president or by the secretary in a like
manner on written request of two directors. Notice of a meeting need not be
given to any director who submits a waiver of notice whether before or after the
meeting or who attends the meeting without protesting prior thereto or at its
commencement, the lack of notice to him.
(b) A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of the
adjournment shall be given all directors who were absent at the time of the
adjournment and, unless such time and place are announced at the meeting, to the
other directors.
12. CHAIRMAN.
5
<PAGE>
At all meetings of the board the president, or in his absence, a chairman
chosen by the board shall preside.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution adopted by a majority of the entire board, may
designate from among its members an executive committee and other committees,
each consisting of three or more directors. Each such committee shall serve at
the pleasure of the board.
14. COMPENSATION.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance,
at each regular or special meeting of the board may be authorized. Nothing
herein contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
15. TELEPHONE MEETING.
Any one or more members of the Board or any Committee thereof may
participate in a meeting of such Board or Committee by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time. Participating in the meeting
by such means shall constitute presence in person at such meeting of the Board.
ARTICLE IV - OFFICERS
1. OFFICES, ELECTION, TERM.
(a) Unless otherwise provided for in the certificate of incorporation, the
board may elect or appoint a president, one or more vice-presidents, a secretary
and a treasurer, and such other officers as it may determine, who shall have
such duties, powers and functions as hereinafter provided.
(b) All officers shall be elected or appointed to hold office until the
meeting of the board following the annual meeting of shareholders.
(c) Each officer shall hold office for the term for which he is elected or
appointed and until his successor has been elected or appointed and qualified.
6
<PAGE>
2. REMOVAL, RESIGNATION, SALARY, ETC.
(a) Any officer elected or appointed by the board may be removed by the
board with or without cause.
(b) In the event of the death, resignation or removal of an officer, the
board in its discretion may elect or appoint a successor to fill the unexpired
term.
(c) Any two or more offices may be held by the same person, except the
offices of president and secretary. When all of the issued and outstanding stock
of the corporation is owned by one person, such person may hold all or any
combination of offices.
(d) The salaries of all officers shall be fixed by the board.
(e) The directors may require any officer to give security for the
faithful performance of his duties.
3. PRESIDENT.
The president shall be the chief executive officer of the corporation; he
shall preside at all meetings of the shareholders and of the board; he shall
have the management of the business of the corporation and shall see that all
orders and resolutions of the board are carried into effect.
4. VICE-PRESIDENTS.
During the absence or disability of the president, the vice-president, or
if there are more than one, the executive vice-president, shall have all the
powers and functions of the president. Each vice-president shall perform such
other duties as the board shall prescribe.
5. SECRETARY.
The secretary shall:
(a) attend all meetings of the board and of the shareholders;
(b) record all votes and minutes of all proceedings in a book to be kept
for that purpose;
(c) give or cause to be given notice of all meetings of shareholders and
of special meetings of the board;
7
<PAGE>
(d) keep in safe custody the seal of the corporation and affix it to any
instrument when authorized by the board;
(e) when required, prepare or cause to be prepared and available at each
meeting of shareholders a certified list in alphabetical order of the names of
shareholders entitled to vote thereat, indicating the number of shares of each
respective class held by each;
(f) keep all the documents and records of the corporation as required by
law or otherwise in a proper and safe manner.
(g) perform such other duties as may be prescribed by the board.
6. ASSISTANT-SECRETARIES.
During the absence or disability of the secretary, the
assistant-secretary, or if there are more than one, the one so designated by the
secretary or by the board, shall have all the powers and functions of the
secretary.
7. TREASURER.
The treasurer shall:
(a) have the custody of the corporate funds and securities;
(b) keep full and accurate accounts of receipts and disbursements in the
corporate books;
(c) deposit all money and other valuables in the name and to the credit of
the corporation in such depositories as may be designated by the board;
(d) disburse the funds of the corporation as may be ordered or authorized
by the board and preserve proper vouchers for such disbursements;
(e) render to the president and board at the regular meetings of the
board, or whenever they require it, an account of all his transactions as
treasurer and of the financial condition of the corporation;
(f) render a full financial report at the annual meeting of the
shareholders if so requested;
8
<PAGE>
(g) be furnished by all corporate officers and agents at his request, with
such reports and statements as he may require as to all financial transactions
of the corporation;
(h) perform such other duties as are given to him by these by-laws or as
from time to time are assigned to him by the board or the president.
8. ASSISTANT-TREASURER.
During the absence or disability of the treasurer, the
assistant-treasurer, or if there are more than one, the one so designated by the
secretary or by the board, shall have all the powers and functions of the
treasurer.
9. SURETIES AND BONDS.
In case the board shall so require, any officer or agent of the
corporation shall execute to the corporation a bond in such sum and with such
surety or sureties as the board may direct, conditioned upon the faithful
performance of his duties to the corporation and including responsibility for
negligence and for the accounting for all property, funds or securities of the
corporation which may come into his hands.
ARTICLE V - CERTIFICATES FOR SHARES
1. CERTIFICATES.
The shares of the corporation shall be represented by certificates. They
shall be numbered and entered in the books of the corporation as they are
issued. They shall exhibit the holder's name and the number of shares and shall
be signed by the president or a vice-president and the treasurer or the
secretary and shall bear the corporate seal.
2. LOST OR DESTROYED CERTIFICATES.
The board 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 to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the board 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
give the corporation a bond in such sum and with such surety or sureties as it
9
<PAGE>
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.
3. TRANSFERS OF SHARES.
(a) 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, and cancel the old certificate; every such transfer shall be entered on
the transfer book of the corporation which shall be kept at its principal
office.
(b) The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of New York.
4. CLOSING TRANSFER BOOKS.
The board shall have the power to close the share transfer books of the
corporation for a period of not more than ten days during the thirty day period
immediately preceding (1) any shareholders' meeting, or (2) any date upon which
shareholders shall be called upon to or have a right to take action without a
meeting, or (3) any date fixed for the payment of a dividend or any other form
of distribution, and only those shareholders of record at the time the transfer
books are closed, shall be recognized as such for the purpose of (1) receiving
notice of or voting at such meeting, or (2) allowing them to take appropriate
action, or (3) entitling them to receive any dividend or other form or
distribution.
ARTICLE VI - DIVIDENDS
Subject to the provisions of the certificate of incorporation and to
applicable law, dividends on the outstanding shares of the corporation may be
declared in such amounts and at such time or times as the board may determine.
Before payment of any dividend, there may be set aside out of the net profits of
the corporation available for dividends such sum or sums as the board from time
to time in its absolute discretion deems proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the board shall think
conducive to the interests of the corporation, and the board may modify or
abolish any such reserve.
10
<PAGE>
ARTICLE VII - CORPORATE SEAL
The seal of the corporation shall be circular in form and bear the name of
the corporation, the year of its organization and the words "Corporate Seal, New
York." The seal may be used by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed thereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be a facsimile, engraved or printed.
ARTICLE VIII - EXECUTION OF INSTRUMENTS
All corporate instruments and documents shall be signed or countersigned,
executed, verified or acknowledged by such officer or officers or other person
or persons as the board may from time to time designate.
ARTICLE IX - FISCAL YEAR
The corporation's fiscal year shall be determined by the board of
directors from time to time.
ARTICLE X - REFERENCES TO CERTIFICATE OF INCORPORATION
Reference to the certificate of incorporation in these by-laws shall
include all amendments thereto or changes thereof unless specifically excepted.
ARTICLE XI - BY-LAW CHANGES
AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.
(a) Except as otherwise provided in the certificate of incorporation the
by-laws may be amended, repealed or adopted by vote of the holders of the shares
at the time entitled to vote in the election of any directors. By-laws may also
be amended,
11
<PAGE>
repealed or adopted by the board but any by-law adopted by the board may be
amended by the shareholders entitled to vote thereon as hereinabove provided.
(b) If any by-law regulating an impending election of directors is
adopted, amended or repealed by the board, there shall be set forth in the
notice of the next meeting of shareholders for the election of directors the
by-law so adopted, amended, or repealed, together with a concise statement of
the changes made.
ARTICLE XII - INDEMNIFICATION
The corporation shall indemnify its officers and directors to the full
extent permitted by Article VII of the New York Business Corporation Law.
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10-QSB FOR THE QUARTER ENDED 9-30-96
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> <- not supplied
<PERIOD-END> SEP-30-1996
<CASH> 437,950
<SECURITIES> 0
<RECEIVABLES> 522,198
<ALLOWANCES> (32,829)
<INVENTORY> 1,580,777
<CURRENT-ASSETS> 2,525,029
<PP&E> 682,080
<DEPRECIATION> (92,705)
<TOTAL-ASSETS> 4,302,136
<CURRENT-LIABILITIES> 7,388,807
<BONDS> 0
0
0
<COMMON> 37,501
<OTHER-SE> 555,800
<TOTAL-LIABILITY-AND-EQUITY> 4,302,136
<SALES> 1,292,646
<TOTAL-REVENUES> 1,292,646
<CGS> 1,052,384
<TOTAL-COSTS> 1,052,384
<OTHER-EXPENSES> 946,177
<LOSS-PROVISION> 19,829
<INTEREST-EXPENSE> 112,260
<INCOME-PRETAX> (818,175)
<INCOME-TAX> 0
<INCOME-CONTINUING> (818,175)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (818,175)
<EPS-PRIMARY> (0.044)
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