UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1998
Commission File Number 0-11353
CIRCUIT RESEARCH LABS, INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0344671
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2522 West Geneva Drive, Tempe, Arizona 85282
(Address of Principal executive office) (Zip Code)
Registrant's telephone number,
including area code
(602) 438-0888
172743 20 5
(CUSIP Number)
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.
YES X NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by
this report.
Outstanding at
Class June 30, 1998
Common stock, $.10 par value 410,182<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
INDEX
Page
number
Part I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
June 30, 1998 (Unaudited) and
December 31, 1997 2
Consolidated Condensed Statements of
Operations - Three and six months ended
June 30, 1998 and 1997 (Unaudited) 4
Consolidated Condensed Statements of Cash
Flows - Six months ended June 30, 1998
and 1997 (Unaudited) 5
Notes to Consolidated Condensed Financial
Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. OTHER INFORMATION:
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Page 1<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
June 30, December 31
1998 1997
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $287,756 $119,851
Securities available-for-sale 512,157 89,607
Accounts receivable, less allowance for
doubtful accounts of $6,520 107,637 112,320
Inventories:
Raw materials and supplies 154,874 176,439
Work in process 322,740 289,690
Finished goods 478,345 416,996
Total inventories 955,959 883,125
Prepaid expenses and other 70,593 58,346
Total current assets 1,934,102 1,263,249
PROPERTY, PLANT AND EQUIPMENT:
Land 130,869 130,869
Building and improvements 503,000 497,004
Furniture and fixtures 305,072 300,628
Machinery and equipment 602,561 599,864
Total 1,541,502 1,528,365
Less accumulated depreciation 1,026,720 996,810
Property, plant and equipment - net 514,782 531,555
OTHER ASSETS - NET 9,869 51,794
TOTAL $2,458,753 $1,846,598
(continued)
Page 2<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
June 30,December 31
1998 1997
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $137,107 $ 53,382
Accrued salaries and benefits 50,967 63,086
Accrued professional fees 19,185 29,302
Customer deposits 14,043 26,180
Other accrued expenses and liabilities 19,802 7,315
Long-term debt - current portion 11,000 16,481
Total current liabilities 252,104 195,746
LONG-TERM DEBT - LESS CURRENT PORTION 9,961 105,656
Total liabilities 262,065 301,402
STOCKHOLDERS' EQUITY:
Preferred stock, $100 par value - authorized
500,000 shares, none issued
Common stock, $.10 par value - authorized
20,000,000 shares, 597,682 shares issued 59,768 59,768
Additional paid-in capital 1,247,240 1,247,240
Retained earnings 1,062,246 238,188
Unrealized appreciation on securities
available-for-sale 9,074
2,378,328 1,545,196
Less common stock in treasury - at cost,
187,500 shares (181,640)
Total stockholders' equity 2,196,688 1,545,196
TOTAL $2,458,753 $1,846,598
See accompanying notes to consolidated condensed financial
statements.
Page 3<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
NET SALES $324,665 $506,287 $841,875$1,017,139
COST OF GOODS SOLD 149,830 277,351 370,735 484,188
-
Gross profit 174,835 228,936 471,140 532,951
OPERATING EXPENSES:
Selling, general and
administrative 303,460 224,607 525,337 472,343
Research and development 57,350 54,513 113,339 105,213
Total operating expenses 360,810 279,120 638,676 577,556
LOSS FROM OPERATIONS (185,975) (50,184) (167,536) (44,605)
OTHER INCOME (EXPENSE):
Proceeds from officer's
life insurance in excess
of cash surrender value 1,000,681
Interest and other income 7,240 2,189 10,069 3,776
Interest expense (3,223) (19,156) (6,526)
Total other income(expense)7,240 (1,034) 991,594 (2,750)
LOSS) INCOME BEFORE INCOME
TAXES (178,735) (51,218) 824,058 (47,355)
INCOME TAX EXPENSE 3,050
NET (LOSS) INCOME $ (178,735) $ (51,218)$ 824,058 $(50,405)
(LOSS) INCOME PER COMMON
SHARE -
Basic $(.38) $( .09) $1.54 $ (.08)
Diluted $(.38) $( .09) $1.53 $ (.08)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
Basic 472,682 597,682 535,182 597,682
Diluted 472,682 597,682 537,815 597,682
See accompanying notes to consolidated condensed
financial statements.
Page 4<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1998 1997
OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 824,058 $(50,405)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH USED IN OPERATING ACTIVITIES:
Depreciation and amortization 30,749 39,768
Proceeds from officer's life insurance in
excess of cash surrender value (1,000,681)
Changes in assets and liabilities:
Accounts receivable 4,683 2,666
Inventories (72,834) 10,704
Prepaid expenses and other assets (3,531) 1,940
Accounts payable, accrued expenses and
customer deposits 61,839 (49,437)
NET CASH USED IN OPERATING ACTIVITIES (155,717) (44,764)
INVESTING ACTIVITIES:
Proceeds from officer's life insurance 1,033,051
Purchase of securities (948,156) ( 59,477)
Proceeds from sale or maturity of
securities 534,680 167,961
Capital expenditures (13,137) (9,283)
NET CASH PROVIDED BY INVESTING ACTIVITIES 606,438 99,201
FINANCING ACTIVITIES:
Principal payments on long-term debt (101,176) (10,464)
Purchase of treasury shares (181,640)
NET CASH USED IN FINANCING ACTIVITIES (282,816) (10,464)
NET INCREASE IN CASH AND CASH EQUIVALENTS 167,905 43,973
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 119,851 48,048
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $287,756 $ 92,021
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest $ 6,526
Cash paid for income taxes $ 3,050
Non cash investing activities - unrealized
appreciation of securities available-for-sale $9,074
See accompanying notes to consolidated condensed financial
statements.
Page 5<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
1. The Consolidated Condensed Financial Statements included
herein have been prepared by Circuit Research Labs, Inc. ("CRL" or
the "Company"), pursuant to the rules and regulations of the
Securities and Exchange Commission. The Consolidated Condensed
Balance Sheet as of June 30, 1998 and the Consolidated Condensed
Statements of Operations for the three and six months ended June
30, 1998 and 1997 and the Consolidated Condensed Statements of
Cash Flows for the six months ended June 30, 1998 and 1997 have
been prepared without audit.
Certain information and note disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these Consolidated
Condensed Financial Statements be read in conjunction with the
consolidated financial statements and notes thereto included in
the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997.
In the opinion of management, the Consolidated Condensed Financial
Statements for the unaudited interim periods presented herein
include all adjustments, consisting only of normal recurring
adjustments, necessary to present a fair statement of the results
of operations for such interim periods. Net operating results for
any interim period may not be comparable to the same interim
period in previous years, nor necessarily indicative of the
results that may be expected for the full year.
2. The following is a reconciliation of the numerators and
denominators of basic and diluted income per share for the six
month period ended June 30, 1998 as required by Statement of
Financial Accounting Standards ("SFAS") No. 128, Earnings per
Share. For the three months ended June 30, 1998 and the three and
six months ended June 30, 1997, the effects of 15,312 total shares
related to options to purchase common stock were not used for
computing diluted earnings per share because the results would be
antidulitive.
Six months ended June 30, 1998
Income Shares Per-Share
(Numerator) (Denominator) Amounts
$ 824,058 535,182 $ 1.54
2,633
$ 824,058 537,815 $ 1.53
Page 6<PAGE>
3. The Company adopted SFAS No. 130, Reporting Comprehensive
Income, on January 1, 1998. Comprehensive (loss) income for the
three and six months ended June 30, 1998 was $(169,661) and
$833,132, respectively. Comprehensive loss for the three and six
months ended June 30, 1997 was the same as net loss for these
periods.
4. Ronald R. Jones, who was the President and a Director and
Chief Executive Officer of the Company, died on January 1, 1998.
At a special meeting of the Board of Directors of the Company on
January 2, 1998, Gary D. Clarkson was appointed President and
Chief Executive Officer. Mr. Clarkson had been the
Secretary/Treasurer and a Director of the Company, and was
co-founder of the Company with Ronald Jones in 1974.
On February 6, 1998, the Company received approximately $1,033,000
as proceeds of an insurance policy payable upon the death of
Ronald Jones. Pursuant to an agreement between the Company and
Ronald R. Jones, the Company repurchased all of Ronald R. Jones'
187,500 shares from the estate of Ronald R. Jones for $181,640 on
May 5, 1998.
5. Until March 31, 1998, Circuit Research Labs, Inc. was listed
on the NASDAQ Small Cap market. NASDAQ has raised its requirements
for continued listing. It now requires among other criteria, a
public float of 500,000 shares, and the Company's public float is
approximately 295,000 shares. "Public float" is defined as shares
that are not held directly or indirectly by any officer or
director of the issuer and by any other person who is the
beneficial owner of more than 10% of the total shares outstanding.
NASDAQ also requires a minimum market value of the public float to
be $1,000,000. The bid price on March 31, 1998 for the Company's
common stock was $2.00. The highest bid price
in 1997 was $2.19. The market value of the Company's public float
at March 31, 1998 was approximately $590,000. In addition, the
Company did not meet other new monetary tests. While the Company's
common shares are no longer listed on the NASDAQ Small Cap market,
as of April 1, 1998, the shares have been listed on the OTC
Bulletin Board.
6. On May 31, 1998, Gary M. Hamker resigned as a member of the
Company's Board of Directors.
7. On July 16, 1998, the Company paid Royce T. Jones $98,000 as a
settlement of any and all claims that Royce T. Jones or the
Estate of Ronald R. Jones, may have had against the Company.
Such amount was accrued at June 30, 1998 and is included in
selling, general and administrative expenses for the three
months ended June 30, 1998. On July 21, 1998, Royce T. Jones
resigned as a member of the Company's Board of Directors.
Page 7<PAGE>
Item. 2
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company had net working capital of approximately
$1,682,000 and the ratio of current assets to current liabilities
was 7.67 to 1 at June 30, 1998. At December 31, 1997, the Company
had net working capital of approximately $1,068,000 and a current
ratio of 6.45 to 1.
In February 1998, the Company received $1,033,000 as
proceeds of an insurance policy payable upon the death of Ronald
R. Jones. In March 1998, the Company paid off the balance, plus
accrued interest and early payment premium, on the mortgage note
collateralized by the Company's operating facility. Pursuant to an
agreement between the Company and Ronald R. Jones, the Company
repurchased all of Ronald R. Jones' 187,500 shares from the estate
of Ronald R. Jones for $181,640 on May 5, 1998. In July 1998, the
Company paid Royce T. Jones $98,000 as a settlement of any and all
claims that Royce T. Jones or the Estate of Ronald R. Jones, may
have had against the Company.
Securities increased from $90,000 at December 31, 1997 to
$512,000 at June 30, 1998. The increase was the result of the use
of the proceeds of the insurance policy mentioned above and an
increase in the unrealized appreciation on the securities of
$9,000. The estimated fair value of the Company's securities at
June 30, 1998 was $512,000.
Accounts receivable of $108,000 at June 30, 1998 was
comparable to $112,000 at December 31, 1997. Accounts receivable
as a percentage of sales for the three months ended June 30, 1998
was 33% as compared to 30% for the three months ended December 31,
1997.
Total inventories were $956,000 at June 30, 1998 compared to
total inventories of $883,000 at December 31, 1997. The increase
is the result of lower than expected sales for the first six
months of 1998.
Net cash used in operating activities increased from $45,000
for the six months ended June 30, 1997 to $156,000 for the six
months ended June 30, 1998, primarily as the result of the
Page 8<PAGE>
increase in the loss from operations from $45,000 to $168,000 for
the comparable periods.
The Company believes its future liquidity needs will be met
by a combination of cash generated from operating activities, the
reduction of investments, and existing cash balances. The company
does not have any available credit facilities. The Company
presently does not have any commitments for capital expenditures.
Page 9<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the second quarter of 1998 totaled $325,000
compared to the second quarter sales in 1997 of $506,000. The
Company continues to experience slower demand across its product
lines, in both domestic and international markets.
Cost of goods sold was 46% of net sales for the second
quarter ended June 30, 1998 compared to 55% for the same period
in 1997. In the second quarter of 1997, the Company experienced a
temporary increase in production costs on CRL's main product line.
The cost of goods sold for the six month period ended June 30,
1998 was 44% compared to 48% for the same period of 1997.
Selling, general and administrative expenses were $303,000
in the second quarter of 1998 compared to selling, general and
administrative expenses of $225,000 for the second quarter of
1997. Selling, general and administrative expenses were $525,000
in the six months ended June 30, 1998 compared to selling,
general and administrative expenses of $472,000 for the six months
ended June 30, 1997. There was an overall decrease in selling,
general and administrative expenses in 1998 except for the accrual
of the payment of $98,000 as a settlement of any and all claims
that Royce T. Jones or the Estate of Ronald R. Jones, may have
had against the Company.
Research and development expense in the second quarter of
1998 totaled $57,000, compared to the 1997 second quarter total
of $55,000.
Proceeds from the gain on officer's life insurance in excess
of cash surrender value of $1,001,000 was the result of the
proceeds of an insurance policy payable upon the death of Ronald
R. Jones.
Interest and other income of $7,200 for the second quarter
of 1998 compared to $2,200 for the second quarter of 1997. The
increase was the result of more funds invested as a result of the
insurance proceeds.
In March 1998, the Company paid off the balance, plus
accrued interest and early payment premium, on the mortgage note
collateralized by the Company's operating facility, therefore the
Company incurred no interest expense during the second quarter of
1998. Interest expense of $3,200 for the second quarter of 1997
consists of the interest cost on this mortgage.
Page 10<PAGE>
For the six months ended June 30, 1998, there is no income
tax provision primarily because the proceeds from officer's life
insurance is not expected to be included in taxable income, and
any remaining income tax benefit has been offset by an increase in
the valuation allowance, as utilization of such benefit is not
reasonably assured.
Net loss for the second quarter of 1998 was $179,000
compared to a net loss of $51,000 for the second quarter of 1997.
The increase in the loss was primarily due to the decline in
gross profit resulting from lower net sales as well as the accrual
of the payment to Royce T. Jones discussed above.
The inability of computers, software and other equipment
utilizing microprocessors to recognize and properly process data
fields containing a 2 digit year is commonly referred to as the
Year 2000 compliance issue. The Company expects to be Year 2000
compliant by year end 1998 by continuing to upgrade its current
accounting and financial software. The Company's accounting
software for its financial systems is under a maintenance contract
which covers Year 2000 compliance, so no additional costs are
expected to be incurred.
This 10QSB includes "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Management's anticipation of future events is based upon
assumptions regarding levels of competition, research and
development results, raw material markets, the markets in which
the Company operates, and stability of the regulatory environment.
Any of these assumptions could prove inaccurate, and therefore
there can be no assurance that the forward-looking information
will prove to be accurate.
Page 11<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
Part II. OTHER INFORMATION
Item 5. Other Information
The Company's common shares are no longer listed on the NASDAQ
Small Cap market, but as of April 1, 1998, the shares have been
listed on the OTC Bulletin Board.
On May 5, 1998, pursuant to an agreement between the Company
and Ronald R. Jones, the Company repurchased all of Ronald R.
Jones' 187,500 shares from the estate of Ronald R. Jones for
the price of $181,640.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits included herein:
3.(ii) Bylaws of Registrant, dated as of
February 28, 1978, as amended May 21, 1998.
(b) Reports on Form 8-K - 8-K filed on August 11, 1998
Page 12<PAGE>
CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Registrant
CIRCUIT RESEARCH LABS, INC.
DATE: August 14, 1998
BY /s/Gary D. Clarkson
Gary D. Clarkson
President (Authorized Officer for
signature)
Page 13<PAGE>
BYLAWS
OF
CIRCUIT RESEARCH LABS, INC.
I. CORPORATION ARTICLES
1.01. Reference to Articles. Any reference herein made
to the corporation's articles will be deemed to refer to its
articles of incorporation and all amendments thereto as at any
given time on file with the Arizona Corporation Commission,
together with any and all certificates filed by the corporation
with the Arizona Corporation Commission (or any successor to its
functions) pursuant to applicable law.
1.02. Seniority. The articles will in all respects be
considered senior and superior to these bylaws, with any
inconsistency to be resolved in favor of the articles, and with
these bylaws to be deemed automatically amended from time to time
to eliminate any such inconsistency which may then exist.
II. CORPORATION OFFICES
2.01. Known Place of Business. The known place of
business of the corporation in the State of Arizona shall be the
office of its statutory agent unless otherwise designated in the
articles. The corporation may have such other offices, either
within or without the State of Arizona, as the board of directors
may designate or as the business of the corporation may require
from time to time.
2.02. Change Thereof. The board of directors may change
the corporation's known place of business or its statutory agent
from time to time by filing a statement with the Arizona
Corporation Commission pursuant to applicable law.
III. SHAREHOLDERS
3.01. Annual Meetings. Each annual meeting of the
shareholders is to be held on the second Tuesday in the month of
May of each year, commencing with the year 1983 (unless that day
be a legal holiday, in which event the annual meeting shall be
held on the next succeeding business day) at a time and place as
determined by the board of directors, or in the absence of action
by the board, as set forth in the notice given, or waiver signed,
with respect to such meeting pursuant to Section 3.03 below. At
the annual meeting, shareholders shall elect a board of directors
and transact such other business as may be properly brought before
the meeting. If any annual meeting is for any reason not held on
Page 14<PAGE>
the date determined as set forth above, a deferred annual meeting
may thereafter be called and held in lieu thereof, at which the
same proceedings (including the election of officers) may be
conducted. Any director elected at any annual meeting, deferred
annual meeting or special meeting will continue in office until
the election of his successor, subject to his earlier resignation
pursuant to Section 7.01 below.
3.02. Special Meetings. Special meetings of the
shareholders may be held whenever and wherever called for by the
chairman of the board, the president or the board of directors, or
by the written demand of the holders of not less than 30% of all
issued and outstanding shares of the corporation entitled to vote
at any such meeting. Any written demand by shareholders shall
state the purpose or purposes of the proposed meeting, and
business to be transacted at any such meeting shall be confined to
the purposes stated in the notice thereof, and to such additional
matters as the chairman of the meeting may rule to be germane to
such purposes.
3.03. Notices. Not less than ten (10) nor more than
fifty (50) days (inclusive of the date of meeting) before the date
of any meeting of the shareholders and at the direction of the
person or persons calling the meeting, the secretary of the
corporation will cause a written notice setting forth the time,
place and general purposes of the meeting to be deposited in the
mail, with first class or airmail postage prepaid, addressed to
each shareholder of record at his last address as it appears on
the corporation's records on the applicable record date. Any
shareholder may waive call or notice of any annual, deferred
annual or special meeting (and any adjournment thereof) at any
time before, during which or after it is held. Attendance of a
shareholder at any such meeting in person or by proxy will
automatically evidence his waiver of call and notice of such
meeting (and any adjournment thereof) unless he or his proxy is
attending the meeting for the express purpose of objecting to the
transaction of business because the meeting has not been properly
called or noticed. No call or notice of a meeting of the
shareholders will be necessary if each shareholder waives the same
in writing or by attendance.
3.04. Shareholders of Record. For the purpose of
determining shareholders entitled to notice of or to vote at any
meeting of shareholders (and at any adjournment of such meeting),
or shareholders entitled to consent to corporate action without a
meeting or shareholders entitled to receive payment of any
dividend, or for any other lawful action, the board of directors
may fix in advance a record date which shall not be more than
sixty (60) nor less than ten (10) days prior to the date of such
meeting or any such other action.
If no record date is fixed by the board of directors for
determining shareholders entitled to notice of, and to vote at, a
Page 15<PAGE>
meeting of shareholders, the record date shall be at four o'clock
in the afternoon on the day before the day on which notice is
given, or, if notice is waived, at the commencement of the
meeting. If no record date is fixed for determining shareholders
entitled to express written consent to corporate action without a
meeting, the record date shall be the time of the day on which the
first written consent is served upon an officer or director of the
corporation.
A determination of shareholders of record entitled to notice of,
and to vote at, a meeting of shareholders shall apply to any
adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting, and
further provided that the adjournment or adjournments of any such
meeting do not exceed thirty (30) days in the aggregate.
3.05. Shareholder Record. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall make, at least ten (10) days before every meeting of
shareholders, a complete record of the shareholders entitled to
vote at the meeting (and at any adjournment thereof), arranged in
alphabetical order, showing the address and the number of shares
registered in the name of each shareholder. Such record shall be
produced and kept open (i) at the office of the corporation prior
to the time of the meeting, and (ii) at the time and place of the
meeting; such record shall be subject to the inspection of any
shareholder during such times for any purpose germane to the
meeting.
3.06. Proxies. Any shareholder entitled to vote thereat
may vote by proxy at any meeting of the shareholders (and at any
adjournment thereof) which is specified in such proxy, provided
that his or her proxy is executed in writing by such shareholder
or his or her duly authorized attorney-in-fact. No proxy shall be
valid after eleven months from the date of its execution, unless
otherwise specifically provided thereon. The burden of proving
the validity of any undated, irrevocable or otherwise contested
proxy at a meeting of the shareholders will rest with the person
seeking to exercise the proxy. A telegram or cablegram appearing
to have been transmitted by a shareholder or by his duly
authorized attorney-in-fact may be accepted as a sufficiently
written and executed proxy.
3.07. Voting. Except for the election of directors
(which will be governed by cumulative voting pursuant to
applicable law) and except as may otherwise be required by the
corporation's articles, these bylaws or by statute, each issued
and outstanding share of the corporation (specifically excluding
shares held in the treasury of the corporation) represented at any
meeting of the shareholders in person or by a proxy given pursuant
to Section 3.06 above, will be entitled to one vote on each matter
submitted to a vote of the shareholders at such meeting. Unless
otherwise required by the corporation's articles or by applicable
Page 16<PAGE>
law, any question submitted to the shareholders will be resolved
by a majority of the votes cast thereon, provided that such votes
constitute a majority of the quorum of that particular meeting,
whether or not such quorum is then present. Voting will be by
ballot on any question as to which a ballot vote is demanded prior
to the time the voting begins, by any person entitled to vote on
such question; otherwise, a voice vote will suffice. No ballot or
change of vote will be accepted after the polls have been declared
closed following the ending of the announced time for voting.
3.08. Voting of Shares by Certain Holders. Shares of the
corporation held by another corporation may be voted by such
corporation's officer, agent or proxy as its bylaws may prescribe,
or in the absence of such bylaw provision, by any other person
designated by resolution of its board of directors, and such
officer, agent or other person so designated may vote such
corporation's shares in this corporation in person or by proxy
appointed by him.
Shares held by an administrator, executor, guardian or
conservator may be voted by such representative, either in person
or by proxy, without a transfer of such shares into his name.
Shares standing in the name of a trustee, other than a trustee in
bankruptcy, may be voted by such representative, either in person
or by proxy, but no such trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver, trustee in
bankruptcy, or assignee for the benefit of creditors may be voted
by such representative, either in person or by proxy. Shares held
by or under the control of such a receiver or trustee may be voted
by such receiver or trustee, either in person or by proxy, without
the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such
receiver or trustee was appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
If shares stand in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in
common, tenants by the entirety or tenants by community property
or otherwise, or if two or " more persons have the same fiduciary
relationship respecting the same shares, unless the corporation is
given written instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (1) If only one votes, his
act binds, (2) if more than one votes, the act of the majority so
voting binds all, and (3) if more than one votes, but the vote is
evenly split on any particular matter, each faction may vote the
shares in question proportionally.
Page 17<PAGE>
Shares standing in the name of a married woman but not also
standing in the name of her husband with such a designation of the
mutual relationship on the certificate, may be voted and all
rights incident thereto may be exercised in the same manner as if
she were married.
Shares of its own stock belonging to the corporation or to
another corporation, if a majority of the shares entitled to vote
in the elections of directors of such other corporation is held,
directly or indirectly, by the corporation, shall neither be
entitled to vote nor counted for quorum purposes. Nothing in this
section shall be construed as limiting the right of the
corporation to vote its own stock held by it in a fiduciary
capacity.
3.09. Quorum. At any meeting of the shareholders, the
presence in person or by proxy of the holders of a majority of the
shares of the corporation issued, outstanding and entitled to vote
at the meeting will constitute a quorum of the shareholders for
all purposes. In the absence of a quorum, any meeting may be
adjourned from time to time by its chairman, without notice other
than by announcement at the meeting, until a quorum is formed. At
any such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the
meeting as originally noticed. once a quorum has been formed at
any meeting, the shareholders from time to time remaining in
attendance may continue to transact business until adjournment,
notwithstanding the prior departure of enough shareholders to
leave less than a quorum. if an adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to each shareholder of record entitled to vote at
the meeting.
3.10. Election Inspectors. The board of directors, in
advance of any meeting of the shareholders, may appoint an
election inspector or inspectors to act at such meeting (and at
any adjournment thereof). If an election inspector or inspectors
are not so appointed, the chairman of the meeting may, or upon
request of any person entitled to vote at the meeting will, make
such appointment. If any person appointed as an inspector fails
to appear or to act, a substitute may be appointed by the chairman
of the meeting. If appointed, the election inspector or
inspectors (acting through a majority of them if there be more
than one) will determine the number of shares outstanding, the
authenticity, validity and effect of proxies and the number of
shares represented at the meeting in person and by proxy; they
will receive and count votes, ballots and consents and announce
the results thereof; they will hear and determine all challenges
and questions pertaining to proxies and voting; and, in general,
they will perform such acts as may be proper to conduct elections
Page 18<PAGE>
and voting with complete fairness to all shareholders. No such
election inspector need be a shareholder of the corporation.
3.11. Organization and Conduct of Meetings. Each
meeting of the shareholders will be called to order and thereafter
chaired by the chairman of the board of directors if there is one;
or, if not, or if the chairman of the board is absent or so
requests, then by the president; or if both the chairman of the
board and the president are unavailable, then by such other
officer of the corporation or such shareholder as may be appointed
by the board of directors. The corporation's secretary will act
as secretary of each meeting of the shareholders; in his or her
absence the chairman of the meeting may appoint any person
(whether a shareholder or not) to act as secretary for the
meeting. After calling a meeting to order, the chairman thereof
may require the registration of all shareholders intending to vote
in person and the filing of all proxies with the election
inspector or inspectors, if one or more have been appointed (or,
if not, with the secretary of the meeting). After the announced
time for such filing of proxies has ended, no further proxies or
changes, substitutions or revocations of proxies will be accepted.
If directors are to be elected, a tabulation of the proxies so
filed will, if any person entitled to vote in such election so
requests, be announced at the meeting (or adjournment thereof)
prior to the closing of the election polls. Absent a showing of
bad faith on his part, the chairman of a meeting will, among other
things, have absolute authority to fix the period of time allowed
for the registration of shareholders and the filing of proxies, to
determine the order of business to be conducted at such meeting
and to establish reasonable rules for expediting the business of
the meeting (including any informal, or question and answer
portions thereof).
3.12. Shareholder Approval or Ratification. The board
of directors may submit any contract or act or approval or
ratification of the shareholders, either at a duly constituted
meeting of the shareholders (the notice of which either includes
mention of the proposed submittal or is waived pursuant to Section
3.03 above) or by unanimous written consent to corporate action
without a meeting pursuant to Section 3.14 below. If any contract
or act so submitted is approved or ratified by a majority of the
votes cast thereon at such meeting or by such unanimous written
consent, the same will be valid and as binding upon the
corporation and all of its shareholders as it would be if it were
the act of the shareholders.
3.13. Informalities and Irregularities. All
informalities or irregularities in any call or notice of a meeting
of the shareholders or in the areas,. of credentials, proxies,
quorums, voting and similar matters, will be deemed waived if no
objection is made at the meeting.
Page 19<PAGE>
3.14. Action by Shareholders Without a Meeting. Any
action required or permitted to be taken at a meeting of the
shareholders of the corporation may be taken without a meeting if
a consent in writing, setting forth the action so taken, is signed
by all of the shareholders entitled to vote with respect to the
subject matter thereof. Such consent shall have the same effect
as a unanimous vote of the shareholders of the corporation at a
meeting duly called and noticed.
Page 20
IV. BOARD OF DIRECTORS
4.01. Membership. The board of directors will be
comprised of not less than two (2) nor more than nine (9) members
who need not be shareholders of the corporation. The directors
will regularly be elected at each annual meeting of the
shareholders. The board of directors will have the power to
increase or decrease its size within the aforesaid limits and to
fill any vacancies which may occur in its membership, whether
resulting from an increase in the size of that board or otherwise,
and shall hold office until the next meeting of the shareholders.
Each director elected by the shareholders or the board of
directors shall hold office until his or her successor is duly
elected and qualified.
4.02. Regular Meetings. A regular annual meeting of the
board of directors is to be held as soon as practicable after the
adjournment of each annual meeting of the shareholders, either at
the place of the shareholders' meeting or at such other place as
the directors elected at the shareholders' meeting may have been
informed of at or prior to the time of their election. Additional
regular meetings may be held at regular intervals at such places
and at such times as the board of directors may determine.
4.03. Special Meetings. Special meetings of the board
of directors may be held whenever and wherever called for by the
chairman of the board, the president or the number of directors
which would be required to constitute a quorum.
4.04. Notices. No notice need be given of regular
meetings of the board of directors. Written notice of the time
and place (but not necessarily the purpose or all of the purposes)
of any special meeting will be given to each director in person or
via mail or telegram addressed to him at his latest address
appearing on the corporation's records. Notice to any director of
any such special meeting will be deemed given sufficiently in
advance when (i) if given by mail, the same is deposited in the
mail, with first class or airmail postage prepaid, at least four
days before the meeting date, or (ii) if personally delivered or
given by telegram, the same is handed to the director, or the
telegram is delivered to the telegraph office for fast
transmittal, at least 48 hours prior to the convening of the
meeting. Any director may waive call or notice of any meeting
(and any adjournment thereof) at any time before, during which or
after it is held. Attendance of a director at any meeting will
automatically evidence his waiver of call and notice of such
meeting (and any adjournment thereof) unless he is attending the
meeting for the express purpose of objecting to the transaction of
business because the meeting has not been properly called or
noticed. No call or notice of a meeting of directors will be
necessary if each of them waives the same in writing or by
Page 21<PAGE>
attendance. Any meeting, once properly called and noticed (or as
to which call and notice have been waived) and at which a quorum
is formed, may be adjourned to another time and place by a
majority of those in attendance.
4.05. Quorum. A quorum for the transaction of business
at any meeting or adjourned meeting of the board of directors will
consist of a majority of those then in office. once a quorum has
been formed, the directors from time to time remaining in
attendance at such meeting prior to its adjournment will continue
to be legally competent to transact business properly brought
before the meeting, notwithstanding the prior departure from the
meeting of enough directors to leave less than a quorum.
4.06. Voting. Any matter submitted to a meeting of the
board of directors will be resolved by a majority of the votes
cast thereon. In case of an equality of votes, the chairman of
the meeting will have a second or deciding vote.
4.07 Executive Committee. The board of directors, by
resolution adopted by a majority of the full board, may name one
or more of its members as an executive committee. Such executive
committee will have and may exercise the powers of the board of
directors in the management of the business and affairs of the
corporation while the board is not in session, subject to such
limitations as may be included in the board's resolution;
provided, however, that such executive committee shall not have
the authority of the board of directors in reference to the
following matters: (1) the submission to shareholders of any
action that requires shareholders' authorization or approval under
applicable law; (2) the filling of vacancies on the board of
directors; (3) the amendment or repeal of the bylaws, or the
adoption of new bylaws; and (4) the fixing of compensation of
directors for serving on the board or on any committee of the
board of directors. Any member of the executive committee may be
removed, with or without cause,, by the board of directors. In
the event any vacancy occurs in the executive committee, it shall
be filled by the board of directors. A majority of those named to
the executive committee will constitute a quorum.
4.08. Other Committees. The board of directors, from
time to time, by resolution adopted by a majority of the full
board, may appoint other standing or temporary committees from its
membership and vest such committees with such powers as the board
may include in its resolution; provided, however, that such
committees shall be restricted in their authority as specifically
set forth with respect to the executive committee in Section 4.07
above. A majority of those named to any such committee will
constitute a quorum.
4.09. Presumption of Assent. A director of the
corporation who is present at a meeting of the board of directors
or of any committee at which action is taken on any matter will be
Page 22<PAGE>
presumed to have assented to the action taken unless his dissent
is entered in the minutes of the meeting or unless he files his
written dissent to such action with the person acting as secretary
of the meeting before the adjournment thereof or forwards such
dissent by registered or certified mail to the secretary of the
corporation within two business days after the adjournment of the
meeting. A right to dissent will not be available to a director
who voted in favor of the action.
4.10. Compensation. By resolution of the board of
directors, each director may be paid his expenses, if any, of
attendance at each meeting of the board of directors or of any
committee, and may be paid a fixed sum for attendance at each such
meeting and/or a stated salary as a director or committee member.
No such payment will preclude any director from serving the
corporation in any other capacity and receiving compensation
therefor.
4.11. Action by Directors Without a Meeting. Any action
required or permitted to be taken at a meeting of the board of
directors or of any committee thereof may be taken without a
meeting if all directors or committee members, as the case may be,
consent thereto in writing. Such consent shall have the same
effect as a unanimous vote of the directors or committee members
of the corporation at a meeting duly called and noticed.
4.12. Meetings by Conference Telephone. Any member of
the board of directors or of a committee of the board may
participate in any meeting of the board or such committee by means
of a conference telephone or similar communication equipment
whereby all members participating in such meeting can hear one
another. Such participation shall constitute attendance in
person, unless otherwise stated as provided in Section 4.04 above.
V. OFFICERS - GENERAL
5.01. Elections and Appointments. The board of
directors will elect or appoint a president, one or more vice
presidents, a secretary, and a treasurer, and may choose a
chairman of the board. The regular election or appointment of
officers will take place at each annual meeting of the board of
directors, but elections of officers may be held at any other
meeting of the board. A person elected or appointed to any office
will continue to hold that office until the election or
appointment of his successor, subject to action earlier taken
pursuant to Sections 5.04 or 7.01 below. Any two or more offices
may be held by the same person, except the offices of president
and secretary.
5.02. Additional Appointments. In addition to the
officers contemplated in Section 5.01 above, the board of
directors may elect or appoint other corporate or divisional
officers or agents with such authority to perform such duties as
Page 23<PAGE>
may be prescribed from time to time by the board of directors, by
the president or, in the case of assistant officers (as, for
example, one or more assistant secretaries) by his or their
superior officer of any person so elected or appointed. Each of
such persons (in the order designated by the board) will be vested
with all of the powers and charged with all of the duties of his
or her superior officer in the event of such superior officer's
absence or disability.
5.03. Bonds and Other Requirements. The board of
directors may require any officer to give bond to the corporation
(with sufficient surety, and conditioned for the faithful
performance of the duties of his or her office) and to comply with
such other conditions as may from time to time be required of him
or her by the board.
5.04. Removal; Delegation of Duties. The board of
directors may, whenever in its judgment the best interests of the
corporation will be served thereby, remove any officer or agent of
the corporation or temporarily delegate his powers and duties to
any other officer or to any director. Such removal or delegation
shall be without prejudice to the contract rights, if any, of the
person so removed or whose powers and duties have been delegated.
Election or appointment of an officer or agent shall not of itself
create contract rights.
5.05. Salaries. The salaries of officers may be fixed
from time to time by the board of directors or (except as to the
president's own) left to the discretion of the president. No
officer will be prevented from receiving a salary by reason of the
fact that he or she is also a director of the corporation.
VI. SPECIFIC OFFICERS
6.01. Chairman of the Board. The board of directors may
elect a chairman to serve as a general executive officer of the
corporation, and, if specifically designated as such by the board,
as the chief executive officer of the corporation. if elected, the
chairman will preside at all meetings of the board of directors
and be vested with such other powers and duties as the board may
from time to time delegate to him or her.
6.02. President and Vice President. Unless otherwise
specified by resolution of the board of directors, the president
will be the chief executive officer of the corporation. The
president will supervise the business and affairs of the
corporation and the performance by all of its other officers of
their respective duties, subject to the control of the board of
directors (and of its chairman, if the chairman has been
specifically designated as chief executive officer of the
corporation). One or more vice presidents shall be elected by the
board of directors to perform such duties as may be designated by
the board or be assigned or delegated to them by the chief
Page 24<PAGE>
executive officer. Any one of the vice presidents as authorized
by the board will be vested with all of the powers and charged
with all of the duties of the president in the event of his or her
absence or inability to act. Except as may otherwise be
specifically provided in a resolution of the board of directors,
the president or any vice president will be a proper officer to
sign on behalf of the corporation, any deed, bill of sale,
assignment, option, mortgage, pledge, note, bond, evidence of
indebtedness, application, consent (to service of process or
otherwise), agreement, indenture or other instrument of any
significant importance to the corporation. The president or any
vice president may represent the corporation at any meeting of the
shareholders of any other corporation in which this corporation
then holds shares, and may vote this corporation's shares in such
other corporation in person or by proxy appointed by him or her,
provided that the board of directors may from time to time confer
the foregoing authority upon any other person or persons.
6.03. Secretary. The secretary will keep the minutes of
meetings of the shareholders, board of directors and any
committee, and all unanimous written consents of the shareholders,
board of directors and any committee of the corporation, and will
see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law. The secretary
will be custodian of the corporate seal and corporate records,
and, in general, perform all duties incident to the office.
Except as may otherwise be specifically provided in a resolution
of the board of directors, the secretary and each assistant
secretary will be a proper officer to take charge of the
corporation's stock transfer books and to compile the voting
record pursuant to Section 3.05 above, and to impress the
corporation's seal on any instrument signed by the president, any
vice president or any other duly authorized person, and to attest
to the same.
6.04. Treasurer. The treasurer will keep full and
accurate accounts of receipts and disbursements in books belonging
to the corporation, and will cause all money and other valuable
effects to be deposited in the name and to the credit of the
corporation in such depositaries, subject to withdrawal in such
manner, as may be designated by the board of directors. He or she
will render to the president, the directors and the shareholders
at proper times an account of all his or her transactions as
treasurer and of the financial condition of the corporation. The
treasurer shall be responsible for preparing and filing such
financial reports, financial statements and returns as may be
required by law.
VII. RESIGNATIONS AND VACANCIES
7.01. Resignations. Any director, committee member or
officer may resign from his or her office at any time by written
notice delivered or addressed to the corporation at its known
Page 25<PAGE>
place of business. Any such resignation will be effective upon
its receipt by the corporation unless some later time is fixed in
such notice, and then from that time; the acceptance of a
resignation will not be required to make it effective.
7.02. Vacancies. If the office of any director,
committee member or officer becomes vacant by reason of his or her
death, resignation, disqualification, removal or otherwise, the
board of directors may choose a successor to hold office for the
unexpired term.
VIII. SEAL
8.01. Form Thereof. The board of directors may provide
for a seal of the corporation which will have inscribed thereon
the name of the corporation, the state and year of its
incorporation and the words "Corporation Seal".
IX. CERTIFICATES REPRESENTING SHARES
9.01. Form Thereof. Each certificate representing
shares of the corporation will be in such form as may from time to
time be approved by the board of directors, will be consecutively
numbered and will exhibit such information as may be required by
applicable law.
9.02. Signatures and Seal Thereon. All certificates
issued for shares o the corporation (whether new, re-issued or
transferred) will bear the signatures of the president or a vice
president, and of the secretary or an assistant secretary, and the
impression of the corporation's corporate seal, if any. The
signatures of such officers of the corporation and the impression
of its corporate seal may be in facsimile form on any certificate
which is countersigned by a transfer agent and/or registered by a
registrar duly appointed by the corporation and other than the
corporation itself or one of its employees. if a supply of
unissued certificates bearing the facsimile signature of a person
remains when that person ceases to hold the office of the
corporation indicated on such certificates, they may still be
countersigned, registered, issued and delivered by the
corporation's transfer agent and/or registrar thereafter, the same
as though such person had continued to hold the office indicated
on such certificate.
9.03. Ownership. The corporation will be entitled to
treat the registered owner of any share as the absolute owner
thereof and, accordingly, will not be bound to recognize any
beneficial, equitable or other claim to, or interest in, such
share on the part of any other person, whether or not it has
notice thereof, except as may expressly be provided by applicable
law.
Page 26<PAGE>
9.04. Transfers. Transfers of shares of the corporation
may be made on the stock transfer books of the corporation only at
the direction of the person named in the certificate therefor (or
by his or her duly authorized attorney-in-fact) and upon the
surrender of such certificate.
9.05. Lost Certificates. In the event of the loss,
theft or destruction of any certificates representing shares of
the corporation or of any predecessor corporation, the corporation
may issue (or, in the case of any such shares as to which a
transfer agent and/or registrar have been appointed, may direct
such transfer agent and/or registrar to countersign, register and
issue) a new certificate, and cause the same to be delivered to
the owner of the shares represented thereby, provided that the
owner shall have submitted such evidence showing the circumstances
of the alleged loss, theft or destruction, and his ownership of
the certificate, as the corporation considers satisfactory,
together with any other facts which the corporation considers
pertinent, and further provided that a bond shall have been
provided in form and amount satisfactory to the corporation (and
to its transfer agent and/or registrar, if applicable), unless the
shares represented by the certificate lost, stolen or destroyed
have at the time of the issuance of the new certificate a market
value of $500 or less (as determined by the corporation on the
basis of such information as it may select), in which case the
requirements of a bond may be waived. The corporation may act
through its president, any vice president, its secretary or its
treasurer for any purpose of this Section 9.05.
X. DIVIDENDS
10.01. Subject to such restrictions or requirements as
may be imposed by applicable law or the corporation's articles or
as may otherwise be binding upon the corporation, the board of
directors may from time to time declare and the corporation may
pay dividends on shares of the corporation outstanding on the
dates of record fixed by the board, to be paid in cash, in
property or in shares of the corporation on or as of such payment
or distribution dates as the board may prescribe.
XI. AMENDMENTS
11.01. These bylaws may be altered, amended,
supplemented, repealed or temporarily or permanently suspended, in
whole or in part, or new bylaws may be adopted, at any duly
constituted meeting of the shareholders or board of directors (the
notice of which meeting either includes mention of the proposed
action relative to the bylaws or is waived pursuant to Section
3.03 or Section 4.04 above) or, alternatively, by unanimous
written consent to corporate action without a meeting of the
shareholders or the board of directors pursuant to Section 3.14 or
Page 27<PAGE>
Section 4.11 above. If, however, any such action arises as a
matter of necessity at any such meeting and is otherwise proper,
no notice thereof will be required.
The undersigned President and Secretary do hereby certify
that the foregoing Bylaws were adopted by the Board of Directors
of Circuit Research Labs, Inc. at their organizational and first
meeting held February 28, 1978.
Ronald R. Jones
President
Gary D. Clarkson
Vice President & Secretary
Page 28<PAGE>
Amended May 21, 1998
3.02. Special Meetings. Special meetings of the shareholders
may be held whenever and wherever called for by the chairman of
the board, the president or the board of directors, or by the
written demand of the holders of not less than 50% of all issued and
outstanding shares of the corporation entitled to vote at any such
meeting.
Any written demand by shareholders shall state the purpose or
purposes of the proposed meeting, and business to be transacted at
any such meeting shall be confined to the purposes stated in the
notice thereof, and to such additional matters as the chairman of
the meeting may rule to be germane to such purposes.
Gary D.Clarkson
President
Dennis L. Drew
Secretary Treasurer
Page 29<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 287,756
<SECURITIES> 512,157
<RECEIVABLES> 114,157
<ALLOWANCES> 6,520
<INVENTORY> 955,959
<CURRENT-ASSETS> 1,934,102
<PP&E> 1,541,502
<DEPRECIATION> 1,026,720
<TOTAL-ASSETS> 2,458,753
<CURRENT-LIABILITIES> 252,104
<BONDS> 9,961
0
0
<COMMON> 59,768
<OTHER-SE> 2,136,920
<TOTAL-LIABILITY-AND-EQUITY> 2,458,753
<SALES> 841,875
<TOTAL-REVENUES> 1,852,625
<CGS> 370,735
<TOTAL-COSTS> 1,009,411
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,156
<INCOME-PRETAX> 824,058
<INCOME-TAX> 0
<INCOME-CONTINUING> 824,058
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 824,058
<EPS-PRIMARY> 1.54
<EPS-DILUTED> 1.53
</TABLE>
