SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
____________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number 0-14724
ARNOX CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 06-1094094
(state or other jurisdiction of (IRS Employer
incorporation of organization) identification No.)
1612 N. Osceola Avenue
Clearwater, Florida 34615
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(813) 443 3434
Securities Registered pursuant to Section 12(g) of the Act
Common Stock, par value $.001 per share.
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).
Yes __________ No. ___ X _____
_____________
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the Registrant has filed all
documents and reports required to be filed by Sections 12,
13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan
confirmed by a court.
Yes ___ No ____
The number of shares outstanding of the Registrant's common
stock is 3,439,247 (according to the records of the transfer
agent, Continental Stock Transfer and Trust Company as of
September 9, 1996). The Registrant is an inactive company
with limited trading in these securities. There has been
virtually no regular trading in the market of this security
over the last six years.
PART I
Item 1. Business
Corporate Background Information
ARNOX CORPORATION (the "Registrant") was incorporated
on October 17, 1983 under the laws of the State of DELAWARE.
The Company's business consisted of specializing in the
culturing of mammalian cells and the production of cellular
proteins, such as antibodies, blood factors, enzymes and
hormones. The Registrant conducted an initial public
offering of its Common Stock in October, 1985 pursuant to a
Form S-1 Registration Statement under the Securities Act of
1933 (the "Securities Act"). In connection with an
application to list its Common Stock on the NASDAQ system,
the Company also registered its Common Stock pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (the
"Exchange Act").
After pursuing its business for several years, the
Registrant filed a voluntary petition under Chapter 11 of
the Bankruptcy Act on September 11, 1989. This proceeding
was filed in with the U.S. Bankruptcy Court for the District
of New Jersey and designated as Case # 89-97155. On
December 18, 1989, the Company's Chapter 11 case was
voluntarily converted to a case in Chapter 7 which resulted
in the orderly liquidation of all corporate assets and the
use of the proceeds to repay the Company's creditors. On
July 12, 1994 the Company's case under Chapter 7 was closed
by an order of the Court and the trustee was discharged. As
a result of the Bankruptcy, the Company has no assets,
liabilities, management or ongoing operations and had not
engaged in any business activities since September, 1989.
The Registrant was totally inactive from July 12, 1994 to
June 13, 1995.
During the pendancy of the Bankruptcy, the Company
neglected to file franchise tax returns with and pay the
required franchise taxes to the State of Delaware. As a
result, the Company's corporate charter was revoked by order
of the Secretary of State of the State of Delaware on March
1, 1990. Similarly, the Company neglected to file with the
SEC either (a) the regular reports that are required of all
companies that have securities registered under the Exchange
Act, or (b) a certification on Form 15 terminating its
registration under the Exchange Act. As a result, the
Company remained a Registrant under the Exchange Act but was
seriously delinquent in its SEC reporting obligations.
According to the National Quotation Bureau, the last
published quotation for the Company's Common Stock was
posted by Gruntal & Co., Inc., one of the Company's market
makers, on March 5, 1990. At that time, the published quote
was $.01 bid and .10 asked. There have been no published
quotations for the Company's Common Stock since March 5,
1990.
Acting in its capacity as a Stockholder of the Company,
and without first receiving any consent, approval or
authorization of any other Stockholder or former officer or
director of the Company, Capston effected a renewal, revival
and restoration of the Company's certificate of
incorporation pursuant to Section 312 of the General
Corporation Law of the State of Delaware. In general,
Section 312 provides that any corporation may "procure an
extension, restoration, renewal or revival of its
certificate of incorporation, together with all the rights,
franchises, privileges and immunities and subject to all of
its duties, debts and liabilities which had been secured or
imposed by its original certificate of incorporation" upon
compliance with certain procedural requirements.
After reviewing the applicable files, Capston
determined that the only debt of the Company that was
"secured or imposed by its original certificate" was the
obligation of the Registrant to pay its Delaware taxes.
Therefore, Capston paid all past due franchise taxes on
behalf of the Company and then filed a Certificate of
Renewal, Revival, Extension and Restoration of the Company's
Certificate of Incorporation on behalf of the Company under
the authority granted by Section 312(h). This Certificate
was filed in the office of the Secretary of State of the
State of Delaware on June 10, 1996 and at the date of this
filing the Company is lawfully incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
On June 13, 1996, Capston Network Company, acting in
its capacity as a Stockholder of the Company, and without
first receiving any consent, approval or authorization of
any other Stockholder or former officer or director of the
Company, Capston filed a 10-K for the years ending December
31, 1989-1995. On the same day, Capston filed a proxy
seeking approval and ratification of its actions, along with
approval to seek a suitable business transaction. After
receiving comments from both the Accounting and Corporate
Finance divisions, Capston filed an amended 10-K with
included an audit at the close of bankruptcy. In July,
1996, the Company filed an 8-K reporting the positive
results of the proxy.
To date a suitable business transaction has not
secured. in a Proxy Statement dated June 13, 1996, Capston
Network Company ("Capston") sought stockholder approval of a
financial restructuring plan for ARNOX that contemplated a 1
for 10 reverse split and the issuance of a 90% equity
interest in the Company to the stockholders of an
unidentified privately-held company. The plan proposed by
Capston was approved by the holders of a majority of the
issued and outstanding common stock of the Company and
Capston has been actively seeking a business combination
opportunity for the Company since August 16, 1996.
As a result of conversations with the management of
several potential acquisition candidates, Capston has
determined that the original plan has a number of features
that will make difficult, if not impossible, to arrange a
suitable business combination transaction. First, the plan
approved by the Stockholders does not provide for an optimal
capital structure for the Company. Instead, it leaves the
existing capital structure of the Company intact. Second,
that plan does not provide for the payment of finders fees
and other third-party costs in the event that a suitable
business combination opportunity is identified and a
combination transaction is negotiated. Third, that plan
does not provide for any payments to Capston in the event
that a suitable business combination opportunity is
identified and a combination transaction is negotiated.
Finally, the plan does not authorize Capston to enter into a
transaction on behalf of the Company. Rather it merely
authorizes Capston to seek out a suitable business
combination and then present the details of the proposed
transaction for a second stockholder vote.
As a result of these discussions, Capston has developed
a revised plan (the "REVISED PLAN") whereby the Company will
be restructured as a "clean public shell" for the purpose of
effecting a business combination transaction with a suitable
privately-held company that has both business history and
operating assets. It is intended by Capston to have a Proxy
mailed to the shareholders detailing the REVISED PLAN in
February, 1997.
Proposed Operations
While the Registrant has no assets, liabilities,
management or ongoing operations and has not engaged in any
business activities since September 1989, Capston believes
that it may be possible to recover some value for the
Stockholders through the adoption and implementation of a
Plan whereby the Registrant will be restructured as a "clean
public shell" for the purpose of effecting a business
combination transaction with a suitable privately-held
company that has both business history and operating assets.
Capston believes the Registrant will offer owners of a
suitable privately-held company the opportunity to acquire a
controlling ownership interest in a public company at
substantially less cost than would otherwise be required to
conduct an initial public offering. Nevertheless, Capston is
not aware of any empirical statistical data that would
independently confirm or quantify Capston's beliefs
concerning the perceived value of a merger or acquisition
transaction for the owners of a suitable privately-held
company. The owners of any existing business selected for a
business combination with the Registrant will incur
significant costs and expenses, including the costs of
preparing the required business combination agreements and
related documents, the costs of preparing the a Current
Report on Form 8-K describing the business combination
transaction and the costs of preparing the documentation
associated with any future reporting under the Exchange Act
and registrations under the Securities Act.
If the "Revised Plan is approved by the Stockholders,
the Registrant will continue to be used as a corporate
vehicle to seek, investigate and, if the results of such
investigation warrant, effect a business combination with a
suitable privately-held company or other business
opportunity presented to it by persons or firms that seek
the perceived advantages of a publicly held corporation. The
business operations proposed in the Plan are sometimes
referred to as a "blind pool" because Stockholders will not
ordinarily have an opportunity to analyze the various
business opportunities presented to the Registrant, or to
approve or disapprove the terms of any business combination
transaction that may be negotiated by Capston on behalf of
the Registrant. Consequently, the Registrant's potential
success will be heavily dependent on the efforts and
abilities of Capston and its officers, directors and
consultants, who will have virtually unlimited discretion in
searching for, negotiating and entering into a business
combination transaction. Capston and its officers, directors
and consultants have had limited experience in the proposed
business of the Registrant. Although Capston believes that
the Registrant will be able to enter into a business
combination transaction within 12 months after the approval
of the Plan by the Stockholders, there can be no assurance
as to how much time will elapse before a business
combination is effected, if ever. The Registrant will not
restrict its search to any specific business, industry or
geographical location, and the Registrant may participate in
a business venture of virtually any kind or nature.
Capston and its officers, directors and consultants
anticipate that the selection of a business opportunity for
the Registrant will be complex and extremely risky. Because
of general economic conditions, rapid technological advances
being made in some industries, and shortages of available
capital, Capston believes that there are numerous privately-
held companies seeking the perceived benefits of a publicly
traded corporation. Such perceived benefits may include
facilitating debt financing or improving the terms on which
additional equity or may be sought, providing liquidity for
the principals of the business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity for all stockholders and
other factors.
Potential business opportunities may occur in many
different industries and at various stages of development,
all of which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex. Capston anticipates that the
Registrant will be able to participate in only one business
venture. This lack of diversification should be considered a
substantial risk inherent in the Plan because it will not
permit the Registrant to offset potential losses from one
venture against gains from another. Moreover, due to the
Registrant's lack of any meaningful financial, managerial or
other resources, Capston believes the Registrant will not be
viewed as a suitable business combination partner for either
developing companies or established business that are in
need of substantial additional capital.
Acquisition of Opportunities
In implementing a particular business combination
transaction, the Registrant may become a party to a merger,
consolidation, reorganization, joint venture, franchise or
licensing agreement with another corporation or entity. It
may also purchase stock or assets of an existing business.
After the consummation of a business combination
transaction, it is likely that the present Stockholders of
the Registrant will only own a small minority interest in
the combined companies. In addition, as part of the terms of
the acquisition transaction, all of the Registrant's
officers and directors will ordinarily resign and be
replaced by new officers and directors without a vote of the
Stockholders. Capston does not intend to obtain the approval
of the Stockholders prior to consummating any acquisition
other than a statutory merger that requires a Stockholder
vote. Capston and its officers, directors and consultants do
not intend to sell any shares held by them in connection
with a business acquisition.
It is anticipated that any securities issued in a
business combination transaction will be issued in reliance
on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a
negotiated element of a business combination, the Registrant
may agree to register such securities either at the time the
transaction is consummated or at some specified time
thereafter. The issuance of substantial additional
securities and their potential sale into any trading market
that may develop may have a depressive effect on such
market. While the actual terms of a transaction to which the
Registrant may be a party cannot be predicted, it may be
expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a so called "tax
free" reorganization under Sections 368(a)(1) or 351 of the
Internal Revenue Code of 1986, as amended (the "Code") In
order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80%
or more of the voting stock of the surviving entity. In such
event, the stockholders of the Registrant would retain less
than 20% of the issued and outstanding shares of the
combined companies, which could result in significant
dilution in the equity of such stockholders. The Registrant
intends to structure any business combination in such manner
as to minimize Federal and state tax consequences to the
Registrant and any target company.
As part of the Registrant's investigation of potential
business opportunities, Capston and its officers, directors
and consultants will ordinarily meet personally with
management and key personnel, may visit and inspect material
facilities, obtain independent analysis or verification of
certain information provided, check reference of management
and key personnel, and take other reasonable investigative
measures, to the extent of the Registrant's limited
resources and Capston's limited expertise. The manner in
which the Registrant participates in an opportunity will
depend on the nature of the opportunity, the respective
needs and desires of the Registrant and other parties and
the relative negotiating strength of the Registrant and such
other management.
With respect to any business combination negotiations,
Capston will ordinarily focus on the percentage of the
Registrant which target company stockholders would acquire
in exchange for their ownership interest in the target
company. Depending upon, among other things, the target
company's assets and liabilities, the Registrant's
stockholders will in all likelihood only own a small
minority interest in the combined companies upon completion
of the business combination transaction. Any business
combination effected by the Registrant can be expected to
have a significant dilutive effect on the percentage of
shares held by the Registrant's current Stockholders.
Upon completion of a business combination transaction,
there can be no assurance that the combined companies will
have sufficient funds to undertake any significant
development, marketing and manufacturing activities.
Accordingly, the combined companies may be required to
either seek additional debt or equity financing or obtain
funding from third parties, in exchange for which the
combined companies might be required to issue a substantial
equity position. There is no assurance that the combined
companies will be able to obtain additional financing on
terms acceptable to the combined companies.
It is anticipated that the investigation of specific
business opportunities and the negotiation, drafting and
execution of relevant agreements, disclosure documents and
other instruments will require substantial management time
and attention and substantial costs for accountants,
attorneys and others. If a decision is made not to
participate in a specific business opportunity the costs
incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached
for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the
loss of the Registrant of the related costs incurred.
Item 2. Properties
None.
Item 3. Legal Proceedings
None.
Item 4. Submission of matters to a vote of Security
Holders
None.
PART II
Item 5. Market for Registrant's Common Equity
There has been no active trading in the Registrant's
security for over five years. It does not currently have a
market maker. It does have a new symbol which is ARXC.
Item 6. Selected Financial Data.
Operating Revenues 1992 1993 1994 1995 1996
Income (Loss) from
Continuing Operation 0 0 0 0 0
Income (Loss) from
Continuing Operations
Per Share 0 0 0 0 0
Total Assets 0 0 0 0 0
Long Term Obligations 0 0 0 0 0
Cash Dividends Declared 0 0 0 0 0
Per Common Share
Item 7. Management Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
For the past eight months, the Company has been
actively seeking an acquisition of assets, property or
business that may benefit the Company and its stockholders.
While these efforts have not resulted in a suitable business
combination transaction, the CompanyOs experience during
this period confirms that demand for well structured clean
public shells is strong. Over the last eight months, the
Company has been evaluated by a number of potential
acquisition candidates. In each case, however, the Company
has been rejected as unsuitable because (1) the Capital
structure of the Company was not suitable, (2) Capston
lacked the authority to negotiate a binding transaction for
the Company, and (3) any proposed business combination would
entail the cost and delay of preparing a business
combination proxy statement and holding an additional
stockholders meeting with no assurance that the proposed
business combination would be approved by the stockholders.
Therefore, it became clear that needed to propose a revised
plan to the stockholders. Management intends to seek
stockholder approval of the Revised Plan described elsewhere
herein at the earliest practicable date.
Financial Condition
As a result of its 1989 Bankruptcy, the Company has no
assets, liabilities, or ongoing operations and has not
engaged in any business activities since September 1989. The
Company had no operations during the year ended December 31,
1996 and no material assets or liabilities as of December
31, 1996. It is the intention of management to seek
stockholder approval of a Revised Plan whereby the Company
will be restructured as a Oclean public shellO for the
purpose of effecting a business combination transaction with
a suitable privately-held company that has both business
history and operating assets, although there can be no
assurance that management will be successful in its effforts
to negotiate such a transaction.
Plan of Operation.
The Company has not engaged in any material operations
or had any revenues from operations during the two
preceeding years. The Company's plan of operation for the
next twelve months is to continue to seek the acquisition of
assets, property or business that may benefit the Company
and its stockholders. Because the Company has no resources,
management anticipates that to achieve any such acquisition,
the Company will be required to issue shares of its common
stock as the sole consideration for such acquisition.
During the next twelve months, the Company's only
foreseeable cash requirements will relate to maintaining the
Company in good standing or the payment of expenses
associated with reviewing or investigating any potential
business venture, which are anticipated to be advanced by
Capston as loans to the Company. Because the Company has
not identified any such venture as of the date of this
Registration Statement, it is impossible to predict the
amount of any such loans. However, any loans from Capston
will be on terms no less favorable to the Company than would
be available from a commercial lender in an arm's length
transaction. As of the date of this Annual Report on Form
10-K, the Company has not begun seeking any acquisition.
Management anticipates that Capston, will advance minor
administrative expenses up to approximately $5,000. In the
event that additional funding is required in order to keep
the Company in good standing and/or to review or investigate
any potential merger or acquisition candidate, the Company
may attempt to raise such funding through a private
placement of its common stock to accredited investors.
At the present time, management has no plans to offer
or sell any securities of the Company. However, at such
time as the Company may decide to engage in such activities,
management may use any legal means of conducting such offer
or sale, including registration with the appropriate federal
and state regulatory agencies and any registration
exemptions that may be available to the Company under
applicable federal and state laws.
Because the Company is not currently making any
offering of its securities, and does not anticipate making
any such offering in the foreseeable future, management does
not believe that Rule 419 promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as
amended, concerning offerings by blank check companies, will
have any effect on the Company or any activities in which it
may engage in the foreseeable future.
Item 8. Financial Statements and Supplementary Data.
For the information called for by this Item, see the
Financial Statements attached.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
The Registrant's financial statements for the years
ended December 31, 1988 were audited by the firm of Crowe.
Chizek and Company, Certified Public Accountants. As a
result of the bankruptcy, as discussed elsewhere herein, the
Registrant did not prepare audited financial statements from
December 31,1989 through December 31, 1995. In connection
with the revival and restoration of the Company's
certificate of incorporation, the firm of Want & Ender,
Certified Public Accountants was retained to audit the
Registrant's balance sheet for the year ended 1995, and to
serve as the Registrant's auditor in the future. During the
fiscal years ended 1995, and the subsequent interim period
preceding the appointment of Crowe. Chizek and Company, CPA,
there were no reportable disagreements between the
Registrant and the firm of Crowe. Chizek and Company,
Certified Public Accountants, on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure. Want & Ender audited the
Registrant's financial statements for the year ended
December 31, 1996.
PART III
Item 10. Directors and Executive Officers of the Registrant
Ms. Sally Fonner, age 48, the president and sole
stockholder of Capston, performs the duties of President,
Secretary, Treasurer and Sole Director of the Registrant
pending a Special Meeting of the Stockholders which is
expected to be scheduled in March, 1997. At that Meeting,
Ms. Fonner intends to seek re-election for a term of office
that is anticipated be no more than two years or until
permanent management can be located, whichever should occur
first in time. Ms. Fonner's sole purpose is to seek out
qualified new operations and management.
Item 11. Executive Compensation.
No officer or director of the Registrant has received
any compensation for services performed during the past
three years and no future compensation agreement between Ms.
Fonner and the Registrant is contemplated. Notwithstanding
the foregoing, the Registrant's proposed Proxy Statement
will provide for significant stock compensation to certain
individuals selected by Capston.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Title of Class Name / Address Amount of Percent of
Beneficial Owner Beneficial Owner
Common George W. Schiele 1,170,162 34.25%
19 Hill Road
Greenwich, CT.
06830
James M. Fail 476,018 13.93%
c/o NPL Corp.
1700 Daniel Bldg.
Birmingham, Al.
35233
Edmund A. Hajim 241,984 7.08%
c/o Furman Selz
230 Park Avenue
New York, N.Y.
10169
Timothy M. Burke 197,162 5.77%
2131 Stateline Road
Niles, Michgan
49120
Capston Network
Company 884 -
1612 N. Osceola Avenue
Clearwater, Florida 34615
The above information, with the exception of Capston, is taken from the last
filed 10-K for December 31. 1988.
Item 13. Certain Relationships and Related Transactions
No officer, director or family member of an officer or
director is indebted to the Registrant.
Item 14. Exhibits, Financial Statement Schedules and
Reports.
Financial statements filed with this report:
Independent Auditor's report for December 31, 1996.
Balance Sheet of December 31, 1996
Statements of Income for December 31, 1996
Shareholders Equity for December 31, 19956
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ARNOX
Date: 2/13/96 By______/S/______________
Sally Fonner,
Acting Director,
Acting President
and Acting Chief Financial Officer
Pursuant to the requirements of the Securities Exchange
Act of 1934 this report has been signed below by the
following person on behalf of the Registrant and in the
capacities and on the date indicated.
Date : 2/13/96 By_______/S/______________
Sally Fonner,
Acting Director
Acting President
and Acting Chief Financial Officer
WANT & ENDER, CPA, P.C.
Certified Public Accountants 37 East 26th Street, 8th floor
New York, NY 10016
Martin Ender, CPA Telephone (212) 684-2414
Stanley Z. Want, CPA, CFP Fax (212) 684-5433
Independent Auditor's Report
To the Shareholders and Board of Directors
ARNOX CORPORATION
We have audited the accompanying balance sheet of ARNOX
CORPORATION (A Dormant State Company) at December 31, 1996
and the related statements of income, shareholders' equity,
and cash flows for the year then ended. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We have conducted our audit in accordance with generally
accepted auditing standards. These standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit also includes examining on a test
basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing
the accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of ARNOX CORPORATION (A Dormant State company) at
December 31, 1996 and the results of its operations and its
cash flows for the years then ended in conformity with
generally accepted accounting principles.
/S/
Martin Ender
Want & Ender, CPA, P.C.
Certified Public Accountants
New York, NY
February 6, 1997
ARNOX CORPORATION
(a Dormant State Company)
Balance Sheets
December 31, 1996
1996
Assets
Organization Cost $ 0.00
Total Assets $ 0.00
Liabilities and Shareholder's Equity
Stockholders' Equity
Common Stock par value at $.001 per share
10,000,000.00 shares authorized,
3,439,247.00 shares issued and outstanding $0.00
Additional Paid in Capital $0.00
Deficit accumulated during development stage $0.00
Total Shareholders' Equity $0.00
Total Liabilities and Shareholders Equity $0.00
ARNOX CORPORATION
(a Dormant State Company)
Income Statements
for the year ending December 31,1996
1996
Revenues and Expenses $0.00
ARNOX CORPORATION
(a Dormant State Company)
Statements of Shareholder's Equity
for the year ending December 31, 1996
1996
Common Stock
(3,439,247 shares issued & outstanding) $0.00
Additional Paid in Capital $0.00
Accumulated Deficit $0.00
Balance January 1 $0.00
Net Income/(loss) for the year $0.00
Balance December 31 $0.00
ARNOX CORPORATION
(A Dormant State Company)
December 31, 1996
Note 1. NATURE OF BUSINESS
ARNOX, (A Dormant State Company), was incorporated on
October 17, 1983, under the laws of the State of Delaware.
The Company's shares were traded on the NASDAQ exchange until
April 25, 1989. On September 11, 1989, the Company filed a
petition, No. 89-97155, in the U.S. Bankruptcy Court for
the District of District Of New Jersey. On July 12, 1994
the Registrant's Petition was declaredclosed and the Trustee
was discharged. The Company remained inactive until on
June 10, 1996, when Capston Network Company, a
stockholder, successfully reinstated the Registrant under
its original Delaware Charter and through a proxy filed
June 13, 1996 became the Company's management.
Note 2. The proxy dated June 13, 1996 provided that Capston
Network Company would assume all expenses for ARNOX on a non-
recoverable basis except as fees paid by a purchaser.
Note 3. RELATED PARTY TRANSACTIONS
The Capston Network Company owns 884 shares in ARNOX
CORPORATION.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 3439247
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3439247
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
