8 8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A-1
[X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee Required]FOR THE YEAR ENDED DECEMBER 31, 1996
[EE] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
Commission File Number 0-14724
ARNOX CORPORATION
(Name of small business issuer in its charter)
Delaware 06-1094094
(state or other jurisdiction of incorporation or organization)
(IRS Employer identification No.)
1612 N. Osceola Avenue, Clearwater, Florida 34615
(Address of principal executive offices) (Zip Code)
IssuerOs telephone number: (813) 443 3434
Securities Registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001 per share.
Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X]No []
Check if there is no disclosure of delinquent filers pursuant
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of IssuerOs knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.
[]
The issuerOs revenues for its most recent fiscal year were
$0.
The aggregate market value of the 3,437,473 shares of Common
Stock, $.01 par value per share, held by non-affiliates of the
Issuer, based on the closing sale price on February 28, 1997 of
$0.00 per share, was $0.00. The number of shares of the Common
Stock, outstanding on February 28, 1997 was 3,438,363.
Check whether the issuer has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court.
Yes [] No [X]
DOCUMENTS INCORPORATED BY REFERENCE
Not Applicable.
PART I
Item 1. Description of 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. Description of Property
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.
Item 3. Legal Proceedings
Not Applicable
Item 4. Submission of matters to a vote of Security Holders
Not Applicable
PART II
Item 5. Market for Registrant's Common Equity
There has been no active trading in the Issuer's common stock
for over five years. The Issuer does not currently have a market
maker. It does, however, have a new symbol which is ARXC.
Item 6. 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 Company's 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 "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, although there can be no
assurance that management will be successful in its efforts 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 preceding 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 7. Financial Statements.
For the information called for by this Item, see the
Financial Statements attached.
Item 8. 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 proceedings discussed elsewhere herein, the Registrant
did not prepare financial statements for the years ended December
31,1989 through December 31, 1994. 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 December 31, 1995 and to serve as the Registrant's auditor
in the future. During the fiscal year ended 1988, and the
subsequent periods preceding the appointment of Want & Ender,
CPAs, there were no known 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.
PART III
Item 9. 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 10. 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 11. Security Ownership of Certain Beneficial Owners and
Management
The following table presents certain information regarding
the beneficial ownership of the Company's equity securities at
February 28, 1997 by (i)Eeach person known by the Company to own
beneficially more than 5% of the outstanding shares of Common
Stock, (ii)Eeach of the Company's directors and officers, and
(iii)Eall directors and officers as a group.
Number of SharesPercent of
Name Beneficially Owned (1)Class
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, NY 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
(1)Unless otherwise indicated, each person or group has sole
voting and investment power with respect to all listed
shares.
The Company knows of no arrangements that will result in a
change in control at a date after this Annual Report on Form 10-
KSB, however, the Issuer's proposed Proxy Statement will provide
for significant stock compensation to certain individuals
selected by Capston in the event that the plan of reorganization
described therein is approved by the Stockholders.
Item 12. Certain Relationships and Related Transactions
No officer, director or family member of an officer or
director has engaged in any material transaction with the issuer
since the beginning of the Issuer's most recent fiscal year.
Item 13. Exhibits and Reports on Form 8-K.
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: _______________ By____________________
Sally Fonner,
Director
President
and 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 : ______________ By_____________________
Sally Fonner,
Director
President
and 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.
Martin Ender
Want & Ender, CPA, P.C.
Certified Public Accountants
New York, NY
March 3, 1997
ARNOX CORPORATION
(a Dormant State Company)
Balance Sheets
December 31, 1996
1996 1995
Assets
Organization Cost $0.00 $0.00
Total Assets 0.00 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 0.00
Preferred Stock par value at $.01 0.00 0.00
- -0- shares issued and outstanding 0.00 0.00
Additional Paid in Capital 7,440.36 0.00
Deficit accumulated during development stage
(7,440.36) 0.00
Total Shareholders' Equity $0.00 0.00
Total Liabilities and Shareholders Equity $0.00 0.00
See accompanying notes to financial statements
ARNOX CORPORATION
(a Dormant State Company)
Income Statements
for the year ending December 31,1996
1996 1995
Current year 12-31-95
____________ ________
Revenues $ 0.00 $ 0.00
Administrative Expenses $ 7,440.36 $ 0.00
Net Income/Loss for the year $(7,440.36) $ 0.00
See accompanying notes to financial statements
ARNOX CORPORATION
(a Dormant State Company)
Statements of Shareholder's Equity
December 31, 1996
1996 1995
Common Stock $ 0.00 $ 0.00
(3,439,247 shares issued & outstanding)
Additional Paid in Capital 7,440.36 0.00
Balance January 1 0.00
Net Income/(loss) for the year (7,440.36) 0.00
Balance December 31 $ 0.00 $ 0.00
See accompanying notes to financial statements
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 NASDAQ 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 declared
closed under Chapter 7 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. As
disclosed in the form 10-K, the Company's case under Chapter 11
of Bankruptcy Act was voluntarily converted to Chapter 7 on
December 18, 1989. As a result of this conversion, all of the
Company's assets and liabilities became assets of the bankruptcy
and the Company ceased operations. Since all activities
subsequent to the date of conversion were conducted by the
Trustee, rather than the Company, the Company remained with no
assets or liabilities and the business ceased operations during
the years ended December 31, 1992, 1993 and 1994.
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. The
Company has no liability for the expenses incurred by Capston.
Capston has full responsibility for the payment of all expenses
occurring as a result of Capston's efforts on ARNOX's behalf.
Any reimbursement received by Capston for those expenses will be
through a business combination and paid by someone other ARNOX.
Note 3. RELATED PARTY TRANSACTIONS
The Capston Network Company owns 884 shares in ARNOX CORPORATION.
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