16
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [
FOR THE YEAR ENDED DECEMBER 31, 1997 [Fee Required]
[ ] 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)
Issuer's 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 Issuer's 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 issuer's revenues for its most recent fiscal
year were $0.
The aggregate market value of the 2,047,181 shares
of Common Stock, $.01 par value per share, held by non-
affiliates of the Issuer, based on the closing sale
price April 15, 1998 of $0.018375 per share is
$37,616.95. However, since trading is sporadic and
rare, the non-affiliates holding cannot be reasonably
assessed and the audit financials reflect zero value.
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, 1996.
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.
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 did not
provide for an optimal capital structure for the
Company. Instead, it left the existing capital
structure of the Company intact. Second, that plan did
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 did 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 did not authorize Capston to enter into a
transaction on behalf of the Company. Rather, it merely
authorized 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 those discussions, Capston developed
a revised plan (the "REVISED PLAN") whereby the Company
was restructured as a "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 as of July, 1997.
Proposed Operations
The Registrant has no assets, liabilities,
management or ongoing operations and has not engaged in
any business activities since September 1989. In July,
1997, the Registrant was restructured as a "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.
As a result of vote of the Stockholders, the
Registrant is 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 still 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 were 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, 1997 and no material assets or
liabilities as of December 31, 1997.
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 seven years, but ARNOX does
currently have a bid of .018375 and an ask of .30625
under the symbol ARXC.
Item 6. Management Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Potential Acquisition
The Company has been actively seeking an
acquisition of assets, property or business that may
benefit the Company and its stockholders. Registrant
has reached a preliminary oral understanding (the
"Understanding") to acquire (the "Acquisition") three
privately-held companies (the "Companies") which
provide wireless telecommunications and ancillary
support services. In the Acquisition, Registrant will
issue a total of 11,500,000 shares of its common stock
in exchange for all of the Companies' outstanding
capital stock, thereby resulting in control of
Registrant by the Companies' shareholders. The
Acquisition is contingent upon Registrant's acceptance
of:
1. the valuation of the Companies' business plans;
2. financial statements and other documentation
acceptable to Registrant.
The Companies have engaged an independent third party
to perform a valuation study of the Companies and their
business plans, and are preparing audited financial
statements. This Understanding will be embodied in a
definitive reorganization agreement containing the
foregoing terms and conditions, as well as customary
representations, warranties and conditions. Registrant
and the Companies hope to complete the Acquisition
during the second quarter of 1998.
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, 1997 and no material assets or
liabilities as of December 31, 1997.
Plan of Operation.
The Company's plan of operation for the next twelve
months is either to consummate the potential
acquisition described above or if that fails, 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 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.
Management anticipates that Capston, will continue
to advance administrative expenses up to approximately
$25,000. 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.
None. Want & Ender of New York, New York remain
the Company's public accountants.
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. Ms. Fonner's sole purpose is to seek
out qualified new operations and management.
Item 10. Executive Compensation.
Ms. Fonner is the sole officer and director of the
Registrant and has received no monetary compensation
for services performed during her tenure. Further, no
future monetary compensation agreement between Ms.
Fonner and the Registrant is contemplated.
Notwithstanding the foregoing, the Ms. Fonner was
approved by the stockholders in a Special Meeting, to
have compensation of 300,000 shares of stock. To avoid
administrative complexity associated with effecting a
reverse split and requiring the stockholder to change
certificates twice, Management has elected to defer the
issuance of stock to Capston, Ms. Fonner or her
designees until an acquisition is completed.
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 December 31, 1997 by (i) each
person known by the Company to own beneficially more
than 5% of the outstanding shares of Common Stock,
(ii) each of the Company's directors and officers, and
(iii) all 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
Sally Fonner
Capston Network Company 884 -
1612 N. Osceola Avenue
Clearwater, Florida 34615 (2)
(1)Unless otherwise indicated, each person or group
has sole voting and investment power with respect
to all listed shares.
(2)In addition, Capston and or Sally Fonner are now
entitled to the 300,000 shares approved as compensation
by shareholders.
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.
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.
None
Financial statements filed with this report:
Independent Auditor's report for December 31, 1996
and 1997.
Consolidated Balance Sheets December 31, 1997 and
1996.
Consolidated Statements of Operations For the Years
Ended December 31, 1997 and 1996
Consolidated Statement of Changes in Shareholders'
Equity/(Deficit)For the years ended December 31,
1997 and 1996.
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: __4/15/98_____________
By_________/s/___________
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 : __4-15-98____________
By________/s/_____________
Sally Fonner,
Director
President
and Chief Financial Officer
Want & Ender, CPA, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
37 East 28th 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 consolidated balance
sheet of ARNOX CORPORATION(A Dormant State Company) at
December 31, 1997 and the related consolidated
statements of operations, shareholders'
equity/(deficit), 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 consolidated financial statements
referred to above present fairly, in all material
respects, the financial position of ARNOX CORPORATION
(A Dormant State Company) at December 31, 1997 and the
results of its operations and its cash flows for the
years then ended in conformity with generally accepted
accounting
Martin Ender
Want & Ender CPA, P.C.
Certified Public Accountants
New York, NY
March 16, 1998
ARNOX CORPORATION
(A Dormant State Company)
Consolidated Balance Sheets December 31, 1997 and 1996
ASSETS 1997 1996
Organization Cost 0 0
Total Assets 0 0
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock, par value S.001 per share;
10,000,000 shares authorized;
3,439,247 shares issued and outstanding 0 0
Additional Paid in Capital 21,839 6,815
Net Profit/(Loss) (21,839)(
6,815)
Total Stockholders' Equity 00
Total Liabilities and Stockholders' Equity 0
0
See accompanying notes to financial statements
ARNOX CORPORATION
(A Dormant State Company)
Consolidated Statements of Operations
For the Year Ended December 31, 1997 and 1996
1997 1996
Revenues $ 0 $ 0
Expenses
Administrative Expenses (15,024) 6,365
Filing Fees 0 450
Net Income/Loss for the year $(15,024) $(6,815)
See accompanying notes to financial statements
ARNOX CORPORATION
(A Dormant State Company)
Consolidated Statement of Changes in Shareholders'
Equity/(Deficit)
For the years ended December 31, 1997 and 1996
1997 1996
Common Stock $ 0 $ 0
(3,439,247 SHARES ISSUED & OUTSTANDING)
Additional Paid in Capital 21,839 6,815
Balance January 1 ( 6,815) (0)
Net Income/(Loss) for the year ( 15,024)(6,815)
Balance December 31 $ 0 $ 0
See accompanying notes to financial statements
ARNOX CORPORATION
(A Dormant State Company)
December 31, 1997
Note 1. HISTORY OF THE COMPANY
Arnox Corporation, (A Dormant State Company), was
incorporated on October 17, 1983, under the laws of the
State of Delaware. The Company conducted an initial
public offering of its Common Stock in October, 1985
and in connection with an application to list its
Common Stock on the NASDAQ system, the Company also
registered it Common Stock pursuant to Section 12(g) of
the Securities Exchange Act of 1934. The Company's
Common Stock remained listed on the NASDAQ exchange
until April 25, 1989.
On September 11, 1989, the Company filed a voluntary
petition under Chapter 11 of the Bankruptcy Act (Case
No. 89-97155), in the U.S. Bankruptcy Court for the
District of New Jersey. On December 18, 1989, the
Company's case under Chapter 11 was voluntarily
converted into a case under Chapter 7 of the Bankruptcy
Act. As result of the voluntary conversion of the
Company's bankruptcy case, all assets of the Company
were transferred to the Trustee in Bankruptcy on the
conversion date and the Company ceased all operations.
Subsequently, the Trustee in Bankruptcy effected an
orderly liquidation of corporate assets and used the
proceeds to repay the Company's creditors. On July 12,
1994 the Company's case under Chapter 7 was closed by
the order of the Court and the Trustee in Bankruptcy
was discharged. As a result of the Bankruptcy, the
Company has no assets, liabilities, management or
ongoing operations and has not engaged in any business
activities since December 18, 1989.
Note 2. RESTORATION OF CORPORATE STATUS
On June 10, 1996, acting in its capacity as the holder of
884 shares (0.026%) of the Company's common stock, and
without first receiving the consent, approval or
authorization of any other person associated with the
Company, Capston Network Company effected a renewal,
revival and restoration of the Company's certificate of
incorporation pursuant to Section 312 of the General
Corporation Law of Delaware. Thereafter, Capston filed
a 10-K for the years ending December 1989-1995, and a
Proxy Statement seeking approval and ratification of
its actions, along with authorization to seek a
suitable business combination transaction. This proxy
statement was ultimately distributed to the Company's
stockholders and the holders of a majority of the
Company's therein approved the proposals issued and
outstanding shares.
Under the terms of the original Proxy Statement, Capston was
authorized to seek a suitable business combination
transaction on behalf of the Company and to submit the
terms of any proposed business combination transaction
to the Company's stockholders for their approval.
Capston did not receive and was not entitled to receive
any equity interest in the Company as a result of its
actions prior to the date of the Proxy Statement.
Moreover, Capston was not entitled to reimbursements
for any expenses incurred by it on behalf of the
Company except to the extent that the terms of a
business combination transaction provided for the
reimbursement of such expenses. However, because Sally
Fonner is both the President of ARNOX and Capston.
Prior Staff Accounting Bulletins require under
generally accepted accounting the treatment of debiting
the expenses with corresponding credit to paid-in
capital. Future expenses of Capston or others will be
treated this way. These expenses are actual cash
0expenditures and do not reflect any costs associated
with the operation of Capston nor any personnel time or
cost.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<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> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,024)
<EPS-PRIMARY> 0
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</TABLE>
