<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended January 31, 1994 Commission file number 0-14361
PARTECH HOLDINGS CORPORATION
(Exact name of Company as specified in its charter)
Delaware 31-1166419
(State or Other jurisdiction of (I.R.S. Employer I.D. Number)
incorporation or organization)
3366 Riverside Drive, Suite 200, Columbus, Ohio 43221
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (614) 538-0660
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
The Company had 5,629,706 shares of $0.05 par value common stock outstanding
as of March 10, 1994.
<PAGE>
PARTECH HOLDINGS CORPORATION
FORM 10-Q
For the Fiscal Quarter Ended January 31, 1994
INDEX
Part I: Financial Information
<TABLE>
<CAPTION>
Item 1. Financial Statements Page
<S> <C>
(a) Consolidated Balance Sheets as of January 31, 1994 and April 30, 1993 3
(b) Statements of Consolidated Operations for the Three Months Ended January 31,
1994 and 1993, respectively 5
(c) Statements of Consolidated Operations for the Nine Months Ended January 31,
1994 and 1993, respectively 6
(d) Statements of Consolidated Cash Flows for the Nine Months Ended January 31,
1994 and 1993, respectively 7
(e) Notes to Consolidated Financial Statements 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 14
Part II: Other Information
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 31
</TABLE>
Page 2
<PAGE>
PART I
Item 1. Financial Statements
--------------------
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
January 31, April 30,
1994 1993
<S> <C> <C>
Assets:
Cash and cash equivalents $ 322,138 $ 143,164
Accounts receivable - related parties 159,269 108,318
Accounts and commissions receivable (net of allowance
for doubtful accounts of $3,148 and $0) 113,098 18,388
Notes receivable - related parties 128,714 129,000
Residuals, notes and accrued interest receivable 795,296 918,843
Equipment notes and accrued interest receivable 60,997,940 87,904,468
Leased property under capital lease, at cost (net of
accumulated amortization of $122,486,461
and $141,703,003, respectively) 43,121,931 44,291,407
Net investment in operating leases (net of
accumulated depreciation of $3,756,888 and
$2,271,639, respectively) 1,949,441 5,293,165
Property and equipment, at cost (net of accumulated
depreciation of $326,086 and $263,626, respectively) 628,368 374,962
Cost in excess of net assets acquired (net of
accumulated amortization of $1,053,428
and $957,067, respectively) 2,315,715 2,410,775
Investment in partnerships 45,498 45,498
Net investment in direct financing leases 2,194,564 3,330,791
Deferred organization, stock issuance and
other financing costs 67,099 27,678
Broadcasting rights 411,326 -
Other assets 80,750 171,305
------------- -------------
Total Assets $ 113,331,147 $ 145,167,762
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
Page 3
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(continued)
<TABLE>
<CAPTION>
January 31, April 30,
1994 1993
<S> <C> <C>
Liabilities:
Accounts payable and accrued expenses $ 57,909 $ 90,450
Accounts payable - related parties 33,472 49,220
Note payable - related party - 625,000
Notes and accrued interest payable 2,367,137 3,514,047
Broadcasting rights payable 411,326 -
Discounted lease rentals and accrued interest payable 45,071,221 49,584,419
Capital lease obligations and accrued interest payable 61,007,448 87,910,364
Accrued officer compensation and interest payable 99,239 215,113
Unearned income - 10,902
Deferred income taxes 75,000 75,000
------------- -------------
Total Liabilities 109,122,752 142,074,515
------------- -------------
Stockholders' Equity:
Preferred stock, $0.01 par value, 1,000,000 shares
authorized, none issued and outstanding
Common stock, $0.05 par value, 50,000,000 shares
authorized, 5,636,906 and 2,662,425, respectively,
issued 281,845 133,121
Common stock subscribed, $0.05 par value, 400,000
shares subscribed at April 30, 1993 - 20,000
Capital in excess of stated value 7,885,949 5,545,851
Retained deficit (3,947,811) (2,515,725)
------------- -------------
4,219,983 3,183,247
Common stock issued and unpaid - (90,000)
Treasury stock, at cost (11,588) -
------------- -------------
Total Stockholders' Equity 4,208,395 3,093,247
------------- -------------
Total Liabilities and Stockholders' Equity $ 113,331,147 $ 145,167,762
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
Page 4
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Statements of Consolidated Operations
<TABLE>
<CAPTION>
Three Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Revenues:
Rental income $ 6,372,622 $ 8,601,414
Commissions, fees and other income 199,164 164,632
Interest income 1,788,387 3,253,925
----------- -----------
Total Revenues 8,360,173 12,019,971
----------- -----------
Costs and Expenses:
Marketing, administrative and other operating expenses 414,103 266,825
Interest expense 2,902,147 4,997,120
Depreciation and amortization of property, equipment
and leased property under capital lease 5,285,942 6,867,978
Amortization of cost in excess of net assets acquired
and other intangible assets 35,231 30,865
----------- -----------
Total Costs and Expenses 8,637,423 12,162,788
----------- -----------
Net Loss $ (277,250) $ (142,817)
=========== ===========
Primary Net Loss Per Share $ (0.05) $ (0.05)
Fully Diluted Net Loss Per Share $ (0.05) $ (0.05)
Average Number of Common and
Common Equivalent Shares:
Primary 5,634,871 2,650,701
Fully diluted 5,634,871 2,650,701
</TABLE>
See accompanying notes to consolidated financial statements.
Page 5
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Statements of Consolidated Operations
<TABLE>
<CAPTION>
Nine Months Ended January 31,
-------------------------------
1994 1993
<S> <C> <C>
Revenues:
Rental income $ 19,243,763 $ 26,607,757
Commissions, fees and other income 288,821 285,876
Interest income 6,194,753 11,831,240
------------ ------------
Total Revenues 25,727,337 38,724,873
------------ ------------
Costs and Expenses:
Marketing, administrative and other operating expenses 1,182,216 616,192
Advisory services 219,665 -
Interest expense - related party 121,011 -
Interest expense 9,105,828 17,406,306
Depreciation and amortization of property, equipment
and leased property under capital lease 16,425,042 21,089,418
Amortization of cost in excess of net assets acquired
and other intangible assets 105,661 92,595
------------ ------------
Total Costs and Expenses 27,159,423 39,204,511
------------ ------------
Loss Before Income Taxes and Cumulative
Effect of Change in Accounting Principal (1,432,086) (479,638)
Income tax benefit - (270,000)
------------ ------------
Loss Before Cumulative Effect of Change
in Accounting Principal (1,432,086) (209,638)
Cumulative Effect to May 1, 1992 of Change
in Accounting Principal for Income Taxes - 180,000
------------ ------------
Net Loss $ (1,432,086) $ (29,638)
============ ============
Primary Income (Loss) Per Share:
Income (loss) before cumulative effect of change in
accounting principal $ (0.29) $ 0.01
Cumulative effect of change in accounting principal 0.00 0.03
------------ ------------
Primary Net Income (Loss) Per Share $ (0.29) $ 0.04
============ ============
Fully Diluted Income (Loss) Per Share:
Income (loss) before cumulative effect of change in
accounting principal $ (0.29) $ 0.01
Cumulative effect of change in accounting principal 0.00 0.03
------------ ------------
Fully Diluted Net Income (Loss) Per Share $ (0.29) $ 0.04
============ ============
Average Number of Common and
Common Equivalent Shares:
Primary 4,924,627 6,888,536
Fully diluted 4,924,627 6,888,668
</TABLE>
See accompanying notes to consolidated financial statements.
Page 6
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Statements of Consolidated Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Nine Months Ended January 31,
-----------------------------
1994 1993
<S> <C> <C>
Cash Flows From Operating Activities:
Commissions, fees and other receipts $ 312,457 $ 326,306
Marketing, administrative and other operating
payments (1,215,785) (889,803)
Interest receipts 33,587 29,622
Interest payments (187,840) (25,114)
------------ ----------
Net Cash Used for Operating Activities (1,057,581) (558,989)
------------ ----------
Cash Flows From Investing Activities:
Payment to officer for loan - (10,125)
Investments in non consolidated affiliates (2,844) (1,206)
Purchases of property and equipment (320,910) (3,880)
Proceeds from the sale of property and equipment 55,327 631
Deferred organization costs (75,929) (50,214)
Escrow deposits for radio station acquisitions (90,000) -
------------ ----------
Net Cash Used for Investing Activities (434,356) (64,794)
------------ ----------
Cash Flows From Financing Activities:
Deferred stock, debt issuance and other financing costs (12,646) (43,690)
Proceeds from issuance of stock 2,364,981 857,353
Principal payments under bank borrowings - (88,125)
Principal payments under other borrowings - (74,147)
Principal payments under radio station acquisition
financings (10,889) -
Principal payments under officer loans - (42,000)
Principal payments under related party loans (other
than officer loans) (625,000) -
Principal payments under capital lease obligations
and other financings (45,535) (4,147)
------------ ----------
Net Cash Provided By Financing Activities 1,670,911 605,244
------------ ----------
Net Increase (Decrease) in Cash and Cash Equivalents 178,974 (18,539)
Cash and Cash Equivalents at Beginning
of Period 143,164 45,077
------------ ----------
Cash and Cash Equivalents at End
of Period $ 322,138 $ 26,538
============ ==========
</TABLE>
See accompanying notes to consolidated financial statements.
Page 7
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Statements of Consolidated Cash Flows
Reconciliation of Net Loss
to Net Cash Used for Operating Activities
<TABLE>
<CAPTION>
Nine Months Ended January 31,
-------------------------------
1994 1993
<S> <C> <C>
Net loss $ (1,432,086) $ (29,638)
------------ ------------
Adjustments to reconcile net loss to net cash used for
operating activities:
Expenses and revenues not affecting operating activities:
Cumulative effect to May 1, 1992 of change in
accounting principal for income taxes - (180,000)
Depreciation and amortization of equipment,
and intangible assets 16,530,703 21,182,013
Deferred costs expensed and amortized 38,127 2,874
Advisory services paid in stock 189,665 -
Employee stock bonus 42,900 -
Rental income (19,243,763) (26,607,757)
Leasing interest income (6,180,819) (11,815,116)
Leasing interest expense 9,075,970 17,383,831
Changes in assets and liabilities:
Changes in accrued interest income 19,653 13,498
Changes in accrued interest expense (36,971) (2,639)
Changes in notes, accounts and
commissions receivable 56,910 31,891
Changes in other assets (7,925) (15,927)
Changes in accounts payable and
accrued expenses (116,574) (252,440)
Income taxes - (270,000)
Other 6,629 421
------------ ------------
Total Adjustments 374,505 (529,351)
------------ ------------
Net Cash Used for Operating Activities $ (1,057,581) $ (558,989)
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
Page 8
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Statements of Consolidated Cash Flows
Supplemental Cash Flow Information
Investment in Finance Assets. The Company acquires leased equipment,
equipment leases and lease receivables partially by assuming existing financing.
Also, the Company may sell or dispose of such assets with a commensurate
transfer of any related financing to the transferee. The net decreases in assets
and liabilities associated with the acquisition and disposition of such
equipment and equipment leases and the related liabilities for the nine months
ended January 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Nine Months Ended January 31,
-----------------------------
1994 1993
<S> <C> <C>
Assets:
Equipment notes and accrued interest receivable $ - $ (15,048,231)
Leased property under capital lease (net of
accumulated amortization) 12,550,816 (24,281,273)
Net investment in operating leases (715,565) 7,564,804
------------ -------------
Total Assets $ 11,835,251 $ (31,764,700)
============ =============
Liabilities:
Discounted lease rentals and accrued interest payable $ 11,835,251 $ (16,716,469)
Capital lease obligations and accrued interest payable - (15,048,231)
------------ -------------
Total Liabilities $ 11,835,251 $ (31,764,700)
============ =============
</TABLE>
During the nine months ended January 31, 1994 the Company (1) incurred
$59,079 of debt and expended $19,449 in cash for the purchase of fixed assets,
(2) entered into a capital lease obligation for $7,670 for new equipment, (3)
issued 110,000 shares for $5,500 in cash and incurred $42,900 of compensation
expense, (4) recorded broadcasting rights of $413,157 and related broadcasting
rights payable of an equivalent amount and (5) reduced common stock issued and
unpaid for $90,000, relieved a liability in the amount of $40,000, charged
capital in excess of stated value for $38,412 and recorded $11,588 of treasury
stock, without receiving or expending cash. During the nine months ended January
31, 1994 the Company purchased assets and liabilities, which included Leased
Property Under Capital Lease of $12,550,816 and Discounted Lease Rentals and
Accrued Interest Payable of $12,550,816. Also, during the nine months ended
January 31, 1994 the Company disposed of Net Investment in Operating Leases of
$715,565 (net of $1,142,909 of accumulated depreciation) and Discounted Lease
Rentals and Accrued Interest Payable of a commensurate amount. Also during the
current nine months leasehold tenancy positions terminated which reduced the
gross value of Leased Property Under Capital Lease by $32,936,834 and
accumulated amortization by an equivalent amount.
During the nine months ended January 31, 1993 the Company sold assets and
liabilities, which at the date of sale included Leased Property Under Capital
Lease of $23,530,628 (net of accumulated amortization of $18,887,171), and
Discounted Lease Rentals and Accrued Interest Payable of $23,530,628 for a
$10,000 reduction of debt. Also, during this same period the Company had
additional dispositions of assets and liabilities which included Leased
Property Under Capital Lease of $750,645 (net of accumulated amortization of
$422,326), Installment Notes and Accrued Interest Receivable of $15,048,231,
Discounted Lease Rentals and Accrued Interest Payable of $750,645, and Capital
Lease Obligations and Accrued Interest Payable of $15,048,231. Acquisitions
during the current period were comprised of Net Investment in Operating Leases
of $7,564,804, and Discounted Lease Rentals and Accrued Interest Payable of
$7,564,804. During the comparative nine months leasehold tenancy positions
terminated which reduced the gross value of Leased Property Under Capital
Lease by $47,958,678 and accumulated amortization by a tantamount.
Also, during the nine months ended January 31, 1993, 100,000 warrants were
exercised for a $100,000 reduction in accrued compensation. Similarly, during
third quarter of fiscal 1993 the Company issued 217,704 shares of $0.05 per
share par value common stock to pay $81,056 of debt. Furthermore, during the
first three months of fiscal 1993, 90,000 warrants were exercised and 90,000
shares were issued for which the Company has recorded a receivable of $90,000.
Additionally, the Company incurred $2,634 of debt pursuant to the purchase of
office equipment during the comparative nine months.
See accompanying notes to consolidated financial statements.
Page 9
<PAGE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Consolidated Financial Statements
The consolidated balance sheet as of January 31, 1994, the statements of
consolidated operations, for the three and nine months ended January 31, 1994,
and the statements of consolidated cash flows, for the nine months ended
January 31, 1994, have been prepared by the Company, without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at January 31, 1994, and for all periods presented
herein, have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included with the Company's April 30, 1993 and
1992, Annual Reports to the Securities and Exchange Commission on Form 10-K.
2. Federal Income Tax
The income tax provision is reported using an asset and liability approach
and measuring the change in the tax asset or liability. A deferred tax asset
or liability generally arises from changes in differences between financial
reporting and tax bases of all assets and liabilities (with exception related
to goodwill). A deferred tax asset will result in an income tax benefit
(before valuation allowance), conversely a deferred tax liability will result
in income tax expense. Previously recorded deferred tax assets and liabilities
are adjusted upon any changes in enacted tax rates. Differences between
financial reporting and tax bases usually result from differences in timing of
income and expense recognition. A valuation allowance is applied to a tax
asset for any amount that does not meet certain realizability criteria. A
change in the amount of valuation allowance that is applicable to the
beginning of the year balance is recognized in income from continuing
operations, increases in the valuation allowance are recognized as income tax
expense and decreases are recognized as income tax benefit. The valuation
allowance at the beginning of the year was $788,200 and increased $330,800.
As of January 31, 1994, the Company and its subsidiaries reported an
aggregate cumulative Federal income tax loss carryforward of approximately
$25,500,000, expiring through 2009. As of January 31, 1993, the Company and
its subsidiaries had aggregate Federal tax net operating loss carryforwards of
approximately $22,768,000.
3. Earnings Per Share
For the three and nine months ended January 31, 1994, primary and fully
diluted earnings per share amounts, are computed based on 5,634,871 shares and
4,924,627 shares, respectively, the weighted average number of common shares
outstanding. The stock purchase rights are not included in primary or fully
diluted earnings per share, the rights are anti-dilutive. Included in the
weighted average number of common shares outstanding are 615,000 shares issued
pursuant to stock sales. During the first quarter of the current fiscal year
the Company issued 2,359,481 shares pursuant to warrant exercises. If these
shares had been issued at the beginning of the period primary and fully
diluted earnings per share would have been ($0.26).
For the three months ended January 31, 1993, primary and fully diluted
earnings per share amounts, are computed based on 2,650,701 shares, the
weighted average number of common shares outstanding. The stock purchase
rights are not included in primary or fully diluted earnings per share for the
three months ended January 31, 1993, due to all rights being anti-dilutive.
Primary earnings per share amounts are computed based on the weighted
average number of common shares outstanding of 2,408,990 shares for the nine
months ended January 31, 1993, and an increased number of shares assuming
exercise of stock purchase rights, and the assumed repurchase of shares at an
average market price. The primary average number of common and common
equivalent shares are 6,888,536 shares for the nine months ended January 31,
1993. For the nine months ended January 31, 1993 fully diluted earnings per
share amounts are based on an increased number of shares computed under the
same method as primary earnings per share, except the repurchase of shares
uses the higher of the average market price during the period or the ending
market price, and if actually exercised it uses the average market price on
the date of exercise. The fully diluted average number of common and common
equivalent shares for the nine months ended January 31, 1993 are 6,888,668
shares.
Page 10
<PAGE>
During the first fiscal quarter of fiscal 1993 the Company issued
1,047,333 shares pursuant to warrant exercises. If these shares had been
issued at the beginning of the fiscal year primary and fully diluted earnings
per share would not have changed. Also, on November 6, 1992 the Company issued
217,704 shares to pay $81,056 of debt. If these shares had been issued at the
beginning of the comparative three months or at the beginning of the
comparative nine months primary and fully diluted earnings per share would not
have changed. Additionally, on October 27, 1992 the Company issued 14,000
shares pursuant to a debt default agreement, which are included in the
weighted average number of common shares outstanding.
4. Warrants
The Company issued an aggregate of 2,360,086 shares pursuant to the
exercise of its Class B Warrants at the Temporary Exercise Price of $1.00
during the Temporary Exercise Period. The Temporary Exercise Period expired
July 23, 1993 and the offering terminated September 12, 1993.
5. Deferred Organization, Stock Issuance and Other Financing Costs
These costs represent costs associated with the acquisition of broadcast
properties and preliminary negotiations of other financings. During the
current period the Company has deferred $60,181 of such costs that relate to
the acquisition of broadcast properties and has expensed $35,000 of previously
deferred costs which relate to abandoned acquisitions. The Company's
accounting policy is to capitalize such costs as the cost of an asset
purchased or as cost in excess of net assets acquired and amortize them to
expense on a straight line basis over the asset's life or 20 years as the case
may be, or expense them totally in the period in which the undertaking to
which they relate is abandoned or sold. Also, the Company has deferred $6,918
of such costs that relate to preliminary negotiations of other financings. The
Company's accounting policy is to capitalize such costs and amortize them over
the life of any debt they may relate to or to charge them to capital in excess
of stated value if they relate to equity financing. If the financing is
terminated the costs are expensed.
The Company charged to capital in excess of stated value deferred offering
expenses during current period in the amount of $5,728 which represent costs
incurred in connection with its Warrant offering and other stock issuances.
6. Advisory Services
During the nine months ended January 31, 1994 the Company paid $30,000 and
issued 505,000 shares of its common stock, valued at $358,832 for advisory
services rendered during the previous and current year. The Company expensed
$219,665 during the current year, and $169,167 in fiscal 1993 for which
400,000 shares were recorded as common stock subscribed at April 30, 1993.
7. Construction in Progress
Property and equipment includes $208,400 of construction in progress for
the building of a broadcasting tower and transmitting site, which were near
completion at January 31, 1994, and the beginning phases of constructing
another transmitting site. The costs relate to the change in frequency and
power upgrade for the Company's radio station in Shallotte, North Carolina and
a station to be located in the Florida Keys.
8. Related Party Transactions
On March 8, 1993 the Company received $500,000 in net proceeds from a
total borrowing of $625,000 which was incurred to finance the purchase of WDZD-
FM and to provide additional working capital, the difference of $125,000 was
recorded as interest expense - related party in fiscal 1993. The loan was to be
repaid by May 7, 1993, but was extended to June 7, 1993 for an additional
charge of $62,500. The loan thereafter accrued interest at 5% per month. The
extension fee and all interest for the current year are recorded as interest
expense - related party. All principal, accrued interest and charges in the
amount of $746,011 were paid on July 30, 1993. The lender, Funder's Trust 1992-
A, is engaged in the business of providing short-term lending for accounts
receivable and purchase order financing; the Chief Executive Officer of the
Company is a trustee, but not a beneficiary, of this trust.
The Company issued 110,000 shares to officers and directors during the
current period for $5,500 and incurred $42,900 of compensation expense. During
the nine months ended January 31, 1994 the Company earned $45,000 from
partnerships which are partially owned by a nonconsolidated affiliate of which
an officer of the Company is a general
Page 11
<PAGE>
partner. The Company has incurred $4,050 for leasing a vehicle from its Chief
Executive Officer and has leased such vehicle to the Chief Operating Officer
of a subsidiary for $2,450.
9. Stock Option Plans
The following table sets forth: (1) the number of shares of the Company's
common stock issuable at January 31, 1994 pursuant to outstanding Options; (2)
the exercise price per share; (3) the aggregate exercise price; (4) the
expiration dates; and (5) the market values of such shares at January 31,
1994, based on $1.7656 per share, which is the average of the high and low ask
and bid prices on the National Association of Securities Dealers Automated
Quotation system on January 31, 1994.
<TABLE>
<CAPTION>
Number of
Shares Market
Covered By Exercise Aggregate Value at
Outstanding Price Per Exercise Expiration January 31,
Plan Options Share Price Dates 1994
- --------------------------- ------------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Incentive Stock Option Plan 71,428 $ 0.69 $ 49,285 11/18/02 $ 126,113
Incentive Stock Option Plan 250,000 (1) $ 1.09 $ 272,500 7/15/03 $ 441,400
Stock Option and Stock
Appreciation Rights Plan 100,000 $ 0.69 $ 69,000 11/18/02 $ 176,560
Stock Option and Stock
Appreciation Rights Plan 500,000 (1) $ 1.09 $ 545,000 7/15/03 $ 882,800
</TABLE>
(1) On February 23, 1994 160,000 Stock Option and Stock Appreciation Rights
Plan options terminated and three months thereafter 90,000 Incentive Stock
Option Plan options will terminate.
(2) All Options are currently exercisable, except as noted above, and no
Options were exercised during the current period.
10. Other Stock Options
On January 3, 1994 the Company entered into an agreement whereby it may
issue up to 48,000 options (8,000 per month), commencing January 1, 1994 and
ending June 30, 1994. The options would be exercisable at 100.25% of the closing
bid price on the date of issuance. The Company has agreed, if requested between
July 1, 1994 and December 31, 1994, to register the options on Form S-8. On
January 31, 1994 the Company issued 8,000 options which are each exercisable at
$1.6917.
11. Other Capital Transactions
During fiscal 1993 the Company issued 90,000 shares of its common stock
pursuant to the exercise of warrants for which funds were not received. The
Company recorded the receivable as common stock issued and unpaid, and brought
suit to recover the monies owed. The Company had also recorded a liability for
$40,000 for promotional services rendered by the person to whom the shares were
issued. On January 6, 1994 the Company settled its law suit and received 7,200
shares of its common stock and relief from its $40,000 liability. The Company
has recorded treasury stock, at its cost, in the amount of $11,588 and as
charged $38,412 to capital in excess of stated value.
12. Barter Transactions
The Company has recognized $40,409 of barter transaction revenue which is
included in commissions, fees and other income and $39,258 of barter transaction
expense included in marketing, administrative and other operating expenses. The
amount of goods and services which were received or used prior to the
transmission of advertising was not material as of the balance sheet date.
Page 12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Results of Operations
The Company is in the process of acquiring several FM and AM radio stations
located in the Southeastern United States. The Company presently operates one FM
radio station in Shallotte, North Carolina (serving the Wilmington, North
Carolina and Myrtle Beach, South Carolina markets), is in the process of
constructing one FM radio station in the Florida Keys, has requests pending
before the FCC for transfer of three FM radio stations and one AM radio station
all located in Florida, has reached an agreement-in-principle for the purchase
of four FM radio stations and one AM station, and has offers pending acceptance
for the purchase of one FM radio station. The Company expects that its
acquisition activities will extend well into calendar year 1994 and that
significant revenues and income will not be realized until all of the stations
have been acquired and integrated into a consolidated operation. During the
current period the Company has deferred $60,181 of such costs that relate to the
acquisition of broadcast properties and has expensed $35,000 of previously
deferred costs which relate to abandoned acquisitions.
The frequency change and power upgrade to 25,000 watts for the Company's
Shallotte, North Carolina radio station was completed early February, 1994. The
sales staff has been increased in order to cover the entire broadcast market.
The Company has started to penetrate new and larger advertising markets and
expects the station to turn profitable in five to six months.
The Company is continuing to manage its lease portfolios and to acquire
lease properties as and when suitable transactions become available and is also
pursuing the acquisition and management of FM radio station broadcast
properties.
The loss from operations for the nine months ended January 31, 1994 includes
$340,676 of one time charges for interest and advisory services. Without these
charges, the loss from operations would have been ($1,091,410). The loss from
operations includes $230,057 of broadcasting operating expenses in excess of
revenues.
Rental income and interest income is a function of the amount of equipment
in the Company's Portfolios which may change substantially from year to year
based upon the volume of Portfolio acquisitions and dispositions. The Company's
net earnings from its Portfolios is minimal until the Operating Leases are
completed and the related Discounted Lease Rentals and Accrued Interest Payable
are paid. The following tables indicate the comparative results of operations
for the three and nine months ended January 31, 1994 and 1993.
<TABLE>
<CAPTION>
=====================================================================================================
Three Months Ended January 31, 1994 Compared to Three Months Ended January 31, 1993
Three Months Ended January 31, Amount of Change
------------------------------- --------------------------
1994 1993 Dollars Percentage
<S> <C> <C> <C> <C>
Rental income $ 6,372,622 $ 8,601,414 $ (2,228,792) (25.9%)
Commissions, fees and other income $ 199,164 $ 164,632 $ 34,532 21.0%
Interest income $ 1,788,387 $ 3,253,925 $ (1,465,538) (45.0%)
Marketing, administrative and other
operating expenses $ 414,103 $ 266,825 $ 147,278 55.2%
Interest expense $ 2,902,147 $ 4,997,120 $ (2,094,973) (41.9%)
Depreciation and amortization of
equipment $ 5,285,942 $ 6,867,978 $ (1,582,036) (23.0%)
Loss before income taxes and
extraordinary item $ (277,250) $ (142,817) $ (134,433) (94.1%)
Net loss $ (277,250) $ (142,817) $ (134,433) (94.1%)
=====================================================================================================
</TABLE>
Page 13
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Nine Months Ended January 31, 1994 Compared to Nine Months Ended January 31, 1993
Nine Months Ended January 31, Amount of Change
------------------------------- --------------------------
1994 1993 Dollars Percentage
<S> <C> <C> <C> <C>
Rental income $ 19,243,763 $ 26,607,757 $ (7,363,994) (27.7%)
Commissions, fees and other income $ 288,821 $ 285,876 $ 2,945 1.0%
Interest income $ 6,194,753 $ 11,831,240 $ (5,636,487) (47.6%)
Marketing, administrative and other
operating expenses $ 1,182,216 $ 616,192 $ 566,024 91.9%
Interest expense $ 9,226,839 $ 17,406,306 $ (8,179,467) (47.0%)
Depreciation and amortization of
equipment $ 16,425,042 $ 21,089,418 $ (4,664,376) (22.1%)
Loss before income taxes and
extraordinary item $ (1,432,086) $ (479,638) $ (952,448) (198.6%)
Net loss $ (1,432,086) $ (29,638) $ (1,402,448) (4,731.9%)
=====================================================================================================
</TABLE>
The above costs reflect the activity of the Portfolios acquired by the
Company. As the number of leases vary, so do the related expenses. As of January
31, 1994 Equipment Notes and Accrued Interest Receivable, Leased Property Under
Capital Lease and Net Investment in Operating Leases were $60,997,940,
$43,121,931 and $1,949,441, respectively, compared to $87,904,468, $44,291,407
and $5,293,165, respectively, at April 30, 1993. Discounted Lease Rentals and
Accrued Interest Payable, and Capital Lease Obligations and Accrued Interest
Payable were $45,071,221 and $61,007,448, respectively, compared to $49,584,419
and $87,910,364, respectively, at April 30, 1993. These and the above leasing
revenue and expense decreases are due to payments made as to the Company's
existing lease receivables and related obligations, which is a normal operating
circumstance, and sales of the lease portfolios. Such revenues and expenses, and
assets and liabilities are expected to change in future periods from new
properties being acquired (resulting in increases), and for payments which will
be received and made as to equipment and leases owned or disposed of, as the
case may be (resulting in decreases).
As the Company is, in part, in the business of acquiring, managing and
selling Portfolio properties, the Company anticipates that it will acquire and
will dispose of large amounts of such property in future years. The acquisition
and disposition of these properties will result in substantial periodic
fluctuations of revenues and expenses and will also result in periodic changes
in the Company's assets and liabilities in equivalent proportions.
The Company earns commissions, fees and other income from transactions which
fluctuates substantially from one comparable period to the next. The Company
believes that its relationship with its lease origination customers remains
good, however, none of these companies are presently underwriting business in
volumes sufficient to assure that the Company will have access to future
suitable Portfolio purchases. The Company will continue to pursue Portfolio
acquisitions on suitable terms as and when available, however, there is no
assurance that the current economic environment will be easing in the near term
sufficiently strong enough for the Company's customers to return to their pre-
1991 lease origination volumes.
The Company has recorded in the accompanying income statement as
commissions, fees and other income $121,406 of broadcasting advertising revenue,
which includes recognition of $40,409 of barter transaction revenue and has
recognized $39,258 of barter transaction expense included in marketing,
administrative and other operating expenses.
Effective on February 23, 1994, Mark S. Manafo ceased to be a Director,
Chief Operating Officer and employee of Partech Communications Group, Inc.
("PCG"), a wholly-owned subsidiary of the Company, and all of PCG's
subsidiaries. Mr. Manafo's options to purchase 160,000 shares of Partech's stock
terminated on February 23, 1994 and his options to purchase 90,000 shares will
terminate three (3) months thereafter.
Page 14
<PAGE>
During the nine months ended January 31, 1994 the Company earned $45,000
from partnerships which are partially owned by a nonconsolidated affiliate of
which an officer of the Company is a general partner. The Company has incurred
$4,050 for leasing a vehicle from its Chief Executive Officer and has leased
such vehicle to the Chief Operating Officer of a subsidiary for $2,450.
Liquidity and Capital Resources
The Company issued an aggregate of 2,360,086 shares pursuant to the exercise
of its Class B Warrants at the Temporary Exercise Price of $1.00 during the
Temporary Exercise Period. The Temporary Exercise Period expired July 23, 1993
and the offering terminated September 12, 1993. During the current period the
Company charged to capital in excess of stated value deferred offering expenses
in the amount of $5,728 which represent costs incurred in connection with its
Warrant offering and other stock issuances. Also, during the current nine months
the Company has deferred $6,918 of costs associated with the preliminary
negotiations of other financings. The Company issued 110,000 shares to officers
and directors during the current period for $5,500 and incurred $42,900 of
compensation expense.
During fiscal 1993 the Company issued 90,000 shares of its common stock
pursuant to the exercise of warrants for which funds were not received. The
Company recorded the receivable as common stock issued and unpaid, and brought
suit to recover the monies owed. The Company had also recorded a liability for
$40,000 for promotional services rendered by the person to whom the shares were
issued. On January 6, 1994 the Company settled its law suit and received 7,200
shares of its common stock and relief from its $40,000 liability. The Company
has recorded treasury stock, at its cost, in the amount of $11,588 and as
charged $38,412 to capital in excess of stated value.
On March 8, 1993 the Company received $500,000 in net proceeds from a total
borrowing of $625,000 which was incurred to finance the purchase of WDZD-FM and
to provide additional working capital, the difference of $125,000 was recorded
as interest expense - related party in fiscal 1993. The loan was to be repaid by
May 7, 1993, but was extended to June 7, 1993 for an additional charge of
$62,500. The loan thereafter accrued interest at 5% per month. The extension fee
and all interest for the current year are recorded as interest expense - related
party. All principal, accrued interest and charges in the amount of $746,011
were paid on July 30, 1993. The lender, Funder's Trust 1992-A, is engaged in the
business of providing short-term lending for accounts receivable and purchase
order financing; the Chief Executive Officer of the Company is a trustee, but
not a beneficiary, of this trust.
The Company has used a combination of seller financing, sale-leaseback
financing and secured bank loans to finance the acquisition of its Portfolio
properties; and internally generated cash flow, and bank and equity financing to
meet operating needs.
Marketing, administrative and other operating payments were $1,215,785 for
the first nine months of fiscal 1994 compared to $889,803 for the previous nine
months. The increase is due to the radio station operations being supported and
ungraded, and internal costs that cannot be deferred as to radio station
acquisitions.
During the nine months ended January 31, 1994 the Company paid $30,000 and
issued 505,000 shares of its common stock, valued at $358,832 for advisory
services rendered during the previous and current year. The Company expensed
$219,665 during the current year, and $169,167 in fiscal 1993 for which 400,000
shares were recorded as common stock subscribed at April 30, 1993. The Company
registered the 505,000 shares on a Form S-8.
On January 3, 1994 the Company entered into an agreement for promotional
services commencing January 3, 1994 and ending June 30, 1994, whereby it will
pay $3,000 per month and it may issue up to 48,000 options (8,000 per month).
The options would be exercisable at 100.25% of the closing bid price on the date
of issuance. The Company has agreed, if requested between July 1, 1994 and
December 31, 1994, to register the options on Form S-8. On January 31, 1994 the
Company issued 8,000 options which are each exercisable at $1.6917.
Current working capital assets, which are composed of cash and short-term
(one year or less) receivables, increased from $250,282 January 31, 1993, to
$542,411 at January 31, 1994. Short-term (one year or less) debt and accounts
payable increased from $130,308 at January 31, 1993, to $180,689 at January 31,
1994, for a net increase in working capital of $241,748. As of January 31, 1994
there is positive working capital of $361,722. Subsequent to January 31, 1994
the Company has a lease transactions pending which will yield cash commissions
of $60,000. The Company's trade payables at January 31, 1994 were $44,508
compared to $37,390 at January 31, 1993 and $42,554 at April 30, 1993.
Page 15
<PAGE>
In connection with the frequency change and power upgrade for the Company's
Shallotte, North Carolina radio station and the beginning phases of constructing
another transmitting site to be located in the Florida Keys the Company has
incurred, as of January 31, 1994, $208,400 of costs for construction in progress
for the building of a broadcasting tower and transmitting sites. Such costs are
included in property and equipment. The Company anticipates $167,711 to be
incurred to finish the transmitting site to be located in the Florida Keys. The
Shallotte, North Carolina construction was completed early February, 1994.
During the current fiscal year the Company received $312,457 in cash from
commissions, fees and other receipts, representing $193,328 from current period
activities (which includes a $115,000 broker fee for a lease transaction) and
$119,129 from receivables; and realized $148,384 from leased equipment
residuals, of which $127,314 are included in commissions, fees and other
receipts, and $21,070 are included in interest income. At January 31, 1994 the
Company had a secured borrowing of $18,306 related to corporate activities and
secured borrowings of $187,563 related to the acquisition of broadcast
properties. During the nine months ended January 31, 1993 the Company realized
$157,159 from leased equipment residuals, of which $130,291 is included in
commissions, fees and other receipts, and $26,868 is included in interest
income.
The Company will continue to collect its receivables, liquidate debt,
convert assets to cash, accumulate cash from asset sales and brokerage fees,
remarket its equipment, and pursue new business opportunities where and whenever
available. The Company believes that its cash on hand will be sufficient to
sustain the Company's operations and its previous radio station purchase
borrowings through the end of its current fiscal year. However, in order to
consummate further radio station acquisitions and construction additional debt
or equity financing will be necessary. The Company is presently negotiating
additional debt and equity financing to complete all of its acquisitions and
sustain operations beyond its current fiscal year.
Page 16
<PAGE>
PART II
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Item 4. Submission of Matters to a Vote of Security Holders 19
---------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit 3.3 Restated Certificate of Incorporation of Partech
Holdings Corporation dated January 25, 1994,
filed herewith as Exhibit 3.3.
Exhibit 11. Computation of Earnings Per Share 20
(b) Reports on Form 8-K 30
</TABLE>
Page 17
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Partech Holdings Corporation's Annual Meeting of Stockholders was held on
January 24, 1994. The Company solicited proxies. Thomas E. Reynolds and Jerald
K. Rayl were elected to the Board of Directors. John E. Rayl's term of office as
a director continued after the meeting and is to expire November, 1994.
The matters which were voted upon at the Meeting were as follows:
1) The election of two directors, Thomas E. Reynolds and Jerald K. Rayl.
2) Approval of an amendment of the Company's Articles of Incorporation as
to foreign ownership of common stock, and foreign directors and officers.
This amendment sought to limit ownership of the Company's Common Stock by
a non United States person, government, entity or representative therefor
to not more than twenty-five percent (25%) of the total number of shares
of the Company's capital stock outstanding. Furthermore the amendment
sought to limit the voting or control thereof to twenty-five percent
(25%) of the Company's capital stock outstanding by any of the foregoing.
Finally, the amendment sought to prohibit any of the foregoing to act as
an officer of the Company and require that no more than one-fourth of the
Board of Directors can be comprised of the foregoing.
3) Adopt the Company's 1993 Long-Term Incentive Plan. The Plan has
600,000 shares available thereunder and consists of stock, stock
options, cash and other types of awards.
4) Ratify Hausser + Taylor as independent certified public accountants.
The following table indicates the results of the voting:
<TABLE>
<CAPTION>
Item 1 Item 1
Jerald K. Thomas E.
Rayl Reynolds Item 2 Item 3 Item 4
<S> <C> <C> <C> <C> <C>
For 4,451,451 4,484,653 2,278,348 2,070,484 4,474,238
Against/Withheld 55,117 21,955 24,857 199,602 15,289
Abstain - - 13,537 26,437 17,081
Broker non-votes 585,257 585,217 2,775,083 2,795,498 585,217
</TABLE>
Due to a clerical error some of the votes were not cast. If such clerical
error had not occurred the results of voting would have been as follows:
<TABLE>
<CAPTION>
Item 1 Item 1
Jerald K. Thomas E.
Rayl Reynolds Item 2 Item 3 Item 4
<S> <C> <C> <C> <C> <C>
For 4,689,468 4,722,640 2,528,306 2,319,887 4,703,725
Against/Withheld 55,127 21,955 24,860 200,315 15,289
Abstain - - 22,037 34,937 25,581
Broker non-votes 507,285 507,285 2,676,677 2,696,937 507,285
</TABLE>
Page 18
<PAGE>
Item 6 (a).
Exhibit 11 (a). Earnings Per Share
-----------------------------------
Primary and fully diluted earnings per share are computed as follows:
Primary:
<TABLE>
<CAPTION>
Three Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding 5,634,871 2,650,701
=========== ===========
Net loss $ (277,250) $ (142,817)
=========== ===========
Net loss per common share $ (0.05) $ (0.05)
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding 4,924,627 2,408,990
Shares assumed to be issued upon exercising
of stock purchase rights in excess of 20%
repurchase limitation - 4,479,546
----------- -----------
Average number of common and common equivalent shares 4,924,627 6,888,536
=========== ===========
Loss before cumulative effect of change in
accounting principal $(1,432,086) $ (209,638)
Increase in interest income (net of tax) from assumed
investment in certificates of deposit and decrease
in interest expense (net of tax) from assumed
payment of short-term debt with assumed
stock purchase rights' proceeds in excess
of 20% repurchase limitation - 295,665
----------- -----------
Adjusted income (loss) before cumulative effect of change
in accounting principal (1,432,086) 86,027
Cumulative effect of change in accounting principal - 180,000
----------- -----------
Adjusted net income (loss) $(1,432,086) $ 266,027
=========== ===========
Income (loss) before cumulative effect of change in
accounting principal (0.29) 0.01
Cumulative effect of change in accounting principal 0.00 0.03
----------- -----------
Net income (loss) per common share $ (0.29) $ 0.04
=========== ===========
</TABLE>
Page 19
<PAGE>
Fully Diluted:
<TABLE>
<CAPTION>
Three Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding 5,634,871 2,650,701
=========== ===========
Net loss $ (277,250) $ (142,817)
=========== ===========
Net loss per common share $ (0.05) $ (0.05)
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding 4,924,627 2,408,990
Shares assumed to be issued upon exercising
of stock purchase rights in excess of 20%
repurchase limitation - 4,479,678
----------- -----------
Average number of common and common equivalent shares 4,924,627 6,888,668
=========== ===========
Loss before cumulative effect of change in
accounting principal $(1,432,086) $ (209,638)
Increase in interest income (net of tax) from assumed
investment in certificates of deposit and decrease
in interest expense (net of tax) from assumed
payment of short-term debt with assumed
stock purchase rights' proceeds in excess
of 20% repurchase limitation - 279,621
----------- -----------
Adjusted income (loss) before cumulative effect of change
in accounting principal (1,432,086) 69,983
Cumulative effect of change in accounting principal - 180,000
----------- -----------
Adjusted net income (loss) $(1,432,086) $ 249,983
=========== ===========
Income (loss) before cumulative effect of change in
accounting principal (0.29) 0.01
Cumulative effect of change in accounting principal 0.00 0.03
----------- -----------
Net income (loss) per common share $ (0.29) $ 0.04
=========== ===========
</TABLE>
Page 20
<PAGE>
Notes regarding the calculation of primary and fully diluted earnings per share
are:
For the three and nine months ended January 31, 1994 shares issuable under
stock purchase rights, are not included in primary or fully diluted earnings per
share since inclusion of the assumed issuable shares is, in all instances, anti-
dilutive. Included in the weighted average number of common shares outstanding
are 615,000 shares issued pursuant to stock sales. During the current nine
months the Company issued 2,359,481 shares pursuant to warrant exercises. If
these shares had been issued at the beginning of the period primary and fully
diluted earnings per share have been ($0.26).
For the three months ended January 31, 1993 shares issuable under stock
purchase rights, are not included in primary or fully diluted earnings per share
since inclusion of the assumed issuable shares is, in all instances, anti-
dilutive.
Primary earnings per share for the nine months ended January 31, 1993,
includes the exercise of stock purchase rights which is assumed at the beginning
of the period or at the date of grant, if granted during the period. Pursuant to
the modified treasury stock method shares assumed to be issued upon exercising
of stock purchase rights represents the number shares issued upon assumed
exercise less shares repurchased at the average market price, not to exceed 20%
of outstanding shares.
For the nine months ended January 31, 1993 fully diluted earnings per share
amounts are based on the increased number of shares that would be issued
assuming exercise of stock purchase rights. Fully diluted earnings per share is
computed under the aforementioned method as primary earnings per share, except
the repurchase of shares uses the higher of the average market price during the
period or the ending market price, unless shares were actually issued pursuant
to exercises, then the average market price on the day of exercise is used.
During the previous comparative period the Company issued 1,047,333 shares
pursuant to warrant exercises. If these shares had been issued at the beginning
of the previous fiscal year primary and fully diluted earnings per share would
not have changed. Also, on November 6, 1992 the Company issued 217,704 shares to
pay $81,056 of debt. If these shares had been issued at the beginning of the
previous three months or at the beginning of the previous nine months primary
and fully diluted earnings per share would not have changed. Additionally, on
October 27, 1992 the Company issued 14,000 shares pursuant to a debt default
agreement, which are included in the weighted average number of common shares
outstanding for the current three and nine months.
Page 21
<PAGE>
Additional primary and fully diluted earnings per share computations
pursuant to Regulation S-K, CFR (S)229.601(b)(11): The following computations
are submitted for informational purposes only pursuant to Regulation S-K,
although they are contrary to APB 15 (computations for the nine months ended
January 31, 1993 do not change from the original computations presented above).
Primary:
<TABLE>
<CAPTION>
Three Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding $ 5,634,871 $ 2,650,701
Shares assumed to be issued upon exercising
of stock purchase rights in excess of 20%
repurchase limitation 387,824 3,791,542
----------- -----------
Average number of common and common
equivalent shares 6,022,695 6,442,243
=========== ===========
Net loss $ (277,250) $ (142,817)
Increase in interest income (net of tax) from assumed
investment in certificates of deposit and decrease
in interest expense (net of tax) from assumed
payment of short-term debt with assumed
stock purchase rights' proceeds in excess
of 20% repurchase limitation - 156,426
----------- -----------
Adjusted net loss $ (277,250) $ 13,609
=========== ===========
Net loss per common share $ (0.05) $ 0.00
</TABLE>
Page 22
<PAGE>
Primary (continued):
<TABLE>
<CAPTION>
Nine Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding 4,924,627 2,408,990
Shares assumed to be issued upon exercising
of stock purchase rights in excess of 20%
repurchase limitation 1,106,307 4,479,546
----------- -----------
Average number of common and common
equivalent shares 6,030,934 6,888,536
=========== ===========
Loss before cumulative effect of change in
accounting principal $(1,432,086) $ (209,638)
Increase in interest income (net of tax) from assumed
investment in certificates of deposit and decrease
in interest expense (net of tax) from assumed
payment of short-term debt with assumed
stock purchase rights' proceeds in excess
of 20% repurchase limitation 25,715 295,665
----------- -----------
Adjusted income (loss) before cumulative effect of change
in accounting principal (1,406,371) 86,027
Cumulative effect of change in accounting principal - 180,000
----------- -----------
Adjusted net income (loss) $(1,406,371) $ 266,027
=========== ===========
Income (loss) before cumulative effect of change in
accounting principal (0.23) 0.01
Cumulative effect of change in accounting principal 0.00 0.03
----------- -----------
Net income (loss) per common share $ (0.23) $ 0.04
=========== ===========
</TABLE>
Page 23
<PAGE>
Fully Diluted:
<TABLE>
<CAPTION>
Three Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding $ 5,634,871 $ 2,650,701
Shares assumed to be issued upon exercising
of stock purchase rights in excess of 20%
repurchase limitation 405,139 3,791,542
----------- -----------
Average number of common and common
equivalent shares 6,040,000 6,442,243
=========== ===========
Net loss $ (277,250) $ (142,817)
Increase in interest income (net of tax) from assumed
investment in certificates of deposit and decrease
in interest expense (net of tax) from assumed
payment of short-term debt with assumed
stock purchase rights' proceeds in excess
of 20% repurchase limitation - 156,426
----------- -----------
Adjusted net loss $ (277,250) $ 13,609
=========== ===========
Net loss per common share $ (0.05) $ 0.00
</TABLE>
Page 24
<PAGE>
Fully Diluted (continued):
<TABLE>
<CAPTION>
Nine Months Ended January 31,
------------------------------
1994 1993
<S> <C> <C>
Weighted average number of common shares outstanding 4,924,627 2,408,990
Shares assumed to be issued upon exercising
of stock purchase rights in excess of 20%
repurchase limitation 1,106,307 4,479,678
----------- -----------
Average number of common and common
equivalent shares 6,030,934 6,888,668
=========== ===========
Loss before cumulative effect of change in
accounting principal $(1,432,086) $ (209,638)
Increase in interest income (net of tax) from assumed
investment in certificates of deposit and decrease
in interest expense (net of tax) from assumed
payment of short-term debt with assumed
stock purchase rights' proceeds in excess
of 20% repurchase limitation 25,715 279,621
----------- -----------
Adjusted income (loss) before cumulative effect of change
in accounting principal (1,406,371) 69,983
Cumulative effect of change in accounting principal - 180,000
----------- -----------
Adjusted net income (loss) $(1,406,371) $ 249,983
=========== ===========
Income (loss) before cumulative effect of change in
accounting principal (0.23) 0.01
Cumulative effect of change in accounting principal 0.00 0.03
----------- -----------
Net income (loss) per common share $ (0.23) $ 0.04
=========== ===========
</TABLE>
Page 25
<PAGE>
Notes regarding the calculation of primary and fully diluted earnings per
share pursuant to Regulation S-K, CFR (S)229.601(b)(11):
Primary earnings per share for the three and nine months ended January 31,
1994, includes the exercise of stock purchase rights which is assumed at the
beginning of the period or at the date of grant, if granted during the period.
Pursuant to the treasury stock method shares assumed to be issued upon
exercising of stock purchase rights represents the number shares issued upon
assumed exercise less shares repurchased at the average market price.
For the three and nine months ended January 31, 1994 fully diluted earnings
per share amounts are based on the increased number of shares that would be
issued assuming exercise of stock purchase rights. Fully diluted earnings per
share is computed under the aforementioned method as primary earnings per share,
except the repurchase of shares uses the higher of the average market price
during the period or the ending market price, unless shares were actually issued
pursuant to exercises, then the average market price on the day of exercise is
used.
Included in the weighted average number of common shares outstanding are
615,000 shares issued pursuant to stock sales. During the current nine months
the Company issued 2,359,481 shares pursuant to warrant exercises. If these
shares had been issued at the beginning of the period primary and fully diluted
earnings per share have been ($0.23).
Primary earnings per share for the three and nine months ended January 31,
1993, includes the exercise of stock purchase rights which is assumed at the
beginning of the period or at the date of grant, if granted during the period.
Pursuant to the modified treasury stock method shares assumed to be issued upon
exercising of stock purchase rights represents the number shares issued upon
assumed exercise less shares repurchased at the average market price, not to
exceed 20% of outstanding shares.
For the three and nine months ended January 31, 1993 fully diluted earnings
per share amounts are based on the increased number of shares that would be
issued assuming exercise of stock purchase rights. Fully diluted earnings per
share is computed under the aforementioned method as primary earnings per share,
except the repurchase of shares uses the higher of the average market price
during the period or the ending market price, unless shares were actually issued
pursuant to exercises, then the average market price on the day of exercise is
used.
During the previous period the Company issued 1,047,333 shares pursuant to
warrant exercises. If these shares had been issued at the beginning of the
previous fiscal year primary and fully diluted earnings per share would not have
changed. Also, on November 6, 1992 the Company issued 217,704 shares to pay
$81,056 of debt. If these shares had been issued at the beginning of the
previous three months or at the beginning of the previous nine months primary
and fully diluted earnings per share would not have changed. Additionally, on
October 27, 1992 the Company issued 14,000 shares pursuant to a debt default
agreement, which are included in the weighted average number of common shares
outstanding for the current three and nine months.
Item 6(b). Reports on Form 8-K.
--------------------
None.
Page 26
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARTECH HOLDINGS CORPORATION
--------------------------------
(Registrant)
Date: March 16, 1994 By: /s/ JOHN E. RAYL
----------------------------
John E. Rayl
Chief Executive Officer, Treasurer
and Director
Page 27
<PAGE>
EXHIBIT 3.3
RESTATED
CERTIFICATE OF INCORPORATION
FOR
PARTECH HOLDINGS CORPORATION
------------------------------------
PARTECH HOLDINGS CORPORATION, a Corporation originally incorporated March
25, 1985, organized and existing under and by virtue of the general
Corporation Law of the state of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Partech Holdings
Corporation on January 24, 1994, resolutions were duly adopted setting forth a
proposed Restated Certificate of Incorporation of said Corporation, declaring
said Restated Certificate to be advisable and calling a meeting of the sole
stockholder of said Corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this Corporation be
restated by changing all of the Articles thereof and filing a Restated
Certificate of Incorporation so that said Certificate shall read as follows:
PARTECH HOLDINGS CORPORATION
----------------------------
RESTATED CERTIFICATE OF INCORPORATION
-------------------------------------
Article First
-------------
Name
The name of the Corporation is Partech Holdings Corporation.
Article Second
--------------
Registered Office
The address of the registered office of Partech Holdings Corporation (the
"Corporation") in the state of Delaware is Corporation Trust Center, 1209
Orange Street, in the city of Wilmington, county of New Castle. The name of
its registered agent at such address is The Corporation Trust Company.
Article Third
-------------
Purposes
The nature of the business to be conducted or promoted and the purpose of
the Corporation are to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State
of Delaware.
Article Fourth
--------------
Capital Stock Classes
The total number of shares of all classes of capital stock which the
Corporation has the authority to issue is 51,000,000 shares. The shares are
divided into two classes as follows:
1. 1,000,000 shares of preferred stock, par value One Cent ($0.01) per
share (Preferred Stock), and
2. 50,000,000 shares of common stock, par value Five Cents ($0.05) per
share (Common Stock).
The designations of voting powers, preferences, preemptive rights, options
and other special rights and qualifications, limitations or restrictions of
the above classes of stock are as follows:
1
<PAGE>
I. Preferred Stock
1. Issuance in Series.
Shares of Preferred Stock may be issued in one or more series at such time
or times, and for such consideration or considerations as the Board of
Directors may determine. All shares of any one series of Preferred Stock will
be identical with each other in all respects, except that shares of one series
issued at different times may differ as to dates from which dividends thereon
may be cumulative. All series will rank equally and be identical in all
respects, except as permitted by the following provisions of paragraph 2 of
this Division I.
2. Authority of the Board with Respect to Series.
The Board of Directors is authorized, at any time and from time to time,
to provide for the issuance of shares of Preferred Stock in one or more series
with such designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof
as are stated and expressed in the resolution or resolutions providing for the
issue thereof adopted by the Board of Directors, and if not restricted by this
Certificate of Incorporation or any amendment thereto including, but not
limited to, determination of any of the following:
(a) the distinctive serial designation and the number of shares
constituting a series;
(b) the dividend rate or rates, whether dividends are cumulative and, if
so, from which date, the payment date or dates for dividends, and the
participating or other special rights, if any, with respect to dividends;
(c) the voting powers, full or limited, if any, of the shares of the
series;
(d) whether the shares are redeemable and, if so, the price or prices at
which, and the terms and conditions under which, the shares may be redeemed;
(e) the amount or amounts payable upon the shares in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation prior to any payment or distribution of the assets of the
Corporation to any class or classes of stock of the Corporation ranking junior
to the Preferred Stock;
(f) whether the shares are entitled to the benefit of a sinking or
retirement fund to be applied to the purchase or redemption of shares of a
series and, if so entitled, the amount of the fund and the manner of its
application, including the price or prices at which the shares may be redeemed
or purchased through the application of the fund;
(g) whether the shares are convertible into, or exchangeable for, shares
of any other class or classes or of any other series of the same or any other
class or classes of stock of the Corporation and, if so convertible or
exchangeable, the conversion price or prices, or the rates of exchange, and
the adjustments thereof, if any, at which the conversion or exchange may be
made, and any other terms and conditions of the conversion or exchange; and
(h) any other preferences, privileges and powers and relative
participating, optional or other special rights, and qualifications,
limitations or restrictions of a series, as the Board of Directors may deem
advisable and as are not inconsistent with the provisions of this Certificate
of Incorporation.
3. Dividends.
Before any dividends on any class or classes of stock of the Corporation
ranking junior to the Preferred Stock may be declared or paid or set apart for
payment, the holders of shares of Preferred Stock of each series are entitled
to such cash dividends, but only when and as declared by the Board of
Directors out of funds legally available therefor, as they may be entitled to
in accordance with the resolution or resolutions adopted by the Board of
Directors providing for the issue of the series, payable on such dates in each
year as may be fixed in the resolution or resolutions. The term "class or
classes of stock of the Corporation ranking junior to the Preferred Stock"
means the Common Stock and any other class or classes of stock of the
Corporation hereafter authorized which rank junior to the Preferred Stock as
to dividends or upon liquidation.
4. Reacquired Shares.
Shares of Preferred Stock which have been issued and reacquired in any
manner by the Corporation (excluding,
2
<PAGE>
until the Corporation elects to retire them, shares which are held as treasury
shares but including shares redeemed, shares purchased and retired and shares
which have been converted into shares of Common Stock) will have the status of
authorized and unissued shares of Preferred Stock and may be reissued.
5. Voting Rights.
Unless and except to the extent otherwise required by law or provided in
the resolution or resolutions of the Board of Directors creating any series of
Preferred Stock pursuant to this Division I, the holders of the Preferred
Stock shall have no voting power with respect to any matter whatsoever. In no
event shall the Preferred Stock be entitled to more than one vote in respect
of each share of stock except as may be required by law or by this Certificate
of Incorporation.
II. Common Stock
1. Dividends.
Subject to the preferential rights of the Preferred Stock, the holders of
the Common Stock are entitled to receive, to the extent permitted by law, such
dividends as may be declared from time to time by the Board of Directors.
2. Liquidation.
In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding up of the Corporation, after distribution in
full of the preferential amounts, if any, to be distributed to the holders of
shares of Preferred Stock, holders of Common Stock shall be entitled to
receive all of the remaining assets of the Corporation of whatever kind
available for distribution to stockholders ratably in proportion to the number
of shares of Common Stock held by them respectively. The Board of Directors
may distribute in kind to the holders of Common Stock such remaining assets of
the Corporation or may sell, transfer or otherwise dispose of all or any part
of such remaining assets to any other Corporation, trust or other entity and
receive payment therefor in cash, stock or obligations of such other
Corporation, trust or other entity, or any combination thereof, and may sell
all or any part of the consideration so received and distribute any balance
thereof in kind to holders of Common Stock. The merger or consolidation of the
Corporation into or with any other corporation, or the merger of any other
corporation into it, or any purchase or redemption of shares of stock of the
Corporation of any class, shall not be deemed to be a dissolution, liquidation
or winding up of the Corporation for the purpose of this paragraph.
3. Voting Rights.
Except as may be otherwise required by law or this Certificate of
Incorporation, each holder of Common Stock has one vote in respect of each
share of stock held by him of record on the books of the Corporation on all
matters voted upon by the stockholders. The shareholder shall not have
cumulative voting rights.
III. Stock Rights and Options
The Board of Directors, in their discretion and without the approval of
the shareholders, may from time to time create and issue, rights or options
entitling the holders thereof to purchase shares of stock of any class or
classes from the Corporation subject to the limitations set forth below. Such
rights or options are to be evidenced by or in such instrument or instruments
as shall be approved by the Board of Directors.
The Directors shall approve the terms upon which, including the time
(which may be limited or unlimited in duration) within which, and the price at
which any such shares may be purchased from the Corporation upon the exercise
of any such right or option. In no event shall the total rights or options
effect more than 50% of the authorized shares, nor can they be at prices less
than 10% of the sales or bid price averaged over the 30 day period immediately
prior to the sale. Rights or options may be granted at such less favorable
terms as shall be stated in a resolution adopted by the Board of Directors
providing for the creation and issuance of such rights or options. In the
absence of actual fraud in the transaction, the judgement of the Board of
Directors as the consideration for the issuance of such rights or options and
the sufficiency thereof shall be conclusive.
In case the shares of stock of the Corporation to be issued upon the
exercise of such rights or options shall be shares having a par value, the
price to be received therefor shall not be less than the par value thereof. In
case the shares of stock to be issued shall be shares of stock without par
value, the consideration therefor shall be determined in the manner provided
in Section 153 of the Delaware General Corporation Law.
3
<PAGE>
IV. Other Provisions
1. Preemptive Rights.
No stockholder of either preferred or common shares shall have any
preemptive right to subscribe to an additional issue of stock of any class or
series or to any stock rights, options, warrants, debentures or other
securities of the Corporation convertible into such stock.
2. Changes in Authorized Capital Stock.
Subject to the protective conditions and restriction of any outstanding
Preferred Stock, any amendment to this Certificate of Incorporation which
increases or decreases the authorized capital stock of any class or classes
may be adopted by the affirmative vote of the holders of a majority of the
outstanding shares of the voting stock of the Corporation.
Article Fifth
-------------
Board of Directors
1. Powers of the Board.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors by a majority vote of the entire Board is expressly
authorized:
(a) to make, alter or repeal the Bylaws of the Corporation and to revise,
alter, amend or repeal the Certificate of Incorporation subject only to
approval by stockholders, if expressly required by statute;
(b) to authorize and cause to be executed mortgages and liens upon part
or all of the real and personal property of the Corporation;
(c) to set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose as the Board of
Directors, in its sole discretion may determine and to abolish any reserve in
the manner in which it was created;
(d) to designate an Executive Committee of the Corporation;
(e) unless a majority vote of the stockholders is required by law, to
sell, lease or exchange all or substantially all of the property and assets of
the Corporation, including its goodwill and its corporate franchises, upon
such terms and conditions and for such consideration, which may consist in
whole or in part of money or property including shares of stock in, and/or
other securities of, any other corporation or corporations, as the Board of
Directors shall deem expedient and for the best interests of the Corporation;
(f) to authorize and issue bonds and debentures and to determine the
terms and conditions, interest rates, discount rates, conversion rates,
redemption schedules, duration and all other matters relating to or arising
out of the issuances of bonds and debentures, whether or not convertible to
common stock, provided that such conversion of bonds or debentures to stock
when added to the issued and outstanding stock and treasury stock does not
exceed the authorized shares of the Corporation.
2. Terms and Number of Board Members.
The number of members of the Board of Directors will be fixed from time to
time by the Board of Directors, but (subject to vacancies) in no event may
there be less than two Directors nor more than eleven. Each director shall
serve until the next annual meeting of stockholders or until his successor is
elected. Election of Directors need not be by written ballot.
If any vacancy occurs in the Board of Directors during a term, the
remaining Directors, by affirmative vote of a majority thereof, may elect a
director to fill the vacancy until the next annual meeting of stockholders.
3. Cumulative Voting.
At all elections of Directors of the Corporation, each stockholder
entitled generally to vote for the election of
4
<PAGE>
Directors shall be entitled to vote one vote for each share owned by the
stockholder for each position. The stockholder shall not have rights for
cumulative voting.
4. Board Action By Consent.
Any Corporate action upon which a vote of Board members is required or
permitted may be taken without a meeting or a formal vote of the Board with
the written consent of the Board members. Such action may be taken by the
written consent of no less than a majority of all the Directors. In no case
shall the written consent be by less than the minimum percent of the Directors
vote required by statute for the proposed corporate action. Prompt notice must
be given to all Board members of the result of the vote on any action taken
without a meeting.
Article Sixth
-------------
Records
The books of the Corporation may be kept (subject to any provisions
contained in the statutes of the State of Delaware) outside the state of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
Article Seventh
---------------
Certain Contracts
No contract or transaction between the Corporation and one or more of its
Directors or officers, or between the Corporation and any other Corporation,
partnership, association, or other organization in which one or more of its
Directors or officers are Directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the
director or officer is present at or participates in a meeting of the Board or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose. It is understood that
some of the business conducted by the Corporation and its subsidiaries involve
the officers and others including subsidiaries and affiliates serving as
general partners, limited partners, trustees, or in joint ventures. Such acts
or action is permitted if:
1. The material facts as to the Director's or officer's interest and as
to the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board of Directors or committee in good
faith authorizes the contract or transaction by a vote sufficient for such
purpose; or, if required
2. The material facts as to his interest and as to the contract or
transaction are disclosed or are known to stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in a good
faith by vote of the stockholders; or
3. The contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
Article Eighth
--------------
Indemnification
The following provisions are included for the purpose of ensuring that
control and management of the Corporation remains with loyal citizens of the
United States and/or corporations formed under the laws of the United States
or any of the states of the United States, as required by the Communications
Act of 1934, as the same may be amended from time to time:
(a) The Corporation shall not issue to (i) a person who is a citizen of a
country other than the United States; (ii) any entity organized under
the laws of a government other than the government of the United
States or any state, territory, or possession of the United States;
(iii) a government other than the government of the Untied States or
of any state, territory, or possession of the United States; or (iv) a
representative of, or an individual or entity controlled by, any of
the foregoing (individually, an "Alien"; collectively, "Aliens") in
excess of 25% of the total number of shares of capital stock of the
Corporation outstanding at any time and shall not permit the transfer
on the books of the Corporation of any capital stock to any Alien that
5
<PAGE>
would result in the total number of shares of such capital stock held
by Aliens to exceed such 25% limit.
(b) No Alien or Aliens shall be entitled to vote or direct or control the
vote of more than 25% of (i) the total number of shares of capital
stock of the Corporation outstanding and entitled to vote at any time
and from time to time, or (ii) the total voting power of all shares of
capital stock of the Corporation outstanding and entitled to vote at
any time and from time to time.
(c) No Alien shall be qualified to act as an officer of the Corporation,
and no more than one-fourth of the total number of directors of the
Corporation at any time and from time to time may be Alien.
(d) The Board of Directors of the Corporation shall have all powers
necessary to implement the provisions of this ARTICLE EIGHTH.
1. The Corporation, its subsidiaries and affiliates shall jointly and
severally indemnify and hold any person harmless if any person was or
is threatened to be made a party to any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative by reason of the fact that the person
is or was a Director or officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise. The Corporation shall indemnify and hold
the person harmless and undertakes to pay the current costs until
resolved against expenses (including attorneys' fees) judgements,
fines, and amounts paid in settlements actually incurred by the person
in connection with such action, suit, or proceeding and, with respect
to any criminal action or proceeding.
2. The Corporation shall indemnify any person, if the person was or is
threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of or in the name of the Corporation
to procure a judgement in its favor by reason of the fact that the
person is or was a Director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually incurred by the person
in connection with the defense or settlement of such negotiation
action or suit.
3. Expenses incurred by any person in defending a civil or criminal
action, suit or proceeding shall be paid by the Corporation upon
request in advance of the final disposition of such action, suit or
proceeding.
4. The indemnification provided hereby shall not be deemed exclusive of
all rights to which any person may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in any person's official capacity and as
to action in another capacity while holding such office, and shall
continue to any person as a person who has ceased to be a Director,
officer or agent as to claims arising during or as a result of the
service to the Corporation and shall inure to the benefit of the
person's heirs, executors and administrators.
5. The Corporation may, purchase and maintain insurance on behalf of each
Director and officer while serving as a Director or officer of the
Corporation or while serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against any person and incurred by any person in
any such capacity, or arising out of the status as such.
6. References to the Corporation shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, and employees or
agents so that any person who is or was a director, officer, employee
or agent of such constituent corporation, or who is or was serving at
the request of such constituent corporation as a director or officer,
of another corporation, partnership, joint venture, trust, or other
enterprise, shall stand in the same position with respect to the
resulting or surviving corporation as the person would have with
respect to such constituent corporation as if its separate existence
had continued.
7. References to "fines" shall include any excise taxes and penalties
assessed to any person with respect to any function; and references to
"serving at the request of the Corporation" shall include any service
as a director or officer of the corporation which imposes duties on,
or involves services by the person. This indemnity shall cover each
person for all responsibilities for the Corporation as a Director or
officer or as a
6
<PAGE>
representative including periods on or prior to the effective date of
this Agreement.
The above right of indemnity shall extend to a person whether or not
the Corporation would have the power to indemnify the person against
such liability under Delaware Corporation law and may not be altered,
amended, or rescinded except by Court order or the advance written
consent of the person.
Article Ninth
-------------
Stockholder Action by Consent
Any action of the Corporation upon which a vote of stockholders is
required or permitted may be taken without a meeting or vote of
stockholders with the written consent of stockholders having not less
than one-third of the shares entitled to vote at a stockholder
meeting; provided, that in no case shall the written consent be by
holders having less than the minimum percent of the vote required by
statute for the proposed corporate action and provided that prompt
notice be given to all stockholders of the result of the vote
authorizing the taking of corporate action without a meeting.
Article Tenth
-------------
Amendment
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted subject to this
reservation.
This Restated Certificate of Incorporation was duly proposed by the
Board of Directors and adopted by the sole stockholder in pursuance
with Sections 242 and 245 of the General Corporation Law of the state
of Delaware.
The capital of said Corporation will not be reduced under or by reason
of this Restated Certificate of Incorporation.
IN WITNESS WHEREOF, said PARTECH HOLDINGS CORPORATION has caused this
certificate to be signed by John E. Rayl its President, and Thomas E.
Reynolds, its Secretary, this 25th day of January, 1994.
PARTECH HOLDINGS CORPORATION
By: /s/ JOHN E. RAYL
-----------------------------
John E. Rayl, President
Attest: /s/ THOMAS E. REYNOLDS
-----------------------------
Thomas E. Reynolds, Secretary
(Seal)
7
