UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 For the quarter period ended: September 30, 1996
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 For the transition period from: to
Commission file number: 33-5902-NY
MICRO-LITE TELEVISION
(Exact name of registrant as specified in its charter)
Nevada 22-2774460
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9 Exchange Place, Suite 210, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 595-0104
Indicate by check mark whether the registrant (1) has filed all reports 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 number of shares outstanding of the registrant's common stock on
October 21, 1996 was 7,009,003 of which 1,004,167 have stop payment orders. The
net shares outstanding of the registrant's common stock on October 21, 1996 was
6,004,836.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
The following Condensed Consolidated Financial Statements of the Company
and its subsidiaries and related notes are included herein:
Condensed Consolidated Balance Sheet as of December 31, 1995 and September
30, 1996;
Condensed Consolidated Statements of Income for the three months and nine
months ended September 30, 1996, for the three months ended September 30, 1995
and September 30, 1996, and for the nine months ended September 30, 1995 and
September 30, 1996;
Condensed Consolidated Statement of Cash Flows for the nine months ended
September 30, 1995 and September 30, 1996;
Notes to Condensed Consolidated Financial Statements.
<PAGE>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1995 1996
- ------ ---- ----
Current Assets:
<S> <C> <C>
Cash 7,019 22,181
Marketable Securities 906 906
Notes Receivable 500 96,246
Accounts Receivable & Prepaids 334 667
--- ---
Total Current Assets 8,759 120,000
Property, Plant & Equipment 254,571 189,659
Other Assets:
Organizational Costs 450 112
Deposits 7,824 2,825
Licenses and Other 1,360,138 1,374,704
--------- ---------
1,368,412 1,377,641
TOTAL ASSETS 1,631,742 1,687,300
========= =========
LIABILITIES & SHAREHOLDERS EQUITY Current Liabilities:
Accounts Payable 84,870 88,772
Accrued Liabilities 768,762 752,951
Note Payable 176,000 606,061
Income Taxes Payable 800 800
Current Portion of Long-Term Debt 12,684 25,035
Payable - Related Parties 571,560 618,945
------- -------
Total Current Liabilities 1,614,676 2,092,564
Long-Term Debt 11,627 169,064
------ -------
Total Liabilities 1,626,303 2,261,628
Shareholders Equity:
Common Stock, $.001 par value;
Authorized 200,000,000 shares;
Issued and Outstanding 5,816,427
at December 31, 1995 and 6,004,836
at September 30, 1996 5,816 6,005
Additional Paid-in Capital 2,050,120 2,110,925
Retained Earnings (Deficit) (2,050,497) (2,691,258)
---------- ----------
Total Shareholder's Equity 5,439 (574,328)
TOTAL LIABILITES & EQUITY 1,631,742 1,687,300
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
Sep-96 Sep-96
------ ------
<S> <C> <C>
Revenues From License Sales 0 300,000
Cost of Licenses Sold 2,500 109,894
----- -------
Gross Profit (2,500) 190,106
Other Revenues 0 600
General & Administrative Expenses:
Brochures & Marketing 206 530
Travel & Auto Expense 23,174 48,016
Postage & Delivery 5,934 13,468
Payroll Taxes 5,393 19,079
Office Expenses 3,364 5,167
Outside and Professional Services 64,282 143,910
Rent 10,278 27,843
Salaries - Officers 48,750 131,250
Salaries - Others 42,566 155,523
Depreciation & Amortization 35,555 111,947
Bank Charges & Interest (net) 69,757 74,525
Insurance 5,585 16,063
Equipment Rental 0 2,381
Seminars & Conventions 1,517 3,470
MMDS Lease Payments 7,650 25,675
Tower Lease Payments 2,385 8,606
FCC Filing Fees 5,750 10,310
Telephone Expense 9,990 27,152
Computer Expense 1,481 3,251
Other Taxes & Licenses 10 1,548
Miscellaneous Expense 1,302 952
----- ---
Total General & Administrative Expenses 344,929 830,666
State Income Taxes 0 800
- ---
Net Income (Loss) (347,429) (640,760)
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
Sep-95 Sep-96
------ ------
<S> <C> <C>
Revenues From License Sales 250,000 0
Cost of Licenses Sold 16,259 2,500
------- -----
Gross Profit 233,741 (2,500)
Other Income (Loss) (125,000) 0
General & Administrative Expenses:
Brochures & Marketing 173 206
Travel & Auto Expense 13,215 23,174
Postage & Delivery 4,882 5,934
Payroll Taxes 8,741 5,393
Office Expenses 3,932 3,364
Outside and Professional Services 35,077 64,282
Rent 10,223 10,278
Salaries - Officers 41,250 48,750
Salaries - Others 47,995 42,566
Depreciation & Amortization 9,674 35,555
Bank Charges & Interest (net) 14,479 69,757
Insurance 793 5,585
Equipment Rental 2,161 0
Seminars & Conventions 0 1,517
MMDS Lease Payments 3,670 7,650
Tower Lease Payments 0 2,385
FCC Filing Fees 0 5,750
Telephone Expense 7,491 9,990
Computer Expense 1,037 1,481
Other Taxes & Licenses 1,264 10
Miscellaneous Expense 2,145 1,302
----- -----
Total General & Administrative Expenses 208,202 344,929
State Income Taxes 0 0
- -
Net Income (Loss) (99,461) (347,429)
========= ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
Sep-30-95 Sep-30-96
--------- ---------
<S> <C> <C>
Revenues From License Sales 506,500 300,000
Cost of Licenses Sold 16,259 109,894
------- -----
Gross Profit 490,241 190,106
Profit (Loss) From Sales of Securities 60,275 0
Other Revenues (Expenses) (125,000) 600
General & Administrative Expenses:
Brochures & Marketing 606 530
Travel & Auto Expense 35,067 48,016
Postage & Delivery 9,671 13,468
Payroll Taxes 21,633 19,079
Office Expenses 12,996 5,167
Outside and Professional Services 66,478 143,910
Rent 23,245 27,843
Salaries - Officers 123,750 131,250
Salaries - Others 143,603 155,523
Depreciation & Amortization 29,112 111,947
Bank Charges & Interest (net) 15,700 74,525
Insurance 17,428 16,063
Equipment Rental 3,215 2,381
Seminars & Conventions 2,095 3,470
MMDS Lease Payments 12,050 25,675
Tower Lease Payments 0 8,606
FCC Filing Fees 6,100 10,310
Telephone Expense 27,388 27,152
Computer Expense 2,696 3,251
Other Taxes & Licenses 1,749 1,548
Miscellaneous Expense 3,147 952
----- -----
Total General & Administrative Expenses 557,730 830,666
State Income Taxes 800 800
--- ---
Net Income (Loss) (133,014) (640,760)
========= ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
Sep-95 Sep-96
------ ------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income (Loss) (133,014) (640,760)
Adjustments:
Depreciation and Amortization 29,112 111,947
(Increase) in Licenses and Other (383,540) (9,229)
Changes in current accounts 259,467 (12,242)
Increase in Notes Receivable (9,816) (95,746)
------ -------
Net Cash Required by Operating Activities (237,791) (646,030)
INVESTING ACTIVITIES
Cost of Securities Sold 206,719 0
Use of Fixed Assets to pay loan 0 16,030
Purchase of Fixed Assets (5,664) 0
------ -----
Net Cash Required by Investing Activities 201,055 16,030
FINANCING ACTIVITIES
Loans 139,500 647,234
Repayment of Loans (94,620) (63,066)
Use of Stock for Acquisitions 0 60,994
------- ------
Net Cash Provided (Required) by Investing
Activities 44,880 645,162
Increase (Decrease) in Cash and Cash
Equivalents 8,144 15,162
Cash and Cash Equivalents at
Beginning of Period 31,388 7,019
------ -----
Cash and Cash Equivalents at
End of Period 39,532 22,181
====== ======
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
MICRO-LITE TELEVISION
A NEVADA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE AND THREE MONTHS ENDED
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principals for complete
financial statements. In the opinion of the Company's management, all
adjustments (consisting of normal accruals) considered necessary for a fair
presentation of these financial statements have been included. The Company's
activities to date have been purely developmental and the Company has not yet
commenced significant commercial operations.
NOTE 2: CAPITALIZATION
The Company was incorporated in the State of Nevada on July 24, 1984 and
authorized 200,000,000 shares of $0.001 par value common stock. On March 16,
1994 the Company effected a 1 share for 30 share reverse stock split. The split
reduced the total outstanding shares from 32,272,000 to 1,075,807. On March 16,
1994 the Company issued 6,500,000 shares of post reverse-split stock to Marrco
Communications, Inc. in the conjunction with the purchase of all of Marrco's
assets and the assumption of all of Marrco's liabilities.
The Company currently is seeking a majority approval of its shareholders to
approve a plan of reorganization which will include a name change and a
recapitalization of the Company. This recapitalization, if approved, would
convert the existing outstanding Common Stock of the Company into a new class of
Preferred Stock. Additionally, the total number of shares of stock authorized by
the Company would be reduced to 65,000,000 shares, comprised of 50,000,000
shares of Common Stock and 15,000,000 shares of serial preferred stock both with
a par value of $0.001. (See ITEM 5. Other Items. Proposed Recapitalization and
Name Change).
NOTE 3: RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their business
interests. The Company has not formulated a policy for the resolution of such
conflicts.
At September 30, 1996 the Company owed $618,945 to related parties for loans and
sales to and payments made on behalf of the Company. The Company computes
interest on the balance due to related parties at a rate of twelve percent (12%)
per annum. Interest expense of $50,133 has been accrued by the Company in the
nine months ended September 30, 1996. The total balance due to related parties
was equal to $571,560 as of December 31, 1995.
NOTE 4: INCOME TAXES
The Company has available at September 30, 1996, net operating loss
carryforwards of approximately $2.7 million which may provide future tax
benefits expiring in June of 2008.
<PAGE>
NOTE 5: INVESTMENT SECURITY
The investment consists of 909 shares of the common stock in CAI Wireless
Systems, Inc. ("CAI") as of December 31, 1995 and September 30, 1996.
NOTE 6: STOCK OPTION PLAN AND WARRANTS
Since the purchase of Marrco Communications, Inc., the Company has set aside
2,500,000 shares of its common stock for an incentive stock option plan that was
previously in place and fully-vested with certain employees of Marrco
Communications that continued their service in working for the Company. The
exercise is $.88 per share. All of the options are fully vested. None of the
stock options have been exercised. The options expire December 28, 1998. At
September 30, 1996, there are outstanding 66,667 warrants to purchase 66,667
shares of common stock at $4.50 per share. The warrants expire on July 16, 1997.
There are also 300,000 redeemable Class "B" common stock purchase warrants to
purchase common stock at a price of $2.00 per share and 25,000 redeemable Class
"C" common stock purchase warrants with a price of $4.00 per share. These
warrants expire March 31, 1999 and couldn't be exercised prior to June 16, 1994.
NOTE 7: SUBSEQUENT EVENTS
See "PART II - Item 5. Other Information".
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company's loss for the three months ended September 30, 1996 was equal
to $347,429 compared to a loss of $99,461 for the three months ended September
30, 1995. The loss for the current quarter was attributable to the Company's
continuing General and Administrative Expenses of which salaries, professional
services and depreciation and amortization made up the largest amount. Total
salaries of $91,316 were paid or accrued for the three months ended September
30, 1996. This equated to 26.5% of the total expenses for the quarter which
totaled $344,029. This is compared to salaries of $89,245, or 42.9% of the
amount of expenses for the three months ended September 30, 1995. The total
expense for professional services, including legal, accounting, engineering and
financial advisors, totaled $64,282 for the three months ended September 30,
1996. This is a substantial increase from the amount from the same period in
1995 of $35,077. This increase is primarily attributable to the legal expenses
associated with the various acquisitions being pursued by the Company as well as
the expense of continuing to pursue financing. Professional services expense
amounted to 18.6% of total General and Administrative Expenses for the quarter
ended September 30, 1996 and 16.8% for the quarter ended September 30, 1995.
Interest expense increased from $14,479 in the quarter ended September 30, 1995
to $69,757 in the quarter ended September 30, 1996. This increase is due to the
interest accruing on the convertible notes that are currently outstanding (See
Part II - OTHER INFORMATION, Item 5. Convertible Debentures.) as well as the
accrual of interest on notes to related parties (See Note 3 in the Notes to
Condensed Consolidated Financial Statements).
The Company's loss for the nine months ended September 30, 1996 was equal
to $640,760 compared to a loss of $133,014 for the nine months ended September
30, 1995. The loss for the nine month period was attributable to the Company's
continuing General and Administrative Expenses of which salaries, professional
services and depreciation and amortization made up the largest amount. Total
salaries of $286,773 were paid or accrued for the nine months ended September
30, 1996. This equated to 34.9% of the total expenses for the period which
totaled $831,565. This is compared to salaries of $267,353, or 47.9% of the
amount of expenses for the nine months ended September 30, 1995. The total
expense for professional services, including legal, accounting and engineering,
totaled $143,910 for the nine months ended September 30, 1996. This is a
substantial increase from the amount from the same period in 1995 of $66,478.
This increase is primarily attributable to the legal expenses associated with
the various acquisitions being pursued by the Company as well as expenses
related to financial advisors assisting the Company in seeking financing for
continued operations and development. Professional services expense amounted to
17.3% of total General and Administrative Expenses for the nine months ended
September 30, 1996 and 11.9% for the nine months ended September 30, 1995.
Interest expense increased from $15,700 in the nine months ended September 30,
1995 to $75,060 in the nine months ended September 30, 1996. This increase is
due to the interest accruing on the convertible notes that are currently
outstanding (See Part II - OTHER INFORMATION, Item 5. Convertible Debentures.)
as well as the accrual of interest on notes to related parties (See Note 3 in
the Notes to Condensed Consolidated Financial Statements). Losses are expected
to continue throughout the development stage of the Company and into the
foreseeable future.
The Company has reported no revenues for the three month period ending
September 30, 1996. This is compared to total revenues of $250,000 in the
quarter ended September 30, 1995 which was generated from the sale of the
Company's ITFS leases in Des Moines, Iowa. During the nine month period ending
September 30, 1996, the Company reported total revenue of $300,000 which was a
result of the Company selling its interests in the Bowling Green, Kentucky
market. The gross profit on this sale was $190,106. In the nine month period
ending September 30, 1995, the Company had posted total revenue of $506,500 with
<PAGE>
a gross profit of $490,241. The Company had also posted a profit of $60,275 on
sales of securities in the nine months ended September 30, 1995 and had written
off worthless licenses for a $125,000 deduction against income. There were no
such items of income or loss in the nine month period ending September 30, 1996.
The Company has continued to operate with a working capital deficit through
the second quarter of 1996. As of September 30, 1996, the Company's current
liabilities of $2,092,564 exceeded its current assets of $120,000 by $1,972,564.
Of this negative working capital, $618,945 represents amounts owed to related
parties. The net working capital deficit, excluding payables to related parties,
is equal to $1,353,619. The Company believes that the majority of the current
liabilities can be settled by the issuance of its common stock or by the
assignment of the preferred stock in World Interactive Network, Inc. ("WIN-TV")
which the Company expects to have after the closing of its asset sale to WIN-TV.
(See "Part II - OTHER INFORMATION, Item 5. Other Information. WIN-TV Asset
Sale.")
The Company continues to explore routes of financing to begin its
development plans and has retained a financial advisor, Rickel & Associates,
Inc. of New York City, to assist in its financing efforts.
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. Other Information.
WIN-TV Asset Sale. As previously disclosed in the Form 10-Q dated September
30, 1995 and the Form 10-K dated December 31, 1995, the Company has entered into
an Agreement to sell certain LPTV and MMDS channel rights to World Interactive
Television, Inc. ("WIN-TV"). An Agreement was executed between the parties in
August of 1995. The parties substantially altered the Agreement between them and
executed a revised contract, which replaced the original agreement, on February
9, 1996. The sale will include one LPTV station in each of the following
markets: Columbia, KY; Idaho Falls, ID; Marshalltown, IA; Davenport, IA and Des
Moines, IA. The sale will also include the Company's MMDS holdings in Traverse
City, MI, Augusta, ME and Wausau, WI. The agreement will close upon the
completion of WIN's pending merger with Struthers Industries, Inc. (NASDAQ OTC
Exchange: "STIG") and the consolidated company's subsequent listing on the
NASDAQ National Market System Exchange. The Company will receive 274,000 shares
of WIN-TV Cumulative Convertible Preferred Series "C" stock with a liquidation
value of $4,567,580. Currently, 249,000 shares of this stock are being held in
escrow in the name of the Company. The remaining 25,000 shares are being held
for distribution to fulfill a commission obligation payable by the Company to an
unrelated third party. The Company intends to assign a significant amount of the
WIN stock to certain creditors to satisfy some of its current liabilities. Any
stock remaining, the Company anticipates distributing to its shareholders in a
non-dividend distribution. The total amount of this distribution is expected to
equal approximately $3,000,000. On September 6, 1996, Struthers announced the
completion of its merger agreement with WIN-TV. The application to be listed on
the NASDAQ NMS of the new company, WINCO, Inc., is pending.
Beaumont Transaction. On April 17, 1996, the Company entered into an
agreement with Beaumont Broadcasting Corporation ("BBC") whereby the Company and
BBC agreed to form a Texas limited liability company, Micro-Lite Television of
Beaumont, LLC (the "LLC"), for purposes of owning and operating a wireless cable
system in the Beaumont, Texas market. The Company has paid $5,000 for a 1%
interest in the LLC and BBC has contributed the licenses and leases for 23
wireless cable channels in the market as well as a significant amount of assets,
including transmission equipment, for the remaining 99% of the LLC. BBC has
granted the Company an option to purchase 79% of the LLC for a purchase price of
$4M, and a second purchase option for the remaining 20% of the LLC for an
additional $1M. The Company has entered into a Management Agreement with the LLC
and is currently operating and managing the Beaumont system thereunder. The
Management Agreement calls for the Company to manage, operate and fund the
system with any funds being used therefor to be booked as a note payable from
the LLC to the Company. As of September 30, 1996, the Company has expended
$80,346 in direct expenses under the Management Agreement and, as such, has
included a note receivable in that amount on its balance sheet as of September
30, 1996.
Convertible Debentures. Beginning in February of 1996, the Company began a
Private Placement of convertible debentures. Two types of debentures have been
offered. As of September 30, 1996 the Company has raised a total of $410,000
from eleven parties in this Private Placement offering. The terms of the first
debentures call for a Promissory Note in the amount of the sum paid to the
Company. This note is bifurcated into an interest bearing note carrying a rate
of 12% per annum for a term ending upon the Company receiving financing in
excess of Three Million Dollars. This portion of the note, which amounts to
92.5% of the amount paid to the Company may be prepaid by the Company. The
remaining 7.5% of the note is in the form of a Non-Negotiable 12% Convertible
Promissory Note which is convertible, at the option of the payee, into Common
Stock of the Company at a rate of $.25 per share. A total of $275,000 has been
<PAGE>
raised under these terms. Should the conversion option be exercised by all of
the holders of this first type of debenture, the Company would issue a total of
82,500 shares of its Common Stock to satisfy $20,625 of the debt which
represents the convertible portion of this first type of debenture. The second
type of debenture being offered by the Company represents a wholly convertible
Promissory Note which is convertible, at the option of the payee, into the
Company's Common Stock at a rate of $.50 per share. The Company has raised
$135,000 under these terms. Should the conversion option be exercised by all of
the holders of this first type of debenture, the Company would issue a total of
270,000 shares of its Common Stock to satisfy all $135,000 of this second type
of convertible debt. The Company has accrued total interest expense of $14,573
on these notes as of September 30, 1996. Should the conversion option be
exercised by all of the holders both of these types of notes, the Company would
issue a total of 352,500 shares of its Common Stock to satisfy $155,625 of debt.
Cardiff Letter of Intent. On September 5, 1996, the Company entered into a
Letter of Intent with Cardiff Broadcasting Group, Inc. ("Cardiff") to acquire
substantially all of the assets of Cardiff in exchange for $7M in convertible
preferred stock. The Cardiff assets include an operating wireless cable system
in Yuma, Arizona and all available wireless cable channels in the Tri-Cities
area of Washington state (this area includes Kennewick, Pasco and Richmond,
Washington). The Cardiff system in Yuma currently serves approximately 1,400
subscribers. The Letter of Intent calls for the Company to authorize and issue a
new class of preferred stock with a par value of $10.00 per share. Each share of
preferred stock would be convertible into $10.00 of common stock upon an equity
offering conducted by the Company. The Company would issue 700,000 shares of
this preferred stock to Cardiff, with 600,000 shares being distributed to
Cardiff shareholders and 100,000 shares being held in escrow to settle certain
liabilities that would not be assumed by the Company under the terms of the
Letter of Intent. The Company and Cardiff are currently working towards the
execution of a Definitive Agreement to complete the proposed transaction.
Proposed Recapitalization and Name Change. The Company is currently seeking
majority consent of its shareholders to approve a plan of reorganization which
includes an amendment to the Company's Articles of Incorporation to change the
name of the Company to Superior Wireless Communications, Inc. The plan of
reorganization, if approved, converts the existing shares of Common Stock in the
Company for a newly created class of preferred stock, Class "A" Cumulative
Convertible Preferred stock. This preferred stock would have a preferential
liquidation value of $1.50 per share and would carry a ten percent (10%)
dividend. After a period of no more than two years, the Class "A" preferred
stock would convert back into Common Stock of the Company at a ten percent (10%)
discount to the market price of the Company's Common Stock at that time. The
Company feels that this plan of reorganization will make it a more attractive
candidate to receive the substantial financing that is necessary for the Company
to move forward with its aggressive growth and development plans. Other items
that are sought to be approved in this document are the amendment of the
Company's stock option plan such that retired employees may still continue to
have the ability to exercise their stock options under the plan. Additionally,
in order to facilitate the Company's recapitilization plans and acquisition
negotiations, the capital structure of the Company will be changed such that the
total number of authorized shares of common stock would be equal to 50,000,000
and the total number of preferred shares of stock authorized for issuance by the
Company would be equal to 15,000,000. The par value of both classes of stock
will be $0.001. Currently, the Company has 200,000,000 shares of common stock
with a par value of $0.001 authorized and 6,004,836 shares outstanding. (See
Exhibit A).
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
Exhibits
Exhibit A Statement of Unanimous Consent of Board of Directors and
Statement of Majority Consent of Shareholders
Note: This document is for informational purposes only and, to
date, has not been signed by a majority of shareholders.
Reports of Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 22, 1996
MICRO-LITE TELEVISION
s:/ Jon H. Marple
Jon H. Marple, President and Chairman
s:/ Mary E. Blake
Mary E. Blake, Vice President
and Chief Financial Officer
<PAGE>
Exhibit A
Statement of Unanimous Consent of Board of Directors
and Statement of Majority Consent of Shareholders
Note: This document is for informational purposes only and, to date, has not
been signed by a majority of shareholders.
<PAGE>
===============================================================================
MICRO-LITE TELEVISION, INC.
- -------------------------------------------------------------------------------
STATEMENT OF UNANIMOUS CONSENT
OF
BOARD OF DIRECTORS
AND
STATEMENT OF MAJORITY CONSENT
OF
SHAREHOLDERS
===============================================================================
<PAGE>
_________This STATEMENT OF UNANIMOUS CONSENT OF DIRECTORS when executed by
the Directors of the Corporation in accordance with the provisions of Section
78.315 of Chapter 78 of the Nevada Revised Statutes, will become effective and
will have the same force and effect as if all such Directors were present and
acting at a meeting duly noticed and held for the purpose of adopting the
resolutions and taking the corporate action hereinafter set forth.
_________This STATEMENT OF MAJORITY CONSENT OF SHAREHOLDERS when executed
by a majority of the Shareholders of the Corporation in accordance with the
provisions of Section 78.320 of Chapter 78 of the Nevada Revised Statutes, will
become effective on the latest date set opposite the signature of each
Shareholder and will have the same force and effect as if such Shareholders were
present and acting at a meeting duly noticed and held for the purpose of
adopting the resolutions and taking the corporate action hereinafter set forth.
AMENDMENTS TO ARTICLES OF INCORPORATION
_________Article I of the Articles of Incorporation is hereby amended to
read as follows:
The name of this corporation is Superior Wireless Communications, Inc.
Article IV of the Articles of Incorporation is hereby amended to read as
follows:
The aggregate number of shares of all classes of capital stock which
the Corporation has authority to issue is 65,000,000 of which 50,000,000
are to be shares of common stock, $.001 par value per share, and of which
15,000,000 are to be shares of serial preferred stock, $.001 par value per
share. The shares may be issued by the Corporation from time to time as
approved by the board of directors of the Corporation without the approval
of the stockholders except as otherwise provided in this Article V or the
rules of a national securities exchange if applicable. The consideration
for the issuance of the shares shall be paid to or received by the
Corporation in full before their issuance and shall not be less than the
par value per share. The consideration for the issuance of the shares shall
be cash, services rendered, personal property (tangible or intangible),
real property, leases of real property or any combination of the foregoing.
In the absence of actual fraud in the transaction, the judgment of the
board of directors as to the value of such consideration shall be
conclusive. Upon payment of such consideration such shares shall be deemed
to be fully paid and nonassessable. In the case of a stock dividend, the
1
<PAGE>
part of the surplus of the Corporation which is transferred to stated
capital upon the issuance of shares as a stock dividend shall be deemed to
be the consideration for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series
(if any) of capital stock, and the qualifications, limitations or
restrictions thereof, are as follows:
A. Common Stock. Except as provided in this Certificate, the
holders of the common stock shall exclusively posses all voting power.
Subject to the provisions of this Certificate, each holder of shares
of common stock shall be entitled to one vote for each share held by
such holders.
Whenever there shall have been paid, or declared and set aside
for payment, to the holders of the outstanding shares of any class or
series of stock having preference over the common stock as to the
payment of dividends, the full amount of dividends and sinking fund or
retirement fund or other retirement payments, if any, to which such
holders are respectively entitled in preference to the common stock,
then dividends may be paid on the common stock, and on any class or
series of stock entitled to participate therewith as to dividends, out
of any assets legally available for the payment of dividends, but only
when and as declared by the board of directors of the Corporation.
In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid, or declared and set
aside for payment, to the holders of the outstanding shares of any
class having preference over the common stock in any such event, the
full preferential amounts to which they are respectively entitled, the
holders of the common stock and of any class or series of stock
entitled to participate therewith, in whole or in part, as to
distribution of assets shall be entitled, after payment or provision
for payment of all debts and liabilities of the Corporation, to
receive the remaining assets of the Corporation available for
distribution, in cash or in kind.
Each share of common stock shall have the same relative powers,
preferences and rights as, and shall be identical in all respects
with, all the other shares of common stock of the Corporation.
B. Serial Preferred Stock. Except as provided in this
Certificate, the board of directors of the Corporation is authorized,
by resolution or resolutions from time to time adopted, to provide for
the issuance of serial preferred stock in series and to fix and state
the powers, designations, preferences and relative, participating,
optional or other special rights of the shares of each such series,
and the qualifications, limitation or restrictions thereof, including,
but not limited to determination of any of the following:
(1) the distinctive serial designation and the number of
shares constituting such series;
(2) the rights in respect of dividends, if any, to be paid
on the shares of such series, whether dividends shall be
cumulative and, if so, from which date or dates, the payment or
date or dates for dividends, and the participating or other
special rights, if any, with respect to dividends;
(3) the voting powers, full or limited, if any, of the
shares of such series;
(4) whether the shares of such series shall be redeemable
and, if so, the price or prices at which, and the terms and
conditions upon which such shares may be redeemed;
2
<PAGE>
(5) the amount or amounts payable upon the shares of such
series in the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
(6) whether the shares of such series shall be entitled to
the benefits of a sinking or retirement fund to be applied to the
purchase or redemption of such shares, and, if so entitled, the
amount of such fund and the manner of its application, including
the price or prices at which such shares may be redeemed or
purchased through the application of such funds;
(7) whether the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or classes
or 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 rate or rates of exchange,
and the adjustments thereof, if any, at which such conversion or
exchange may be made, and any other terms and conditions of such
conversion or exchange;
(8) the subscription or purchase price and form of
consideration for which the shares of such series shall be
issued; and
(9) whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued shares
of serial preferred stock and whether such shares may be reissued
as shares of the same or any other series of serial preferred
stock.
Each share of each series of serial preferred stock shall have
the same relative powers, preferences and rights as, and shall be
identical in all respects with, all the other shares of the
Corporation of the same series, except the times from which dividends
on shares which may be issued from time to time of any such series may
begin to accrue.
EXCHANGE OF SERIES A PREFERRED STOCK FOR COMMON STOCK
RESOLVED, that each of the 6,004,836 shares of presently issued and
outstanding common stock of the Corporation be exchanged for one share of
preferred stock designated as Class A Convertible Cumulative Preferred Stock
(the "Class A Preferred Stock"), par value of $.001 per share, with the
following rights and preferences:
1. Record Date. All common stockholders of record at the close of
business in New York, NY on the 17th day of October, 1996 ("the Record
Date") will exchange each share of common stock held for one share of Class
A Preferred Stock.
2. Dividends. The holders of the Class A Preferred Stock ("Holders")
shall be entitled to cumulative preferential dividends, when, as and if
declared by the Board of Directors quarter annually on November 15,
February 15, May 15 and August 15 each year in an amount equal to ten
percent (10%) per annum of the liquidation preference per share of $1.50.
In the event the Corporation has not filed a registration statement
relating to the Conversion Shares (as hereinafter defined) under the
Securities Act of 1933, as amended (the "Act"), after the Record Date for
the exchange of the Class A Preferred Stock by the Corporation and such
registration statement is not effective under the Act on the Conversion
Date, the cumulative preferential dividend rate shall be increased to
twelve (12%) per annum of the liquidation preference per share of $1.50.
3
<PAGE>
Dividends may be paid (to the extent permissible under the Nevada Revised
Statutes) to the Holders in cash or, at the option of the Company, in
shares (the "Dividend Shares") of common stock of the Corporation, par
value $.001 per share (the "Common Stock") (based upon the average last
sale price of a share of Common Stock for the five (5) trading days
preceding the record date for a particular dividend) provided that such
Dividend Shares are covered by a current registration statement which has
been declared effective under the Act.
3. Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation,
each share of Class A Preferred Stock shall be entitled to receive $1.50
per share.
4. Voting Rights. The Holders shall be entitled to one vote for each
five shares held upon any matters to which holders of common stock are
entitled to vote at the same time and in the same manner as the common
stockholders.
5. Redemption. The Class A Preferred Stock is not redeemable by the
Corporation.
6. Conversion Into Common Stock. (a) Upon the earlier of: (i) 24
months after the Record Date for the exchange of Class A Preferred Stock
for common stock or (ii) 14 months after the effective date of a
registration statement under the Act covering a primary offering of not
less than $10,000,000 of common stock of the Corporation (the "Conversion
Date") and with no other action required by the Corporation or the Holder,
the shares of Class A Preferred Stock held by each Holder shall be
converted into the next highest number of whole shares of the Corporation's
Common Stock (the "Conversion Shares") as shall equal $1.50 plus all
accrued and unpaid dividends per share divided by 90% of the average daily
closing prices for the 30 consecutive trading days commencing with the 35th
trading day before the Conversion Date (the "Conversion Price") subject to
adjustment as set forth below.
(b) The Conversion Price shall be subject to adjustment as
follows:
(i) In the event that the Corporation shall issue or sell
shares of its Common Stock (except for shares issuable upon
exercise or conversion of securities outstanding or issuable by
the Company as of the date hereof) at a price per share less that
the then current Conversion Price (the "New Issue Price"), the
Conversion Price shall be reduced to the greater of the New Issue
Price or $1.25 per share; and
(ii) In the event that the Corporation's registration
statement under the Act registering the Conversion Shares is not
effective on the Conversion Date, the Conversion Price shall be
subject to an additional reduction of 10% for each 90-day delay
in the effective date of such registration statement, provided
however that in no event shall the Conversion Price be less than
$1.25 per share.
(d) Promptly after the receipt of certificates representing Class
A Preferred Stock and surrender of Class A Preferred Stock, the
Corporation shall issue and deliver, or cause to be issued and
delivered, to the Holder a certificate or certificates for the number
of next highest number of whole shares of Common Stock issuable upon
the conversion of such Class A Preferred Stock. No fractional shares
shall be issued upon conversion of the Class A Preferred Stock into
shares of Common Stock. To the extent permitted by law, the conversion
shall be deemed to have been effected as of the close of business on
4
<PAGE>
the Conversion Date (or on the next preceding business day if the
Conversion Date is not a business day) and at that time the rights of
the Holder, as such Holder, shall cease, and the holder shall become
the Holder of record of Conversion Shares.
(e) Upon any liquidation or winding up of the Corporation, the
right of conversion of the Class A Preferred Stock shall terminate at
the close of business on the last full business day before the date
fixed for payment of the amount distributable in liquidation of the
Class A Preferred Stock.
7. Registration Rights. Unless sooner registered, the Corporation
shall file a registration statement registering the Conversion Shares
issuable to the Holders of Class A Preferred Stock. In the event that the
registration statement is not effective on the Conversion Date, the
Conversion Price will be reduced as provided by Subsection 6(b) hereof, and
dividends payable on the Class A Preferred Stock will be increased as
provided by Subsection 2 hereof.
8. Rank. With respect to the payment of dividends and upon
liquidation, the shares of the Class A Preferred Stock shall rank junior to
any other shares of Preferred Stock and senior to the shares of Common
Stock of the Corporation.
BE IT FURTHER RESOLVED, that the proper officers of this Corporation be,
and each hereby is, authorized, empowered and directed, to prepare, execute and
deliver to, or upon the order of, each holder of record of shares of common
stock, a certificate or certificates evidencing the ownership of the shares of
Class A Preferred Stock;
BE IT FURTHER RESOLVED, that upon issuance thereof, each of said shares of
Class A Preferred Stock of the Corporation be, and each such share hereby is,
vested in each holder of record of shares of common stock as the owner thereof
as fully paid and non-assessable shares of Class A Preferred Stock of the
Corporation; and
BE IT FURTHER RESOLVED, that the President and the Secretary or Assistant
Secretary of the Corporation be, and each of them hereby is, authorized to
execute and deliver such documents and instruments and to do all acts and things
to effectuate the intent of the foregoing resolutions.
AMENDMENT TO MICRO-LITE TELEVISION, INC. STOCK OPTION PLAN
RESOLVED, that Section II of the Micro-Lite Television, Inc. Stock Option
Plan effective the 1st day of January, 1993 shall be amended so that
subparagraph H reads as follows:
"Plan" shall mean the Superior Wireless Communications, Inc.
Stock Option Plan.
BE IT FURTHER RESOLVED, that the Micro-Lite Television, Inc. Stock Option
Plan shall be amended by deleting therefrom the following section:
VIII. TERMINATION OF EMPLOYMENT
Except as provided in Article IX below, if a Participant ceases
to be employed by the Company, his Options shall terminate
immediately; provided, however, that if a Participant's cessation of
employment with the Company is due to his retirement with the consent
of the Company, the Participant may, at any time within three (3)
months after such cessation of employment, exercise his Options to the
extent that he was entitled to exercise them on the date of cessation
of employment, but in no event shall any Option be exercisable more
than ten (10) years from the date it was granted. The Committee may
cancel an Option during the three (3) month period referred to in this
5
<PAGE>
paragraph, if the Participant engages in employment or activities
contrary, in the opinion of the Committee, to the best interests of
the Company. The Committee shall determine in each case whether a
termination of employment shall be considered a retirement with the
consent of the Company, and, subject to applicable law, whether a
leave of absence shall constitute a termination of employment. Any
such determination of the Committee shall be final and conclusive,
unless overruled by the Board.
BE IT FURTHER RESOLVED, that the President and the Secretary of the
Corporation be, and each of them hereby is, authorized to execute and deliver
such documents and instruments and to do all acts and things to effectuate the
intent of the foregoing resolution.
EXECUTED in multiple counterparts by each of the Directors of the
Corporation and the holders of a majority of the outstanding shares of capital
stock entitled to vote as of the date set below their respective signatures.
DIRECTORS
/s/ Jon H. Marple /s/ Mary Blake
Jon H. Marple, Director Mary Blake, Director
Date: October 9, 1996 Date: October 9, 1996
/s/ John C. Spradley /s/ Charles Bartell
John C. Spradley, III, Director Charles Bartell, Director
Date: October 9, 1996 Date: October 9, 1996
/s/ Jon Richard Marple /s/ Brooks M. Freeman
Jon Richard Marple, Director Brooks M. Freeman, Director
Date: October 9, 1996 Date: October 9, 1996
/s/ Jeffrey R. Matsen
Jeffrey R. Matsen, J.D., Director
Date: October 9, 1996
6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Micro Lite Television September 30, 1996 financial
statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000793986
<NAME> Micro Lite Television
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 22,181
<SECURITIES> 906
<RECEIVABLES> 96,913
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 120,000
<PP&E> 355,494
<DEPRECIATION> (165,835)
<TOTAL-ASSETS> 1,687,300
<CURRENT-LIABILITIES> 2,092,564
<BONDS> 0
0
0
<COMMON> 6,005
<OTHER-SE> (580,333)
<TOTAL-LIABILITY-AND-EQUITY> 1,687,300
<SALES> 300,000
<TOTAL-REVENUES> 300,600
<CGS> 109,894
<TOTAL-COSTS> 109,894
<OTHER-EXPENSES> 830,666
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (639,960)
<INCOME-TAX> 800
<INCOME-CONTINUING> (640,760)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (640,760)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
