U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
___
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
___ 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 1995
___
___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________
Commission file number 0-5887
RTI INC.
(Exact name of small business issuer as specified in its charter)
NEW YORK 11-2163152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
108 Lake Denmark Road, Rockaway, New Jersey 07866
(Address of principal executive offices) (Zip Code)
(201) 625-8400
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section l3 or l5(d) of the Exchange Act during the past 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 ___
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
July 21, 1995 - 1,072,688 shares of common stock
Transitional Small Business Disclosure Form Yes __ No x
Exhibit Index on sequentially numbered page 17
Total number of pages 21
-1-
<PAGE>
Part I. Financial Information
Item I. Financial Statements
RTI Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, December 31,
1995 1994
Assets (unaudited)
----------------------------------------- ----------- -----------
Current:
Cash and cash equivalents $ 65,217 $ 172,198
Accounts receivable, net of allowance
for doubtful accounts of $24,000
and $10,000 494,288 541,742
Prepaid expenses and other 71,664 103,975
Restricted deposits (Notes 2 and 11) 15,771 39,028
----------- ----------
Total current assets 646,940 856,943
Property, plant, equipment and Cobalt 60,
net of accumulated depreciation and
amortization 7,071,245 6,865,198
Certificates of financial assurance -
restricted (Note 3) 150,000 150,000
Deferred financing costs (Note 4) 43,324 48,224
----------- -----------
Total assets $ 7,911,509 $ 7,920,365
=========== ===========
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
RTI Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, December 31,
1995 1994
Liabilities and Stockholders' Equity (unaudited)
----------------------------------------- ----------- ----------
Current:
Current portion of long-term debt
(Note 7) $ 824,780 $ 607,600
Accounts payable 165,945 235,172
Accrued expenses (Note 6) 431,747 523,879
----------- ----------
Total current liabilities 1,422,472 1,366,651
Long-term debt, net of current portion
and discount of $55,000 and $66,000
(Notes 7 and 10) 2,272,506 2,021,713
Other liabilities (Notes 8 and 11) 798,193 836,510
----------- ----------
Total liabilities 4,493,171 4,224,874
----------- ----------
Commitments and contingencies
(Notes 5,6,7,8,9,10,11 and 13)
Stockholders' equity (Note 15):
Preferred stock, $.05 par value -
shares authorized 2,000,000;
no shares issued and outstanding -- --
Common stock, $.08 par value -
shares authorized 15,000,000;
issued and outstanding, 1,072,688 85,815 86,175
Additional paid-in capital 16,014,622 16,014,622
Deficit (12,682,099) (12,405,306)
----------- -----------
Total stockholders' equity 3,418,338 3,695,491
----------- -----------
Total liabilities and
stockholders' equity $ 7,911,509 $ 7,920,365
=========== ===========
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
RTI Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
Three Months Ended June 30,
1995 1994
---------- ----------
Net sales $1,034,310 $1,180,113
Cost of sales 722,038 590,779
---------- ----------
Gross profit 312,272 589,334
Operating expenses:
Selling, general and
administrative expenses 419,144 414,230
---------- ----------
Income (loss) from operations (106,872) 175,104
Other income (expense):
Investment income, net 2,700 2,304
Expenses of Salem facility,
including interest expense of
$17,161 (Notes 5 and 7) -- (50,906)
Expenses of Rockaway Industrial
Park - Parcel I, including
interest expense of $5,500
in 1995 and 1994 (Notes 9 and 10) (22,874) (33,888)
Other interest expense (Note 12) (71,302) (13,272)
---------- ----------
Income (loss) before taxes on income (198,348) 79,342
Taxes on income -- 1,232
---------- ----------
Net income (loss) $ (198,348) $ 78,110
========== ==========
Net income (loss) per share $ (.18) $ .07
========== ==========
Weighted average number of common
shares outstanding (Notes 14 and 15) 1,072,688 1,072,688
========== ==========
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
RTI Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
Six Months Ended June 30,
1995 1994
---------- ----------
Net sales $2,156,790 $2,326,266
Cost of sales 1,427,265 1,135,918
---------- ----------
Gross profit 729,525 1,190,348
Operating expenses:
Selling, general and
administrative expenses 826,348 824,547
---------- ----------
Income (loss) from operations (96,823) 365,801
Other income (expense):
Investment income, net 6,594 5,368
Expenses of Salem facility,
including interest expense of
$37,081 (Notes 5 and 7) -- (105,493)
Expenses of Rockaway Industrial
Park - Parcel I, including
interest expense of $11,000
in 1995 and 1994 (Notes 9 and 10) (56,877) (66,477)
Other interest expense (Note 12) (129,687) (29,144)
---------- ----------
Income (loss) before taxes on income (276,793) 170,055
Taxes on income -- 3,030
---------- ----------
Net income (loss) $ (276,793) $ 167,025
========== ==========
Net income (loss) per share $ (.26) $ .16
========== ==========
Weighted average number of common
shares outstanding (Notes 14 and 15) 1,072,688 1,072,678
========== ==========
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
RTI Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
( Note 16 )
Six Months Ended June 30,
1995 1994
Cash flows from operating activities: --------- ---------
Net income (loss) $(276,793) $ 167,025
--------- ---------
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 427,451 348,230
Allowance for bad debt 14,500 --
Discounting of note payable 11,004 --
(Increase) decrease in:
Accounts receivable 32,954 (8,949)
Restricted deposits 23,257 78,844
Prepaid expenses and other 37,211 ( 7,898)
Certificates of Financial Assurance -- (75,000)
Increase (decrease) in:
Accounts payable (69,227) (67,060)
Accrued expenses (92,132) (217,056)
--------- ---------
Total adjustments 385,018 51,111
--------- ---------
Net cash provided by
operating activities 108,225 218,136
---------- ---------
Cash flows from investing activities:
Purchases of fixed assets (36,112) (49,609)
Decrease in short-term investments -- 275,801
--------- ---------
Net cash provided by (used in)
investing activities (36,112) 226,192
--------- ---------
Cash flows from financing activities:
Payments on long-term debt (140,417) (280,483)
Payments on other liabilities (38,317) (151,417)
Payments for fractional shares
of common stock (Note 15) (360) --
Proceeds from exercise of stock options -- 219
--------- ---------
Net cash (used in)
financing activities (179,094) (431,618)
--------- ---------
Net increase (decrease) in cash
and cash equivalents (106,981) 12,647
Cash and cash equivalents,
beginning of year 172,198 379,421
--------- ---------
Cash and cash equivalents,
end of period $ 65,217 $ 392,068
========= =========
See accompanying notes to consolidated financial statements.
-6-
<PAGE>
RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of June 30, 1995 and 1994, and for
the three and six months then ended is unaudited)
1. Unaudited Information
In the opinion of management of RTI Inc. (with its subsidiaries the "Company"),
the accompanying unaudited consolidated financial statements include all
adjustments necessary to present fairly, in all material respects, the Company's
financial position as of June 30, 1995, its results of operations for the three
months and six months ended June 30, 1995 and 1994, and its cash flows for the
six months ended June 30, 1995 and 1994. Results of operations for the six month
period ended June 30, 1995 presented are not necessarily indicative of the
results to be expected for the year ending December 31, 1995. Information
included in the consolidated balance sheet as of December 31, 1994 has been
derived from the Company's audited consolidated financial statements in its
Annual Report on Form 10-KSB for the year ended December 31, 1994, to which
reference is made. Certain information included in audited financial statements
and related notes prepared in accordance with generally accepted accounting
principles may have been condensed or omitted.
2. Restricted Deposits
Restricted deposits are funds held in accordance with an Administrative Consent
Order of the New Jersey Department of Environmental Protection (the "DEP") (Note
11).
3. Certificates of Financial Assurance
In accordance with Nuclear Regulatory Commission ("NRC") regulations, the
Company must provide a $75,000 Certificate of Financial Assurance for each NRC
licensed facility. The Company has elected to use trust funds which are on
deposit in restricted bank accounts.
4. Deferred financing costs
The outstanding City of Salem Municipal Port Authority, Port Development Bonds
were redeemed and remarketed in December 1994 (Note 7). The related financing
costs are being amortized over the remaining life of the bonds.
5. Salem Facility
In 1986, the Company commenced irradiation processing operations at a new
facility in Salem, New Jersey. This facility is located on land
-7-
<PAGE>
RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of June 30, 1995 and 1994, and for
the three and six months then ended is unaudited)
utilized pursuant to a long-term lease with the City of Salem Municipal Port
Authority. The lease has been accounted for as a capitalized lease. The lease
initially expires in 2004 and permits an extension. During 1988, the Company
suspended operations at this facility. In October 1994, the Company reopened
this facility and irradiation services are ongoing.
6. Accrued Expenses
Accrued expenses consisted of the following at June 30, 1995:
Property taxes $ 136,087
Interest expense 44,659
Professional fees and other 63,058
Payroll and related costs 32,172
Environmental cleanup and DEP oversight 155,771
---------
Total $ 431,747
=========
7. Long-term debt
Long-term debt consisted of the following at June 30, 1995:
City of Salem Municipal Port Authority,
Port Development Revenue Bonds $1,250,000
Notes payable 307,020
Secured Cobalt 60 financing and
capital lease agreements 1,540,266
----------
Total 3,097,286
Less: Current portion 824,780
----------
Total long-term debt $2,272,506
==========
8. Other Liabilities
Other Liabilities of $798,193 at June 30, 1995 consisted of DEP oversight costs
and reserves for site remediation (Note 11).
-8-
<PAGE>
RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of June 30, 1995 and 1994, and for
the three and six months then ended is unaudited)
9. Rockaway Industrial Park
The Company owns a 248 acre parcel of land ("Parcel I") in Rockaway, New Jersey,
that is contiguous to the 15 acre operating parcel that is the site of one of
its irradiation processing facilities ("Parcel II" and, with Parcel I, the
"Rockaway Industrial Park"). Since 1985, the Company has been seeking a buyer
for Parcel I; however, the Company's ability to sell Parcel I is impaired until
an environmental cleanup and remediation program is completed (Note 11).
10. Note Discount and Discount Amortization
The $287,000 note related to the Rockaway Industrial Park was discounted on
December 31, 1992 by $110,000, which discount is being amortized over five years
beginning January 1, 1993 (Note 7).
11. Environmental Investigation, and Remediation
As a result of engineering tests that commenced in 1981, the New Jersey
Department of Environmental Protection (the "DEP") issued a directive in 1986
ordering a remedial investigation and feasibility study (the "Study") designed
to determine the nature and extent of contamination on the Rockaway Industrial
Park property. The Company agreed to pay the costs of the Study and entered into
an Administrative Consent Order with the DEP. In 1989, the DEP issued a Second
Directive seeking payment for approximately $1,200,000 to pay for an additional
environmental study and DEP oversight costs ("Phase II"). In 1993, the Company
entered into an Administrative Consent Order ("ACO II") with the DEP. The ACO II
allows for the remaining Study and Phase II liability to the DEP to be paid in
quarterly installments of $35,000 including principal and interest, until the
liability is satisfied.
The Company believes its ability to dispose of any portion of the Rockaway
Industrial Park will be impaired until it has been released from DEP
involvement. There can be no assurances that the cleanup and remediation
accruals will represent the Company's ultimate liability.
In addition, the Company has been named a respondent in an environmental
proceeding relating to a disposal site to which the Company is alleged to have
shipped materials in 1978. The Company has disclaimed liability and has made no
provision for such potential liability in its financial statements.
-9-
<PAGE>
RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of June 30, 1995 and 1994, and for
the three and six months then ended is unaudited)
12. Other Interest Expense
Other interest expense is primarily related to long-term debt and includes
amortization of deferred financing costs (Notes 4 and 7).
13. Stock Options
The Company's 1987 stock option plan (the "Plan") authorizes the issuance of
options for common stock until November 3, 1997. The options granted may be
either incentive stock options which are exercisable one year or more from the
date of grant or nonqualified stock options which may be exercisable
immediately. Details of stock option transactions for the six month period ended
June 30, 1995 under the 1987 Plan, which reflect the one for eight reverse stock
split effective May 1995 (Note 15), are as follows:
Price per Exercisable
Options Share Options
-----------------------------------------
Outstanding at
December 31, 1994 4,623 $6.50 - $7.76 3,205
Granted 1,250 4.00 --
Exercised --
Canceled (937)
--------
Outstanding at
June 30, 1995 4,936 $4.00 - $6.50 2,581
========
14. Weighted Average Number of Common Shares Outstanding
The computation of the weighted average number of common shares outstanding for
the three month and six month periods ended June 30 1995 and 1994 considered the
one for eight reverse stock split, as if such stock split occurred at the
beginning of each period (Note 15), and excluded outstanding options, which were
considered antidilutive. No shares were issued during the six month period ended
June 30, 1995.
15. Common and Preferred Stock Authorized, Issued and Outstanding
Effective May 25, 1995 the Company's Certificate of Incorporation was amended to
effect a one for eight reverse stock split of the common stock and authorize
2,000,000 shares of preferred stock. No preferred
-10-
<PAGE>
RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of June 30, 1995 and 1994, and for
the three and six months then ended is unaudited)
stock was issued as of June 30, 1995 and the outstanding common stock at June
30, 1995 was an estimate (since fractional shares were not issuable) based on
the actual number of shares converted one for eight and the remaining shares to
be converted.
16. Statement of Cash Flows
Supplemental disclosures of cash flow information are as follows:
Six months ended Six months ended
June 30, 1995 June 30, 1994
---------------- ----------------
Interest paid $111,561 $ 62,897
Income taxes paid 4,985 3,949
In April 1995, the Company financed a purchase of Cobalt 60 amounting to
$597,000.
Item 2.
Management's Discussion and Analysis or Plan of Operation
Reference is made to Item 6 - "Management's Discussion and Analysis or Plan of
Operation" contained in the Company's Annual Report on Form l0-KSB for its
fiscal year ended December 31, 1994 for a discussion of the Company's financial
condition as of December 31, 1994, including a discussion of the Company's
anticipated liquidity and working capital requirements during 1995.
Comparison of Operations for the Three Months Ended June 30, 1995 to
the Three Months Ended June 30, 1994
Net sales for the three months ended June 30, 1995 were $1,034,310, a decrease
of 12% from net sales of $1,180,113 for the same period in 1994. The lower net
sales in 1995, as compared to 1994, were primarily a result of decreased
processing demand, lower product volume from certain major customers and
competitive pricing pressures.
Cost of sales for the second quarter of 1995 increased to $722,038 from $590,779
in the comparable quarter of 1994. The increase was primarily due to the
operations of the Salem facility which was not in operation in the second
quarter of 1994. The cost of sales at the other facilities was consistent with
ongoing operations and the
-11-
<PAGE>
related Cobalt 60 in place. Cost of sales associated with facilities operations
are primarily fixed costs and therefore do not necessarily decline with
reductions in sales. As a result, the gross profit percentage for the second
quarter of 1995 decreased to 30% from 50% in 1994.
Selling, general and administrative ("SG&A") expenses of $419,144 for the second
quarter of 1995 increased 1% from $414,230 for the same period in 1994. Certain
SG&A expenses in 1995, such as salaries and professional fees, were
significantly reduced compared to the same expenses in 1994, which decrease was
offset by the added SG&A expenses associated with the Salem facility, which was
not in operation during the 1994 period.
As a result of the foregoing, loss from operations for the second quarter of
1995 was $106,872 as compared to income of $175,104 in 1994.
Investment income was $2,700 for the second quarter of 1995 as compared to
$2,304 for the same period in 1994, a result of increased interest rates.
Expenses of the Salem facility for the second quarter of 1995 were included in
cost of sales, SG&A, and other interest expense. Salem facility expenses of
$50,906 in the second quarter of 1994 reflected the cost of the idle facility
during that period.
Expenses of Rockaway Industrial Park - Parcel I decreased to $22,874 in the
second quarter of 1995 as compared to $33,888 in 1994. The decrease was
primarily due to lower maintenance and environmental costs in the 1995 period.
Other interest expense of $71,302 in the second quarter of 1995, increased
primarily due to the higher interest rate of the long-term debt (which was
converted in December 1994 to a fixed rate of 10% from a lower floating rate)
related to the Salem facility (Note 7), interest related to financing additional
Cobalt 60 for the Salem facility, and a short-term loan incurred in 1994.
Interest expense in 1994 of $13,272 related to Cobalt 60 financing and lease
agreements.
As a result of the foregoing, the Company reported net loss before taxes of
$198,348 for the second quarter of 1995, as compared to net income before taxes
of $79,342 in 1994.
Income tax expense for the second quarter of 1994 was estimated to be $1,232.
The amount of estimated net income tax expense is the net of regular estimated
income tax offset by the available net operating loss carryforwards for Federal
income taxes and State income taxes.
For the quarter ended June 30, 1995, the Company reported net loss of $198,348
or $.18 per share, as compared to net income of $78,110 or $.07 for the same
quarter of 1994.
-12-
<PAGE>
Comparison of Operations for the Six Months Ended June 30, 1995 to the
Six Months Ended June 30, 1994
Net sales for the six months ended June 30, 1995 were $2,156,790, a decrease of
7% from net sales of $2,326,266 for the same period in 1994. The lower net sales
in 1995, as compared to 1994, was a result of decreased product volume,
decreased processing demand from certain major customers primarily in the
medical segment and competitive pricing pressures.
Cost of sales for the six month period of 1995 increased to $1,427,265 from
$1,135,918 in the comparable period of 1994. The increase was primarily due to
the operation of the Salem facility which was not in operation during the
comparable six month period of 1994. The cost of sales at the other facilities
was consistent with ongoing operations and the related Cobalt 60 in place. Cost
of sales associated with facilities operations are primarily fixed costs and
therefore do not necessarily decline with reductions in sales. As a result, the
gross profit percentage for the six month period of 1995 decreased to 34% from
51% in 1994.
SG&A expenses of $826,348 for the six month period of 1995 increased slightly
from $824,547 for the same period in 1994. Certain SG&A expenses in 1995, such
as salaries and professional fees, were significantly reduced compared to the
same expenses in 1994, which decrease was offset by the added SG&A expenses
associated with the Salem facility, which was not in operation during the 1994
period.
As a result of the foregoing, loss from operations for the six month period of
1995 was $96,823 as compared to income of $365,801 in 1994.
Investment income was $6,594 for the six month period of 1995 as compared to
$5,368 for the same period in 1994, a result of increased interest rates.
Expenses of the Salem facility for the six month period of 1995 are included in
cost of sales, SG&A, and other interest expense. Salem facility expenses of
$105,493 in 1994 reflected the cost of the idle facility during that period.
Expenses of Rockaway Industrial Park - Parcel I decreased to $56,877 in the six
month period of 1995 as compared to $66,477 in 1994. The decrease was due to
lower maintenance and environmental costs in the 1995 period.
Other interest expense of $129,687 in the six month period of 1995, increased
due to the higher fixed interest rate commencing December 1, 1994 of the
long-term debt related to the Salem facility (which was converted in December
1994 to a fixed rate of 10% from a lower floating rate), interest related to
financing of additional Cobalt 60, and a short-term loan incurred in 1994.
Interest expense in 1994 of $29,144 related to Cobalt 60 financing and lease
agreements.
-13-
<PAGE>
As a result of the foregoing, the Company reported net loss before taxes of
$276,793 for the six months of 1995, as compared to net income before taxes of
$170,055 in 1994.
Income tax expense for the six month period of 1994 was estimated to be $3,030.
The amount of net income tax expense estimated is the net of regular estimated
income tax offset by the available net operating loss carryforwards for Federal
income taxes and State income taxes.
For the six month period ended June 30, 1995, the Company reported net loss of
$276,793 or $.26 per share, as compared to net income of $167,025 or $.16 for
the same period of 1994.
Financial Condition
At June 30, 1995, the Company had a working capital deficit of $775,532, as
compared to a working capital deficit of $509,708 at December 31, 1994. Working
capital during the six month period of 1995 decreased by $265,824 due to the
operating costs and Cobalt 60 financing related to the Salem Facility which
began operations in October 1994. The Company's ability to decrease the working
capital deficit is dependent on increasing the current level of sales revenues
and obtaining external financing. Based on current forecasts, management
believes that sales revenues of the Salem Facility will significantly increase
in the second half of 1995, but that the Company will require additional
financing to enable the Company to continue to meet its obligations on a timely
basis. Accordingly, the Company is negotiating with certain investment bankers
for a possible public or private sale of equity securities. In June 1995, the
Company advised the DEP that the quarterly payment of $35,000 for prior DEP
oversight costs due in July would be delayed. The Company is currently
negotiating with the DEP for relief from the requirement to make quarterly
payments and the DEP has agreed in writing not to take any action with respect
to this matter until the outstanding issues are addressed. The Company has
negotiated a commitment for a short-term credit line of $100,000 which would
require the Company to pledge certain assets. The Company believes that the
short-term financing would be sufficient to continue current operations, but in
the event that additional financing is not obtained by December 1, 1995 the
Company may not be able to pay the City of Salem Municipal Port Authority, Port
Development Revenue Bonds annual principal payment of $250,000 due December 1,
1995. Management believes that the sale of securities is feasible and should
provide sufficient funds to continue operations and pay existing obligations,
although there can be no assurance that it will be timely obtained.
The Company's net cash provided by operating activities during the first six
months of 1995 was $108,225 as compared to $218,136 for the same period of 1994.
Investing activities in the six month period of 1995 used $36,112 compared to
cash provided of $226,192 in 1994. Net cash used in financing activities during
the six month period was $179,094, primarily a result of payments for previously
installed Cobalt 60, and a DEP payment related to the ACO II. The net decrease
-14-
<PAGE>
in cash and cash equivalents for the six month period ended June 30, 1995 was
$106,981 as compared to a net increase of $12,647 for the same period in 1994.
Part II. Other Information
Item 1. Legal Proceedings.
Reference is made to Item 3 - "Legal Proceedings - Martin Welt Litigation"
contained in the Company's Annual Report on Form 10-KSB for its fiscal year
ended December 31, 1994 for a discussion concerning various pending litigation
relating to Martin Welt, including a litigation (the "Welt Litigation")
instituted in January 1987 by Dr. Welt against the Company and others in the
Superior Court of New Jersey, Chancery Division, Essex County (Docket No.
C-1305-87E).
In May 1995, the Appellate Division of the Superior Court affirmed all
actions taken in the Welt Litigation by the Superior Court which has been
appealed by either Dr. Welt or the Company, with respect to which (as previously
reported) oral argument had been heard on March 8, 1995.
In August 1993 (as previously reported), Dr. Welt filed for relief under
Chapter 11 of the United States Bankruptcy Code. On June 26, 1995, the
Bankruptcy Court dismissed Dr. Welt's Chapter 11 bankruptcy petition, without
prejudice to the right of Dr. Welt to appeal the non-dischargeability in
bankruptcy of a 1994 judgment obtained by the Company in the Welt litigation.
On August 7, 1995 the Company and Dr. Welt entered into an agreement
regarding the Welt Litigation. Pursuant to such agreement, (a) Dr. Welt, Ruth
Welt and The Welt Group, Inc., on the one hand, and the Company, on the other,
released each other from all outstanding claims and causes of action,
irrespective of whether the same had yet been asserted, (b) Dr. Welt and the
Company agreed to a dismissal of the Welt Litigation, with prejudice, (c) Dr.
Welt delivered to the Company $72,000 and a third-party promissory note obtained
by Dr. Welt in 1987 (the "Note"), and (d) Dr. Welt made arrangements to deliver
his 57,112 shares of RTI Common Stock to a broker-dealer with instructions to
sell such shares from time to time as such broker-dealer shall deem appropriate
and to remit the net proceeds thereof to the Company.
The Note is subject to an alleged claim of unenforceability and Dr. Welt,
in delivering the Note to the Company, made no representation as to
enforceability. The Company, at the present time, does not have adequate
information to determine whether the Note is enforceable or whether the obligor
thereunder has adequate assets to satisfy all or a portion thereof.
-15-
<PAGE>
Item 2. Changes in Securities.
None; however, on May 25, 1995, the Company filed a Certificate of
Amendment to its Certificate of Incorporation which, among other things,
effected a one-for-eight reverse stock split of its Common Stock. Such amendment
did not affect the rights and privileges of the holders of Common Stock.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securityholders.
On May 16, 1995, the Company held an Annual Meeting of its shareholders, at
which time each of the four incumbent directors of the Company who had been
nominated by the Board of Directors for reelection as a director of the Company
was reelected as a director. The votes cast were as follows:
FOR WITHHELD
--------- --------
Sanders Davies 6,768,876 349,975
C. W. McMillan 6,765,044 353,807
Theo W. Muller 6,763,826 353,275
George M. Whitmore, Jr 6,754,124 364,727
At the Annual Meeting three additional proposals were voted upon as
follows:
(i) Proposal to amend the Certificate of Incorporation to effect a
one-for-eight reverse stock split:
FOR AGAINST ABSTAINING
--------- ------- ----------
6,285,241 771,326 54,804
(ii) Proposal to amend the Certificate of Incorporation to authorize the
issuance of up to 2,000,000 shares of preferred stock:
FOR AGAINST ABSTAINING
--------- ------- ----------
4,544,607 711,796 78,760
-16-
<PAGE>
(iii) Proposal to ratify BDO Seidman as the independent auditors of the
Company for the fiscal year ending December 31, 1995:
FOR AGAINST ABSTAINING
--------- ------- ----------
6,780,796 280,989 59,586
Item 5. Other Information - none
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
19. Previously unfiled documents.
Certificate of Amendment of Certificate of Incorporation of the
Company, as filed by the New York Department of State on May 25,
1995.
(b) Reports on Form 8-K
No reports on Form 8-KSB were filed during the fiscal quarter with
respect to which this report is filed.
-17-
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RTI INC.
Date: August 9, 1995 /s/ Theo W. Muller
-------------------
Theo W. Muller
President
Date: August 9, 1995 /s/ R. Stephen Maico
---------------------
R. Stephen Maico
Treasurer
Principal Accounting and
Financial Officer
-18-
<PAGE>
Exhibit 19
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
RTI INC.
Under Section 805 of the Business Corporation Law
--------------
It is hereby certified that:
FIRST: The name of the Corporation is RTI Inc. The name under which the
Corporation was formed is Radiation Technology, Inc.
SECOND: The certificate of incorporation of the Corporation was filed by
the Department of State on August 27, 1968.
THIRD: The amendments of the certificate of incorporation of the
Corporation effected by this certificate of amendment are as follows:
(a) to change (i) 8,617,519 authorized shares of common stock, par
value of $.01 per share, of the Corporation (the "Pre-Split Common Stock"), all
of which are issued and outstanding, into approximately 1,075,000 issued and
outstanding shares of common stock, par value $.08 per share, of the Corporation
(the "Post-Split Common Stock"), the terms of the change being at the rate of
one-eighth share of Post-Split Common Stock for each one share of Pre- Split
Common Stock; provided that no fractional shares of Post-Split Common Stock
resulting from such change shall be issued and any holder who otherwise shall
have been entitled to receive a fractional share resulting from such change
shall, instead, be entitled to receive, upon surrender of such holder's stock
certificate representing Pre-Split Common Stock, a new certificate or
certificates representing the number of whole shares of Post-Split Common Stock
to which such holder is entitled and cash in lieu of any fractional share of
Post-Split Common Stock to which such holder otherwise would have been entitled;
and (ii) the authorized but unissued shares of Pre-Split Common Stock into
approximately 13,925,000 shares of authorized but unissued shares of Post-Split
Common Stock, par value $.08 per share, such change being at the rate of 2.181
shares of Post-Split Common Stock for each one share of Pre-Split Common Stock;
and
-19-
<PAGE>
(b) to authorize the Corporation to issue 2,000,000 shares of
preferred stock, $.05 par value.
FOURTH: To accomplish the foregoing amendments, Article FOURTH is deleted
in its entirety and the following is substituted therefor:
"FOURTH: (a) The total number of shares of stock which the Corporation
shall have the authority to issue is 17,000,000 shares, which shall consist of
15,000,000 shares of common stock, $.08 par value per share ("Common Shares")
and 2,000,000 shares of preferred stock, $.05 par value per share ("Preferred
Shares"). Except as otherwise provided in accordance with this Certificate of
Incorporation, the Common Shares shall have unlimited voting rights, with each
Common Share being entitled to one vote, and the right to receive the net assets
of the Corporation upon dissolution, with each Common Share participating on a
pro rata basis.
(b) The Board of Directors is hereby authorized, from time to
time and without shareholder action, to provide for the issuance of Preferred
Shares in one or more series not exceeding in the aggregate the number of
Preferred Shares authorized by this Certificate of Incorporation, as amended
from time to time; and to determine with respect to each such series the voting
powers, if any (which voting powers, if granted, may be full or limited),
designations, preferences and relative, participating, option or other special
rights, and the qualifications, limitations or restrictions relating thereto,
including without limiting the generality of the foregoing, the voting rights
relating to Preferred Shares of any series (which may be one or more votes per
share or a fraction of a vote per share, which may vary over time, and which may
be applicable generally or only upon the happening and continuance of stated
events or conditions), the rate of dividend to which holders of Preferred Shares
of any series may be entitled (which may be cumulative or noncumulative), the
rights of holders of Preferred Shares of any series in the event of liquidation,
dissolution or winding up of the affairs of the Corporation, the rights, if any,
of holders of Preferred Shares of any series to convert or exchange such
Preferred Shares of such series for shares of any other class or series of
capital stock or for any other securities, property or assets of the Corporation
or any subsidiary (including the determination of the price or prices or the
rate or rates applicable to such rights to convert or exchange and the
adjustment thereof, the time or
-20-
<PAGE>
times during which the right to convert or exchange shall be applicable, and the
time or times during which a particular price or rate shall be applicable),
whether or not the shares of that series shall be redeemable, and if so, the
terms and conditions of such redemption, including the date or dates upon or
after which they shall be redeemable, and the amount per share payable in case
of redemption, which amount may vary under different conditions and at different
dates, and whether any shares of that series shall be redeemed pursuant to a
retirement or sinking fund or otherwise and the terms and conditions of such
obligation.
(c) Before the Corporation shall issue any Preferred Shares of
any series, a Certificate of Amendment to the Certificate of Incorporation
fixing the voting powers, designations, preferences, the relative,
participating, option or other rights, if any, and the qualifications,
limitations and restrictions, if any, relating to the Preferred Shares of such
series, and the number of Preferred Shares of such series authorized by the
Board of Directors to be issued shall be filed with the Secretary of State of
the State of New York in accordance with the New York Business Corporation Law
and shall become effective without any shareholder action. The Board of
Directors is further authorized to increase or decrease (but not below the
number of such shares of such series then outstanding) the number of shares of
any series subsequent to the issuance of shares of that series."
FIFTH: The foregoing amendments of the certificate of incorporation of the
Corporation were authorized by the vote at a meeting of the Board of Directors
of the Corporation, followed by the vote of the holders of a majority of all of
the outstanding shares of the Corporation entitled to vote on the said
amendments of the certificate of incorporation.
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained herein have been examined by us and are true and correct.
Dated: May 22, 1995 /s/ Theo W. Muller
-------------------
Theo W. Muller
President
/s/ R. Stephen Maico
---------------------
R. Stephen Maico
Secretary
-21-
