SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A-3
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12 (g) of the Securities Exchange Act of 1934
ATR Industries, Inc.
---------------------
(Name of Small business Issuer in its charter)
Nevada 13-3422912
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(State or other jurisdiction of (I.R.S. Employee
Incorporation or organization) Identification No.)
4614 North University Drive, Ft. Lauderdale, Florida 33351
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(Address of principal executive offices) (Zip Code)
(954) 572-4023
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Issuer's telephone number, including area code
Securities to be registered under Section 12(b) of
the Act:
None
Securities to be registered under Section 12(g) of
the Act:
Common Stock, $.001 par value
Convertible Preferred Stock, $.001 par value
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TABLE OF CONTENTS
PART I
ITEM 1. DESCRIPTION OF BUSINESS................................................1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..............3
ITEM 3. DESCRIPTION OF PROPERTY................................................9
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
...............................................................................9
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS..........10
ITEM 6. EXECUTIVE COMPENSATION................................................11
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................12
ITEM 8. DESCRIPTION OF SECURITIES.............................................12
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..............14
ITEM 2. LEGAL PROCEEDINGS.....................................................14
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.........................14
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES...............................15
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................16
PART F/S
INDEX TO FINANCIAL STATEMENTS.................................................17
PART III
SIGNATURES....................................................................18
INDEX TO EXHIBITS.............................................................19
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Corporate Organization
As used herein the term "Company" refers to ATR Industries, Inc., a Nevada
Corporation, and its subsidiaries and predecessors, unless the context indicates
otherwise. Originally incorporated in 1987 in Nevada as Tri-Capital Corporation,
the name was changed in 1988 to Advanced Appearance of America which operated
beauty salons until 1995 at which time the Company discontinued its operations
and went inactive with no operations or revenues until 1998. In March of 1998,
the Company changed its name to ATR Industries, Inc., and on June 1, 1998
acquired ATR Industries, Inc. of Florida (AKA Cleaning Express USA and Cleaning
Express of South Palm Beach, Inc.), a private Florida Corporation, for 3,000,000
restricted shares of ATR Industries, Inc., the Nevada Corporation.
Since 1998, the Company has concentrated its operations primarily on the home
cleaning services industry. In February 1999, the Company developed a new
division of operations related to the preparation, development and marketing of
a cosmetic and beauty product e-commerce Internet site. These operations are
conducted through a wholly owned subsidiary known as Beautymax.com, Inc. The
Company has to date made significant expenditures toward the development of
Beautymax.com, Inc. and has yet to commence operations of this subsidiary. The
Company anticipates that the launch date for the web site will be Fall of 1999.
Description of Business
Cleaning Express USA. The Company's operations primarily involve home cleaning
services, specializing in affordable home services. Through its emphasis on
budget pricing, the Company has developed a market in the home cleaning
industry. The Company currently operates two offices and dispatches 40-50
workers in teams of two on a daily basis. The present geographic area the
Company operates in includes the Dade County, Broward County, and South Palm
Beach County areas of South Florida.
Marketing for the home cleaning services is accomplished through print ads,
television and radio commercials. Additionally, the Company utilizes a referral
program that rewards customers with future discounts for referring a client.
The home cleaning supply industry is highly competitive with respect to price,
service, quality and location. There are numerous, well-established, larger
competitors in the home cleaning industry possessing substantially greater
financial, marketing, personnel and other resources than the Company. There can
be no assurance that the Company will be able to respond to various competitive
factors affecting the business. The Company plans to gain a competitive
advantage over its competitors in the home cleaning industry by offering quality
service at a low price. The Company has been successful in achieving this goal
since 1996 and plans to further expand in South Florida by continuing its
current marketing strategy.
The main market for Cleaning Express USA is individual households and no single
customer makes up more than ten percent of the total revenues of Cleaning
Express USA. The Company does not expect that this will change in the future.
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The Company has three full time employees, and the 40-50 workers that are each
independently contracted with the Company to service and provide home cleaning
services to existing and new customers.
Beautymax.com, Inc. The Company, through its wholly owned subsidiary
Beautymax.com, Inc., is developing a cosmetic and beauty product e-commerce
Internet site. Beautymax.com is being developed under the guidance of the CEO,
Mr. Ed Roth, who has served as a management consultant for beauty salons from
1978-1988, during this time he became familiar with retail cosmetics, hair
products and attended various trade shows, and studied consumer trends
concerning retailing of hair and skin products. The Company has entered into a
web site development contract with Meurer Marketing of Los Angeles to
development its online store and web site. The site will be designed to create a
marketing and distribution area for cosmetic, hair care, nail and skin care and
general beauty lines on a discounted basis. Beautymax.com will sell and
distribute popular cosmetic and beauty products, primarily to females in the
18-40 age bracket. Additionally, a department will be developed that focuses on
the cosmetic and beauty needs of individuals from a variety of ethnic
backgrounds and skin color. Products, development and resources in this area
will be focused on filling the needs of the African-American community with
further expansion to additional ethnic groups planned for the future.
The Company will attempt to develop the Beautymax.com concept, " Max Beauty, Max
Discount", and will strive to provide the best prices available. Initially, the
Company anticipates a catalogue format with 1000-3000 products, with new product
lines being added as web traffic increases. The Company intends to maintain a
floating inventory of products, as currently available product sourcing
eliminates the need for an extended inventory. All customer orders will be
implimented by online credit card or cyber cash systems with a virtual shopping
cart. Visitors to the online store will be able to shop 24 hours a day,
regardless of location, and will be able to shop and order in English, Spanish,
or French. Beautymax.com has projected a launch date on the Internet for fall of
1999. The Company has already launched a preview site for the general public,
now available for viewing.
Beauty products will be marketed over the World Wide Web via the Internet. The
Company has agreed to a marketing alliance with Planet Shopping Network by means
of a prepaid annual contract for site affiliation. Planet Shopping Network will
provide links and marketing from the Planet Shopping Site for Beautymax.com. The
Company has agreed to an agreement with Earthlink Network to host the site.
Through Marketing Magic, Inc. of Hollywood, Florida, strategic marketing
alliances with search engines are being negotiated, along with a complete
marketing campaign. Advertising is expected to begin in the fall of 1999. To
date, no formal contracts or agreements have been reached with search engines or
other potential advertising or marketing outlets.
Beautymax.co.uk is projected to be open in winter of 1999. The Company expects
to open a branch office with HQ Business centers in London, England providing
local address and business identification, along with fax and telephone service,
so local customers can contact costumer service directly if needed. To date, no
formal contract or agreement has been reached with HQ Business centers.
The online beauty supply industry is highly competitive with respect to price,
service, quality and internet marketing. As a result the potential for failure
in this industry is significant. There are numerous, well-established, larger
competitors in the online beauty supply industry with comprehensive web sites,
possessing substantially greater financial, marketing, personnel and other
resources than the Company. There can be no assurance that the Company will be
able to respond to various competitive factors affecting the business. The
Company plans to attempt to gain a competitive advantage over its competitors in
online beauty products industry by offering a variety of quality products at a
low price, directly to the consumer. This will be achieved by working directly
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with wholesalers, enabling the Company to get and pass on to the costumer the
best prices in the online market. The Company also plans to gain an advantage
over the competition by providing access to the web site in English, French and
Spanish. The Company hopes that this will successfully increase its market
appeal and presence with a wide variety of cultures and communities.
The principal suppliers to Beautymax.com will be wholesale distributors, who do
not sell retail, but do supply other retail stores and export companies. The
company is in contract negotiations with five different distributers of cosmetic
and beauty products. The Company has yet to finalize these negotiations with
written agreements but currently has verbal commitments. If such agreements are
not finalized, the Company will continue to search for other suppliers until a
successful partnership is found. A delay in establishing suppliers could likely
have an adverse effect on the revenues and cash flow of the Company.
The Company does not expect that any single customer will account for more than
ten percent of its business. At the present time there is no need for government
approval, though this may change in the future.
The Beautymax.com in-house staff is projected at 3-6 new employees for the first
12 months. These new employees will be managed by the three employees that are
presently on staff.
Reports to Security Holders
The Company's annual report will contain audited financial statements. The
Company is not required to deliver an annual report to security holders and will
not voluntarily deliver a copy of the annual report to the security holders. The
Company intends to, from this date forward, file all of its required information
with the Securities and Exchange Commission ("SEC"). Prior to this form being
filed there were no other forms filed. The Company plans to file its 10KSB,
10QSB, and all other forms that may be or become applicable to the Company with
the SEC.
The public may read and copy any materials that are filed by the Company with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Public may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The statements
and forms filed by the Company with the SEC have also been filed electronically
and are available for viewing or copy on the SEC maintained Internet site that
contains reports, proxy, information statements, and other information regarding
issuers that file electronically with the SEC. The internet address for this
site can be found at http://www.sec.gov. Additional information can be found
concerning the company on the Internet at http://www.atrindustries.com and
http://www.beautymax.com.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
The Company plans to continue the operation of its home cleaning service
business in the South Florida area. Emphasis will be placed on continuing to
strengthen its position in that market. The Company also plans to greatly expand
its operations in the online beauty supply industry, through its wholly owned
subsidiary, Beautymax.com. A significant amount of its resources and finances
will be spent on further developing and expanding this aspect of its operations.
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The Company projects that the revenues from the sales of its products along with
the proceeds of the sale of its securities in February of 1999 will be
sufficient to pay its operating costs for the next twelve months. The Company is
weighing the advantages of creating a large scale marketing and advertising
campaign for its subsidiary, Beautymax.com. This campaign will require
substantial capital which the Company does not currently have. If the Company
should choose to create such a campaign the funds required to perform it would
be raised through a future stock offering. In the event the Company is unable to
raise additional monies through its future stock offering it may have to
substantially modify its future plans.
Beautymax.com
The Company currently has no plans to conduct any product research. The Company
will continue to develop and expand the Beautymax.com Internet site. This
development will not require the purchase of additional equipment or supplies
but funds will be used to pay developers of the web site and other related
online and software needs. As the Company expands, significant personnel changes
will be made. Initially, the Company projects the need for 3-6 additional
full-time employees to administrate over and operate the Beautymax.com
subsidiary. If revenues should increase from the Beautymax.com Internet site the
need for personnel will greatly increase with it.
Security of Online Transactions
Beautymax.com will address the risks associated with security breaches for
online credit cards and cyber cash systems by utilizing the services of a
leading provider of custom processing solutions, that provide the highest levels
of secured customer transactions including high level encryption standards to
ensure a safe and secure funding. Including checkless checks and all major
credit cards using state of the art electronic processing. At the present time,
the Company is reviewing various proposals from companies that guarantee secure
transactions.
A significant barrier to online commerce and communications is the secure
transmission of confidential information over public networks. The Company
relies on encryption and authentication technology licensed from third parties
to provide the security and authentication necessary to effect secure
transmission of confidential information, such as customer credit card numbers.
There can be no assurance that advances in computer capabilities, new
discoveries in the field of cryptography, or other events or developments will
not result in a compromise or breach of the algorithms used by the Company to
protect customer transaction data. If any such compromise of the Company's
security were to occur, it could have a material adverse effect on the Company's
reputation, business, prospects, financial condition and results of operations.
A party who is able to circumvent the Company's security measures could
misappropriate proprietary information or cause interruptions in the Company's
operations. The Company may be required to expend significant capital and other
resources to protect against such security breaches or to alleviate problems
caused by such breaches. Concerns over the security of the Internet and other
online transactions and the privacy of users may also inhibit the growth of the
Internet and other online services generally, and the Web in particular,
especially as a means of conducting commercial transactions. To the extent that
activities of the Company or third-party contractors involve the storage and
transmission of proprietary information, such as credit card numbers, security
breaches could damage the Company's reputation and expose the Company to a risk
of loss or litigation and possible liability. There can be no assurance that the
Company's security measures will prevent security breaches or that failure to
prevent such security breaches will not have a material adverse effect on the
Company's business.
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Management's Discussion and Analysis of Financial Conditions and Results of
Operations
Results of Operations
Three months ended March 31, 1999 and March 31, 1998 & years ended December 31,
1998 and December 31, 1997
Sales
Sales for the six months ended March 31, 1999 increased to $126,086 from
$116,164 for comparable period in 1998, an increase of 8.6%. The increase in
revenues were primarily attributable to an increase in clients related to
Cleaning Express USA, the home cleaning service subsidiary.
Sales for the year ended December 31, 1998 increased to $474,370 from $473,824
for the year ended December 31, 1997, an increase of .1%. The increase in
revenues were primarily attributable to an increase in clients related to
Cleaning Express USA, the home cleaning service subsidiary.
Sales from the home cleaning industry have accounted for 100% of total net sales
in 1997 and 1998 to date. The accelerated growth of sales in 1999 is due to
increased expenditures on marketing and a growing public awareness of services.
Income / Losses
Net income for the three months ended March 31, 1999, increased to $12,293 from
$3,761 for the comparable period in 1998, an increase of 227%. The increase in
income was primarily attributable to $17,197 in interest income receive in the
March 31, 1999 quarter.
Net losses for the year ended December 31, 1998 increased to $62,921 from $8,232
for the year ended December 31, 1997, an increase of 664%. The substantial
increase in losses was attributable primarily to an increase in professional
fees associated with legal and accounting expenses associated with the filing
of this registration statement.
The Company expects to continue to incur losses at least through fiscal 1999 and
there can be no assurance that the Company will achieve or maintain
profitability or that its revenue growth can be sustained in the future.
Expenses
Selling, general and administrative expenses for the three months ended March
31, 1999, increased to $58,681 from $44,684 in the comparable period in 1998, an
increase of 31%. The increase in selling general and administrative expenses was
the result of an $11,279 increase in professional fees from the same period in
1998.
Selling, general and administrative expenses for the year ended December 31,
1998, increased to $223,185 from $217,143 for the year ended December 31, 1997,
an increase of 3% The increase in selling general and administrative expenses
was the result of a significant increase in professional fees and which resulted
from expenses associated with obtaining trading status on the OTC Bulletin
Board.
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Depreciation and amortization expenses for the three months ended March 31, 1999
and March 31, 1998 were $650 and $1,140, respectively. The decrease was due to a
decrease in the value of property and equipment held by the company.
Depreciation and amortization expenses for the years ended December 31, 1998 and
December 31, 1997 were $2,600 and $4,812, respectively. The increase was due to
a decrease in the value of property and equipment held by the company.
The Company expects increases in expenses through 1999 as the Company moves
toward increasing development and marketing of its Beautymax.com subsidiary.
Cost of Labor
The cost of labor for the three months ended March 31, 1999 were $69,980
compared to $66,719 for the comparable period in 1998. The increase in the cost
of labor was primarily attributable to an increase in sales. Cost of labor as a
percentage for three months ended March 31, 1999 and 1998 respectively, were
55.5% and 57.4%.
The cost of labor the year ended December 31, 1998 was $314,106 compared to
$267,013 for the year ended December 31, 1997. The increase in the cost of labor
was primarily attributable to an increase in the number of contracts. Cost of
labor as a percentage for December 31, 1998 and 1997 respectively, were 56.4%
and 66.2%.
Cost of Sales
The cost of sales is currently not a material cost for the Company. Upon
commencement of Beautymax.com the cost of goods will vary from year to year and
may have a material impact upon the Company.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations
over the past three years. The Company believes that it can offset inflationary
increases in the cost of labor by increasing sales and improving operating
efficiencies.
Liquidity and Capital Resources
Three months ended March 31, 1999 and March 31, 1998 & years ended December 31,
1998 and December 31, 1997
Cash flow generated by operations were a negative $4,775 for the three months
ended March 31, 1999 and $3,907 for the comparable period in 1998. Negative cash
flows from operating activities for the three months ended March 31, 1999 are
primarily attributable to an increase in interest receivables. Cash flows from
operating activities for the comparable period in 1998 were positive primarily
because of a decrease in operating expenses.
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Cash flow generated by operations were a negative $46,536 for the year ended
December 31, 1998, and a negative $8,031 for the year ended December 31, 1997.
Negative cash flows from operating activities for the years ended December 31,
1999 and 1998 are primarily attributable to losses from operations.
Cash flow generated from financing activities was $67,897 for the three months
ended March 30, 1999 and a negative $3,750 for the comparable period in 1998.
The Company conducted a private placement offering in an effort to improve its
cash flow in 1999.
Cash flow generated from investing activities was $0 for the year ended December
31, 1998 and a negative $49,899 for the year ended December 31, 1997.
The Company has funded its cash needs from inception through March 31, 1999 with
a series of debt and equity transactions, including private placements.
The shareholder loan payable of $41,235 on December 31, 1998 is payable to
Edward A. Roth, President and majority shareholder. The loan is not evidenced by
a written promissary note, rather it is an oral agreement. There is no interest
on this loan and the effects of imputed interest are immaterial to the financial
statements taken as a whole. The shareholder loan was repaid in full subsequent
to year end.
In February of 1999, the Company raised $957,200 through a limited private
placement under Rule 504 of Regulation D. As of the date of the last revision of
this report, the Company had issued all of the stock under those agreements but
has yet to receive all of the funds from that offering. If such funds are not
realized it would significantly effect the Companies ability to perform its
business, especially in its' Beautymax.com subsidiary.
The Company made no significant capital expenditures on property or equipment
for the three months ended March 31, 1999 or 1998 and made no significant
capital expenditures on property or equipment for the years ended December 31,
1998 or 1997.
Expenses for development, marketing and advertisement are projected at Five
Hundred Thousand dollars ($500,000) for the first three to six months. The
company also expects to create an initial inventory valued at approximately One
Hundred Thousand Dollars ($100,000). The value and amount of the inventory will
increase as business develops. The Company is currently applying for 30 day
lines of credit with its distributers. This will allow the Company to purchase
the needed initial inventory. If the Company fails to get the lines of credit
from the distributors, the Company may have to reduce the initial amount of
inventory and purchase needed amounts with cash. Additional initial development,
marketing, advertising, and inventory costs are being paid for with funds from
the proceeds of a limited private offering executed in February of 1999. The
Company expects to generate immediate revenues upon opening the web site and
will use those revenues to pay for its operating costs. However, the Company
does not guarantee that such revenues will be adequate to fund the Company's
plans.
The Company will substantially rely on the existence of revenue from the home
cleaning business and from the projected revenues of Beautymax.com. The Company
projects that current and projected revenues and capital reserves will sustain
it for 12 months. If the projected revenues of Beautymax.com fall short of
needed capital the Company will not be able to sustain its capital needs for
more than six months. The Company will then need to obtain additional capital
through equity or debt financing to sustain operations for an additional year. A
lack of significant revenues beginning in the fourth quarter of 1999 will
significantly affect the cash position of the Company and move the Company
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toward a position where the raising of additional funds through equity or debt
financing will be necessary.
On a long term basis, liquidity is dependent on continuation and expansion of
operations, receipt of revenues, additional infusions of capital and debt
financing. The Company is considering launching a wide scale marketing and
advertising campaign. The current Company's capital and revenues are not
sufficient to fund such a campaign. If the Company chooses to launch such a
campaign it well require substantially more capital. If necessary, the Company
plans to raise this capital through an additional stock offering. The funds
raised from this offering will be used to develop and execute the marketing and
advertising strategy which may include the use of television, radio, print and
Internet advertising. However , there can be no assurance that the Company will
be able to obtain additional equity or debt financing in the future, if at all.
If the Company is unable to raise additional funds the growth potential will be
adversely effected.
Additionally, the Company will have to significantly modify its plans.
Trends, Events, and Uncertainties
Demand for the Company's home cleaning services and Beautymax products will be
dependent on, among other things, market acceptance of the Company's concept,
the quality of its Web site and general economic conditions, which are cyclical
in nature. Inasmuch as a major portion of the Company's activities is the
receipt of revenues from the sales of its products, the Company's business
operations may be adversely affected by the Company's competitors and prolonged
recessionary periods.
Year 2000 Implications
Many current installed computer systems and software may be coded to accept only
two-digit entries in the date code field and cannot distinguish 21st century
dates from 20th century dates. As a result, many software and computer systems
may need to be upgraded or replaced. Because of the nature of the business of
the Company's subsidiary, Beautymax.com, being an internet based company, there
is uncertainty about the overall effect of the Year 2000 on the internet and
therefore the Company's Internet operations. If other third parties that the
Company uses or the overall Internet should experience significant problems from
Year 2000 related issues, it could significantly affect the operation and
ability of Beautymax.com to perform business over the Internet and therefore
could adversely affect revenues. The Company has taken steps to insure that all
of the internal computer systems are compliant. The Company has to date replaced
its computers with new Year 2000 compliant machines. The Company has not
incurred material costs to date in the process, and does not believe that the
cost of additional actions will have a material effect on its operating results
or financial condition. The Companies current systems and products may contain
undetected errors or defects with Year 2000 date functions that may result in
material costs. In addition, the Company utilizes third-party equipment,
software and content, including non-information technology systems, such as
security systems, building equipment and systems with embedded micro-controllers
that may not be Year 2000 compliant.
The Company has taken steps to analyze its technical relationships and ensure
that its third party suppliers, distributors, advisors, and other entities that
the Company depends on for operations are also compliant. These include but are
not limited to its relationship with Earthlink Network, Planet Shopping Network,
and Marketing Magic, Inc. of Hollywood, Florida. The Company has received
verification that some of these companies are compliant. Not all of the
Company's third party distributors have given adequate assurances that they are
or are not compliant and therefore may or may not experience problems relating
to the Year 2000 issues and potentially create delays in distributing needed
inventory or create other unforseen problems.
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Failure of third-party equipment, software or content to operate properly with
regard to the Year 2000 issue could require the Company to incur unanticipated
expenses to remedy problems, which could have a material adverse effect on its
business, operating results and financial condition. If any problems arise from
third parties or from the Internet in general related to the Year 2000 issues,
the ability of the Company to respond is limited, due to its nature as an
Internet Company.
Additionally, the computer systems necessary to maintain the viability of the
Internet or any of the Web sites that direct consumers to the Company's online
stores may not be Year 2000 compliant. Computers used by customers to access the
Company's online stores may not be Year 2000 compliant, delaying customers'
product purchases. The Company cannot guarantee that its systems will be Year
2000 compliant or that the Year 2000 problem will not adversely affect its
business, which includes limiting or precluding customer purchases.
Year 2000 Contingency Plan
If such a situation should occur the Company will process the existing orders
using none Internet and computer based methods, such as telephone conformation,
standard ground shipping done through local offices, and manual processing of
credit cards. This will continue until all third parties or the Internet solve
the problems and normal business operations can continue.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's executive offices are located at 4614 North University Drive, Fort
Lauderdale (Lauderhill), Florida 33351. These offices consist of 1,100 square
feet, which are leased month to month for $1,000.00 per month. The Boca Raton
offices consist of 1,000 square feet, which are leased month to month for
$636.00 per month. The Company projects that its current offices will be
sufficient for the Company's growth through 1999.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information concerning the ownership of
the Company's Common Stock as of March 31, 1999, with respect to: (i) each
person known to the company to be the beneficial owner of more than five percent
of the Company's Common Stock, (ii) all directors; and (iii) directors and
executive officers of the Company as a group. The notes accompanying the
information in the table below are necessary for a complete understanding of the
figures provided below. As of March 31, 1999 there were 12,816,604 post-split
shares of common stock outstanding.
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<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Class Name and Address of Beneficial Amount and Nature of Percent of class
-------------- ------------------------------ -------------------- ----------------
Owner Beneficial Ownership
<S> <C> <C> <C>
Common Stock Edward A. Roth(1) 4,156,000(1) 32.4%
($0.001 par value) 4614 North University Dr.
Fort Lauderdale, Fla. 33351
Preferred Stock Edward A. Roth 500,000 50%
($0.001 par value)
Common Stock Alisha M. Roth 4,156,000 32.4000%
($0.001 par value) 4614 North University Dr.
Fort Lauderdale, Fla. 33351
Preferred Stock Alisha M. Roth 500,000 50%
($0.001 par value)
Common Stock Barbara Patigalia 1,000 .00007%
($0.001 par value)
Common Stock Jon J. Marks 0 0%
($0.001 par value)
Common Stock All Directors 8,313,000 64.8007%
($0.001 par value)
Preferred Stock As a group 1,000,000 100%
($0.001 par value)
</TABLE>
<TABLE>
<CAPTION>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
<S> <C> <C>
Name and Age Position Term(s) of Office
------------ -------- -----------------
Edward A. Roth, age 43 President and Director 1997 to present
Alisha M. Roth, age 33 Secretary, Treasurer and Director 1997 to present
Barbara Patigalia, age 52 Director 1997 to present
Jon J. Marks, age 54 Director 1998 to present
</TABLE>
Edward A. Roth has been President and Director of the Company since 1997.
Mr. Roth previously served as Vice-President and Director of Operations for
Cleaning Express USA since it's inception in November 1994. During this period
Mr. Roth developed and implimented all operations and developments creating a
company that started with less than 50 customers, and today services over 8,000
customers in South Florida. Mr. Roth was President of Advanced Appearance, a
chain of Beauty Salons, in Alabama and Florida form 1978 to 1988. Prior to this
Mr. Roth served as a management consultant working independently for 20 years.
Mr. Roth has attended Auburn University majoring in Business and marketing, and
is also a veteran of the United States Air Force. Edward A. Roth is married to
Alisha M. Roth
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1 Edward A. Roth and Alisha M. Roth are the beneficial owners of different
securities, but hold them as Joint Tenancy.
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Alisha M. Roth has served as Secretary and Director of the Company since
1997. Mrs. Roth served previously as President of Cleaning Express USA, and
during her tenure she was in charge of staffing and customer relations. Mrs.
Roth has been with Cleaning Express USA since 1994, prior to that she was a
resident of Trinadad, West Indies. Mrs. Roth has owned and operated her own
business in the restaurant and pre-school development areas, and has 8 years of
management experience. Alisha M. Roth is married to Edward A. Roth.
Barbara Patigalia is a language pathologist with the Head Start program in
Maryland, and serves as President of the League of Women Voters in Potomac,
Maryland. Ms. Patigalia had no business experience during the last 5 years,
except other than through her role as a director of the Company.
Jon J. Marks is CEO of Marketing Magic, Inc. founded in 1984. Mr. Marks
writes a monthly newspaper column on Advertising, Marketing and Promotions for
the Business to Business Newspaper in Florida. Mr. Marks created a business
radio show on AM stations WSRF and WWNN in South Florida. Mr. Marks has authored
a book, " Barter: The Original Currency". Mr. Marks was Co-Founder and
shareholder of Entertainment Radio Systems, Inc. through 1997, Co-Founder and
shareholder of Business to Business Newspapers through 1996 and Co-Founder and
shareholder of Explosive Promotions through 1992. Mr. Marks receive a Bachelor
of Business Administration from Florida Atlantic University in 1971 and a Master
of Public administration in 1974.
ITEM 6. EXECUTIVE COMPENSATION
Executive Compensation
No compensation in excess of $100,000 was awarded to, earned by, or
paid to any executive officer of the Company during the years 1996 to 1998. The
following table and the accompanying notes provide summary information for each
of the last three fiscal years concerning cash and non-cash compensation paid or
accrued by Ed Roth, the Company's chief executive officer for the past three
years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payouts
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Compensation Award(s) Options payouts Compensation
Position ($) ($) ($) ($) SARs(#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ed Roth 1998 - - -(2) - - - -
Chief 1997 - - - - - - -
Executive 1996 - - - - - - -
Officer
Alisha Roth 1998 - - - - - - -
Secretary, 1997 - - - - - - -
Treasurer 1996 - - - - - - -
</TABLE>
- --------
2 Subsequent to year end 1998 Edward Roth and Alisha Roth were each compensated
for services performed in 1996, 1997, 1998 by the issuance of Four Million
(4,000,000) Common Shares at par value ($.001) and Five Hundred Thousand
(500,000) Preferred Shares at par value ($.001) to each individual.
11
<PAGE>
The Company has entered into an employment agreement with Edward A. Roth for a
term of three years. Pursuant to the agreement, Mr. Roth serves as President,
Director and General Manager. Mr. Roth shall receive an annualized base salary
of $125,000 and is entitled to an incentive bonus of 2% of the gross profits.
Mr. Roth's salary has not started to accrue.
The Company has also entered into an employment agreement with Alisha Roth for a
term of three years. Pursuant to the agreement, Mrs. Roth serves as Secretary,
Treasurer and Director. Mrs. Roth shall receive an annualized salary of $60,000,
payable in installments according to the Employer's regular payroll schedule.
Mrs. Roth's salary has not started to accrue.
All executive salaries and agreements will not begin until fall of 1999.
Compensation of Directors
In 1999, the Company committed itself to compensate each of its Board of
Directors with shares of its common stock and common stock purchase options. As
of the date of this report, the terms have yet to be finalized and no option
agreement has been officially adopted. Comments in the auditor's report reflect
that term have been defined regarding compensation. Since the writing of the
report terms remain undefined and no agreement or terms have been reached.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Relationship between Jon Marks, CEO of Marketing Magic, Inc. and the Company.
The Company has used and will continue to use the services of Marketing Magic,
Inc. for its advertising, marketing and promotiional needs. There currently is
no formal agreement bewteen Marketing Magic, Inc. and the Company and services
are performed on per project basis. Compensation for those services will be
consistent with current market prices and will also be determined on a per
project basis. To date no compensation has been paid by the Company to Marketing
Magic, Inc. or Mr. Marks directly for services that have been performed.
ITEM 8. DESCRIPTION OF SECURITIES
Qualification. The following statements constitute summaries of the material
provisions of the Company's Certificate of Incorporation and Bylaws, as amended.
Such summaries do not purport to be complete and are qualified in their entirety
by reference to the full text of the Certificate of Incorporation and Bylaws.
The Company's Articles of Incorporation authorize it to issue up to 100,000,000
Common Shares, $.001 par value per Common Share. On October 26, 1998 the Company
Amended its Articles of Incorporation to authorize 50,000,000 shares of
Convertible Preferred Stock, $.001 par value per share, with each preferred
share convertible into 10 shares of common stock, including but not limited to
voting rights.
Liquidation Rights. Upon liquidation or dissolution, and after payment of the
Preferred Shareholders, each outstanding Common Share will be entitled to share
equally in the remaining assets of the Company legally available for
distribution to shareholders after the payment of all debts and other
liabilities.
12
<PAGE>
Dividend Rights. There are no limitations or restrictions upon the rights of the
Board of Directors to declare dividends out of any funds legally available
thereof. The Company has not paid dividends to date and it is not anticipated
that any dividends will be paid in the foreseeable future. The Board of
Directors initially may follow a policy of retaining earnings, if any, to
finance the future growth of the Company. Accordingly, future dividends, if any,
will depend upon, among other considerations, the Company's need for working
capital and its financial conditions at the time.
Voting Rights. Holders of Common Shares of the Company are entitled to cast one
vote for each share held at all shareholders meetings for all purposes.
Other Rights. Common Shares are not redeemable, have no conversion rights and
carry no preemptive or other rights to subscribe to or purchase additional
Common Shares in the event of a subsequent offering.
Convertible Preferred Stock. The Corporation is authorized to issue Fifty
Million (50,000,000) Convertible Preferred Shares, par value $.001 per share.
The rights, preferences, privileges and restrictions granted to and imposed on
the Common Shares and the Preferred Shares are identical in all respects, except
that the holders of the Preferred Shares have certain conversion rights and a
liquidation preference as set forth below.
A. Liquidation Preference
1. In the event of any liquidation, dissolution or winding up
of this corporation, either voluntary or involuntary, the
holders of the Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any of the
assets of the Company to the holders of Common Stock by reason
of their ownership thereof, an amount per share equal to the
price for which such share was originally issued, as adjusted
for any stock dividends, combination or splits with respect to
such shares. If upon the occurrence of such event, the assets
and funds thus distributed among the holders of Preferred
Shares shall be insufficient to permit the entire assets and
funds of this corporation legally available fordistribution
to be distributed ratably among the holders of Preferred
Shares in proportion to the number of shares of Preferred
shares owned by such holder.
2. After payment has been made to the holders of the Preferred
Shares of the full amounts to which they shall be entitled,
then the entire remaining assets and funds of the corporation
legally available for distribution, if any shall be
distributed equally among the Common Shareholders.
B. Conversion.
1. The Preferred Shares shall convert on a 10 to 1 basis into
Common Shares at any time at the direction of the Preferred
shareholder.
C. Voting Rights
1. Holders of Preferred Shares of the Company are entitled to
cast ten votes for each preferred share held at all
shareholders meetings for all purposes.
13
<PAGE>
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
On January 4, 1999, the Securities and Exchange Commission (SEC) approved
amendments to National Association of Securities Dealers, Inc. (NASD(R)) Rules
6530 and 6540 to limit quotations on the OTC Bulletin Board(R) (OTCBB) to the
securities of companies that report their current financial information to the
SEC, banking, or insurance regulators.
On July 2, 1999 the Company was deleted from the OTCBB and only traded on the
National Quotation Service "Pink Sheets" due to non-compliance with NASD rules
6530 and 6540. The Company's current Symbol is ATTRE. Upon filing of all the
Company's required SEC documents the company plans to apply to be re-listed with
the OTCBB.
In February of 1999 the Company performed a 10 to 1 reverse split of it common
stock, as of March 31, 1999 there were 12,816,604 post-split shares of common
stock outstanding.
The Company's market makers are Hill & Co. The quotations represent inter-dealer
prices without retail markup, markdown or commission, and may not necessarily
represent actual transactions.
Quarter Ended High Bid Low Bid
3/31/99* $7.00 .25
* There was no trading prior to this time.
The Company has never paid any cash dividends nor does it intend, at this time,
to make any cash distributions to its shareholders as dividends in the near
future.
As of March 31, 1999, the number of holders of the Company's common stock is 64.
ITEM 2. LEGAL PROCEEDINGS
There have been no legal proceedings against the Company since inception, nor is
the Company aware of any disputes which may result in legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in or disagreements with accountants regarding
accounting and financial disclosure.
14
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In February 1999, the Company issued the following Common Shares pursuant to
section 4(2) of the Securities Act of 1933 for compensation of services rendered
from 1996 - 1998 to the following Executive officers:
Name # of Common Shares
Edward Roth 4,000,000
Alisha Roth 4,000,000
In February 1999, the Company issued the following Preferred Shares pursuant to
section 4(2) of the Securities Act of 1933 for compensation of services rendered
from 1996 - 1998 to the following Executive officers:
Name # of Preferred Shares
Edward Roth 500,000
Alisha Roth 500,000
In February 1999, the Company issued the following Common Shares as
compensations for services rendered pursuant to section 4(2) of the Securities
Act of 1933 to the following:
Name # of Common Shares
Barbara Patigalia 1,000
Wayne Guthrie 4,000
Steven Dolchin 2,000
In February 1999, the Company completed an offering of 4,350,910 Common Shares
(post 1-for-10 reverse split shares) pursuant to Rule 504 of Regulation D of the
Securities Act of 1933 to 10 persons or entities at $.22 per Common Share. The
Company relied on the following facts in determining that Rule 504 Regulation D
was available: (a) the Company was not subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act; (b) the Company's operations consisted
of home cleaning services through its subsidiary Cleaning Express USA and
therefore, was neither a development stage company with no specific business
plan or purpose nor a company whose plan was to merger with an unidentified
company; (c) the aggregate offering price did not exceed $1,000,000 and (d) the
Company filed a Form D within 15 days of the first sale of the shares subject to
the offering. The Company also distributed a disclosure document to the 10
investors and offered to allow them to inspect the books and records of the
Company. The individuals or entities that participated in this offering are
listed below.
Name # of Common Shares
Michael, David Irrevocable Trust 503,273
Senkovski, Alexander Irrevocable Trust 503,273
A-Z Oil LLC 435,091
China Connection 435,091
East-West Trading Corporation 435,091
Sequoia International 435,091
15
<PAGE>
Karston Electronics LTD 435,091
Leeward Consulting Group, LLC 435,091
Lexington Sales Corporation LTD 435,091
Oriental Investments Limited 435,091
On June 1, 1998, the Company acquired 100% of the outstanding common stock of
ATR Industries, Inc. (a Florida corporation) through the issuance of 3,000,000
shares of its common stock with no readily available market price at the time.
The acquisition resulted in a tax-free exchange for federal and state income tax
purposes. The transaction was accounted for as a reverse merger in accordance
with Accounting Principle Board Opinion No.16 wherein the shareholders of the
Florida corporation retained the majority of the outstanding stock of the
Company after the merger.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification. The Company shall indemnify to the fullest extent permitted by,
and in the manner permissible under the laws of the State of Nevada, any person
made, or threatened to be made, a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that he
is or was a director or officer of the Company, or served any other enterprise
as director, officer or employee at the request of the Company. The Board of
Directors, in its discretion, shall have the power on behalf of the Company to
indemnify any person, other than a director or officer, made a party to any
action, suit or proceeding by reason of the fact that he/she is or was an
employee of the Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceedings) is asserted by such
director, officer, or controlling person in connection with any securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issues.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
16
<PAGE>
PART F/S
The Company's financial statements for the fiscal year ended December 31, 1998
are attached hereto as pages F-1 through F-11.
INDEX TO FINANCIAL STATEMENTS
Unaudited Interim Financial Reports for the period ending March 31, 1999
Balance Sheet...........................................................F-1, F-2
Statements of Income.....................................................F-3, F4
Statements of Cash Flows.....................................................F-5
Notes to Interim Financial Statements...................................F-6, F-7
Audited Financial Reports for Year ending December 31, 1998
Letter From Auditor..........................................................F-8
Balance Sheet..........................................................F-9, F-10
Statements of Operations..............................................F-11, F-12
Statements of Cash Flows....................................................F-13
Statement of Stockholder's Deficit..........................................F-14
Notes to Financial Statements......................................F-15 ... F-18
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
17
<PAGE>
CONSOLIDATED BALANCE SHEETS
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
As of March 31, 1999
ASSETS (Unaudited)
March 31, 1999
CURRENT ASSETS
Cash $ 67,286
Recoverable income taxes ---
Accounts receivable 340
Interest receivable 17,197
----------------
TOTAL CURRENT ASSETS 84,823
PROPERTY AND EQUIPMENT
Furniture 4,215
Leasehold improvements 2,000
Equipment 23,631
Accumulated depreciation (26,344)
---------------
NET PROPERTY AND EQUIPMENT 3,502
OTHER ASSETS
Deposits 1,700
--------------
TOTAL OTHER ASSETS 1,700
TOTAL ASSETS $ 90,025
==============
See Accompanying Notes to Consolidated Financial Statements
F-1
<PAGE>
CONSOLIDATED BALANCE SHEETS (Continued)
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
As of March 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT) (Unaudited)
March 31, 1999
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 8,980
Excess of outstanding checks over
bank balance ---
Shareholder loans payable 23,748
Current portion of capitalized
lease obligation 2,402
Income taxes currently payable 1,929
----------------
TOTAL CURRENT LIABILITIES 37,059
LONG-TERM DEBT
Capitalized lease obligation 6,660
STOCKHOLDERS' EQUITY(DEFICIT)
Common stock 8,908
($.001, par value, 100,000,000
authorized- 8,908,309 issued
and outstanding)
Common stock subscribed($.001,
par value, 3,908,295 subscribed
at $.22 per share) 3,909
Preferred stock (50 million
authorized- zero issued and
outstanding) ---
Common stock subscriptions
receivable (859,825)
Additional Paid-in-Capital 947,566
Retained deficit (54,252)
---------------
TOTAL STOCKHOLDERS' EQUITY(DEFICIT) 46,306
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 90,025
==============
See Accompanying Notes to Consolidated Financial Statements
F-2
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
For Three Months Ended March 31, 1999 & 1998
March 31, 1999 March 31, 1998
REVENUE
Sales $ 126,086 116,164
Cost of Labor (69,980) (66,719)
---------- ---------
GROSS PROFIT 56,106 49,445
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
Advertising 17,520 16,961
Banking Fees 168 ---
Contract Labor --- 1,903
Depreciation 650 1,140
Dues & Fees 2,000 100
Employee Benefits 1,040 300
Employee Leasing 6,928 13,421
Equipment Leasing 926 1,276
Interest Expense 361 290
Miscellaneous Expense 131 17
Office Expense and Supplies 3,575 207
Professional Fees 12,124 845
Public Trading 2,320 1,004
Rent 6,304 3,885
Supplies 408 219
Taxes & Licenses 125 64
Telephone 3,662 2,935
Utilities 439 117
--------- ---------
TOTAL EXPENSES 58,681 44,684
See Accompanying Notes to Consolidated Financial Statements
F-3
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (Continued)
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
For Three Months Ended March 31, 1999 & 1998
March 31, 1999 March 31, 1998
OPERATING INCOME(LOSS) (2,575) 4,761
Interest Income 17,197 ---
Income Tax Provision (2,329) (1,000)
--------- ---------
NET INCOME $ 12,293 3,761
Retained Deficit,
January 1 (66,545) (3,624)
Retained Earnings
(Deficit), March 31 $ (54,252) 137
============ ==========
Net Income Per Share-
Basic and fully diluted $ .001 N/A
============ ==========
Weighted Average Shares 10,717,745 N/A
============ ==========
See Accompanying Notes to Consolidated Financial Statements
F-4
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
For the Three Months Ended March 31, 1999 & 1998
<S> <C> <C>
March 31, 1999 March 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 12,293 3,761
Adjustments to reconcile net income
to net cash provided by (used in) operating
activities:
Depreciation 650 1,140
Recoverable income tax decrease 400 ---
(Increase) decrease in operating assets:
Accounts receivable 160 (1,790)
Interest receivable (17,197) --
Increase (decrease) in operating liabilities:
Accounts payable & accrued expenses (3,010) (204)
Income tax currently payable 1,929 1,000
--------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (4,775) 3,907
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issuances 97,375 ---
Principal repayments under capital lease (625) (596)
Shareholder loans repayments (17,487) ---
Excess of outstanding checks over
bank balance (11,366) (3,154)
--------- ---------
NET CASH PROVIDED BY
(USED IN) FINANCING ACTIVITIES 67,897 (3,750)
--------- ---------
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 63,122 157
Cash and cash equivalents, beginning of period
CASH AND CASH EQUIVALENTS $ 4,164 801
-------- ---------
END OF PERIOD $ 67,286 958
======== =========
Supplementary cash flow disclosure:
Cash paid for interest $ 361 ---
======== =========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-5
<PAGE>
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
MARCH 31, 1999
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of management, the unaudited condensed consolidated financial
statements contain all adjustments consisting only of normal recurring accruals
considered necessary to present fairly the Company's financial position at March
31, 1999, the results of operations for the three month periods ended March
31,1999 and 1998, and cash flows for the three months ended March 31, 1999 and
1998. The results for the period ended March 31, 1999, are not necessarily
indicative of the results to be expected for the entire fiscal year ending
December 31, 1999.
NOTE B - EARNINGS (LOSS) PER SHARE
The following represents the calculation of earnings (loss) per share:
For the three months ended
BASIC March 31, 1999 March 31, 1998
------------ --------------- ----------------
Net income $ 12,293 $ 3,761
Less- preferred stock dividends --- ---
----------- ------------
Net income $ 12,293 $ 3,761
Weighted average number
Of common shares 10,717,745 N/A
----------- ------------
Basic earnings per share $ .001 N/A
=========== ============
F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
ATR INDUSTRIES, INC. & SUBSIDIARIES
UNAUDITED
MARCH 31, 1999
NOTE B - EARNINGS (LOSS) PER SHARE (CONT')
For the three months ended
DILUTED March 31, 1999 March 31,1998
-------------- -------------
Net income $ 12,293 $ 3,761
Less- preferred stock dividends --- ---
----------- ----------
Net income $ 12,293 $ 3,761
Weighted average number
Of common shares 10,717,745 N/A
Common stock equivalent shares --- N/A
----------- ----------
Weighted average number of shares
Used in calculation of diluted
Income per share 10,717,745 N/A
----------- ----------
Diluted earnings per share $ .001 N/A
============ ==========
F-7
<PAGE>
Michael J. Bongiovanni, C.P.A., P.A.
12433 Willingdon Road
Charlotte, N.C. 28078
(704) 904-2390
To the Board of Directors
ATR INDUSTRIES, INC. (a Nevada corporation) & SUBSIDIARIES
4614 North University Drive
Lauderhill, Florida 33351
I have audited the accompanying balance sheet of ATR Industries, Inc. (a Nevada
corporation) and its wholly-owned subsidiaries as of December 31, 1998 and the
related statements of operations, stockholders' deficit, and cash flows for the
years ended December 31, 1998 and 1997. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of ATR Industries, Inc. (a Nevada
corporation) and its wholly-owned subsidiaries as of December 31, 1998, and the
results of its operations and its cash flows for the years ended December 31,
1998 and 1997 in conformity with generally accepted accounting principles.
/S/
Michael J. Bongiovanni, C.P.A.
March 31, 1999
F-8
<PAGE>
BALANCE SHEET
ATR INDUSTRIES, INC. & SUBSIDIARIES
December 31, 1998
ASSETS
CURRENT ASSETS
Cash $ 4,164
Recoverable income taxes 400
Accounts receivable 500
---
TOTAL CURRENT ASSETS 5,064
PROPERTY AND EQUIPMENT
Furniture 4,215
Leasehold improvements 2,000
Equipment 23,631
Less: Accumulated depreciation (25,694)
-------------
NET PROPERTY AND EQUIPMENT 4,152
OTHER ASSETS
Deposits 1,700
-------------
TOTAL OTHER ASSETS 1,700
-------------
TOTAL ASSETS $ 10,916
=============
See notes to audited financial statements and
auditor's report.
F-9
<PAGE>
BALANCE SHEET (CONTINUED)
ATR INDUSTRIES, INC. & SUBSIDIARIES
December 31, 1998
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Excess of outstanding checks
over bank balance $ 11,366
Accounts payable and accrued expenses 11,990
Shareholder loans payable 41,235
Current portion of capitalized
lease obligation 2,482
----------
TOTAL CURRENT LIABILITIES 67,073
LONG-TERM DEBT
Capitalized lease obligation 7,205
STOCKHOLDERS' DEFICIT
Common stock 3,183
Retained deficit (66,545)
----------
TOTAL STOCKHOLDERS' DEFICIT (63,362)
----------
TOTAL LIABILITIES AND SOTCKHOLDERS' EQUITY $ 10,916
==========
See notes to audited financial statements and
auditor's report.
F-10
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Years Ended December 31, 1998 and 1997
1998 1997
------------------------ ----------------------
<S> <C> <C>
REVENUE
Sales $ 474,370 $ 473,824
Cost of Labor (314,106) (267,013)
---------------- --------------
GROSS PROFIT 160,264 206,811
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
Advertising 57,581 96,911
Alarm and Security Service 326 300
Automobile 2,163 1,993
Casual Office Labor 16,598 -
Depreciation 2,600 4,812
Dues & Fees 4,447 3,287
Employee Leasing 31,040 63,002
Employee Benefits 4,706 11,746
Entertainment 3,900 89
Equipment Leasing 9,915 4,611
Insurance 2,741 3,408
Interest Expense 1,309 -
Office Expense and Supplies 4,627 9,175
Professional Fees 23,328 300
Public Trading 22,335 -
Rent 16,628 10,802
Repairs & Maintenance 3,000 513
Taxes & Licenses 6,760 569
Telephone 7,952 4,524
Utilities 1,229 1,101
----------------- ---------------
TOTAL EXPENSES 223,18 217,143
----------------- ---------------
</TABLE>
ee notes to audited financial statements and auditor's report.
F-11
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (CONT.)
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Years Ended December 31, 1998 and 1997
1998 1997
------------------------ ---------------------
<S> <C> <C>
OPERATING LOSS $ (62,921) $ (10,332)
Income Tax Benefit 2,100
----------------- ------------
NET LOSS $ (62,921) (8,232)
Retained Earnings (Deficit),
beginning of year (3,624) 4,608
----------------- ------------
Retained Deficit,
end of year $ (66,545) $ (3,624)
================= ============
Basic and fully diluted loss per common share $ (.03) $ (.001)
================= ============
</TABLE>
See notes to audited financial statements and auditor's report.
F-12
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
1998 1997
------------------------ ----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (62,921) (8,232)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation 2,600 4,812
Recoverable income taxes (increase) decrease 1,700 (2,100)
(Increase) decrease in operating assets:
Accounts receivable 699 2,547
Deposits & other - (1,550)
Increase (decrease) in operating liabilities:
Accounts payable & accrued expenses 11,386 (3,508)
NET CASH USED IN
OPERATING ACTIVITIES (46,536) (8,031)
----------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment - (10,861)
----------------- -------------
NET CASH USED IN
INVESTING ACTIVITIES (10,861)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock adjustment (317) -
Common stock issuance 3,000 -
Proceeds from shareholder loans 41,235 -
Excess of outstanding checks over
bank balance 8,212 3,154
Borrowings under capital lease - 11,918
Principal repayments under capital lease (2,231) -
----------------- -------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES $ 49,899 15,072
----------------- -------------
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 3,363 (3,820)
Cash and cash equivalents, beginning of year $ 801 4,621
----------------- -------------
CASH AND CASH EQUIVALENTS
END OF YEAR $ 4,164 801
================= =============
</TABLE>
See notes to audited financial statements and auditor's report.
F-13
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF STOCKHOLDERS' DEFICIT
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
<S> <C> <C> <C>
Retained
Common Common Earnings
Stock Shares (Deficit)
----------- ----------- -------------
Balance, January 1, 1997 $ 500 36,670,000 $ 4,608
Year Ended December 31, 1997 Net Loss - - (8,232)
----------- ------------- -----------
Balance, January 1, 1998 500 36,670,000 $ (3,624)
200 to 1 Reverse Stock Split in 1998 - (36,486,650) -
Issuance of shares on June 1, 1998 3,000 3,000,000 -
Adjustment to pre-1998 (317)
Year Ended December 31, 1998 Net Loss - - (62,921)
------------ -------------- ------------
Balance, December 31, 1998 $ 3,183 3,183,350 $ (66,545)
============ ============== ============
</TABLE>
Supplementary Information:
Common stock, par value $.001, consists of 100,000,000 authorized shares. There
are 3,183,350 shares, issued and outstanding at December 31, 1998. On June 1,
1998 the Company acquired all of the then outstanding common shares of ATR
Industries, Inc. and its wholly owned subsidiary (Florida corporations),
formerly known as Cleaning Express USA, in exchange for 3,000,000 of its own
shares.
On October 26, 1998, The Company amended its Articles of Incorporation to
authorize 50,000,000 shares of convertible preferred stock.
See notes to audited financial statements and
auditor's report.
F-14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Years Ended December 31, 1998 and 1997
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - ATR Industries, Inc. (a Nevada corporation) was incorporated
in 1987. These financial statements include the effects of its wholly-owned
subsidiaries, ATR Industries, Inc. (a Florida corporation) AKA Cleaning Express
USA and Cleaning Express of South Palm Beach, Inc. On December 1, 1997, ATR
Industries, Inc. (a Florida corporation) amended its Articles of Incorporation
to effect a name change from Cleaning Express USA, Inc. The company is a full
service cleaning company offering daily residential cleaning services, carpet
cleaning and other related services in the South Florida area.
On June 1, 1998, the Company acquired 100% of the outstanding common stock of
ATR Industries, Inc. (a Florida corporation) through the issuance of 3,000,000
shares of its common stock with no readily available market price at the time.
The acquisition resulted in a tax-free exchange for federal and state income tax
purposes. The transaction was accounted for as a reverse merger in accordance
with Accounting Principle Board Opinion No.16 wherein the shareholders of the
Florida corporation retained the majority of the outstanding stock of the
Company after the merger.
Accounts Receivable - Accounts receivable are charged to bad debt expense as
they are deemed uncollectible based upon a periodic review of the accounts. No
bad debt expense for the year ended December 31, 1998 was recorded. At December
31, 1998, no allowance for doubtful accounts was deemed necessary in
management's opinion.
Property and Equipment - Property and equipment are recorded at cost and include
expenditures which substantially increase the productive lives of the existing
assets. Maintenance and repair costs are expensed as incurred. Depreciation is
provided using the straight-line method and other methods which approximate the
straight-line method. It is calculated over recovery periods as prescribed by
management which range from 5 years for equipment to 7 years for furniture.
Leasehold improvements are amortized over the term of the office operating
leases.
When a fixed asset is disposed of, its cost and related accumulated depreciation
are removed from the accounts. The difference between undepreciated cost and
proceeds from disposition is recorded as gain or loss.
Cash and Cash Equivalents - For purposes of the Statement of Cash Flows, the
Company considers liquid investments with an original maturity of three months
or less to be cash equivalents.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition - Revenue is recognized when cleaning services are
performed.
Income Taxes - Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of deferred taxes related
F-15
<PAGE>
primarily to differences between the bases of certain assets and liabilities
for financial and tax reporting. Deferred taxes represent the future tax return
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled. The income tax benefit
consists of taxes currently refundable due to net operating loss carryback
provisions for federal and state governments. There are no other deferred
income tax assets or liabilities required to be recorded or disclosed in accord-
ance with Statement of Financial Accounting Standards No. 109.
Advertising - The Company charges the costs of advertising to expense when
incurred.
NOTE B - OBLIGATION UNDER CAPITAL LEASE
The Company is leasing equipment under a noncancelable capital lease which
expires in December, 2000. The obligation under capital lease has been recorded
in the accompanying Balance Sheet at the net present value of the future minimum
lease payments, discounted at an interest rate of 20%. The book value of the
equipment was approximately $5,000 at December 31, 1998.
Minimum future obligations under this capital lease at December 31, 1998 are as
follows:
Year Amount
- ---- ------
1999 $ 3,540
2000 3,540
2001 3,540
2002 3,540
-------
Total minimum obligation 14,160
Less amount representing interest 4,473
-------
Present value of net
minimum obligation 9,687
Less current portion 2,482
-------
$7,205
=======
NOTE C - COMMITMENTS
The Company leases its offices in Lauderhill and Boca Raton, Florida under
noncancelable operating leases. Future minimum rental payments as of December
31, 1998 in the aggregate and for each of the two succeeding years are as
follows:
Year Amount
- ---- ------
1999 $13,525
2000 1,800
---------
$15,325
=========
F-16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Years Ended December 31, 1998 and 1997
NOTE C - COMMITMENTS (CONT.)
In 1999, the Company has committed itself to compensate each of its Board of
Directors in the amount of 1,000 shares of its common stock annually and 10,000
common stock purchase options over a thirty six month period. As of the date of
this report, no option agreement has been officially adopted, there is no fair
market value for the options and none of the equity instruments have been
issued.
NOTE D - INCOME TAXES
The benefit for income taxes for the years ending December 31, 1998 and 1997
consists of the following:
1998 1997
----------- ---------
Recoverable federal income taxes $ 300 $ 1,500
Recoverable state income taxes 100 600
------------ ----------
Total $ 400 $ 2,100
============ ==========
The Company has approximately $70,000 of federal and state net operating losses
available which expire in the year 2013. The losses can be partially carried
back to previous taxable years to obtain federal and state income tax refunds.
Due to operating losses, there is no provision for current federal or state
income taxes for the years ended December 31, 1998 and 1997.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amount used for federal and state income tax purposes.
The Company's deferred tax asset at December 31, 1998 consists of net operating
loss carryforwards calculated using federal and state effective tax rates
equating to approximately $14,000 less a valuation allowance in the amount of
approximately $14,000, respectively. Because of the Company's lack of earnings
history, the deferred tax asset has been fully offset by a valuation allowance.
The valuation allowance increased by approximately $14,000 for the year ended
December 31, 1998.
Utilization of the net operating losses may be subject to certain annual
limitations under Code Section 382 of the Internal Revenue Code of 1986, as
amended. The annual limitation may result in the expiration of net operating
losses before full utilization.
F-17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Years Ended December 31, 1998 and 1997
NOTE E - RECLASSIFICATIONS
Certain amounts in the presentation of the 1997 statement of operations and
statement of cash flows have been reclassified to conform with the 1998
presentation.
NOTE F - EARNINGS (LOSS) PER SHARE (EPS)
The Company adopted Statement of Financial Accounting Standard (SFAS) No. 128
during the year. This statement requires dual presentation of basic and diluted
EPS with a reconciliation of the numerator and denominator of the EPS
computations. Basic earnings per share amounts are based on the weighted average
shares of common outstanding. If applicable, diluted earnings per share would
assume the conversion, exercise or issuance of all potential common stock
instruments such as options, warrants and convertible securities, unless the
effect is to reduce a loss or increase earnings per share. Accordingly, this
presentation has been adopted for the period presented. There were no
adjustments required to net loss for the period presented in the computation of
diluted earnings per share. The basic and diluted weighted average shares
outstanding for the year ended December 31, 1998 is as follows:
Weighted average outstanding common shares used
for basic and diluted EPS 1,942,254
=========
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
F-18
<PAGE>
PART III
Exhibits required to be attached are listed in the Index of Exhibits beginning
on page 38 of the Form 10-SB, which is incorporated herein by reference.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
ATR Industries, Inc.
Date _______August 4, 1999_____________
By _____/s/ Edward Roth_______
Edward Roth, President
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
19
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Page No. Description
2(i) 20 Articles of Incorporation for Tri-Capital Corporation, now
ATR Industries, Inc
2(ii) 23 By-laws for ATR Industries, Inc.
6(i) 33 September 1, 1998 Employment Agreement between Edward
Anthony Roth, CEO, and ATR Industries. Term of Employment
is from September 1, 1998 until September 1, 2001.
6(ii) 41 September 1, 1998 Employment Agreement between Alisha Roth,
Secretary and Treasurer, and ATR Industries, Inc. Term of
Employment is from September 1,1998 until September 1, 2001
15 49 Year 2000 Disclosure Statement from Custom Service Dist-
ribution, Inc.
27 50 Financial Data Schedule.
20
3.1 ARTICLES OF INCORPORATION
OF
TRI CAPITAL CORPORATION
We the undersigned, being each of the original incorporators herein named, for
the purpose of forming a corporation to do business both within and without the
State of Nevada, and in pursuance of the corporation laws of the State of
Nevada, being Chapter 78 of the Nevada Revised Statutes, do make and file these
Articles of Incorporation hereby declaring and certifying that the facts herein
stated are true:
1. The name of the corporation is TRI CAPITAL CORP.
2. Its principal office in the County of Tahoe, State of Nevada is located at
350 South Center Street, Suite 4040, Reno, Nevada 89501. The name and address of
its Resident Agent is Elliott R. Pearson, 350 South Center Street, Suite 404,
Reno, Nevada 89501.
3. The purpose for which the corporation is organized are to engage in any
activity or business not in conflict with the laws of the State of Nevada or of
the United States of America, and without limiting the generality of the
foregoing, specifically:
1. To have and to exercise all the powers now or hereafter conferred by
the laws of the State of Nevada upon corporations organized pursuant to the laws
under which the corporation is organized and any and all acts amendatory thereof
and supplemental thereto.
2. To discount and negotiate promissory notes, drafts, bill of exchange
and other evidence of debts, and to collect for others money due them on notes,
checks, drafts, bill of exchange, commercial paper and other evidence of
indebtedness.
3. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, or otherwise dispose of, to guaranty, to
invest, trade, and deal in and with personal property of every class and
description.
4. To enter into any kind of contract or agreement, cooperative or
profit sharing plan with its officers or employees that the corporation may deem
advantageous or expedient or otherwise to reward or pay such persons for their
services as the directors may deem fit.
5. To purchase, lease, or otherwise acquire, in whole or in part, the
business, the good will, rights, franchises and property of every kind, and to
undertake the whole or any part of the assets or liabilities, of any person,
firm, association, non-profit or profit corporation, or own property necessary
or suitable for its purposes, and to pay the same in cash, in the stocks or
bonds of this company or otherwise, to hold or in any manner dispose of the
whole or any part of the business or property so acquired and to exercise all of
the powers necessary to incidental to the conduct of such business.
6. To lend or borrow money and to negotiate and make loans, either on
its own account or as agent, or broker for others.
7. To enter into, make, perform and carry out contracts of every kind
and for any lawful purpose, without limit as to amount with any person, firm,
association, cooperative profit or non-profit corporation, municipality, State
or Government or any subdivision, district or department thereof.
8. To buy, sell, exchange, negotiate, or otherwise deal in, or
hypothecate securities, stocks, bonds, debentures, mortgages, notes or other
collaterals or securities, created or issued by any corporation wherever
organized including this corporation, within such limits as may be provided by
law, and while owner of any such sticks or other collaterals to exercise all
rights, powers and privileges of ownership, including the right to vote the
same, to subscribe for stock of any corporation to be organized, other than to
promote the organization thereof.
9. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage,
21
<PAGE>
pledge, license, or otherwise dispose of any letters, patents, copyrights, or
trademarks of every class and description.
10. To do any and all other such acts, things, business or businesses
in any manner connected with or necessary, incidental, convenient or auxiliary
to do any of these objects hereinbefore enumerated, or calculated, directly or
indirectly, to promote the interest of the corporation; and in carrying on its
purposes, or for the purpose of obtaining or furthering any of its business, to
do any and all acts and things, and to exercise any and all other powers which a
co-partnership or natural person could do or exercise, and which now or
hereafter may be authorized by law, and in any other part of the world.
11. The several clauses contained in this statement of powers shall be
construed as both purposes and powers. And the statements contained in each of
these causes shall be in no way limited or restricted, by reference to or
inference form, the terms of any other clauses, but shall be regarded as
independent purposes and powers, and no recitations, expression or declaration
of specific or special powers or purposes herein enumerated shall be deemed to
be exclusive, but is hereby expressly declared that all other lawful powers not
inconsistent herewith, are hereby included.
4. The aggregate number of shares which the corporation shall have authority to
issue is 100,000,000. Each share will have a par value of .001.
5. The governing board shall be styled "Director", and the first Board
shall be one (1) in number. So long as all of the shares of the
corporation are owned beneficially and of record by either one or
two shareholders, the number of directors may be less than three, but not less
then the number of shareholders. Otherwise, the number of directors shall not be
less than three.
Subject to the foregoing limitations, the number of directors shall not
be reduced to less than one, and may, at any time or times, be increased or
decreased by a duly adopted amendment to these Articles of Incorporation, or in
such manner as shall be provided in the By-laws of the corporation duly adopted
by either the Board of Directors or the shareholders.
The names and addresses of the first Board of Directors are as follows:
Directors Address
Monroe Arndt 350 Broadway, 4th flr
New York, NY 1001
6. All shares are to be non-assessable.
7. The names and addresses of the incorporators of the Corporation are as
follows:
Name Address
Elliott R. Pearson 350 S. Center St. # 404
Reno, NV 89501
8. The period of its duration ir perpetual.
9 Provisions for the regulation of the internal affairs of the corporation are
contained in the By-laws of this Corporation.
DATED this 4th Day of August, 1987
------------------------------
Elliott R. Pearson
22
BYLAWS
FOR THE REGULATION, EXCEPT AS OTHERWISE
PROVIDED BY STATUTE OR ITS ARTICLES OF INCORPORATION
OF
ATR INDUSTRIES, INC.
ARTICLE 1
OFFICES
The registered office of the Corporation in the State of Nevada shall be located
in the City and State designated in the Articles of Incorporation. The
Corporation May also maintain offices at such other places within or without the
State of Nevada as the Board of Directors may, from time to time, determine.
ARTICLE 2
MEETINGS OF SHAREHOLDERS
Section 1- Annual Meetings (Chapter 78.310)
The annual meeting of the shareholders of the Corporation shall be held at the
time fixed, from time to time, by the Directors.
Section 2- Special Meetings (Chapter 78.310)
Special meetings of the shareholders may be called by the Board of Directors or
such person or persons authorized by the Board of Directors and shall be held
within or without the State of Nevada.
Section 3- Place of Meetings (Chapter 78.310)
Meetings of shareholders shall be held at the registered office of the
Corporation, or at such other places, within or without the State of Nevada as
the Directors may from time to time fix. If no designation is made, the meeting
shall be held at the Corporation's registered office in the state of Nevada.
Section 4- Notice of Meetings (Section 78.370)
(a) Written or printed notice of each meeting of shareholders, whether annual or
special, signed by the president, vice president of secretary, stating the time
when and place where it is to be held, as well as the purpose or purposes for
which the meeting is called, shall be served either personally or by mail, by or
at the direction of the direction of the president, the secretary, or the
officer or the person calling the meeting, not less than ten or more than sixty
days before the date of the meeting, unless the lapse of the prescribed time
shall have been waived before or after the taking of such action, upon each
shareholder of record entitled to vote at such meeting, and to any other
shareholder to whom the giving of notice may be required by law. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
addressed to the shareholder as it appears on the share transfer records of the
Corporation or to the current address, which a shareholder has delivered to the
Corporation in a written notice.
23
<PAGE>
(b) Further notice to a shareholder is not required when notice of two
consecutive annual meetings, and all notices of meetings or of the taking of
action by written consent without a meeting to him or her during the period
between those two consecutive annual meetings; or all, and at least two payments
sent by first-class mail of dividends or interest of securities during a
12-month period have been mailed addressed to him or her at his or her address
as shown on the records of the Corporation and have been returned undeliverable.
Section 5- Quorum (Section 78.320)
(a) Except as other wise provided herein, or by law, or in the Articles of
Incorporation (such Articles and any amendments thereof being hereinafter
collectively referred to as the "Articles of Incorporation"), a quorum shall be
present at all meetings of shareholders of the Corporation, if the holders of a
majority of the shares entitled to vote of that matter are represented at the
meeting in person or by proxy.
(b) The subsequent withdrawal of any shareholder form the meeting, after the
commencement of a meeting, or the refusal of any shareholder represented in
person or by proxy to vote, shall have no effect of the existence of a quorum,
after a quorum has been established at such meeting.
(c) Despite the absence of a quorum at any meeting of shareholders, the
shareholders present may adjourn the meeting.
Section 6- Voting and Acting (Section 78.320 & 78.350)
(a) Except as otherwise provided by law, the Articles of Incorporation, or these
Bylaws, any corporate action, the affirmative vote of the majority of shares
entitled to vote on that matter and represented either in person or by proxy at
a meeting of shareholders at which a quorum is present, shall be the act of the
shareholders of the Corporation.
(b) Except as otherwise provided by statute, the Certificate of Incorporation,
or these bylaws, at each meeting of shareholders, each shareholder of the
Corporation entitled to vote thereat, shall be entitled to one vote for each
share registered in his name on the books of the Corporation.
(c) Where appropriate communication facilities are reasonably available, any or
all shareholders shall have the right to participate in any shareholders'
meeting, by means of conference telephone or any means of communications by
which all persons participating in the meeting are able to hear each other.
Section 7- Proxies (Section 78.355)
Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so either in person or by proxy, so long as such proxy is
executed in writing by the shareholder himself, his authorized officer,
director, employee or agent or by causing the signature of the stockholder to be
affixed to the writing by any reasonable means, including, but not limited to ,
a facsimile signature, or by his attorney-in-fact there unto duly authorized in
writing. Every proxy shall be revocable at will unless the proxy conspicuously
states that it is irrevocable and the proxy is coupled with an interest. A
telegram, telex, cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, shall be treated as a valid proxy, and
treated as a substitution of the original proxy, so long as such transmission is
a complete reproduction executed by the shareholder. If it is determined that
the telegram, cablegram or other electronic transmission is valid, the persons
appointed by the Corporation to count the votes of
24
<PAGE>
shareholders and determine the validity of proxies and ballots or other persons
making those determinations must specify the information upon which they relied.
No proxy shall be valid after the expiration of six months from the date of its
execution, unless otherwise provided in the proxy. Such instrument shall be
exhibited to the Secretary at the meeting and shall be filed with the records of
the Corporation. If any shareholder designates two or more persons to act as
proxies, a majority of those persons present at the meeting, or, if one is
present, then that one has and may exercise all of the powers conferred by the
shareholder upon all of the persons so designated unless the shareholder
provides otherwise.
Section 8- Action Without a Meeting (section 78.320)
Unless otherwise provided for in the Articles of Incorporation of the
Corporation, any action to be taken at any annual or special shareholders'
meeting, may be taken without a meeting, without prior notice and without a vote
if written consents are signed by a majority of the shareholders of the
Corporation, except however if a different proportion of voting power is
required by law, the Articles of Incorporation or these Bylaws, than that
proportion of written consents is required. Such written consents must be filed
with the minutes of the proceedings of the shareholders of the Corporation.
ARTICLE 3
Board of Directors
Section 1- Number, Term, Election and Qualifications (Section 78.115,
78.330)
(a) The first Board of Directors and all subsequent Boards of the Corporation
shall consist of ( ), unless and until otherwise determined by vote of a
majority of the entire Board of Directors. The Board of Directors or
shareholders all have the power, in the interim between annual and special
meetings of the shareholders, to increase or decrease the number of Directors of
the Corporation. A Director need not be a shareholder of the Corporation unless
the Certificate of Incorporation of the Corporation or these Bylaws so require.
(b) Except as may otherwise be provided herein or in the Articles of
Incorporation, the members of the Board of Directors of the Corporation shall be
elected at the first annual shareholders' meeting and at each annual meeting
thereafter, unless their terms are staggered in the Articles of Incorporation of
the Corporation or these Bylaws, by a plurality of the votes cast at a meeting
of shareholders, by the holders of shares entitled to vote in the election.
(c) The first Board of Directors shall hold office until the first annual
meeting of shareholders and until their successors have been duly elected and
qualified or until there is a decrease in the number of Directors. Thereinafter,
Directors will be elected at the annual meeting of shareholders and shall hold
office until the annual meeting of the shareholders next succeeding his
election, unless their terms are staggered in the Articles of incorporation of
the Corporation (so long as at least one-fourth in number of the Directors of
the Corporation are elected at each annual shareholders' meeting) or these
Bylaws, or until his prior death, resignation or removal. Any Director may
resign at any time upon written notice of such resignation to the Corporation.
(d) All Directors of the Corporation shall have equal voting power unless the
Articles of Incorporation of
25
<PAGE>
the Corporation provide that the voting power of individual Directors or classes
of directors are greater than or less than that of any other individual
Directors or classes of Directors, and the different voting powers may be stated
in the Articles of Incorporation or may be dependent upon any fact or event that
may be ascertained outside the Articles of Incorporation is the manner in which
the fact or event may operate of those voting powers is stated in the Articles
of Incorporation. If the Articles of Incorporation provide that any Directors
have voting power greater than or less than other Directors of the Corporation,
every reference in these Bylaws to a majority or other proportion of Directors
shall be deemed to refer to majority or other proportion of the voting power of
all the Directors or classes of Directors, as may be required by the Articles of
Incorporation.
Section 2- Duties and Powers (Section 78.120)
The Board of Directors shall be responsible for the control and management of
the business and affairs, property and interests of the Corporation, and may
exercise all powers of the Corporation, except such as those stated under Nevada
state law, are in the Articles of Incorporation or these Bylaws, expressly
conferred upon or reserved the shareholders or any other person or persons named
therein.
Section 3- Regular Meetings; Notice (Section 78.310)
(a) A regular meeting of the Board of Directors shall be held either within or
without the State of Nevada at such time and at such place as the Board shall
fix.
(b) No notice shall be required of any regular meeting of the Board of Directors
and, if given, need not specify the purpose of the meeting' provided, however
that in case the Board of Directors shall fix or change the time or place of any
regular meeting when such time and place was fixed before such change, notice of
such action shall be given to each director who shall not have been present at
the meeting at which such action was taken within the time limited, and in the
manner set forth in these Bylaws with respect to special meetings, unless such
notice shall be waived in the manner set forth in these Bylaws.
Section 4- Special Meetings, Notice (Section 78.310)
(a) Special meetings of the Board of Directors shall be held at such time and
place as may be specified in the respective notices or waivers of notice
thereof.
(b) Except as otherwise required statute, written notice of special meetings
shall be mailed directly to each Director, addressed to him at his residence or
usual place of business, or delivered orally. With sufficient time for the
convenient assembly of Directors thereat, or shall be sent to him at such place
by telegram, radio or cable, or shall be delivered to him personally or given to
him orally, not later than the day before the day on which the meeting is to be
held. If mailed, the notice of any special meeting shall be deemed to be
delivered on the second day after it is deposited in the United States mails, so
addressed, with postage prepaid. If notice is given by telegram, it shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
A notice, or waiver of notice, except as required by these Bylaws, need not
specify the business to be Transacted at or the purpose or purposes of the
meeting.
(c) Notice of any special meeting shall not be required to be given to any
director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
26
<PAGE>
Section 5- Chairperson
The Chairperson of the Board, if any and if present, shall preside at all
meetings of the Board of Directors. If there shall be no Chairperson, or he or
she shall be absent, then the President shall preside, and in his absence, any
other director chosen by the Board of Directors shall preside.
Section 6- Quorum and Adjournments (Section 78.315)
(a) At all meetings of the Board of Directors, or any committee thereof, the
presence of a majority of the entire Board, or such committee thereof, shall
constitute a quorum for the transaction of business, except as otherwise
provided by law, by the Certificate of Incorporation, or these Bylaws.
(b) A majority of the directors present at the time and place of any regular or
special meeting, although less than a quorum, may adjourn the same from time to
time without notice, whether or not a quorum exists. Notice of such adjourned
meeting shall be given to Directors not present at time of the adjournment and,
unless the time and place of the adjourned meeting are announced at the time of
the adjournment, to the other Directors who were present at the adjourned
meeting.
Section 7- Manner of Acting (Section 78.315)
(a) At all meetings of the Board of Directors, each director present shall have
one vote, irrespective of the number of shares of stock, if any, which he may
hold.
(b) Except as otherwise provided by law, by the Articles of Incorporation, or
these bylaws, action approved by a majority of the votes of the Directors
present at any meeting of the Board or any committee thereof, at which a quorum
is present shall be the act of the Board of Directors or any committee thereof.
(c) Any action authorized in writing made prior or subsequent to such action, by
all of the Directors entitled to vote thereon and filed with the minutes of the
Corporation shall be the act of the Board of Directors, or any committee
thereof, and have the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of the Board or committee for all
purposes.
(d) Where appropriate communications facilities are reasonably available, any or
all directors shall have the right to participate in any Board of Directors
meeting, or a committee of the Board of Directors meeting, by means of
conference telephone or any means of communications by which all persons
participating in the meeting are able to hear each other.
Section 8- Vacancies (Section 78.335)
(a) Unless otherwise provided for by the Articles of Incorporation of the
Corporation, any vacancy in the Board of Directors occurring by reason of an
increase in the number of directors, or by reason of the death, resignation,
disqualification, removal or inability to act of any director, or other cause,
shall be filled by an affirmative vote of a majority of the remaining directors,
though less than a quorum of the Board or by a sole remaining Director, at any
regular meeting or special meeting of the Board of Directors called for that
purpose except whenever the shareholders of any class or classes or series
thereof are entitled to elect one or more Directors by the Certificate of
Incorporation of the Corporation, vacancies and newly created directorships of
such class or classes or series may be filled by a majority of the Directors
elected by such
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class or classes or series thereof then in office, or by a sole remaining
Director so elected.
Section 9- Resignation (Section 78.335)
A Director may resign at any time by giving written notice of such resignation
to the Corporation.
Section 10- Removal (Section 78.335)
Unless otherwise provided for by the Articles of Incorporation, one or more or
all the Directors of the Corporation may be removed with or without cause at any
time by a vote of two-thirds of the shareholders entitled to vote thereon, at a
special meeting of the shareholders called for that purpose, unless the Articles
of Incorporation provide that Directors may only be removed for cause, provided
however, such Director shall not be removed if the Corporation states in its
Articles of Incorporation that its Directors shall be elected by cumulative
voting and there are a sufficient number of shares cast against his or her
removal, which if cumulatively voted at an e4lection of Directors would be
sufficient to elect him or her. If a Director was elected by a voting group of
shareholders, only the shareholders of that voting group may participate in the
vote to remove that Director.
Section 11- Compensation (Section 78.140)
The Board of Directors may authorize and establish reasonable compensation of
the Directors for services to the Corporation as Directors, including, but not
limited to attendance at any annual or special meeting of the Board.
Section 12- Committees (Section 78.125)
Unless otherwise provided for by the Articles of Incorporation of the
Corporation, the Board of Directors, may from time to time designate from among
its members one or more committees, and alternate members thereof, as they deem
desirable, each consisting of one or more members, with such powers and
authority (to the extent permitted by law and these Bylaws ) as may be provided
in such resolution. Unless the Articles of Incorporation or Bylaws state
otherwise, the Board of Directors may appoint natural persons who are not
Directors to serve on such committees authorized herein. Each such committee
shall serve at the pleasure of the Board and, unless otherwise stated by law,
the Certificate of Incorporation of the Corporation or these Bylaws, shall be
governed by the rules and regulations stated herein regarding the Board of
Directors.
ARTICLE 4
OFFICERS
Section 1- Number, Qualifications, Election and Term of Office (Section
78.130)
(a) The Corporation's officers shall have such titles and duties as shall be
stated in these Bylaws or in a resolution of the Board of Directors which is not
inconsistent with these Bylaws. The officers of the Corporation shall consist of
a president, secretary and treasurer, and also may have one or more vice
presidents, assistant secretaries and assistant treasurers and such other
officers as the Board of Directors may from time to time deem advisable. Any
officer may hold two or more offices in the Corporation.
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(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
duly elected and qualified, subject to earlier termination by his or her death,
resignation or removal.
Section 2- Resignation
Any officer may resign at any time by giving written notice of such resignation
to the Corporation.
Section 3- Removal
Any officer elected by the Board of Directors may be removed, either with or
without cause, and a successor elected by the Board at any time, and any officer
or assistant officer, if appointed by another officer, may likewise by removed
by such officer.
Section 4- Vacancies
A vacancy, however caused, occurring in the Board and any newly created
Directorships resulting from an increase in the authorized number of Directors
may be filled by the Board of Directors.
Section 5- Bonds
The Corporation may require any or all of its officers or Agents to post a bond,
or otherwise, to the Corporation for the faithful performance of their positions
or duties.
Section 6- Compensation
The compensation of the officers of the Corporation shall be fixed from time to
time by the Board of Directors.
ARTICLE 5
SHARES OF STOCK
Section 1- Certificate of Stock (Section 78.235)
(a) The shares of the Corporation shall be represented by certificates or shall
be uncertified shares.
(b) Certificated shares of the Corporation shall be signed , (either manually or
by facsimile), by officers or agents designated by the Corporation for such
purposes, and shall certify the number of shares owned by him in the
Corporation. Whenever any certificate is countersigned or otherwise
authenticated by a transfer
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agent or transfer clerk, and by a registrar, then a facsimile of the signatures
of the officers or agents, the transfer agent or transfer clerk or the registrar
of the Corporation may be printed or lithographed upon the certificate in lieu
of the actual signatures. If the corporation uses facsimile signatures of its
officers and agents on its stock certificates, it cannot act as registrar of its
own stock, but its transfer agent and registrar may be identical if the
institution action in those dual capacities countersigns or otherwise
authenticates any stock certificates in both capacities. If any officer who has
signed or whose facsimile signature has been placed upon such certificate, shall
have ceased to be such officer before such certificate is issued, it may be
issued by the Corporation with the same effect as if he were such officer at the
date of its issue.
(c) If the Corporation issues uncertified shares as provided for in these
Bylaws, within a reasonable time after the issuance or transfer of such
uncertified shares, and at least annually thereafter, the Corporation shall send
the shareholder a written statement certifying the number of shares owned by
such shareholder in the Corporation.
(d) Except as otherwise provided by law, the rights and obligation of the
holders of uncertified shares and the rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical.
Section 2- Lost or Destroyed Certificates (Section 104.8405)
The Board of Directors may direct a new certificate or certificates to be issued
in place of any certificate or certificates therefore issued by the Corporation
alleged to have been lost, stolen or destroyed if the owner:
(a) so requests before the Corporation has notice that the shares have bee
acquired by a bona fide purchaser, (b) files with the Corporation a sufficient
indemnity bond; and (c) satisfies such other requirements, including evidence of
such loss, theft or destruction, as may be imposed by the Corporation.
Section 3- Transfers of shares (Section 104.8401,104.8406. & 104.8416)
(a) Transfers or registration of transfers of shares of the Corporation shall be
made of the stock transfer books of the Corporation by the registered holder
thereof, or by his attorney duly authorized by a written power of attorney; and
in the case of shares represented by certificates, only after the surrender to
the Corporation of the certificates representing such shares with such shares
properly endorsed, with such evidence of the authenticity of such endorsement,
transfer, authorization and other matters as the Corporation may reasonably
require, and the payment of all stock transfer taxes due thereon.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares as the absolute owner thereof for all purposes and accordingly, shall
not be bound to recognize any legal, equitable or other claim to, or interest
in, such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4- Record Date (Section 78.215 & 78.350)
(a) The Board of Directors may fix, in advance, which shall not be more than
sixty days before the meeting or action requiring a determination of
shareholders, as the record date for the determination of shareholders entitled
to receive notice of, or to vote at, any meeting of shareholders, or to consent
to any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any
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dividends, or allotment of any rights, or for the purpose of any other action.
If no record date is fixed, the record date for shareholders entitled to notice
of meeting shall be at the close of business on the day preceding the day on
which notice is given, or, if no notice is given, the day on which the meeting
is held, or if notice is waived, at the close of business on the day before the
day on which the meeting is held.
(b) the Board of Directors may fix a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted for
shareholders entitled to receive payment of any dividend or other distribution
or allotment of any rights of shareholders entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action.
(c) A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned meeting.
Section 5- Fractions of Shares/Scrip (Section 78.205)
The Board of Directors may authorize the issuance of certificates or payment of
money for fractions of a share, either represented by a certificate or
uncertificated, which shall entitle the holder to exercise voting rights,
receive dividends and participate in any assets of the Corporation in the event
of liquidation, in proportion to the fractional holdings; or it may authorize
the payment in case of the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it may
authorize the issuance, subject to such conditions as may be permitted by law,
of scrip in registered or bearer form over the manual or facsimile signature of
and officer or agent of the Corporation or its agent for that purpose,
exchangeable as therein provided for full shares, but such scrip shall not
entitle the holder to any rights of shareholder, except as therein provided. The
scrip may contain any provisions or conditions that the Corporation deems
advisable. If a scrip ceases to be exchangeable for full share certificates, the
shares that would otherwise have been issuable as provided on the scrip are
deemed to be treasury shares unless the scrip contains other provisions for
their disposition.
ARTICLE 6
DIVIDENDS
(a) Dividends may be declared and paid out of any funds available therefor, as
often, in such amounts, and at such time or times as the Board of Directors may
determine and shares may be issued pro rata and without consideration to the
Corporation's shareholders or to the shareholders of one or more classes or
series.
(b) Shares of one class or series may not be issued as a share dividend to
shareholders of another class or series unless:
(i) so authorized by the Articles of Incorporation;
(ii) a majority of the shareholders of the class or series to be issued
approve the issue; or (iii) there are no outstanding shares of the
class or series of shares that are authorized to be issued.
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ARTICLE 7
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be subject to
change by the Board of Directors from time to time, subject to applicable law.
ARTICLE 8 (Section 78.065)
CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be prescribed and
altered, from time to time, by the Board of Directors. The use of a seal or
stamp by the Corporation on corporate documents is not necessary and the lack
thereof shall not in any way affect the legality of a corporate document.
ARTICLE 9
AMENDMENTS
Section 1- By Shareholders
All Bylaws of the Corporation shall be subject to alteration or repeal, and new
Bylaws may be made, by a majority vote of the shareholders at the time entitled
to vote in the election of Directors even though these Bylaws may also be
altered, amended or repealed by the Board of Directors.
Section 2- By Directors (Section 78.120)
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, Bylaws of the Corporation.
ARTICLE 10 (Section 78.375)
WAIVER OF NOTICE
Whenever any notice is required to given by law, the Articles of Incorporation
or these Bylaws, a written waiver signed by the person or persons entitled to
such notice, whether before or after the meeting by any person, shall constitute
a waiver of notice of such meeting.
ARTICLE 11 (Section 78.140)
No contract or transaction shall be void or voidable if such contract or
transaction is 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, when such
Director or Officer is present at or participates in the meeting of the Board,
or the committee of the shareholders which authorizes the contract or
transaction or his, her or their votes are counted for such purpose, if:
(a) the material facts as to his, her or their relationship or interest and as
to the contract or transaction are disclosed or are known to the Board of
Directors or the committee and are noted in the minutes of such meeting, and the
Board or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested Directors, even though the
disinterested Directors be less than a quorum, or
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(b) the material facts as to his, her or their relationship or relationships or
interest or interests and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or
(c) 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 of
the shareholder; or
(d) the fact of the common directorship, office or financial interest is not
disclosed or known to the Director or Officer at the time the transaction is
brought before the Board of Directors of the Corporation for such action.
Such interested Directors may be counted when determining the presence of a
quorum at the Board of Directors or committee meeting authorizing the contract
or transaction.
ARTICLE 12 (Section 78.150 & 78.165)
ANNUAL LIST OF OFFICERS, DIRECTORS, AND REGISTERED AGENTS
The Corporation shall, within sixty days after the filing of its Articles of
Incorporation with the Secretary of State, and annually thereafter on or before
the last day of the month in which the anniversary date of incorporation occurs
each year, file with the Secretary of State a list of its president, secretary
and treasurer and all of its Directors, along with the post office box or street
address, either residence or business, and a designation of its resident agent
in the state of Nevada. Such list shall be certified by an officer of the
Corporation.
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 1 day of September, 1998, by and between EDWARD ANTHONY ROTH of 7760 N.W.
10th Street, Plantation, FL. 33322 (hereinafter "Employee"), and ATR INDUSTRIES
[a Nevada Corporation] having it's principal offices at 4614 N. University Dr,
Ft. Lauderdale (hereinafter "Employer")
W I T N E S S E T H
This Agreement is made and entered into under the following
circumstances:
(1) Whereas, Employer is engaged in the business of
________________________________; and
(2) Whereas, Employer desires, on the terms and conditions stated
herein, to employ the Employee as a General Manager; and
(3) Whereas, the Employee desires, on the terms and conditions stated
herein, to be employed by the Employer.
NOW THEREFORE, in consideration of the foregoing recitals, and of the
promises, covenants, terms and conditions contained herein, which is hereby
acknowledged by the parties hereto, it is agreed as follows:
1. Employment and Term.
a) Subject to earlier termination as provided for in this
Section 1 and in Section 2 hereof, the Employer hereby employs Employee, and
Employee hereby accepts employment with the employer, as General Manager for a
period of three (3) years (hereinafter the "Term of Employment")commencing the
1 day of September, 1998 ("hereinafter the "Effective Date") through the 1
day of September 2001. The Term of Employment shall be renewed upon the mutual
agreement of Employee and Employer. This agreement and Employee's employment
may be terminated at the Employer's discretion during the Term of Employment,
provided that Employer shall pay to Employee an amount of Employee's base salary
for the remaining period of the Term of Employment.
b) This Agreement may be terminated by Employee at Employee's
discretion by providing at least thirty (30) days prior written notice to
Employer. In the event of termination by Employee pursuant to this subsection,
Employer may immediately relieve Employee of all duties and immediately
terminate this Agreement, provided that Employer shall pay Employee at the then
applicable base salary rate to the termination date included in Employee's
original termination notice.
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2. Employment Termination.
Subject to earlier termination as provided for in this
Section, the Employer hereby employs Employee, and Employee hereby accepts
employment with the employer pursuant to the terms of this agreement, which
empowers Employer to terminate employee at any time with cause.
Cause shall be defined as:
i) failure of Employee to perform the duties in
a manner satisfactory to Employer, in its sole discretion; provided, however,
that the Employment shall not be terminated pursuant to this subparagraph (i)
unless Employer first gives Employee a written notice ("Notice of Deficiency").
The Notice of Deficiency shall specify the deficiencies in Employee's per-
formance of his duties. Employee shall have a period of thirty (30) days,
commencing on receipt of the Notice of Deficiency, in which to cure the
deficiencies contained in the Notice of Deficiency. In the event Employee does
not cure the deficiencies to the satisfaction of Employer, in its sole
discretion, within such thirty (30) day period, the Employer shall have the
right to immediately terminate the Employee's Employment. The provisions of
this subparagraph (i) may be invoked by Employer any number of times and cure of
deficiencies contained in any Notice of Deficiency shall not be construed as
a waiver of this subparagraph (i) nor prevent the Employer from issuing any
subsequent Notices of Deficiency;
ii) any dishonesty by Employee in dealings with the Employer, the
commission of fraud by Employee, or negligence or willful neglect in the
performance of the duties of Employee;
iii) the arrest or conviction (or plea of guilty or nolo contendere) of
Employee of any felony or other crime involving dishonesty or moral turpitude;
iv) any violation of any provision contained in this agreement;
v) unlawful use of narcotics or other controlled substances, or use of
alcohol or other drugs in a manner the Employer reasonably determines to be
adverse to the best interest of the Employer;
vi) Failure of Employee to attend training programs required for competency
in his duties (job description) as an Employee;
vii) if, due to any act or omission of Employee, liability insurance cannot
be reasonably obtained or maintained, or if, due to any act or omission of
Employee, liability insurance is canceled, terminated or revoked; or,
For all purposes of this Agreement, termination for "cause" shall be deemed
to have occurred in the event of Employee's resignation when, because of
existing facts and circumstances, subsequent termination for "cause" can be
reasonably forseen. In the event of termination pursuant to this subsection,
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Employee shall be paid only at the then applicable base salary rate up to and
including the date of termination. Employee shall not be paid any incentive
salary payments or other compensation, prorated or otherwise.
3. Duties and Responsibilities.
Employee shall: (a) engage full-time services, on behalf of Employer, at
locations directed by Employer, as Employer may designate; (b) perform all
managerial duties necessary; (c) perform such other duties as may from time to
time be reasonably assigned to the Employee by Employer; (d) cooperate with
Employer, to the fullest ethical extent, to promote Employer's business and to
continue and expand the products provided by Employer, and to further the best
interests of the Employer; and (e) perform all services in a professional manner
using the full knowledge and skill of Employee which services shall be performed
in accordance with standards and procedures established by Employer.
Employee shall (i) devote Employee's entire business time, attention and
energies exclusively to the Employer; and (ii) faithfully and competently
perform the duties hereunder using Employee's full professional skill and
knowledge; and (iii) not engage in any other professional or business activity.
4. Compensation.
Employee shall be paid compensation during this Agreement as follows:
a) A base salary of $125,000.00 per year, payable in installments according
to the Employer's regular payroll schedule.
b) An incentive salary equal to two (2%) percent of the adjusted net
profits (hereinafter defined) of the Employer beginning with the Employer's year
end 1998 and each fiscal year thereafter during the term of this Agreement.
"Adjusted net profit" shall be the net profit of the Employer before federal and
state income taxes, determined in accordance with generally accepted accounting
practices by the Employer's independent accounting firm and adjusted to exclude:
(i) any incentive salary payments paid pursuant to this Agreement; (ii) any
contributions to pension and/or profit sharing plans; (iii) any extraordinary
gains or losses (including, but not limited to, gains or losses on disposition
of assets); (iv) any refund or deficiency of federal and state income taxes paid
in a prior year; and (v) any provision for federal or state income taxes made in
prior years which is subsequently determined to be unnecessary. The
determination of the adjusted net profits made by the independent accounting
firm employed by the Employer shall be final and binding upon the Employee and
Employer. The incentive salary payment shall be made within thirty (30) days
after the Employer's independent accounting firm has concluded it's audit. If
the final audit is not prepared within ninety (90) days after the end of the
fiscal year, then Employer shall make preliminary payment equal to fifty percent
(50%) of the amount due based upon the adjusted net profits preliminarily
determined by the independent accounting firm, subject to payment of the
balance, if any, promptly following completion of the audit by the Employer's
independent accounting firm.
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5. Benefits.
a) Vacation/Personal Time. Employer shall be entitled to an
aggregate of fourteen (14) working days paid vacation during each full year
during the Term of Employment. In addition, personal time will be provided,
calculated at a rate of four (4) hours during each full year during the Term of
Employment.
b) Holidays. Employee shall be entitled to at lease six (6)
paid holidays each calendar year. Employer shall notify Employee on or about the
beginning of each calendar year with respect to the holiday schedule for the
coming year. Personal holidays, if any, will be scheduled in advance subject to
requirements of Employer. Such holidays must be taken during the calendar year
and cannot be carried forward into the next year.
c) Sick Leave. Employee shall be entitled to sick leave and
emergency leave which shall be liberally granted upon reasonable notice.
d) Medical and Group Life Insurance. Employer agrees to
include Employee in the group medical and hospital plan of Employer and provide
group life insurance for Employee at no charge to Employee in the amount of
$250,000.00 during this agreement.
e) Pension and Profit Sharing Plans. Employee shall be
entitled to participate in any pension or profit sharing plan or other type
adopted by the Employer for the benefit of its officers and/or regular
employees.
f) Automobile. Employer shall provide to Employee the use of
an automobile of Employee's choice at a gross purchase price not to exceed
$40,000.00. Employer agrees to replace the automobile with a new one at
Employee's request no more than once every two years. Employer shall pay all
automobile operating expenses incurred by Employee in the performance of
Employee's duties. Employer shall procure and maintain in force an automobile
liability policy for the automobile with coverage, including Employee, in the
minimum amount of $1,000,000.00 combined single limit on bodily injury and
property damage.
g) Expense Reimbursement. Employee shall be entitled to
reimbursement for all reasonable expenses, including travel and entertainment,
incurred by Employee in the performance of Employee's duties. Employee shall
maintain records and written receipts as required by the Employer and reasonably
requested by the board of directors to substantiate such expenses.
6. Non-Competition.
During the Term of Employment and for a continuous period of
two (2) years commencing upon termination of employment, Employee shall not,
individually or jointly with others, own or hold any ownership or voting
interest in any person or entity engaged in a business the same as or similar to
any business of the employer or which competes in any manner whatsoever with the
business of Employer, and which is located or intended to be located in the
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State of Florida; and Employee shall not act as an officer, director, employee,
partner, independent contractor, consultant, principal, agent, proprietor, or in
any other capacity for, not lend any assistance (financial, managerial,
professional or otherwise) or cooperation to, nor perform any services for, any
such person or entity; and during the Term of Employment Employee shall be
prohibited from the foregoing activities and relationships with any person or
entity which competes with Employer, regardless of the geographic location of
such person or entity.
7. Non-Disclosure; Non-Solicitation. Except in the performance of
servicing customers of Employer, at no time during the Term of Employment or at
anytime thereafter shall Employee, individually or jointly with others, for the
benefit of Employee or any third party, publish, disclose, use or authorize
anyone else to publish, disclose or use, any secret or confidential material or
information regarding the business methods, business policies, procedures,
techniques or trade secrets, or other knowledge or processes of or developed by
Employer (and/or any other Employee or agent of Employer), any affiliate of the
employer, any entity in which the Employer has an interest, including, without
limitation, any secret or confidential information relating to the business,
customers, financial position, trade or industrial practices, trade secrets,
technology or know-how of the Employer.
Furthermore, for a period of two (2) years commencing upon termination
of Employee's employment, Employee shall not solicit or contact, or cause any
other person or entity to solicit or contact, any current customer of Employer
at the time of termination.
8. Reasonableness of Restrictions: Reformation: Enforcement. The
parties hereto recognize and acknowledge that the geographical and time
limitations contained in Section 6 and 7 hereof (hereinafter "Restrictive
Covenants") are reasonably necessary to protect the Employer's legitimate
business interests and properly required for the adequate protection of such
business interests of Employer. Employee acknowledges that the Employer will
provide to Employee confidential information concerning the Employer's business
methods and operating practices in reliance on the covenants contained in the
Restricted Covenants. It is agreed by the parties hereto that if any portion of
the restrictions contained in the Restrictive Covenants. It is agreed by the
parties hereto that if any portion of the restrictions contained in the
Restrictive Covenants are held to be unreasonable, arbitrary, or against public
policy, then the restrictions shall be considered divisible, both as to the time
and to the geographical area, with each month of the specified period being
deemed a separate period of time and each radius mile of the restricted
territory being deemed a separate geographic area, so that the lesser period of
time or geographical area shall remain effective so long as the same is not
unreasonable, arbitrary, or against public policy. The parties hereto agree that
in the event any court of competent jurisdiction determines the specified period
or the specified geographical area of the restricted territory to be
unreasonable, arbitrary, or against public policy, a lesser time period or
geographical area which is determined to be reasonable, nonarbitrary, and not
against public policy may be enforced against Employee. If Employee shall
violate any of the covenants contained herein and if any court action is
instituted by the Employer to prevent or enjoin such violation, then the period
of time during which the Employer's business activities shall be restricted, as
provided in this Agreement, shall be lengthened by a period of time equal to the
period between the date of the Employee's breach of
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the terms or covenants contained in this Agreement and the date on which the
decree of the court disposing of the issued upon the merits shall become final
and not subject to further appeal.
9. No Remedy At Law. Employee agrees that the remedy at law for any
breach by Employee of the covenants contained in Sections 6 and 7 will be
inadequate and would be difficult to ascertain and therefore, in the event of
the breach or threatened breach of any such covenants, the Employer, in addition
to any and all other remedies, shall have the right to enjoin Employee from any
threatened or actual activities in violation thereof; and Employee hereby
consents and agrees that temporary and permanent injunctive relief may be
granted in any proceedings which might be brought to enforce any such covenants
without the necessity of proof of actual damages.
10. Representations of Employee. Employee hereby makes the following
representations to Employer, each of which is material and is being relied on by
Employer and shall be true as of the date hereof and throughout the Term of
Employment:
a) Employment Qualifications. Employee shall (i) use
Employee's best efforts to maintain qualifications as a general manager, (ii) is
experienced in administrative procedure, (iii) agrees to participate and shall
participate in a continuing education and/or training programs, (iv) use
Employee's best efforts as a general manager.
b) Factual Information. Any and all factual information
furnished by Employee to Employer is true and accurate in every material respect
as of the date on which such information was furnished.
c) Professional Conduct. Employee has and will continue to
conduct all activities in accordance and compliance with any and all laws,
regulations and ethical standards.
d) Authority. Employee has full power and authority to enter
into this Agreement and perform all obligations hereunder. The execution and
performance of this Agreement by Employee will not constitute a breach or
violation of any covenant, agreement or contract to which Employee is a party or
by which Employee is bound.
11. Books, Office Equipment, Etc.
a) Employee's Ownership. All books, office equipment
and other property furnished by Employee shall remain Employee's property.
b) Employer's Ownership. All instruments, equipment,
furniture, furnishings, supplies, products, samples, forms, charts, logs,
brochures, client records, procedures, contracts and any other property,
materials or information furnished by Employer are and shall remain the sole
property of Employer. Upon termination of this Agreement, Employee shall return
all such property to Employer.
12. Assignability. This Agreement and the rights and duties created
hereunder shall not be assignable or delegable by Employee. Employer may, at
Employer's optio and without
39
<PAGE>
consent of Employee, assign its rights and duties hereunder to any successor
entity or transferee of Employer's assets.
13. Notices. All notices or other communications provided for herein to
be given or sent to a party by the other party shall be deemed validly given or
sent if in writing and mailed, postage prepaid, by registered or certified
United States mail, addressed to the parties at their addresses hereinabove set
forth. Any party may give notice to the other parties at any time, by the method
specified above, of a change in the address at which, or the person to whom,
notice is to be addressed.
14. Severability. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. In the event that any provision of this Agreement shall be determined to
be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable provision shall be deemed severed from this
Agreement, but every other provision of this Agreement shall remain in full
force and effect.
15. Effect of Termination. The termination of this Agreement, for
whatever reason, shall not extinguish those obligations of Employee specified in
the Restrictive Covenants, nor shall the same extinguish the right of either
party to bring an action, either in law or in equity, for breach of this
Agreement by the other party.
16. Waiver. The failure of a party to enforce any term, provision or
condition of this Agreement at any time or times shall not be deemed a waiver of
that term, provision or condition for the future, nor shall any specific waiver
of a term, provision or condition at one time be deemed a waiver of such term,
provision or condition for any future time or times.
17. Parties. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their heirs, personal representative,
legal representative and proper successors and assigns, as the case may be.
18. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the laws of the State of Florida, without giving
effect to the principles of comity or conflicts of laws thereof.
19. Captions. The captions of this Agreement have been assigned thereto
for convenience only, and shall not be construed to the limit, define or modify
the substantive terms hereof.
20. Entire Agreement; Counterparts. This Agreement constitutes the
entire agreement between the parties hereto concerning the subject matter
hereof, and supersedes all prior agreements, memoranda, correspondence,
conversations and negotiations. This Agreement may be executed in several
counterparts that together shall constitute but one and the same Agreement.
40
<PAGE>
21. Costs of Enforcement. In the event it is necessary for any party to
retain the services of an attorney or to initiate legal proceedings to enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
from the non-prevailing party, in addition to all other remedies, all costs of
such enforcement, including reasonable attorneys' fees and including trial and
appellate proceedings.
22. Gender, Etc. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the date first above written.
Signed in the presence of: Employee:
/s/Edward Anthony Roth
- ---------------------------- -----------------------------
As to Employer EDWARD ANTHONY ROTH
/s/Alisha Roth
- ----------------------------
As to Employee
Signed in the presence of: Employer:
ATR INDUSTRIES
ATTEST
___/s/Alisha Roth____________ By:__/s/_________________
Secretary __Director____________________
For ATR INDUSTRIES
41
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 1 day of September, 1998, by and between ALISHA ROTH of 7760 N.W. 10th
Street, Plantation, FL. 33322 (hereinafter "Employee"), and ATR INDUSTRIES
[a Nevada Corporation] having it's principal offices at 4614 N. University Dr,
Ft. Lauderdale (hereinafter "Employer")
W I T N E S S E T H
This Agreement is made and entered into under the following
circumstances:
(1) Whereas, Employer is engaged in the business of providing residential
cleaning services; and
(2) Whereas, Employer desires, on the terms and conditions stated herein,
to employ the Employee as a General Manager; and
(3) Whereas, the Employee desires, on the terms and conditions stated
herein, to be employed by the Employer.
NOW THEREFORE, in consideration of the foregoing recitals, and of the
promises, covenants, terms and conditions contained herein, which is hereby
acknowledged by the parties hereto, it is agreed as follows:
1. Employment and Term.
a) Subject to earlier termination as provided for in this
Section 1 and in Section 2 hereof, the Employer hereby employs Employee, and
Employee hereby accepts employment with the employer, as Manager for a period
of three (3) years (hereinafter the "Term of Employment"), commencing the 1 day
September, 1998 (hereinafter the "Effective Date") through the 31 day of August,
2001. The Term of Employment shall be renewed upon the mutual agreement of
Employee and Employer. This agreement and Employee's employment may be
terminated at the Employer's discretion during the Term of Employment, provided
that Employer shall pay to Employee an amount of Employee's base salary for the
remaining period of the Term of Employment.
b) This Agreement may be terminated by Employee at Employee's
discretion by providing at least thirty (30) days prior written notice to
Employer. In the event of termination by Employee pursuant to this subsection,
Employer may immediately relieve Employee of all duties and immediately
terminate this Agreement, provided that Employer shall pay Employee at the then
applicable base salary rate to the termination date included in Employee's
original termination notice.
42
<PAGE>
2. Employment Termination.
Subject to earlier termination as provided for in this
Section, the Employer hereby employs Employee, and Employee hereby accepts
employment with the employer pursuant to the terms of this agreement, which
empowers Employer to terminate employee at any time with cause.
Cause shall be defined as:
i) failure of Employee to perform the duties in
a manner satisfactory to Employer, in its sole discretion; provided, however,
that the Employment shall not be terminated pursuant to this subparagraph (i)
unless Employer first gives Employee a written notice ("Notice of Deficiency").
The Notice of Deficiency shall specify the deficiencies in Employee's per-
formance of his duties. Employee shall have a period of thirty (30) days,
commencing on receipt of the Notice of Deficiency, in which to cure the
deficiencies contained in the Notice of Deficiency. In the event Employee does
not cure the deficiencies to the satisfaction of Employer, in its sole
discretion, within such thirty (30) day period, the Employer shall have the
right to immediately terminate the Employee's Employment. The provisions of
this subparagraph (i) may be invoked by Employer any number of times and cure of
deficiencies contained in any Notice of Deficiency shall not be construed as
a waiver of this subparagraph (i) nor prevent the Employer from issuing any
subsequent Notices of Deficiency;
ii) any dishonesty by Employee in dealings with the Employer, the
commission of fraud by Employee, or negligence or willful neglect in the
performance of the duties of Employee;
iii) the arrest or conviction (or plea of guilty or nolo contendere) of
Employee of any felony or other crime involving dishonesty or moral turpitude;
iv) any violation of any provision contained in this agreement;
v) unlawful use of narcotics or other controlled substances, or use of
alcohol or other drugs in a manner the Employer reasonably determines to be
adverse to the best interest of the Employer;
vi) Failure of Employee to attend training programs required for competency
in his duties (job description) as an Employee;
vii) if, due to any act or omission of Employee, liability insurance cannot
be reasonably obtained or maintained, or if, due to any act or omission of
Employee, liability insurance is canceled, terminated or revoked; or,
For all purposes of this Agreement, termination for "cause" shall be deemed
to have occurred in the event of Employee's resignation when, because of
existing facts and circumstances, subsequent termination for "cause" can be
reasonably forseen. In the event of termination pursuant to this subsection,
43
<PAGE>
Employee shall be paid only at the then applicable base salary rate up to and
including the date of termination. Employee shall not be paid any incentive
salary payments or other compensation, prorated or otherwise.
3. Duties and Responsibilities.
Employee shall: (a) engage full-time services, on behalf of Employer, at
locations directed by Employer, as Employer may designate; (b) perform all
managerial duties necessary; (c) perform such other duties as may from time to
time be reasonably assigned to the Employee by Employer; (d) cooperate with
Employer, to the fullest ethical extent, to promote Employer's business and to
continue and expand the products provided by Employer, and to further the best
interests of the Employer; and (e) perform all services in a professional manner
using the full knowledge and skill of Employee which services shall be performed
in accordance with standards and procedures established by Employer.
Employee shall (i) devote Employee's entire business time, attention and
energies exclusively to the Employer; and (ii) faithfully and competently
perform the duties hereunder using Employee's full professional skill and
knowledge; and (iii) not engage in any other professional or business activity.
4. Compensation.
Employee shall be paid compensation during this Agreement as follows:
a) A base salary of $60,000.00 per year, payable in installments according
to the Employer's regular payroll schedule.
b) An incentive salary equal to zero (0%) percent of the adjusted net
profits (hereinafter defined) of the Employer beginning with the Employer's year
end 1998 and each fiscal year thereafter during the term of this Agreement.
"Adjusted net profit" shall be the net profit of the Employer before federal and
state income taxes, determined in accordance with generally accepted accounting
practices by the Employer's independent accounting firm and adjusted to exclude:
(i) any incentive salary payments paid pursuant to this Agreement; (ii) any
contributions to pension and/or profit sharing plans; (iii) any extraordinary
gains or losses (including, but not limited to, gains or losses on disposition
of assets); (iv) any refund or deficiency of federal and state income taxes paid
in a prior year; and (v) any provision for federal or state income taxes made in
prior years which is subsequently determined to be unnecessary. The
determination of the adjusted net profits made by the independent accounting
firm employed by the Employer shall be final and binding upon the Employee and
Employer. The incentive salary payment shall be made within thirty (30) days
after the Employer's independent accounting firm has concluded it's audit. If
the final audit is not prepared within ninety (90) days after the end of the
fiscal year, then Employer shall make preliminary payment equal to fifty percent
(50%) of the amount due based upon the adjusted net profits preliminarily
determined by the independent accounting firm, subject to payment of the
balance, if any, promptly following completion of the audit by the Employer's
independent accounting firm.
44
<PAGE>
5. Benefits.
a) Vacation/Personal Time. Employer shall be entitled to an
aggregate of fourteen (14) working days paid vacation during each full year
during the Term of Employment. In addition, personal time will be provided,
calculated at a rate of four (4) hours during each full year during the Term of
Employment.
b) Holidays. Employee shall be entitled to at lease six (6)
paid holidays each calendar year. Employer shall notify Employee on or about the
beginning of each calendar year with respect to the holiday schedule for the
coming year. Personal holidays, if any, will be scheduled in advance subject to
requirements of Employer. Such holidays must be taken during the calendar year
and cannot be carried forward into the next year.
c) Sick Leave. Employee shall be entitled to sick leave and
emergency leave which shall be liberally granted upon reasonable notice.
d) Medical and Group Life Insurance. Employer agrees to
include Employee in the group medical and hospital plan of Employer and provide
group life insurance for Employee at no charge to Employee in the amount of
$250,000.00 during this agreement.
e) Pension and Profit Sharing Plans. Employee shall be
entitled to participate in any pension or profit sharing plan or other type
adopted by the Employer for the benefit of its officers and/or regular
employees.
f) Expense Reimbursement. Employee shall be entitled to
reimbursement for all reasonable expenses, including travel and entertainment,
incurred by Employee in the performance of Employee's duties. Employee shall
maintain records and written receipts as required by the Employer and reasonably
requested by the board of directors to substantiate such expenses.
6. Non-Competition.
During the Term of Employment and for a continuous period of
two (2) years commencing upon termination of employment, Employee shall not,
individually or jointly with others, own or hold any ownership or voting
interest in any person or entity engaged in a business the same as or similar to
any business of the employer or which competes in any manner whatsoever with the
business of Employer, and which is located or intended to be located in the
State of Florida; and Employee shall not act as an officer, director, employee,
partner, independent contractor, consultant, principal, agent, proprietor, or in
any other capacity for, not lend any assistance (financial, managerial,
professional or otherwise) or cooperation to, nor perform any services for, any
such person or entity; and during the Term of Employment Employee shall be
prohibited from the foregoing activities and relationships with any person or
entity which competes with Employer, regardless of the geographic location of
such person or entity.
45
<PAGE>
7. Non-Disclosure; Non-Solicitation. Except in the performance of
servicing customers of Employer, at no time during the Term of Employment or at
anytime thereafter shall Employee, individually or jointly with others, for the
benefit of Employee or any third party, publish, disclose, use or authorize
anyone else to publish, disclose or use, any secret or confidential material or
information regarding the business methods, business policies, procedures,
techniques or trade secrets, or other knowledge or processes of or developed by
Employer (and/or any other Employee or agent of Employer), any affiliate of the
employer, any entity in which the Employer has an interest, including, without
limitation, any secret or confidential information relating to the business,
customers, financial position, trade or industrial practices, trade secrets,
technology or know-how of the Employer.
Furthermore, for a period of two (2) years commencing upon termination
of Employee's employment, Employee shall not solicit or contact, or cause any
other person or entity to solicit or contact, any current customer of Employer
at the time of termination.
8. Reasonableness of Restrictions: Reformation: Enforcement. The
parties hereto recognize and acknowledge that the geographical and time
limitations contained in Section 6 and 7 hereof (hereinafter "Restrictive
Covenants") are reasonably necessary to protect the Employer's legitimate
business interests and properly required for the adequate protection of such
business interests of Employer. Employee acknowledges that the Employer will
provide to Employee confidential information concerning the Employer's business
methods and operating practices in reliance on the covenants contained in the
Restricted Covenants. It is agreed by the parties hereto that if any portion of
the restrictions contained in the Restrictive Covenants. It is agreed by the
parties hereto that if any portion of the restrictions contained in the
Restrictive Covenants are held to be unreasonable, arbitrary, or against public
policy, then the restrictions shall be considered divisible, both as to the time
and to the geographical area, with each month of the specified period being
deemed a separate period of time and each radius mile of the restricted
territory being deemed a separate geographic area, so that the lesser period of
time or geographical area shall remain effective so long as the same is not
unreasonable, arbitrary, or against public policy. The parties hereto agree that
in the event any court of competent jurisdiction determines the specified period
or the specified geographical area of the restricted territory to be
unreasonable, arbitrary, or against public policy, a lesser time period or
geographical area which is determined to be reasonable, nonarbitrary, and not
against public policy may be enforced against Employee. If Employee shall
violate any of the covenants contained herein and if any court action is
instituted by the Employer to prevent or enjoin such violation, then the period
of time during which the Employer's business activities shall be restricted, as
provided in this Agreement, shall be lengthened by a period of time equal to the
period between the date of the Employee's breach of
the terms or covenants contained in this Agreement and the date on which the
decree of the court disposing of the issued upon the merits shall become final
and not subject to further appeal.
9. No Remedy At Law. Employee agrees that the remedy at law for any
breach by Employee of the covenants contained in Sections 6 and 7 will be
inadequate and would be difficult to ascertain and therefore, in the event of
the breach or threatened breach of any such covenants, the Employer, in addition
to any and all other remedies, shall have the right to enjoin Employee from any
46
<PAGE>
threatened or actual activities in violation thereof; and Employee hereby
consents and agrees that temporary and permanent injunctive relief may be
granted in any proceedings which might be brought to enforce any such covenants
without the necessity of proof of actual damages.
10. Representations of Employee. Employee hereby makes the following
representations to Employer, each of which is material and is being relied on by
Employer and shall be true as of the date hereof and throughout the Term of
Employment:
a) Employment Qualifications. Employee shall (i) use
Employee's best efforts to maintain qualifications as a general manager, (ii) is
experienced in administrative procedure, (iii) agrees to participate and shall
participate in a continuing education and/or training programs, (iv) use
Employee's best efforts as a general manager.
b) Factual Information. Any and all factual information
furnished by Employee to Employer is true and accurate in every material respect
as of the date on which such information was furnished.
c) Professional Conduct. Employee has and will continue to
conduct all activities in accordance and compliance with any and all laws,
regulations and ethical standards.
d) Authority. Employee has full power and authority to enter
into this Agreement and perform all obligations hereunder. The execution and
performance of this Agreement by Employee will not constitute a breach or
violation of any covenant, agreement or contract to which Employee is a party or
by which Employee is bound.
11. Books, Office Equipment, Etc.
a) Employee's Ownership. All books, office equipment
and other property furnished by Employee shall remain Employee's property.
b) Employer's Ownership. All instruments, equipment,
furniture, furnishings, supplies, products, samples, forms, charts, logs,
brochures, client records, procedures, contracts and any other property,
materials or information furnished by Employer are and shall remain the sole
property of Employer. Upon termination of this Agreement, Employee shall return
all such property to Employer.
12. Assignability. This Agreement and the rights and duties created
hereunder shall not be assignable or delegable by Employee. Employer may, at
Employer's optio and without consent of Employee, assign its rights and duties
hereunder to any successor entity or transferee of Employer's assets.
13. Notices. All notices or other communications provided for herein to
be given or sent to a party by the other party shall be deemed validly given or
sent if in writing and mailed, postage prepaid, by registered or certified
United States mail, addressed to the parties at their addresses hereinabove set
47
<PAGE>
forth. Any party may give notice to the other parties at any time, by the method
specified above, of a change in the address at which, or the person to whom,
notice is to be addressed.
14. Severability. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. In the event that any provision of this Agreement shall be determined to
be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable provision shall be deemed severed from this
Agreement, but every other provision of this Agreement shall remain in full
force and effect.
15. Effect of Termination. The termination of this Agreement, for
whatever reason, shall not extinguish those obligations of Employee specified in
the Restrictive Covenants, nor shall the same extinguish the right of either
party to bring an action, either in law or in equity, for breach of this
Agreement by the other party.
16. Waiver. The failure of a party to enforce any term, provision or
condition of this Agreement at any time or times shall not be deemed a waiver of
that term, provision or condition for the future, nor shall any specific waiver
of a term, provision or condition at one time be deemed a waiver of such term,
provision or condition for any future time or times.
17. Parties. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their heirs, personal representative,
legal representative and proper successors and assigns, as the case may be.
18. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the laws of the State of Florida, without giving
effect to the principles of comity or conflicts of laws thereof.
19. Captions. The captions of this Agreement have been assigned thereto
for convenience only, and shall not be construed to the limit, define or modify
the substantive terms hereof.
20. Entire Agreement; Counterparts. This Agreement constitutes the
entire agreement between the parties hereto concerning the subject matter
hereof, and supersedes all prior agreements, memoranda, correspondence,
conversations and negotiations. This Agreement may be executed in several
counterparts that together shall constitute but one and the same Agreement.
21. Costs of Enforcement. In the event it is necessary for any party to
retain the services of an attorney or to initiate legal proceedings to enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
from the non-prevailing party, in addition to all other remedies, all costs of
such enforcement, including reasonable attorneys' fees and including trial and
appellate proceedings.
48
<PAGE>
22. Gender, Etc. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the date first above written.
Signed in the presence of: Employee:
/S/Ed Roth /S/ Alisha Roth
- ---------------------------- -----------------------------
As to Employer ALISHA ROTH
/S/Ed roth
- ----------------------------
As to Employee
Signed in the presence of: Employer:
ATR INDUSTRIES
ATTEST
______/s/Ed Roth____________ By:____/s/______________________
Secretary __Director_____________________
For ATR INDUSTRIES
49
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED AUDITED AND UNAUDITED CONDENSED FINANCIAL STATEMENTS FOR THE
PERIODS ENDED DECEMBER 31, 1998 AND MARCH 31, 1999 RESPECTIVELY, THAT WERE
FILED WITH THE COMPANY'S ANNUAL REPORT ON FORM 10-SB AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 MAR-31-1999
<EXCHANGE-RATE> 1 1
<CASH> 4,164 67,286
<SECURITIES> 0 0
<RECEIVABLES> 500 340
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 5,064 84,823
<PP&E> 29,846 29,846
<DEPRECIATION> (25,694) (26,344)
<TOTAL-ASSETS> 10,916 90,025
<CURRENT-LIABILITIES> 67,073 37,059
<BONDS> 0 0
0 0
0 0
<COMMON> 3,183 12,817
<OTHER-SE> (66,545) 33,489
<TOTAL-LIABILITY-AND-EQUITY> 10,916 90,025
<SALES> 474,370 126,086
<TOTAL-REVENUES> 474,370 126,086
<CGS> 314,106 69,980
<TOTAL-COSTS> 314,106 69,980
<OTHER-EXPENSES> 223,185 58,681
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (62,921) 14,622
<INCOME-TAX> 0 (2,329)
<INCOME-CONTINUING> (62,921) 12,293
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (62,921) 12,293
<EPS-BASIC> (.03) .001
<EPS-DILUTED> (.03) .001
</TABLE>
