SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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XX Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, For the quarterly
period ended September 30, 1996, or
Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, For the transition
period from ___________ to ___________
Commission File Number 1-10139
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NETEGRITY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2911320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
245 Winter Street
Waltham, MA 02154
(Address of principal executive offices) (Zip Code)
(617)890-1700
(Registrant's Telephone Number)
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such other shorter period that the Registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days XX Yes No
As of November 11, 1996 there were 9,204,946 shares of Common
Stock outstanding.
<PAGE>
FORM 10-Q
QUARTERLY REPORT
----------------
TABLE OF CONTENTS
Facing Sheet . . . . . . . . . . . . . . . . . 1
Table of Contents .. . . . . . . . . . . . . . 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets. . . . . . . . . . . . 3
Statements of Operations. . . . . . . 5
Statements of Cash Flows. . . . . . . 6
Notes to Financial Statements . . . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . . 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . 14
Item 2. Changes in Securities. . . . . . . . . 14
Item 3. Defaults Upon Senior Securities. . . . 14
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . 14
Item 5. Other Information. . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . 16
Exhibit 11.00 - Computation of earnings per share 17-18
<PAGE>
PART I. - FINANCIAL INFORMATION
NETEGRITY, INC.
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, March 31,
1996 1996
CURRENT ASSETS:
Cash $8,770,643 $1,410,445
Accounts receivable - trade, net
of allowance for doubtful accounts
of $26,004 and $274,272 at September
30, 1996 and March 31, 1996,
respectively 432,886 5,676,239
Accounts receivable - product, net of
allowance for doubtful accounts of
$73,714 at March 31, 1996 --- 83,237
Inventory --- 1,292,961
Other current assets ,026,810 303,429
TOTAL CURRENT ASSETS 10,230,339 8,766,311
EQUIPMENT & LEASEHOLD
IMPROVEMENTS, NET 198,679 745,268
INTANGIBLE ASSETS, NET, INCLUDING
GOODWILL --- 834,266
OTHER ASSETS 66,734 109,900
TOTAL ASSETS $10,495,752 $10,455,745
The accompanying footnotes are an integral part of the financial
statements.<PAGE>
NETEGRITY, INC.
BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, March 31,
1996 1996
CURRENT LIABILITIES:
Accounts payable - trade $1,432,061 $4,631,213
Line of credit --- 723,470
Other accrued expenses 1,906,853 2,029,303
Accrued payroll 322,098 498,769
Customer advances --- 69,480
Notes payable - related party --- 300,000
Current portion of capitalized lease
obligation --- 112,730
TOTAL CURRENT LIABILITIES 3,661,012 8,364,965
LONG-TERM NOTES PAYABLE --- 187,417
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value,
authorized 5,000,000 shares:
Series C, voting, non-cumulative,
0 issued and outstanding
at September 30, 1996 (628,330
issued and outstanding at
March 31, 1996) --- 6,283
Common stock, voting, $.01 par value,
authorized 25,000,000 shares;
9,175,946 issued and 8,830,432
outstanding at September 30, 1996
(8,197,887 issued and 8,172,786
outstanding at March 31, 1996) 91,764 81,979
Additional paid-in capital 10,418,609 10,024,710
Cumulative translation adjustment 28,028 21,569
Cumulative deficit (3,420,004) (8,147,521)
Loan to officer (200,000) ---
Less treasury stock, at cost,
25,101 shares (83,657) (83,657)
TOTAL STOCKHOLDERS' EQUITY 6,834,740 1,903,363
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $10,495,752 $10,455,745
The accompanying footnotes are an integral part of the financial
statements.<PAGE>
NETEGRITY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For three months ended
September 30,
1996 1995
Net revenues $1,075,961 $584,215
Costs of products sold 611,772 354,207
Selling, general & administrative
expenses 785,440 218,362
Research and development costs 446,245 ---
(LOSS) INCOME BEFORE INTEREST
AND TAXES (767,496) 11,646
Interest income 90,872 3,195
Operating (loss) income before
income taxes (676,624) 14,841
Provision for taxes --- 4,658
(LOSS) INCOME FROM CONTINUING
OPERATIONS (676,624) 10,183
(LOSS) INCOME FROM DISCONTINUED
OPERATIONS --- 20,918
GAIN ON SALE OF ASSETS OF
DISCONTINUED OPERATIONS --- ---
NET (LOSS) INCOME $ (676,624) $ 31,101
Per share amounts:
(Loss) income from continuing
operations $(0.07) $0.00
(Loss) income from discontinued
operations --- 0.00
Gain on sale of assets of
discontinued operations --- ---
NET INCOME PER SHARE $(0.07) $0.00
Weighted average shares outstanding 9,745,000 9,151,000
The accompanying footnotes are an integral part of the financial
statements.<PAGE>
NETEGRITY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For six months ended
September 30,
1996 1995
Net revenues $2,205,933 $1,314,580
Costs of products sold 1,363,608 809,497
Selling, general & administrative
expenses 1,177,596 385,189
Research and development costs 499,934 ---
(LOSS) INCOME BEFORE INTEREST
AND TAXES (835,205) 119,894
Interest income 101,967 6,744
Operating (loss) income before income
taxes (733,238) 126,638
Provision for taxes 19,000 62,260
(LOSS) INCOME FROM CONTINUING
OPERATIONS (752,238) 64,378
(LOSS) INCOME FROM DISCONTINUED
OPERATIONS (520,245) 176,055
GAIN ON SALE OF ASSETS OF
DISCONTINUED OPERATIONS 6,000,000 ---
NET (LOSS) INCOME $4,727,517 $ 240,433
Per share amounts:
(Loss) income from continuing
operations $(0.08) $0.01
(Loss) income from discontinued
operations (0.05) 0.02
Gain on sale of assets of
discontinued operations 0.62 ---
NET INCOME PER SHARE $0.49 $0.03
Weighted average shares outstanding 9,739,000 9,183,000
The accompanying footnotes are an integral part of the financial
statements.<PAGE>
NETEGRITY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended
September 30,
1996 1995
OPERATING ACTIVITIES
Net (loss)income from continuing
operations $ (752,238) $ 64,378
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation and amortization 20,100 2,107
Provision for doubtful accounts
receivable 15,000 ---
Changes in operating assets and
liabilities:
Accounts receivable 492,829 (195,295)
Inventory 21,400 ---
Other current assets (78,424) (42,151)
Other assets 8,679 136
Accounts payable (44,591) 253,574
Other accrued expenses (456,618) 77,996
Accrued payroll (866,404) 99,540
Customer advances (6,000) ---
Total adjustments (894,029) 195,907
Net cash (used for) provided
by continuing operating activities (1,646,267) 260,285
Net cash provided by discontinued
operating activities 712,117 770,680
Net cash (used for) provided by
operating activities $ (934,150) $1,030,965
The accompanying footnotes are an integral part of the financial
statements.<PAGE>
NETEGRITY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended
September 30,
1996 1995
INVESTING ACTIVITIES
Purchase of equipment $ (161,805) $ (14,321)
Proceeds from sale of certain assets 9,300,000 ---
Net cash provided by (used for)
investing activities 9,138,195 (14,321)
FINANCING ACTIVITIES
Notes payable-related party (300,000) ---
Issuance of common stock 197,401 ---
Paydown of line of credit (741,248) (126,840)
Principal payments under capital
leasing --- (20,510)
Net cash used for financing
activities (843,847) (147,350)
Net increase in cash 7,360,198 869,294
Cash at beginning of period 1,410,445 672,386
Cash at end of period $8,770,643 $1,541,680
Supplemental disclosures of cash
flow information:
Interest paid $ 20,256 $ 81,511
Supplemental schedule of noncash
investing and financing activities:
Collection of products in
satisfaction of accounts
receivable - product $ 108,012 $ 363,931
The accompanying footnotes are an integral part of the financial
statements.<PAGE>
NETEGRITY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - The unaudited financial information furnished
herein reflects all adjustments which are of a normal recurring
nature, which in the opinion of management are necessary to
fairly state the Company's financial position, cash flows and the
results of its operations for the periods presented. Certain
information and footnote disclosure normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
This information should be read in conjunction with the Company's
audited financial statements for the fiscal year ended March 31,
1996, included in Form 10-K filed on June 28, 1996.
NOTE 2 - The results of operations for the three-month and
six-month periods ended September 30, 1996 are not necessarily
indicative of the results to be expected for the period ending
December 31, 1996 (see Note 7).
NOTE 3 - Minority interest represents the minority
shareholders' proportionate share of their equity of Personal
Computing Tools, Inc. (PCT). At September 30, 1996, the Company
owned 94% of the capital stock of PCT.
NOTE 4 - Net income per share is based upon the weighted
average number of common shares outstanding including the
dilutive effects of options and warrants.
NOTE 5 - The Company provides for income taxes during
interim reporting periods based on reported earnings before
income taxes using an estimate of the annual effective tax rate.
Deferred income taxes reflect the impact of temporary differences
between the amount of assets and liabilities recognized for tax
purposes. These deferred taxes are measured by applying
currently enacted tax laws.
NOTE 6 - As of June 28, 1996, the Company completed the
divestiture of its catalog related business, consisting of The
Programmer's SuperShop ("TPS")catalog, the TPS web site, the
corporate sales group, the German subsidiary ("SDC Germany") and
SDC Communications. The Company completed the transaction for an
aggregate price of $10,035,000. The aggregate price consisted of
payment of $9,300,000 in immediately available funds and the
deposit of $735,000 under an escrow arrangement. As of August
12, 1996, $135,000 of the escrow has been returned to the
Company. The final purchase price of $10,035,000 was a
negotiated settlement. Prior to the closing, the parties had a
dispute as to how catalog revenue should be measured under the
Agreement.
The aggregate price of $10,035,000 assumes that the Company
will transfer to the Purchaser as of the Closing date, tangible
net assets of the catalog related business that equal $1,500,000.
These net assets are currently being audited and the Company
expects no material adjustments.
The Company incurred $2,587,000 in expenses and write-
offs related to the divestiture. These expenses were primarily
comprised of write-off of goodwill, severance costs, professional
fees and facility shut-down costs for its corporate offices and
distribution facility. The Company reported a gain of $6,000,000
from the sale of the assets of its catalog related business.
As a result of the divestiture described in Note 7, the
Company estimates the utilization of approximately $6,000,000 of
its current available operating loss carryforward.
NOTE 7 - As reported on Form 8-K, dated August 21, 1996, the
Company's Board of Directors approved, on August 14, 1996, a
change in the Company's fiscal year from March 31 to December 31.
The Company intends to file a transition report on Form 10-K for
the nine-month period ending December 31, 1996.
NOTE 8 - The Company has appropriately expensed, per its
policy, research and development costs when incurred.
NOTE 9 - The Company has reclassified research and
development expenses as of June 30, 1996 to conform with the
financial statement presentation at September 30, 1996. This
reclassification has no effect on earnings.
<PAGE>
NETEGRITY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Private Securities Litigation Reform Act of 1995
contains certain safe harbors regarding forward-looking
statements. In that context, the discussion in this Item
contains forward-looking statements which involve certain degrees
of risk and uncertainties, including statements relating to
liquidity and capital resources. Except for the historical
information contained herein, the matters discussed in this
section are such forward-looking statements that involve risks
and uncertainties, including the impact of competitive pricing
within the software industry, the effect any reaction to such
competitive pressures has on current inventory valuations, the
need for and effect of any business restructuring, the presence
of competitors with greater financial resources, capacity and
supply constraints or difficulties, and the Company's continuing
need for improved profitability and liquidity.
The following overview reflects the recent divestiture of
the Company's catalog related business. Any comments relating to
operating results or issues are reflective of the continuing
network security business. The Company's revenues were generated
by the sale of network security products, integration and support
services to companies doing business on the Internet and internal
networks. The divestiture of the Company's catalog related
business is recorded as discontinued operations in the
accompanying unaudited financial statements.
The Company plans to develop and introduce new products to
address the changing needs of the evolving network security
market. There can be no assurance that the Company will be able
to develop new products or that such products will achieve market
acceptance, or, if market acceptance is achieved, that the
Company will be able to maintain such acceptance for a
significant period of time.
<PAGE>
RESULTS OF CONTINUING OPERATIONS
The following information should be read in conjunction with
the consolidated financial statements and notes thereto:
For the three months % to Net Revenue % Change
ended September 30, 1996 1995 96 v. 95
Net Revenues:
Product sales 100% 100% ---
Gross Margins:
Product sales 44% 40% 4%
Selling, general and
administrative expenses 73% 38% 35%
Research and development costs 42% --- 42%
Income (loss) from continuing
operations (63%) 5% (65%)
REVENUES: Total net revenues for the second quarter ended
September 30, 1996 increased $491,746, or 84%, to $1,075,961 from
$584,215 for the second quarter ended September 30, 1995. This
increase in net sales revenue was primarily due to the increasing
need for network security as companies connect to the Internet.
GROSS MARGIN: Total gross margin dollars increased $234,181, or
102%, to $464,189 in the three month period ended September 30,
1996 from $230,008 in the same period last year. Gross margin
improved as a result of the increase in sales and the growth in
the network security market.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, General
and Administrative (SG&A) expenses increased 360% to $785,440 in
the quarter ended September 30, 1996 from $218,362 in the quarter
ended September 30, 1995. The increase was mainly attributable to
planned headcount additions in the sales and technical support
groups as the Company began to build its operation in preparation
for future growth.
RESEARCH AND DEVELOPMENT COSTS: The Company began a research and
development project in the current fiscal year. For the three
months ended September 30, 1996, $446,245 in costs were expensed
per Company policy.
INTEREST INCOME: Net interest income increased in the quarter
ended September 30, 1996 to $90,872 from $3,195 in the same
period last year. This increase is mainly attributable to
available cash being invested at prevailing rates of interest.
The Company's quarterly operating results have varied and
may continue to vary significantly depending on external factors.
Substantially all of the Company's revenue in a quarter is
derived from orders received in that quarter. Accordingly,
delays in orders are likely to result in the associated revenue
not being realized by the Company in the period. Moreover, the
Company's expense levels are based in part on expectations of
future revenue levels, and a shortfall in expected revenue could
therefore result in a disproportionate decrease in the Company's
net income.
For the six months % to Net Revenue % Change
ended September 30, 1996 1995 96 v. 95
Net Revenues:
Product sales 100% 100% ---
Gross Margins:
Product sales 39% 39% ---
Selling, general and
administrative expenses 54% 30% 24%
Research and development costs 23% --- 23%
Income (loss) from continuing
operations (34%) 5% (39%)
REVENUES: Total net revenues for six months ended September 30,
1996 increased $891,353 , or 68%, to $2,205,933 for the six
months ended September 30, 1995. This increase in net sales
revenue was primarily due to the increasing need for network
security as companies connect to the Internet.
GROSS MARGIN: Total gross margin dollars increased $337,242, or
67%, to $842,325 in the six-month period ended September 30, 1996
from $505,083 in the same period last year. Gross margin improved
as a result of the increase in sales and the growth in the
network security market.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, General
and Administrative (SG&A) expenses increased 306% to $1,177,596
in the six months ended September 30, 1996 from $385,189 in the
same period ended September 30, 1995. The increase was mainly
attributable to planned headcount additions in the sales and
technical support groups as the Company began to build its
operation in preparation for future growth.
RESEARCH AND DEVELOPMENT COSTS: The Company began a research and
development project in the current fiscal year. For the six
months ended September 30, 1996, $499,934 in costs were expensed
per Company policy.
INTEREST INCOME: Net interest income increased in the six month
period ended September 30, 1996 to $101,967 from $6,744 in the
same period last year. This increase is mainly attributable to
available cash being invested at prevailing rates of interest.
LIQUIDITY AND CAPITAL RESOURCES
(in thousands, except ratios)
September 30, March 31,
Financial Condition as of: 1996 1996
Cash and cash equivalents $8,771 $1,410
Working capital 6,569 401
Current ratio 2.80 1.05
Cash Flow Activity Summary for September 30,
the Six Months Ended 1996 1995
Net cash (used for) provided by
continuing operating activities $(1,646,267) $ 260,285
Net cash provided by (used for)
investing activities $ 7,480,156 $ (14,321)
Net cash provided by (used for)
financing activities $ (834,847) $(147,350)
The Company's net cash balance increased by $7,360,198 to
$8,770,643 at September 30, 1996 from $1,410,445 at March 31,
1996. This increase was primarily attributable to the proceeds
received from the divestiture of the catalog related business.
Accounts receivable-trade decreased 92% to $433,000 at
September 30, 1996 from $5,676,000 at March 31, 1996. This
decrease resulted from the Company's divestiture of its catalog
business.
Working capital increased by $6,168,000 to $6,569,000 at
September 30, 1996 from $401,000 at March 31, 1996. This
increase was the result of the divestiture of its catalog
business.
The Company anticipates that its existing cash resources and
cash flow from operations will be sufficient to fund its
operations through the Company's current fiscal year ending
December 31, 1996. Additionally, the Company currently
anticipates that its available cash, expected cash flows from
operations, and its borrowing capacity will be sufficient to fund
operations through 1997.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any material legal
proceedings.
ITEM 2. CHANGES IN SECURITIES
As of September 30, 1996, the Company's automatic conversion
of its Series C Preferred Stock to Common Stock on a one-to-one
basis has been completed.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders,
whether through the solicitation of proxies or otherwise, during
the quarter ended September 30, 1996.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following exhibits, required are filed
as a part of this Quarterly Report on Form 10-Q.
<PAGE>
Exhibit
Item No. Item and Reference
3.01 Restated Certificate of Incorporation of
The Software Developer's Company, Inc.
dated October 27, 1987
3.02 Certificate of Amendment of Restated
Certificate of Incorporation of The
Software Developer's Company, Inc. dated
August 8, 1988
3.03 Certificate of Amendment to Restated
Certificate of Incorporation of The
Software Developer's Company,Inc. dated
September 27, 1991
3.04 Certificate of Amendment to Restated
Certificate of Incorporation of The
Software Developer's Company, Inc. dated
March 22, 1994
3.05 Certificate of Amendment of Restated
Certificate of Incorporation of The
Software Developer's Company,Inc. dated
June 28, 1996.
11.00 Computation of earnings per share.
(b) Reports on Form 8-K:
On August 21, 1996 the Company filed a current report
on Form 8-K related to a change in the Company's fiscal
year from March 31 to December 31. The Company intends
to file a transition report on Form 10-K for the nine-
month period ending December 31, 1996.
On July 3, 1996, the Company filed a report on Form 8-K
dated June 28, 1996. The current report on Form 8-K
was filed pursuant to Item 2 of Form 8-K announcing the
closing of the sale of the Company's catalog business
to Programmer's Paradise, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
NETEGRITY, INC.
Date: November 13, 1996 By:/s/ Barry N. Bycoff
Barry N. Bycoff
President and Chief
Executive Officer (Principal
Executive Officer)
Date: November 13, 1996 By:/s/ James O'Connor, Jr.
James O'Connor, Jr.
Vice President, Finance and
Chief Financial Officer
(Principal Financial and
Chief Accounting Officer)
<PAGE>
EXHIBIT 11.00
NETEGRITY, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share data)
Three months ended
September 30,
1996 1995
Weighted average shares outstanding 9,109 8,751
Net effect of dilutive stock options
and warrants - based on the treasury
stock method using the average
market price 636 400
Total 9,745 9,151
Net (loss) income from continuing
operations $ (677) $ 10
Net income(loss) from discontinued
operations --- 21
Gain on sale of assets from
discontinued operations --- ---
Net income for EPS computation $ (677) $ 31
Per share amounts:
(Loss) income from continuing
operations $(0.07) $0.00
Income from discontinued
operations --- 0.00
Gain on sale of assets from
discontinued operations --- ---
NET INCOME PER SHARE $(0.07) $0.00
<PAGE>
EXHIBIT 11.00 (cont.)
NETEGRITY, INC.
COMPUTATION OF EARNINGS PER SHARE(CONT.)
(In thousands, except per share data)
Six months ended
September 30,
1996 1995
Weighted average shares outstanding 9,109 8,775
Net effect of dilutive stock options
and warrants - based on the treasury
stock method using the average
market price 630 409
Total 9,739 9,184
Net (loss) income from continuing
operations $ (752) $ 64
Net income(loss) from discontinued
operations (520) 176
Gain on sale of assets from
discontinued operations 6,000 ---
Net income for EPS computation $4,728 $ 240
Per share amounts:
(Loss) income from continuing
operations $(0.08) $0.01
Income from discontinued
operations (0.05) 0.02
Gain on sale of assets from
discontinued operations 0.62 ---
NET INCOME PER SHARE $0.49 $0.03
<PAGE>
EXHIBIT 3.01
RESTATED CERTIFICATE OF INCORPORATION
OF
THE SOFTWARE DEVELOPER'S COMPANY, INC.
The Software Developer's Company, Inc., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), filed its Certificate of
Incorporation with the Secretary of State of the State of
Delaware on September 11, 1986. Said Certificate of
Incorporation was further amended by the filing of a Certificate
of Agreement of Merger on October 3, 1986. Desiring to further
amend its Certificate of Incorporation, as heretofore amended,
and to restate the same, as amended, The Software Developer's
Company, Inc. does hereby certify:
FIRST: That the Board of Directors of the Corporation, by
unanimous written consent, duly adopted .resolutions proposing
and declaring advisable the amendment and restatement of the
Certificate of Incorporation of the Corporation as hereinafter
set forth.
SECOND: That, thereafter, the stockholders of the
Corporation, at a meeting duly called and held at which a quorum
was present and acting throughout, voted the necessary number of
shares as required by statute in favor of the amendment and
restatement.
THIRD: That upon the Effectiveness of the filing of this
Restated Certificate of incorporation with the Secretary of State
of Delaware (i) each currently outstanding share of the
Corporation's Series A Common Stock, $.01 par value per share
shall be converted into one share of Common Stock, $.01 par value
per share, and (ii) each currently outstanding share of the
Corporation's Series B Common Stock, $.01 par value per share
shall be converted into one share of Common Stock, $.01 par value
per share.
FOURTH: That this Restated Certificate of Incorporation
has been duly adopted in accordance with Sections 242 and 245 of
the General Corporation Law of the State of Delaware.
FIFTH: That the text of the Certificate of Incorporation of
The Software Developer's Company, Inc. is hereby further amended
and restated in full to read as follows:
ARTICLE FIRST: The name of the Corporation is The
Software Developer's Company, Inc.
ARTICLE SECOND: The address of its registered office
in the State of Delaware is Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THIRD: The nature of the business or purposes
to be conducted or promoted is to engage in any lawful act or
activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
ARTICLE FOURTH: The total number of shares of stock
which the Corporation shall have authority to issue is Four
Million (4,000,000) shares, with Three Million Five Hundred
Thousand (3,500,000) shares of Common Stock with a par value of
one cent ($.01) per share (the "Common Stock"), and Five Hundred
Thousand (500,000) shares of Preferred Stock with a par value of
one ($.01) per share (the "Preferred Stock").
A description of the respective classes of stock and a
statement of the designations, preferences, voting powers (or no
voting powers), relative, participating, optional or other
special rights and privileges and the qualifications, limitations
and restrictions of the Preferred Stock and Common Stock are as
follows:
A. PREFERRED STOCK
The Preferred Stock may be issued in one or more series at such
time or times and for such consideration or considerations as at
least two-thirds of the members of the Board of Directors of the
Corporation may determine. Each series shall be so designated as
to distinguish the shares thereof from the shares of all other
series and classes. Except as otherwise provided in this
Restated Certificate of Incorporation, different series of
Preferred Stock shall not be construed to constitute different
classes of shares for the purpose of voting by classes.
The Board of Directors of the Corporation is expressly
authorized, by a vote or written consent of at least two-thirds
of the directors then in office, to provide for the issuance of
all or any shares of the Preferred Stock in one or more series,
each with such designations, preferences, voting powers (or no
voting powers), relative, participating, optional or other
special rights and privileges and such qualifications,
limitations or restrictions thereof as shall be stated in the
resolution or resolutions adopted by the Board of Directors of
the Corporation to create such series, and a Certificate of
Designation of said resolution or resolutions shall be filed in
accordance with the General Corporation Law of the State of
Delaware. The authority of the Board of Directors of the
Corporation with respect to each such series shall include,
without limitation of the foregoing, the right to provide that
the shares of each such series may be: (i) subject to redemption
at such time or times and at such price or prices; (ii) entitled
to receive dividends (which may be cumulative or non-cumulative),
at such rates, on such conditions, and at such times, and payable
in preference to, or in such relation to, the dividends payable
on any other class or classes or any other series; (iii) entitled
to such rights upon the dissolution of, or upon any distribution
of the assets of, the Corporation; (iv) convertible into, or
exchangeable for, shares of any other class or classes of capital
stock, or of any other series of the same or any other class or
classes of stock of the Corporation at such price or prices or at
such rates of exchange and with such adjustments, if any; (v)
entitled to the benefit of such limitations, if any, on the
issuance of additional shares of such series or shares of any
other series of Preferred Stock; or (vi) entitled to such other
preferences, powers, qualifications, rights and privileges, all
as the Board of Directors of the Corporation may deem advisable
and as are not inconsistent with law and the provisions of this
Restated Certificate of Incorporation.
B. COMMON STOCK
1. Relative Rights of Preferred Stock and Common Stock.
All preferences, voting powers, relative, participating, optional
or other special rights and privileges, and qualifications,
limitations, or restrictions of the Common Stock are expressly
made subject and subordinate to those that may be fixed from time
to time with respect to any shares of the Preferred Stock.
2. Voting Rights. Except as otherwise required by law or
this Restated Certificate of Incorporation, each holder of Common
Stock shall have one vote in respect of each share of stock held
by him of record on the books of the Corporation for the election
of directors and on all matters submitted to a vote of
stockholders of the Corporation. Except. as otherwise required
by law or as set forth in this Restated Certificate of
Incorporation, any further amendment or restatement thereof, or
in any Certificate of Designation filed in accordance with the
General Corporation Law of the State of Delaware with respect to
the Preferred Stock, the holders of Common Stock and Preferred
Stock shall vote together as a single class on all matters
submitted to the stockholders for a vote.
3. Dividends. Subject to the preferential rights of the
Preferred Stock, if any, the holders of shares of Common Stock
shall be entitled to receive, when, as and if declared by the
Board of Directors of the Corporation, out of the assets of the
Corporation which are by law available therefor, dividends
payable either in cash, in property or in shares of capital
stock.
4. Dissolution, Liquidation or Winding Up. In the event
of any dissolution, liquidation or winding up of the affairs of
the Corporation, after distribution in full of the preferential
amounts, if any, to be distributed to the holders of shares of
the Preferred Stock, the holders of Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively, unless otherwise provided
by law or this Amended and Restated Certificate of Incorporation,
any further amendment or restatement thereof, or in any
Certificate of Designation filed in accordance with the General
Corporation Law of the State of Delaware with respect to the
Preferred Stock.
ARTICLE FIFTH: The Corporation is to have perpetual
existence.
ARTICLE SIXTH: In furtherance and not in limitation of
the powers conferred by the laws of the State of Delaware:
A. The Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the By-laws of the
Corporation.
B. Elections of directors need not be by written ballot unless
the By-laws of the Corporation shall so provide.
C. The books of the Corporation may be kept at such place
within or without the State of Delaware as the By-laws of the
Corporation may provide or as may be designated from time to time
by the Board of Directors of the Corporation.
D. Any vote or votes authorizing liquidation of the Corporation
or proceedings for its dissolution may provide, subject to the
rights of creditors and the rights expressly provided for
particular classes or series of capital stock, for the
distribution among the stockholders of the Corporation of the
assets of the Corporation as provided herein, wholly or in part
or in kind, whether such assets be in cash or other property, and
may authorize the Board of Directors of the Corporation to
determine the valuation of the different assets of the
Corporation for the purpose of such liquidation and may divide or
authorize the Board of Directors to divide such assets or any
part thereof among the stockholders of the Corporation, in such
manner that every stockholder will receive a proportionate amount
in value (determined as provided herein) of cash or property of
the Corporation upon such liquidation or dissolution even though
each stockholder may not receive a strictly proportionate part of
each such asset.
ARTICLE SEVENTH: Whenever a compromise or arrangement
is proposed between the Corporation and its creditors or any
class of them and/or between the Corporation and its stockholders
or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of
the Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for the
Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as
the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any
reorganization of the Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the
creditors or class of creditors, and/or: on all the stockholders
or class of stockholders of the Corporation, as the case may be
and also on the Corporation.
ARTICLE EIGHTH:
Section 1. Elimination of Personal Liability. The
Corporation eliminates the personal liability of each m ember of
its Board of Directors to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
provided that the foregoing shall not eliminate the liability of
a director (i) for any breach of such director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174
of Title 8 of the Delaware Code, or (iv) for any transaction from
which such director derived an improper personal benefit.
If the General Corporation Law of the State of Delaware is
amended in the future to authorize corporate action further
eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as so amended
from time to time.
Any repeal or modification of this Article Eighth shall not
increase the personal liability of any director of this
Corporation for any act or occurrence taking place prior to such
repeal or modification, or otherwise adversely affect any right
or protection of a director of the Corporation existing at the
time of such repeal or modification.
Section 2.(a) Right to Indemnification. Each person
who was or is made a party or is threatened to be made a party to
or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or
she is or was a director, officer or employee of the Corporation
or is or was serving at the request of the Corporation as a
directors officer, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans
(hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent authorized by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter he amended (but, in
the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in Connection
therewith and such indemnification shall continue as to an
indemnitee who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the indemnitee's heirs,
executors and administrators; provided, however, that except as
provided in paragraph. (b) hereof with respect to proceedings to
enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or
part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided,
however, that, if the General Corporation Law so of the State of
Delaware requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by
such indemnitee, including without limitation, service to an
employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which
there is no further right to appeal that such indemnitee is not
entitled to be indemnified for such expenses under this Section
or otherwise (hereinafter an "undertaking").
Section 2.(b) Right of Indemnitee to Bring Suit. If a
claim under paragraph (a) of this Section is not paid in full by
the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period
shall be twenty days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit
or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder
(but not in a suit brought by the indemnitee to enforce a right
to an advancement of expenses) it shall be a defense that, and
(ii) any suit by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking the Corporation
shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met the applicable
standard of conduct set forth in the General Corporation Law of
the State of Delaware. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or
its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual
determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that
the indemnitee has not met such applicable standard of conduct,
shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any
suit brought by the indemnitee to enforce a right hereunder, or
by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified or to such
advancement of expenses under this Section or otherwise shall be
on the Corporation.
Section 2.(c) Non-Exclusivity of Rights. The rights
to indemnification and to the advancement of expenses conferred
in this Section shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, this
Restated Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership,
joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
(e) Indemnification of Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to
advancement of expenses, to any agent of the Corporation to the
fullest extent of the provisions of this Section with respect to
the indemnification and advancement of expenses of directors,
officers and employees of the Corporation.
ARTICLE NINTH: The Corporation reserves the right to
amend or repeal any provision in this Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon a stockholder herein are
granted subject to this reservation.
IN WITNESS WHEREOF, The Software Developers Company, Inc. has
caused this certificate to be signed by Bruce W. Lynch, its duly
authorized President, and attested by John M. Hession, its duly
authorized Secretary, this 20th day of October, 1987.
THE SOFTWARE DEVELOPER'S COMPANY, INC.
By: /s/ Bruce W. Lynch
Bruce W. Lynch, President
ATTEST:
/s/ John M. Hession
John M. Hession, Secretary<PAGE>
EXHIBIT 3.02
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE SOFTWARE DEVELOPER'S COMPANY, INC.
The Software Developer's Company, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law
of the State of Delaware (the "Corporation"), DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of said Corporation,
in a written consent dated July 13, 1988 in accordance with the
provisions of Sections 141(f) and 222 of the General Corporation
Law of the State of Delaware, adopted the following resolution
authorizing a proposed amendment to the Restated Certificate of
Incorporation of said Corporation, declaring said amendment to be
advisable and recommending said amendment to the stockholders of
the Corporation for approval thereby:
RESOLVED: That the Restated Certificate of Incorporation be
amended to authorize &n additional 6,500,000 shares f Common
Stock and that such amendment be recommended to the stockholders
as in the best interests of the Corporation.
SECOND: That the stockholders of said Corporation, at a
special meeting in lieu of annual meeting of stockholders held on
July 28, 1988 in accordance with the provisions of Sections 211
and 222 of the General Corporation Law of the State of Delaware,
voted to amend the Restated Certificate of Incorporation to
authorize an additional 6,500,000 shares of Common Stock.
THIRD: That in accordance with the aforementioned
resolutions, the Restated Certificate of Incorporation of this
Corporation is hereby amended by deleting the first sentence of
Article FOURTH thereof in its entirety and replacing it with a
new sentence so that, as amended, the first sentence of Article
FOURTH shall read as follows:
The total number of shares of stock which the Corporation shall
have authority to issue is Ten Million Five Hundred Thousand
(10,500,000), with Ten million (10,000,000) shares of common
stock with a par value of one cent ($.01) per share ("Common
Stock"), and Five Hundred Thousand (500,000) shares of Preferred
Stock with a par value of one cent ($.01) per share ("Preferred
Stock").
FOURTH: That said amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, The Software Developer's Company, Inc. has
caused this certificate to be signed by Bruce W. Lynch,
President, and attested by John M. Hession, Secretary, this 8th
day of August, 1988.
THE SOFTWARE DEVELOPER'S COMPANY, INC.
By: /s/ Bruce W. Lynch
Bruce W. Lynch, President
ATTEST:
/s/ John M. Hession
John M. Hession, Secretary
<PAGE>
EXHIBIT 3.03
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
THE SOFTWARE DEVELOPER'S COMPANY, INC.
THE SOFTWARE DEVELOPER'S COMPANY, INC., a corporation
organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY AS FOLLOWS:
FIRST: That the Board of Directors of said Corporation,
by unanimous written consent dated August 20, 1991, in accordance
with the provisions of Section 141(f) of the General Corporation
Law of the State of Delaware, adopted the following resolution
authorizing a proposed amendment to the Restated Certificate of
Incorporation of said Corporation, declaring said amendment to be
advisable and recommending said amendment to the stockholders of
the Corporation for approval thereby:
RESOLVED: That an amendment to the Company's
Restated Certificate of Incorporation to increase the number of
authorized shares of undesignated Preferred Stock from 500,000
shares to 2,000,000 shares is hereby adopted and approved and
shall be submitted to the Corporation's stockholders for their
approval.
SECOND: That the stockholders of said Corporation, at an
Annual Meeting of Stockholders held on September 27, 1991, in
accordance with the provisions of Sections 211, 222 and 242 of
the General Corporation Law of the State of Delaware, voted to
amend the Restated Certificate of Incorporation to authorize an
additional 1,500,000 shares of Preferred Stock and to increase
the number of authorized shares of Preferred Stock from 500,000
shares to 2,000,000 shares.
THIRD: That in accordance with the aforementioned
resolutions, the Restated Certificate of Incorporation of this
Corporation is hereby amended by deleting the first sentence of
Article FOURTH thereof in its entirety and replacing it with a
new sentence so that, as amended, the first sentence of Article
FOURTH shall read as follows:
The total number of shares of stock which the
Corporation shall have authority to issue is Twelve Million
(12,000,000) shares, with Ten Million (10,000,000) shares of
common stock with a par value of one cent ($.01) per share
("Common Stock"), and Two Million (2,000,000) shares of Preferred
Stock with a par value of one cent ($.01) per share ("Preferred
Stock").
FOURTH: That the stockholders of the Company duly adopted
such resolution by a majority vote at a meeting held in
accordance with the provisions of Sections 222 and 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, The Software Developer's Company, Inc.
has caused this certificate to be signed by Stephen L. Watson,
its President, and attested by John M. Hession, its Assistant
Secretary, as of this 27th day of September, 1991.
THE SOFTWARE DEVELOPER'S COMPANY, INC.
By: /s/ Stephen L. Watson
Stephen L. Watson, President
ATTEST:
/s/ John M. Hession
John M. Hession, Assistant Secretary
<PAGE>
EXHIBIT 3.04
THE SOFTWARE DEVELOPER'S COMPANY, INC.
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
THE SOFTWARE DEVELOPER'S COMPANY, INC., a corporation
organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY AS FOLLOWS:
FIRST: That the Board of Directors of said Corporation,
by unanimous written consent dated January 17, 1994, in
accordance with the provisions of Section 141(f) of the General
Corporation Law of the State of Delaware, adopted the following
resolutions authorizing proposed amendments to the Restated
Certificate of Incorporation of said Corporation, declaring said
amendments to be advisable and recommending said amendments to
the stockholders of the Corporation for approval thereby:
RESOLVED: TO approve an amendment to the Company's Restated
Certificate of Incorporation, as amended (the "Charter"), to
increase the number of authorized shares of Common Stock, par
value $.01 per share, from 10,000,000 shares to 25,000,000
shares.
RESOLVED: To approve an amendment to the Company's Charter to
increase the number of authorized shares of Preferred Stock, par
value $.01 per share, from 1,519,320 shares to 5,000,000 shares.
SECOND: That the stockholders of said Corporation, at a
Special Meeting of Stockholders held on March 22, 1994, in
accordance with the provisions of Sections 211, 222 and 242 of
the General Corporation Law of the State of Delaware, voted to
amend the Restated Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 10,000,000
shares to 25,000,000 shares and to increase the authorized number
of Preferred Stock from 1,519,320 shares to 5,000,000 shares.
THIRD: That in accordance with the aforementioned
resolutions, the Restated Certificate of Incorporation of this
Corporation is hereby amended by deleting the first sentence of
Article FOURTH thereof in its entirety and replacing it with a
new sentence so that, as amended, the first sentence of Article
FOURTH shall read as follows:
The total number of shares of stock which the Corporation
shall have authority to issue is Thirty Million (30,000,000)
shares, with Twenty-five Million (25,000,000) shares of Common
Stock with a par value of one cent ($.01) per share ("Common
Stock"), and Five Million (5,000,000) shares of Preferred Stock
with a par value of one cent ($.01) per share ("Preferred
Stock").
FOURTH: That the stockholders of the Company duly adopted
such resolution by a majority vote of each class outstanding at a
meeting held in accordance with the provisions of Sections 222
and 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, The Software Developer's Company, Inc.
has caused this certificate to be signed by Barry N. Bycoff, its
President and Chief Executive Officer, and attested by John M.
Hession, its Assistant Secretary, as of this 22nd day of March,
1994.
THE SOFTWARE DEVELOPER'S COMPANY, INC.
By: /s/ Barry N. Bycoff
Barry N. Bycoff, President
and Chief Executive Officer
ATTEST:
/s/ John M. Hession
John M. Hession, Assistant Secretary
<PAGE>
EXHIBIT 3.5
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
THE SOFTWARE DEVELOPER'S COMPANY, INC.
The Software Developer's Company, Inc. (the "Corporation"),
a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the "Delaware
Law"), DOES HEREBY CERTIFY:
FIRST. The Board of Directors of the Corporation duly
adopted a resolution setting forth and declaring advisable the
amendment of Article First of the Restated Certificate of
Incorporation of the Corporation, so that, as amended, said
Article shall read as follows:
First. The name of the corporation is Netegrity, Inc.
SECOND. The foregoing Amendment of the Restated
Certificate of Incorporation has been duly adopted by the written
consent of stockholders in accordance with the provisions of
Sections 228 and 242 of the Delaware Law. In addition, written
notice of the adoption of the foregoing Amendment of the Restated
Certificate of Incorporation has been given to those stockholders
who did not consent in writing in accordance with Section 228 of
the Delaware Law.
Signed and attested to on June 28, 1996.
THE SOFTWARE DEVELOPER'S COMPANY, INC.
By: /s/ Barry N. Bycoff
Barry N. Bycoff, President
Attest:
/s/ John Hession
John Hession, Assistant Secretary
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