<PAGE> 1
United States Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 1
to
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934. For the quarterly period ended August 31, 1998.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from ______to ______
Commission file number: 001-12867
TERRA NATURAL RESOURCES CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
NEVADA 88-0219765
(State or Other Jurisdiction of (I.R.S.Employer
Incorporation or Organization) Identification No.)
5038 N. PARKWAY CALABASAS, SUITE #100, CALABASAS, CA 91302
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices
(818) 591-4400
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
NEVADA MANHATTAN MINING INCORPORATED
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
3 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 35,885,168 of Common Stock and
176,414 of Series A Preferred Stock.
Traditional Small Business Disclosure Format (check one): Yes [X] No [ ]
<PAGE> 2
TERRA NATURAL RESOURCES CORPORATION AND SUBSIDIARIES
(dba NEVADA MANHATTAN)
INDEX TO FORM 10-QSB
PART I FINANCIAL INFORMATION PAGE NO.
Item 1 Financial Statements for Terra Natural Resources Corp.
Consolidated Balance Sheets -
August 31, 1998 and May 31, 1998 3
Consolidated Statements of Operations -
Three Months Ended August 31, 1998 and 1997 4
Consolidated Statements of Cash Flow -
Three Months Ended August 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operation 8
PART II OTHER INFORMATION
Item 1 Legal Proceedings 10
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K 11
Signature 12
<PAGE> 3
TERRA NATURAL RESOURCES CORPORATION AND SUBSIDIARIES
(dba NEVADA MANHATTAN)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited) (Audited)
August 31, 1998 May 31, 1998
--------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 221,273 $ 81,529
Accounts receivable, net of allowance
for doubtful accounts of $150,000 285,316 255,027
Inventories 96,001 108,844
Stock Subscription Receivable 250,000
Prepaid expenses 372,789 283,354
--------- -------
Total current assets 1,225,379 728,754
Properties and equipment
Mineral Properties:
Domestic 2,936,000 2,936,000
Indonesia 1,400,000 1,400,000
Timber concession 700,000 700,000
Machinery and equipment, net 352,300 355,392
Other Assets 234,445 265,700
---------- ----------
TOTAL ASSETS $6,848,124 $6,385,846
========== ==========
LIABILITIES AND STOCKHOLDERS'EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable and Accrued Expenses $1,524,254 $1,445,106
Convertible Notes payable to stockholders
- Secured by Common Stock 1,264,520 1,366,075
Notes Payable to Stockholders 522,950 522,950
Note Payable to Officer 713,955 718,000
Current portion of long-term debt 32,214 32,214
---------- ----------
Total current liabilities 4,057,893 4,084,345
Long term debt 35,327 44,327
Convertible debentures 2,407,771 2,313,459
---------- ---------
Total liabilities 6,500,991 6,442,131
---------- ---------
Commitments and contingencies --- ---
Stockholders' Equity (Deficiency):
Preferred stock, $1 par, 250,000 shares
Authorized, 176,414 outstanding
At August 31, 1998 and May 31, 1998 176,414 176,414
Common stock, $0.01 par, 49,750,000
Shares authorized, 40,157,243 and
26,492,543 shares issued and outstanding 401,572 264,926
Additional paid-in capital 30,540,415 28,715,550
Accumulated Foreign Currency Translation 29,610 24,940
Accumulated deficit (30,800,878) (29,238,115)
---------- -----------
Total stockholders' equity (deficiency) 347,133 ( 56,285)
---------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY) $6,848,124 $ 6,385,846
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 4
TERRA NATURAL RESOURCES CORPORATION AND SUBSIDIARIES
(dba NEVADA MANHATTAN)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended August 31, 1998 and 1997
<TABLE>
<CAPTION>
(Unaudited)
1998 1997
---- ----
<S> <C> <C>
Revenues $ 248,649 $ 156,776
Cost of Sales 191,004 80,595
------- ------
Gross profit 57,645 76,181
Exploration Costs 78,008 ---
General and administrative Expenses 1,308,308 1,354,981
--------- ---------
Net loss from Operations (1,328,671) (1,278,800)
Other Expenses 234,092 ---
--------- ---------
Net Loss (1,562,763) (1,278,800)
---------- ---------
Cumulative preferred dividends --- 29,337
----------- ---------
Net loss attributable to common
shareholders $(1,562,763) $(1,308,137)
=========== ===========
Basic Loss Per Share $ (0.06) $ (0.10)
=========== ===========
Diluted Loss Per Share $ (0.06) $ (0.10)
=========== ===========
Weighted average shares outstanding 28,895,266 12,467,496
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 5
TERRA NATURAL RESOURCES CORPORATION AND SUBSIDIARIES
(dba NEVADA MANHATTAN)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended August 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------ ------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,562,763) $(1,278,800)
Adjustments to reconcile net loss to net cash
used in operating activities:
Common stock issued for services 196,092 ---
Common Stock Issued for Financing Expense ---
Amortization of Debenture Discount 94,312
Depreciation and amortization 15,771 99,909
(Increase) Decrease
Accounts receivable (30,289) (13,391)
Inventories 12,843
Prepaid expenses 87,614 (320,849)
Other Assets 31,255
Increase (Decrease)
Accounts payable and accrued Expenses 282,317 481,109
------- -------
Net cash used in operating activities (872,848) (1,032,022)
--------- -----------
Cash flows from investing activities:
Purchase of property and equipment (12,678) (419,189)
--------- ---------
Cash flows from financing activities:
Proceeds from Issuance of convertible
debentures --- 1,500,000
Payments on long-term debt (9,000) (489,928)
Proceeds from issuance of notes to
stockholders 25,000
Payments for Notes Payable to Officer (4,045)
Proceeds from issuance of stock 1,033,645 0
--------- -------
Net cash provided by financing activities 1,020,600 1,035,072
--------- ---------
Foreign Currency Translation Adjustment 4,670 ---
Net increase (decrease) in cash and cash
equivalents 139,744 (416,139)
Cash and cash equivalents at beginning of
period 81,529 559,510
----------- ----------
Cash and cash equivalents at end of period $ 221,273 $ 143,371
=========== ==========
</TABLE>
Supplemental disclosure of cash flow information:
During the three months ended August 31, 1998 and 1997, the Company paid no
income taxes and no interest.
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During the three months ended August 31, 1998, the Company issued: 722,754
shares of its common stock for services rendered by employees and third parties
for $196,092; and 138,834 shares of its common stock for $187,846 of liquidating
damages associated with the Convertible Debentures.
See accompanying notes to consolidated financial statements
<PAGE> 6
TERRA NATURAL RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of August
31, 1998, the results of operations for the three months ending August 31,
1998 and 1997, and the cash flows for the three months ended August 31,
1998 and 1997. These results have been determined on the basis of generally
accepted accounting principles and practices applied consistently with
those used in the preparation of the Company's audited financial statements
for its fiscal year ended May 31, 1998.
2. Business
The Company's business is the harvesting of timber and the production of
rough sawn lumber and other finished wood products in Brazil, the
exploration and mining of precious metals in Nevada and the exploration of
precious metals and coal in Indonesia. The Company holds various rights to
develop and/or harvest timber properties on up to approximately 950,000
hectares located in the states of Para and Amazonas, Brazil; the right to
conduct sawmill operations at a 3.6 hectare sawmill facility located near
the port city of Belem, Para, Brazil; and the right to conduct exploration
activities on seven (7) gold properties and four (4) coal properties in
Indonesia. In August 1998, the Company entered into an agreement to harvest
timber from an additional 1,380 hectares in Para, Brazil, for a period of
thirty years.
3. Other
A. On August 31, 1998, the Company announced that it received an initial
capital infusion of $500,000 from a group led by Tetsuo Kitagawa. Mr.
Kitagawa had a 25-year history with the Marubeni Group and until
recently was the financial managing director of Marubeni's subsidiary
in Holland. Mr. Kitagawa is currently assigned by the Office of the
President of the Russian Federation to form investment funds in and
outside of Russia under the management of the Office of the President
of the Russian Federation for the improvement of its economy. Mr.
Kitagawa, with his group, will provide full-time management and
financial services for the Company. The Company has been reviewing
acquisition candidates submitted through the Kitigawa Group, many of
which are located in the countries of the former Soviet Union. On
October 14, 1998, Mr. Kitagawa was elected a director of the Company
by the Board of Directors.
B. From July 1997 through October 16, 1998, Jeffrey S. Kramer, Chief
Operating Officer, provided loans to the Company, aggregating
approximately $714,000. Mr. Kramer and the Company are currently
contemplating a partial settlement of these outstanding loans through
the issuance of restricted common shares by the Company.
<PAGE> 7
4. Subsequent Events
A. On September 24, 1998, the Company announced that it executed a letter
of understanding to acquire the controlling interest of "Chrustalnaia"
of Russia. Chrustalnaia owns and operates five mines with significant
reserves as well as 100 percent of "Stanum" which is involved in
harvesting, cutting and fabricating timber, also with substantial
reserves. Chrustalnaia/Stanum has gross revnues of approximately $16.2
million for fiscal 1997 as presented in their Russian-audited balance
sheet. A recognized major accounting firm will be retained to perform
an audit of the Russian balance sheet and assets, and the final
closing will be subject to such confirmation and the preparation of a
more definitive agreement prepared in accordance with the laws of the
United States and the other appropriate countries which will contain
other closing conditions. Chrustalnaia's mining activities include
mining, processing ore of colored metals and obtaining concentrates in
the fields of gold, silver and tin, and functions under the direction
of Dr. Alexander Gonchar. Dr. Gonchar is a well-known academician and
a respected member of the Academy of Science in Russia as well as
other highly respected scientific communities.
B. On September 10, 1998, the Company announced that Dr. Thomas Ward,
consultant to the U.S. Department of Energy and the Pentagon, has
agreed to become a member of the Company's Advisory Committee in the
capacity of Executive Consulting Director for Scientific Development
Mr. Ward, an internationally respected scientist, was for a period of
six years, a representative of the United States in Russia in charge
of the nuclear demilitarization program. Mr. Ward owns his own
consulting company which contracts a number of scientists providing
project expertise to the U.S. government and private companies. Ward
will head the Company's Research and Development Department in a
number of areas including monocrystallite silicon and isotope
development. In addition, he will implement the technology to process
Russian timber for export to the U.S. in order to preserve the United
States' forests and parks in accordance with the Gore-Russian
Agreement which starts in the year 2000 and is in the range of 20
million cubic meters of timber.
On October 13, 1998, the Company formed Science & Technology
Resources, Inc., which is currently structured as a wholly owned
subsidiary, for the purpose of developing its technological division
to be headed by Mr. Ward.
C. The Company is in the final stages of negotiation with Cyprus Amax
Coal Company for the exploration and development of one of the
Company's coal properties in East Kalimantan, Indonesia.
<PAGE> 8
D. On October 5, 1998, the Company announced that it had signed an
agreement for the acquisition of a substantial interest in oil and
revenue-producing gas leases located on the Plainview natural gas
field on 25,000 acres of gas prospects. The agreement on the leases
located in Macoupin County in southwest Illinois is with S.M.T.V. and
Western Pipeline Group. In its initial due diligence on a small part
of the holdings prior to entering into the agreement, the Company has
been able to confirm approximately an initial 4.76 BCF of natural gas.
Additional due diligence and confirmation is planned to commence
immediately.
E. On October 13, 1998 the Board of Directors elected Tetsuo Kitagawa and
Neil H. Lewis as directors, expanding the Board to seven members. Mr.
Kitagawa has been President of SYMIC, a management consulting firm,
since October 1997, prior to which he was employed by Marubeni Finance
(Holland). For the last six of those years he was a Managing Director
of Marubeni Finance, which is a wholly-owned subsidiary of Marubeni,
one of Japan's leading general trading companies. Mr. Lewis is an
attorney in private practice and a consultant to the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
RESULTS OF OPERATION
Comparison of Results of Operations - Three months Ended August 31, 1998 and
August 31, 1997.
- --------------------------------------------------------------------------------
Revenues for three months ended August 31, 1998 were approximately $249,000 as
compared to approximately $157,000 for the same period in 1997. The sales in
both periods relate to the Brazilian operations. The $92,000 increase in Sales
is due to increased efficiencies. The gross margin for the three months ended
August 31, 1998 was approximately 23% as compared to approximately 49% for the
same period in 1997. The decrease in the gross margin is attributable to
increased labor costs. The General and Administrative Expenses and exploration
costs in the aggregate for the three month period ending August 31, 1998
increased slightly compared to the same period in 1997. Although the Company's
operating activities increased for the three months ending August 31, 1998 over
the same period in 1997, General and Administrative Expenses and exploration
costs in the aggregate rose only slightly due to the Company's ability to
control corporate expenses.
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital position as of August 31, 1998 was a deficit of
approximately $2,833,000. Almost since inception, the Company has experienced
pressure on its working capital position due to operating losses and the need to
continually invest in exploration activities on the Nevada Property and, more
recently, the Brazilian Properties, the Silobat Property and the remainder of
the Indonesian Concessions.
To raise funds in the past, the Company has relied upon private placements of
its equity securities. In the quarter ending August 31, 1998, the Company raised
approximately $1,242,000 pursuant to such private placements.
On March 27, 1998, the Company executed an agreement securing $14 million in
equity financing, primarily to fund its timber operations in South America. The
financing, through Bristol Asset Management Company II LLC, requires an
effective registration statement and enables the Company to draw up to $14
million over a three-year period. As of the filing date of this Quarterly
Report, the Company has not effected a registration statement covering the
common stock to be issued pursuant to the $14 million equity financing
agreement.
As of August 28, 1998, TiNV1, Inc., ("TiNV1"), entered into a Subscription
Agreement and a letter agreement with the Company pursuant to which TiNV1
purchased 5,500,000 shares of the Company's common stock for $500,000.
The Brazilian operations represent an opportunity for the Company to generate
significant cash flows for the first time. The Company believes that with the
anticipated increase in daily production at its Brazilian operations to 125
cubic meters per day, much of its continued operations in Brazil, Indonesia, the
Nevada Property, and its operating expenses and overhead at its corporate
offices will be funded by the cash flow generated from its operations in Brazil.
The pending acquisition of Chrustalnaia and the formation of Science &
Technology Resources, Inc. are also being developed for the purpose of increased
revenues.
The Company anticipates that it will require additional capital and intends to
secure it through its agreement with Bristol Assets Management Company II LLC,
by utilizing a publicly registered offering of its securities, the capital
provided by the TiNV1 transaction, "Private Placements" and/or funds generated
from its Brazilian operations.
<PAGE> 10
TERRA NATURAL RESOURCES CORPORATION AND SUBSIDIARIES
(dba NEVADA MANHATTAN)
PART II - OTHER INFORMATION
1. LEGAL PROCEEDINGS
As reported in the Company's Annual Report on Form 10-KSB, on July 14, 1998 the
following lawsuit was filed in United States District Court for the Central
District of California (Case No. 98-5624 JSL CTx) (the "Securities Action") on
behalf of the Company and Francis Parkes, Dr. Joe C. Rude, Christopher D.
Michaels, who are individual Company shareholders: Francis Parkes, Dr. Joe C.
Rude III, Christopher D. Michaels and Nevada Manhattan Mining, Inc. v. Sheldon
Salcman, Arie Rabinowitz, Mayer Rooz, Thomson Kernaghan & Co. Limited, Soreq,
Inc., Silenus Limited, Mary Park Properties, L.H. Financial Services, Austost
Anstalt Schaan, Tusk Investments, Inc., Mendel Group, Inc., Top Holding
International, Ltd., Praha Investments S.A., UFH Endowment, Ltd., Atead
Consulting S.A., and Ausinvest Anstalt Balzers, In the Securities Action,
plaintiffs contend that defendants violated Section 10(b) and 13(g) of the
Securities Exchange Act, Section 1962(b) of the Racketeer Influenced and Corrupt
Organizations Act, and committed fraud by engaging in a fraudulent scheme to
manipulate and artificially depress the market in and for the Company's common
stock by use of massive short sales. Plaintiffs seek an unspecified amount of
damages, including punitive damages, a judicial declaration that the terms,
conditions and covenants of certain debentures and subscription agreements were
violated and certain injunctive relief.
During this quarterly period, various defendants filed motions to dismiss and/or
transfer venue.
2. CHANGES IN SECURITIES
Not applicable.
3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
5. OTHER INFORMATION
Not applicable.
<PAGE> 11
6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
- --------
Exhibit Description Reference No.
- ------------------- -------------
Amended By-Laws of Terra Natural Resources Corporation 3.(xi)
Financial Data Schedule 27
REPORTS ON FORM 8-K
- -------------------
8-K Report dated July 15, 1998 to report the press release issued on July 15,
1998 announcing that the company and certain company stockholders filed a
lawsuit in the U.S. Federal District Court in Los Angeles seeking damages, among
other things, for an alleged fraudulent scheme to depress the market price of
the Company's common stock.
8-K Report dated July 7, 1998 to report Changes in Certifying Accountants.
<PAGE> 12
SIGNATURE
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.
Terra Natural Resources Corporation
/s/ Jeffrey S. Kramer
October 20, 1998 __________________________________________
Jeffrey S. Kramer, Chief Financial Officer
<PAGE> 13
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- ----------------------
3.(xi) Amended By-Laws of Terra Natural Resources Corporation
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 3.(XI)
BY-LAWS
OF
TERRA NATURAL RESOURCES CORPORATION.
-------------------------------------------------------------------------------
ARTICLE I-OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at the office of the resident agent.
SECTION 2. OTHER OFFICES. The corporation may have other offices,
either within or without the State of Nevada, at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II-MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders for the
election of directors and for such business as may be stated in the notice of
the meeting, shall be held at such place, either within or without the State of
Nevada, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Nevada on: The first Monday which occurs after the annual
anniversary of the date upon which the corporation's Articles of Incorporation
were certified by the Secretary of State of Nevada.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held an the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
may transact such other corporate business as shall be stated in the notice of
the meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose
other than the election of Directors may be held at such time and place, within
or without the State of Nevada, as shall be stated in the notice of the meeting.
SECTION 3. VOTING. Each stockholder entitled to vote in accordance with
the terms and provisions of the Articles of Incorporation and these By-Laws
shall be entitled to one vote, in person or by proxy, from each share of stock
entitled to vote held by such stockholder, but no proxy shall be voted after
three years from its date unless such proxy provides for a longer period. Upon
the demand of any stockholder, the vote for directors and upon any question
before the meeting shall be by ballot. All elections for Directors shall be
decided by plurality vote; all other questions shall be decided by majority vote
except as otherwise provided by the Articles of Incorporation or the laws of the
State of Nevada.
<PAGE> 2
SECTION 4. STOCKHOLDER LIST. The Officer who has charge of the stock
ledger of the corporation shall at least 10 days before each meeting of
stockholders prepare a completely alphabetically addressed list of the
stockholders entitled to vote at the ensuing election, with the number of shares
held by each. Said list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least 10 days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held. The list shall be available for inspection at the meeting.
SECTION 5. QUORUM. Except as otherwise required by law, by the Articles
of Incorporation or by these By-Laws, the presence, in person or by proxy, of
stockholders holding a majority of the stock of the corporation entitled to vote
shall constitute a meeting. A majority in interest of the stockholders entitled
to vote thereat, present in person or by proxy, shall have the power to adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until the requisite amount of stock entitled to vote shall be present.
At any such adjourned meeting at which the requisite amount of stock entitled to
vote shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be entitled to vote
at any adjournment or adjournments thereof.
SECTION 6. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose, unless otherwise prescribed by statute or by the Articles of
incorporation, may be called by the President and shall be called by the
President or Secretary at the request in writing of a majority of the Directors
or stockholders entitled to vote. Such request shall state the purpose of the
proposed meeting.
SECTION 7. NOTICE OF MEETINGS. Written notice, stating the place, date
and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than 10 nor
more than 50 days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. No business other than that stated in
the notice shall be transacted at any meeting without the unanimous consent of
all the stockholders entitled to vote thereat.
<PAGE> 3
SECTION 9. ACTION WITHOUT MEETING. Except as otherwise provided by the
Articles of Incorporation, whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or the Articles of Incorporation or of
these By-Laws, the meeting and vote of stockholders may be dispensed with, if
all the stockholders who would have been entitled to vote upon the action if
such meeting were held, shall consent in writing to such corporate action being
taken.
SECTION 10. STOCKHOLDER NOMINATION OF DIRECTORS. Nominations for the
Board of Directors may be made by resolution of the Board of Directors or a
committee appointed by the Board of Directors or by any stockholder entitled to
vote in the election of Directors. Notwithstanding the foregoing, any
stockholder may nominate one or more persons for election as Directors at a
meeting of the stockholders only if written notice of such stockholder's intent
to make such nomination or nominations has been given to the Secretary of the
Company not later than the close of business on the fifteenth day following the
date on which notice of such meeting or the record date thereof is first
publicly announced or, if earlier with respect to an election of Directors to be
held at the annual meeting of stockholders, ninety days prior to the date that
is one year from the date of the immediately preceding annual meeting of
stockholders. Each such notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (c) a description of any arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
persons) pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been nominated by the
Board of Directors; and (e) the consent of each nominee to serve as a Director
of the Company if so elected. The presiding officer at the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
SECTION 11. STOCKHOLDER PROPOSALS. Proposals for business to be
conducted and actions to be taken by the stockholders at any annual or special
meeting may be made by resolution of the Board of Directors or a committee
appointed by the Board of Directors or by any stockholder entitled to vote at
such meeting. Notwithstanding the foregoing, any stockholder may propose
business to be conducted or actions to be taken at a meeting of the stockholders
only if written notice of such stockholder's intent to propose such business or
action has been given to the Secretary of the Company not later than the earlier
of (a) the close of business on the fifteenth day following the date on which
notice of such meeting or the record date thereof is first publicly announced,
and (b) ninety days prior to the date that is one year from the date of the
immediately preceding annual meeting of stockholders with respect to proposals
to be considered at an annual meeting of stockholders. Each such notice shall
set forth: (a) the name and address of the stockholder who intends to make the
proposal; (b) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to make the proposals specified in the notice;
(c) a copy of the proposal; and (d) such other information regarding the
proposal as is necessary to inform the stockholders with reasonable
particularity of the nature, purpose, intent and consequences of the proposal to
the Company if adopted. The presiding officer at the meeting may refuse to
acknowledge any proposal not made in compliance with the foregoing procedure.
<PAGE> 4
ARTICLE III-DIRECTORS
SECTION 1. NUMBER AND TERM. The number of Directors shall be not more
than 7. The Directors shall be elected at the annual meeting of stockholders and
each Director shall be elected to serve until his successor shall be elected and
shall qualify. The number of Directors may not be less than 3 except that where
all the shares of the corporation are owned beneficially and of record by either
one or two stockholders, the number of Directors may be less than 3 but not less
than the number of stockholders.
SECTION 2. RESIGNATIONS. Any Director, member of a committee or other
Officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES. If the office of any Director, member of a
committee or other Officer becomes vacant, the remaining Directors in office,
though less than a quorum, by a majority vote may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. Any Director or Directors may be removed either for
or without cause at any time by the affirmative vote of the holders of
two-thirds of the Company's shares then entitled to vote at an election of
Directors, at a special meeting of stockholders duly called for such purpose,
and the vacancies thus created may be filled at the meeting held for the purpose
of removal by the affirmative vote of two-thirds in interest of the
stockholders, provided that any person elected as a Director pursuant hereto
must be duly nominated as provided in Article II, Section 10 of these By-Laws.
If the stockholders fail to fill the vacancies created by removal at such
special meeting, the vacancies shall be filled as provided in Article III,
Section 3 of these By-Laws.
SECTION 5. INCREASE IN NUMBER. The number of Directors may be increased
by amendment of these By-Laws by the affirmative vote of a majority of the
Directors, though less than a quorum, or, by the affirmative vote of a majority
in interest of the stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional Directors may be chosen
at such meeting to hold office until the next annual election and until their
successors are elected and qualify.
SECTION 6. COMPENSATION. Directors shall not receive any stated salary
for their services as Directors or as members of committees, but by resolution
of the Board a fixed fee and expenses of attendance my be allowed for attendance
at each meeting. Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity as an Officer,
Agent, or otherwise, and receiving compensation therefor.
SECTION 7. ACTION WITHOUT MEETING. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board, or of such committee as the case
may be, and such written consent is filed with the minutes of proceedings of the
Board or committee.
<PAGE> 5
ARTICLE IV-OFFICERS
SECTION 1. OFFICERS. The Officers of the corporation shall consist of a
President, a Treasurer, and a Secretary, and shall be elected by the Board of
Directors and shall hold office until their successors are elected and
qualified. In addition, the Board of Directors may elect a Chairman of the
Board, one or more Vice Presidents, and such Assistant Secretaries and Assistant
Treasurers as it may deem proper. None of the Officers of the corporation need
be Directors. The Officers shall be elected at the first meeting of the Board of
Directors after each annual meeting. More than two offices may be held by the
same person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of Directors may
appoint such Officers and Agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such power and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors, if one be elected, shall preside at all meetings of the
Board of Directors and he shall have and perform such other duties as from time
to time may be assigned to him by the Board of Directors.
SECTION 4. PRESIDENT. The President shall be the Chief Executive
Officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the Office of President of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. Except as
the Board of Directors shall authorize the execution thereof in some manner, he
shall execute bonds, mortgages, and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer or an Assistant Secretary or an Assist- and
Treasurer.
<PAGE> 6
SECTION 5. VICE-PRESIDENT. Each Vice-President shall have such powers
and shall perform such duties as shall be assigned to him by the Directors.
SECTION 6. TREASURER. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate account of receipts and
disbursements in books belonging to the corporation. He shall deposit all moneys
and other valuables in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors, or the President, taking proper vouchers for
such disbursements. He shall render to the President and Board of Directors at
the regular meetings of the Board of Directors, or whenever they may request it,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the Board shall prescribe.
SECTION 7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and Directors, and all other notices
required by law or by these By-Laws, and in case of his absence or refusal or
neglect to do so, any such notice may be given by any person thereunto directed
by the President, or by the Directors, or stockholders, upon whose requisition
the meeting is called as provided in these By-Laws. He shall record all the
proceedings of the meetings of the corporation's stockholders and Directors in a
book to be kept for that purpose, and shall affix the seal to all instruments
requiring it, when authorized by the Directors or the President, and attest the
same.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the Directors.
<PAGE> 7
ARTICLE V-STOCK
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the Chairman or Vice-Chairman of the Board of Directors,
or the President or a Vice-President, and the Treasurer or Assistant Treasurer,
or the Secretary or Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof, and the
qualifications, limitations, or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class or series of stock,
provided that, except as otherwise provided in the General Corporation Law of
Nevada, in lieu of the foregoing requirements, there may be set forth on the
face or back of the certificate which the corporation shall issue to represent
such class or series of stock, a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preference and/or rights. Where a certificate is
countersigned (1) by a Transfer Agent other than the corporation or its
employee, or (2) by a registrar other than the corporation or its employee, the
signatures of such persons may be facsimiles.
SECTION 2. LOST CERTIFICATES. New certificates of stock my be issued in
the place of any certificate therefore issued by the corporation, alleged to
have been lost or destroyed, and the Directors may, in their discretion, require
the owner of the lost or destroyed certificate or his legal representatives, to
give the corporation a bond, in such sum as they my direct, not exceeding double
the value of the stock, to indemnify the corporation against it on account of
the alleged loss of any new certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other persons as the Directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 50 nor less than 10 days
before the day of such meeting, nor more than 50 days prior to any other action.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
<PAGE> 8
SECTION 5. DIVIDENDS. Subject to the provisions of the Articles of
Incorporation the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividends there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the Directors from time to time in their
discretion deem proper working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in form and shall
contain the name of the corporation, the year of its creation and the words
"CORPORATE SEAL NEVADA." Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or otherwise reproduced.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts, or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by an Officer or Officers, or Agent or Agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any notice is required
by these By-Laws to be given, personal notice is not meant unless expressly
stated, and any notice so required shall be deemed, to be sufficient if given by
depositing the same in the United States Postal System, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Articles of Incorporation
of the corporation or these By-Laws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed proper notice.
SECTION 10. NRS GOVERNANCE. The Board of Directors of the Company, by
virtue of this Section 10 of the By-Laws, elects not to be governed by Nevada
Revised Statutes Sections 78.378 through 78.3793 inclusive in connection with
the acquisition of common stock and options by TiNV1, Inc. approved by the Board
of Directors on August 28, 1998.
<PAGE> 9
ARTICLE VI-AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be made at
any annual meeting of the stockholders or at any special meeting thereof if
notice thereof is contained in the notice of such special meeting by the
affirmative vote of a majority of the stock issued and outstanding or entitled
to vote thereat, or by the regular meeting of the Board of Directors, or at any
special meeting of the Board of Directors, if notice thereof is contained in the
notice of such special meetings.
(SEAL)
AMENDED BY-LAWS AS OF AUGUST 31, 1998
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