<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission File Number: 0-29020
MULTIMEDIA ACCESS CORPORATION
-----------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 75-2528700
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer Incorporation
Incorporation or Organization) Identification No.)
2665 VILLA CREEK DRIVE, SUITE 200, DALLAS, TX
---------------------------------------------
75234 (Address of principal executive offices)
972/488-7200
------------
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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
----- ------
As of November 6, 1998, 10,495,507 shares of the Registrant's common stock were
outstanding.
<PAGE> 2
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION
<TABLE>
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets at December 31, 1997 and
September 30, 1998 (Unaudited).................................................................................3
Consolidated Statements of Operations for the Three Months
ended September 30, 1997 and 1998 (Unaudited) and the Nine Months
ended September 30, 1997 and 1998 (Unaudited)..................................................................4
Consolidated Statement of Stockholders' Equity for the
Nine Months ended September 30, 1998 (Unaudited)...............................................................5
Consolidated Statements of Cash Flows for the Nine Months ended
September 30, 1997 and 1998 (Unaudited)........................................................................6
Notes to Consolidated Financial Statements.......................................................................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................................................................9
PART II. OTHER INFORMATION.....................................................................................12
SIGNATURES.......................................................................................................13
</TABLE>
2
<PAGE> 3
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
ASSETS 1997 1998
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,117,202 $ 131,340
Accounts receivable, less allowance for doubtful accounts of $65,000
at December 31, 1997 and $152,000 at September 30, 1998 (unaudited) 1,195,230 3,063,313
Inventory 1,762,186 2,890,744
Prepaid expenses 75,096 165,212
Deferred charges 191,287 --
--------------- ---------------
Total current assets 6,341,001 6,250,609
Property and equipment, net 877,440 1,256,802
Software development costs, net 203,858 376,822
Investment in equity securities -- 2,000,000
Deferred charges 752,125 226,647
Deposits 36,991 135,958
--------------- ---------------
Total assets $ 8,211,415 $ 10,246,838
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 759,319 $ 2,186,206
Accrued compensation 313,634 433,054
Deferred revenue 52,784 133,572
Other accrued liabilities 343,051 709,281
Short-term debt, officer 311,243 116,666
Short-term debt, other (See Note 5) 13,120 2,195,463
--------------- ---------------
Total current liabilities 1,793,151 5,774,242
Long-term debt - convertible 5,000,000 1,360,000
Commitments
Stockholders' equity:
Convertible preferred stock, $.0001 par value:
Authorized shares - 5,000,000
Issued and outstanding shares - none at December 31, 1997 -- 36
and 364,000 at September 30, 1998 (unaudited)
Common stock, $.0001 par value:
Authorized shares - 30,000,000
Issued and outstanding shares - 8,995,455 at December 31, 1997
and 10,687,116 at September 30, 1998 (unaudited) 900 1,069
Additional paid-in capital 19,628,703 26,666,041
Accumulated deficit (18,199,433) (23,542,644)
Treasury stock, 261,497 shares at December 31, 1997 and
September 30, 1998 (unaudited) (11,906) (11,906)
--------------- ---------------
Total stockholders' equity 1,418,264 3,112,596
--------------- ---------------
Total liabilities and stockholders' equity $ 8,211,415 $ 10,246,838
=============== ===============
</TABLE>
Note: The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See accompanying notes.
3
<PAGE> 4
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------------ ------------------------------------
1997 1998 1997 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
NET SALES $ 1,158,682 $ 2,648,567 $ 1,992,783 $ 7,049,173
Cost of goods sold 596,688 1,372,956 1,007,451 3,614,300
--------------- --------------- --------------- ---------------
GROSS PROFIT 561,994 1,275,611 985,332 3,434,873
Operating expenses:
Selling, general and administrative 1,119,971 1,954,777 2,981,568 5,593,754
Research and development 773,095 740,430 2,017,455 2,221,403
Depreciation and amortization 85,884 165,866 220,551 379,829
--------------- --------------- --------------- ---------------
Total operating expenses 1,978,950 2,861,073 5,219,574 8,194,986
--------------- --------------- --------------- ---------------
OPERATING LOSS (1,416,956) (1,585,462) (4,234,242) (4,760,113)
Other income (expense):
Dividend and interest income 4,871 2,592 54,682 33,185
Interest expense (12,096) (187,370) (239,910) (579,033)
Other 7,346 68 24,226 48
--------------- --------------- --------------- ---------------
Total other income (expense) 121 (184,710) (161,002) (545,800)
--------------- --------------- --------------- ---------------
NET LOSS $ (1,416,835) $ (1,770,172) $ (4,395,244) $ (5,305,913)
=============== =============== =============== ===============
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.18) $ (0.20) $ (0.58) $ (0.60)
=============== =============== =============== ===============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 8,026,197 9,307,884 7,523,947 8,930,913
=============== =============== =============== ===============
</TABLE>
See accompanying notes.
4
<PAGE> 5
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
PREFERRED STOCK COMMON STOCK PAID-IN ACCUMULATED TREASURY STOCKHOLDERS'
SHARES PAR VALUE SHARES PAR VALUE CAPITAL DEFICIT STOCK EQUITY
----------- ----------- ----------- ----------- ----------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 -- $ -- 8,995,455 $ 900 $19,628,703 $(18,199,433) $(11,906) $ 1,418,264
Conversion of long-term debt
to convertible preferred stock 364,000 36 -- -- 3,003,586 -- -- 3,003,622
Common stock issued in exchange
for equity securities -- -- 1,000,000 100 1,999,900 -- -- 2,000,000
Exercise of options and warrants -- -- 662,669 66 1,857,187 -- -- 1,857,253
Sale of common stock, employee
stock purchase plan -- -- 25,437 3 66,551 -- -- 66,554
Fair market value of options and
warrants issued for consulting
services -- -- -- -- 100,114 -- -- 100,114
Common stock issued for
consulting services -- -- 3,555 -- 10,000 -- -- 10,000
Preferred stock dividend - accrued -- -- -- -- -- (37,298) -- (37,298)
Net loss -- -- -- -- -- (5,305,913) -- (5,305,913)
=========== =========== =========== =========== =========== ============ ======== ===========
BALANCE, SEPTEMBER 30, 1998 364,000 $ 36 10,687,116 $ 1,069 $26,666,041 $(23,542,644) $(11,906) $ 3,112,596
=========== =========== =========== =========== =========== ============ ======== ===========
</TABLE>
See accompanying notes.
5
<PAGE> 6
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------
1997 1998
--------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (4,395,244) $ (5,305,913)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation of fixed assets 163,001 270,451
Amortization of software development costs 57,549 109,378
Non-cash charges to interest expense 155,667 121,850
Non-cash consulting fees exchanged for options and warrants
and common stock -- 110,114
Changes in operating assets and liabilities:
Accounts receivable (609,072) (1,868,083)
Inventory (1,331,654) (1,128,558)
Prepaid expenses (44,977) (90,116)
Deferred charges 415,128 (41,463)
Deposits (5,385) (98,967)
Accounts payable 358,830 1,426,887
Accrued compensation 46,867 119,420
Deferred revenue (12,456) 80,788
Other accrued liabilities (261,372) 328,932
--------------- ---------------
Net cash used in operating activities (5,463,118) (5,965,280)
--------------- ---------------
INVESTING ACTIVITIES:
Purchase of property and equipment (487,376) (649,813)
Software development costs (60,228) (282,342)
--------------- ---------------
Net cash used in investing activities (547,604) (932,155)
--------------- ---------------
FINANCING ACTIVITIES:
Net proceeds from issuance of short-term debt 210,202 2,062,830
Repayment of short-term debt-officer (235,000) (194,576)
Other 4,611 119,512
Net proceeds from sale of common stock and warrants 5,427,238 66,554
Proceeds from the exercise of options and warrants 652,745 1,857,253
--------------- ---------------
Net cash provided by financing activities 6,059,796 3,911,573
--------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 49,074 (2,985,862)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,539 3,117,202
--------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 67,613 $ 131,340
=============== ===============
</TABLE>
See accompanying notes.
6
<PAGE> 7
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements
include the accounts of MultiMedia Access Corporation and its wholly-owned
subsidiaries, Viewpoint Systems, Inc., VideoWare, Inc. and Osprey Technologies,
Inc. (collectively, the Company). All material inter-company accounts and
transactions have been eliminated in consolidation.
The financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-KSB filed for the year ended December 31, 1997.
2. INVENTORIES
Inventory is comprised primarily of purchased electronic components and
computer system products, along with related documentation manuals and packaging
materials and consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
Purchased materials $ 1,035,006 $ 929,327
Finished goods 727,180 1,961,417
--------------- ---------------
$ 1,762,186 $ 2,890,744
=============== ===============
</TABLE>
3. INVESTMENT IN EQUITY SECURITIES
In September 1998, the Company entered into a strategic business alliance
with Tadeo Holdings, Inc. ("THI") that included a stock purchase agreement
whereby the Company acquired 1,240,310 shares of THI common stock in exchange
for 1,000,000 shares of the Company's common stock. As specified in the purchase
agreement, the number of shares exchanged was determined by dividing $2,000,000
by the average closing price per share of each company's common stock for the
five trading days prior to September 24, 1998. The shares issued by the Company
and THI are not registered under the Securities Act of 1933, as amended, and may
not be sold, transferred or otherwise distributed in the absence of such
registration or an applicable exemption therefrom.
4. LONG-TERM DEBT - CONVERTIBLE
In August 1998, the Company exchanged $3,640,000 of its 8% Senior
Convertible Notes for 364,000 shares of its newly created Series A Convertible
Preferred Stock (the "Preferred Stock"). The Preferred Stock carries a dividend
of 8.5% per year payable in cash or Common Stock of the Company, at the
Company's option, and is convertible into Common Stock of the Company at a fixed
conversion price of $3.625 per share (subject to certain conditions).
7
<PAGE> 8
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
4. NET LOSS PER SHARE
The Company has adopted Statement of Financial Accounting Standards No. 128
(SFAS 128), "Earnings per Share," which has changed the method for calculating
earnings per share on the face of the income statement. The new standard
eliminates primary and fully diluted earnings per share and requires
presentation of basic and diluted earnings per share together with disclosure of
how the per share amounts were computed. Basic earnings per share is calculated
by dividing net income/loss applicable to common shareholders by the weighted
average number of common shares outstanding for the period. Since the Company
has reported net losses for the periods presented, the computation of diluted
loss per share excludes the effects of options, warrants and convertible debt
since their effect is anti-dilutive. Loss per share amounts for prior periods
have been restated to conform to SFAS 128 requirements.
Loss per share calculations for the three and nine month periods ended
September 30, 1997 and 1998 are as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- --------------------------------
1997 1998 1997 1998
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net loss $ (1,416,835) $ (1,770,172) $ (4,395,244) $ (5,305,913)
Preferred dividends and accretion of
issue costs -- (61,563) -- (61,563)
------------- ------------- ------------- -------------
Net loss applicable to common shareholders $ (1,416,835) $ (1,831,735) $ (4,395,244) $ (5,367,476)
============= ============= ============= =============
Weighted average number of common shares
outstanding 8,026,197 9,307,884 7,523,947 8,930,913
============= ============= ============= =============
Loss per share as reported in the financial
statements: basic and diluted $ (0.18) $ (0.20) $ (0.58) $ (0.60)
============= ============= ============= =============
</TABLE>
5. SUBSEQUENT EVENTS
In November 1998, the Company entered into a Working Capital Line of Credit
facility for up to $9 million with one of its principal shareholders, H.T.
Ardinger Jr. This one year, renewable facility, which contains terms that are
more favorable to the Company than its existing facility, bears interest at 12%
per annum and is secured by all assets of the Company. The availability of funds
under this facility is subject to certain Borrowing Base limitations based
principally on outstanding accounts receivable and inventory. A portion of the
proceeds from this facility was used to repay the Company's existing accounts
receivable line of credit with a Texas commercial bank.
8
<PAGE> 9
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
MultiMedia Access Corporation develops, manufactures and markets
standards-based systems that provide advanced video communications applications
for business customers. The Company's VBX(TM) video distribution and switching
systems, Osprey(R) video codecs and video peripherals and ViewCast(R)
Internet-video systems deliver popular video applications, including
videoconferencing, video broadcasting, video-based training, surveillance,
distance learning, telemedicine and Internet/Intranet video communications. The
Company's products are available from leading resellers, systems integrators,
OEMs, and applications developers worldwide.
This Form 10-QSB contains forward-looking statements which involve risks
and uncertainties. The Company's actual results may differ significantly from
the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, product demand and
market acceptance risks, the impact of competitive products and pricing, product
development, commercialization and technological difficulties, capacity and
supply constraints or difficulties, general business and economic conditions,
the effect of the Company's accounting policies and other risks detailed in the
Company's Annual Report on Form 10-KSB and other filings with the Securities and
Exchange Commission.
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1998 compared to Nine Months Ended September 30,
1997.
Net Sales. Net sales for the nine months ended September 30, 1998 increased
254% to $7,049,173 from $1,992,783 reported for the same period last year. The
increase can be attributed to significant growth in demand for both video
systems and video peripheral products during the first nine months of 1998 as
compared to the same period in 1997. The Company has experienced a growing
acceptance of its products and technologies in the marketplace and expects its
sales volumes to continue to increase as the demand for video communications
products expands.
During the first nine months of 1998, sales of VBX(TM) video distribution
systems increased 648% over the same period in 1997 and represented 57% of 1998
revenues compared to 27% of 1997 revenues. Sales of Osprey(R) codecs and
peripherals increased 109% in the first nine months of 1998 over the same period
in 1997 and represented 41% of 1998 revenues, compared to 69% of 1997 revenues.
Consulting and custom programming revenues increased 242% to $151,715 for the
first nine months of 1998 compared to $44,372 reported in the same period in
1997. Sales are expected to increase for both systems and peripheral products as
new products are developed and marketed and as new reseller/distributor
contracts and marketing alliances are finalized.
Cost of Goods Sold. Cost of goods sold increased $2,606,849 to $3,614,300
for the first nine months of 1998 compared to the same period last year,
primarily due to the increase in net sales described above. Gross profit margin
for first nine months of 1998 was 48.7%, representing a slight decline from the
49.4% margin reflected in the same period last year. The decrease in gross
margin can be attributed primarily to increases in 1998 in the percentage of
sales to OEM and Master Distributor partners with contractual sales discounts
appropriate for two-tier distribution.
9
<PAGE> 10
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
Selling, General and Administrative Expense. Selling, general and
administrative expenses increased from $2,981,568 in the first nine months of
1997 to $5,593,754 in the first nine months of 1998 primarily due to a
significant expansion of the Company's sales, marketing and customer support
efforts. By the end of the first half of 1998, the Company had added 16 sales, 3
marketing, and 3 customer support positions that did not exist during the same
period in 1997 and had opened five sales offices, four in the continental U.S.
and one in Europe. This growth resulted in significant increases in labor,
benefits, hiring, office rental, and travel expenses. Also contributing to the
increase were growth in legal and professional, filing fees and investor
relations' expenses associated with being a public company.
Research and Development Expense. Research and development expense
increased from $2,017,455 in the first nine months of 1997 to $2,221,403 during
the same period in 1998. This increase of $190,736 can be attributed to
additions to the Company's development staff and contract consultants during
1998. The new staff and consultants were principally involved in the development
and testing of product designs and related software releases for both systems
and peripheral products.
Other Income (Expense). For the nine months ended September 30, 1998, other
expense increased $384,798 compared to the same period in 1997. The change was
due primarily to an increase in interest expense associated with the addition of
$5,000,000 of 8% convertible notes in December of 1997 and an accounts
receivable line of credit in May of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds for conducting its business
activities come from operations and from the sale of its debt and equity
securities. The Company requires liquidity and working capital primarily to fund
increases in inventories and accounts receivable associated with sales growth,
development of its products, debt service and for capital expenditures.
Net cash used in operating activities for the nine months ended September
30, 1998 was $5,965,280 due primarily to the $5,305,913 net loss for the period,
changes in operating assets and liabilities of $1,271,160 offset by $611,793 of
non-cash operating expenses.
Investing activities utilized cash of $932,155 during the nine months ended
September 30, 1998 for capital expenditures for computer equipment, telephone
equipment, test equipment, purchased software, leasehold improvements and
capitalized software development costs associated with the Company's growth and
product development.
Financing activities provided cash in the amount of $3,911,573 during the
first nine months of 1998 primarily due to $2,182,342 of net proceeds generated
from an accounts receivable financing line of credit and issuance of short-term
debt, $1,923,807 generated from the exercise of options, warrants and sales of
equity securities offset in part by repayment of $194,576 of short-term debt to
an officer of the Company.
The Company had working capital of $476,367 at September 30, 1998 compared
to $4,547,850 at December 31, 1997 and cash and cash equivalents of $131,340 at
September 30, 1998 compared to $3,117,202 at December 31, 1997. The Company
experienced significant sales growth during the first nine months of 1998.
However, it is anticipated that losses will continue during 1998 and until such
time as gross margins from the sales of its products exceed its development,
selling, administrative and financing costs. As revenues continue to grow,
operating expenses are forecasted to decline as a percent of revenues and the
Company's quarterly results are expected to move toward profitability over the
next few quarters.
10
<PAGE> 11
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
In November 1998, the Company entered into a Working Capital Line of Credit
financing arrangement for up to $9 million with one of its principal
shareholders. The availability of funds under this facility is subject to
certain Borrowing Base limitations, based principally on outstanding accounts
receivable and inventory. The initial draw under this facility, which contains
terms that are more favorable to the Company than its existing facility, was
approximately $3.7 million, a portion of which was used to repay the existing
credit facility (See Note 5 to the Consolidated Financial Statements).
The Company anticipates that additional financing may be needed during the
balance of 1998 and in 1999 in order to meet its working capital requirements
and has had preliminary discussions with several potential sources of financing,
and may seek additional financing to provide additional working capital in the
future. Such financing may include loans or capital financing through the
issuance of convertible preferred stock or other equity securities.
Although the Company has no firm arrangements with respect to any
additional financing, it is currently considering various proposals by several
potential investors for a cash investment in the Company. There can be no
assurance that any such additional financing will be available to the Company on
acceptable terms, or at all. Additional equity financing may involve substantial
dilution to the Company's then existing shareholders. In the event the Company
is unable to raise additional capital it may be required to curtail some of its
activities. However, the Company believes that it will be able to raise
sufficient capital to fund its growth.
On October 29, 1998 the Company received a response letter from the Nasdaq
Stock Market, Inc. notifying the Company of its continued listing on The Nasdaq
SmallCap Market, subject to the Company making certain public filings on or
before November 30, 1998. The Company expects to comply with such conditions in
a timely manner.
YEAR 2000
The Company is developing plans to address the possible exposures related
to the impact on its computer systems for the Year 2000. Key financial
information and operational systems are being assessed and plans are being
developed to address system modifications required by December 31, 1999. The
financial impact of making the required systems changes is not expected to be
material to the Company's consolidated financial position, results of operations
or cash flows. There can be no assurance, however that the Company will be able
to identify all aspects of its business that are subject to Year 2000 problems,
or identify Year 2000 problems of customers or suppliers that affect the
Company's business. There also can be no assurance that the Company's software
vendors are correct in their assertions that the software is Year 2000 compliant
or that the Company's estimate of the cost of systems preparation for Year 2000
compliance will prove ultimately to be accurate.
11
<PAGE> 12
MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES
OTHER INFORMATION
PART II: OTHER INFORMATION
<TABLE>
<S> <C>
Item 1. Legal Proceedings
(Not Applicable)
Item 2. Changes in Securities
(Not Applicable)
Item 3. Defaults Upon Senior Securities
(Not Applicable)
Item 4. Submission of Matters to a Vote of Security Holders
(Not Applicable)
Item 5. Other Information
(None)
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
(a) Exhibits filed with this report:
Exhibit 3(ii): Complete By-laws as Amended
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
(None)
12
<PAGE> 13
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MultiMedia Access Corporation
-----------------------------
(registrant)
BY:
Date: November 13, 1998 /s/ WILLIAM S. LEFTWICH
-----------------------------
William S. Leftwich
Chief Financial Officer
Principal Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3(ii) Complete By-laws as amended
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 3(ii)
MULTIMEDIA ACCESS CORPORATION
BY-LAWS AS AMENDED OCTOBER 6, 1998
<PAGE> 2
EXHIBIT 3(ii)
MULTIMEDIA ACCESS CORPORATION
* * * * *
RESTATED BY-LAWS
* * * * *
The following are the By-laws of Multimedia Access Corporation,
restated as of October 6, 1998.
ARTICLE I
OFFICES
1.1 The registered office of the Company shall be located at 2665
Villa Creek, Suite 200, Dallas, Texas 75234.
1.2 The Company may also have offices at such other places both within
and without the State of Texas as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 All meetings of the stockholders for the election of Directors
shall be held at the principal offices of the Company, or at such other place
either within or without the State of Texas as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting. Meetings
of stockholders for any other purpose may be
<PAGE> 3
held at such time and place, within or without the State of Texas, as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
2.2 Annual meeting of stockholders, for the purpose of electing
directors and of transacting such other business as may come before it, shall be
held at the office of the corporation or at such other place as may be fixed by
the Board of Directors and specified in the notice of the meeting and within
four months after the close of the fiscal year.
2.3 Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than 10 nor more than 60 days before the date of the meeting.
2.4 (a) No notice of the time, place, or purposes of any regular or
special meeting of shareholders need be given to any shareholder who, in person,
or by proxy, either attends the meeting or, in a writing which is filed with the
records of the meeting, waives the notice either before or after the meeting.
(b) Any shareholder who has signed a waiver of notice of the
meeting shall be bound by the proceedings of that meeting in all respects as if
due notice of that meeting had been given.
2.5 (a) For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of Directors may provide
that the share transfer books shall be closed for a stated period not to exceed,
in any case, 50 days. If the transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote
<PAGE> 4
at a meeting of shareholders, such books shall be closed for at least 10 days
immediately preceding such meeting.
(b) In lieu of closing the share transfer books, the Board of
Directors may fix in advance a date as the record date for any determination of
shareholders, such date in any case to be not more than 50 days and, in case of
a meeting of shareholders, not less than 10 days prior to the date on which the
action requiring that determination of shareholders is to be taken.
(c) If the share transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or shareholders entitled to receive payment
of a dividend, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring the dividend is
adopted, as the case may be, is the record date for determination of
shareholders.
2.6 The officer who has charge of the stock ledger of the corporation
shall prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such 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 also be
produced and kept at the
<PAGE> 5
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.7 Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Certificate 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 Board of Directors, or at the
request in writing of stockholders owning a majority in amount of the entire
capital stock of the corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.
2.8 Written notice of a special meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than 10 nor more than 60 days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
2.9 The President, or in his absence the Chairman or ViceChairman,
shall call to order meetings of shareholders and shall act as Chairman of such
meetings. The Board of Directors or the shareholders may appoint any shareholder
or any director or officer of the corporation to act as Chairman of any meeting
in the absence of the President and the chairman or vice-chairman. The Secretary
of the corporation shall act as Secretary of all meetings of shareholders, but
in the absence of the Secretary the presiding officer may appoint any
shareholder or any director or officer to act as Secretary of any meeting.
2.10 Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice. The order of business at annual
and special meetings of shareholders shall, to the extent appropriate, be as
follows:
<PAGE> 6
(1) Call to order;
(2) Determination of the presence of a quorum;
(3) Consideration of minutes not previously approved;
(4) Report of the President and other officers;
(5) Election of Directors;
(6) Consideration of unfinished business;
(7) Consideration of new business; and
(8) Adjournment.
2.11 The holders of one-third (1/3) of the voting stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
<PAGE> 7
2.12 When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or represented
by proxy shall decide any question brought before such meeting, unless the
question is one upon which by express provision of the statutes or of the
Certificate of Incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
Elections for Directors need not be by ballot unless a shareholder demands
election by ballot at the election and before the voting begins.
2.13 Unless otherwise provided in the Certificate of Incorporation each
stockholder shall at every meeting of the stockholders be entitled to one vote
in person or by proxy for each share of the capital stock having voting power
held by such stockholder, but no proxy shall be voted on after three years from
its date, unless the proxy provides for a longer period.
2.14 Unless a proxy is irrevocable --
(a) The later execution by the shareholder of a different proxy
revokes the earlier one; and
(b) An attempt to vote by the shareholder who is present at the
meeting revokes all other proxies executed by him.
2.15 Holders of fractional share or scrip shall have no right to vote
at or participate in any meeting of shareholders.
2.16 (a) In advance of any meeting of shareholders, the Board of
Directors may appoint any persons, other than nominees for office, as inspectors
of election to act at that meeting or any adjournment thereof. If inspectors of
election are not appointed, the chairman of any meeting may, and on the request
of any shareholder or shareholder's
<PAGE> 8
proxy shall, appoint inspectors of election at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed. In case any
person appointed as inspector fails to appear or fails or refuses to act, the
vacancy may be filled by appointment by the Board of Directors in advance of the
meeting, or at the meeting by the person acting as chairman.
(b) The inspectors of election shall determine the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, and the authenticity, validity, and effect
of proxies. The inspectors shall also receive votes, ballots, or consents, hear
and determine all challenges and questions in any way arising in connection with
the right to vote, count and tabulate all votes or consents, determine the
result, and do such acts as may be proper to conduct the election or vote with
fairness to all shareholders. The inspectors of election shall perform their
duties impartially, in good faith, to the best of their ability, and as
expeditiously as is practical.
(c) If there are three inspectors of election the decision,
act, or certificate of a majority is effective in all respects as the decision,
act, or certificate of all.
(d) On request of the chairman of the meeting or of any
shareholder or his proxy the inspectors shall make a report in writing of any
challenge or question or matter determined by them and execute a certificate of
any fact found by them. Any report or certificate made by them is prima facie
evidence of the facts stated therein.
<PAGE> 9
ARTICLE III
DIRECTORS
3.1 The number of Directors which shall constitute the whole board
shall be such number as shall be determined from time to time by resolution of
the Board of Directors. The Directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 3.2 of this Article, and each
Director elected shall hold office until his successor is elected and qualified.
3.2 Vacancies and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a majority of
the Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the Directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least 10% of the total
number of the shares at the time outstanding having the right to vote for such
Directors, summarily order an election to be held to fill any such vacancies or
newly created directorships, or to replace the Directors chosen by the Directors
then in office.
3.3 The business and affairs of the corporation shall be managed by or
under the direction of its Board of Directors which may exercise all such powers
of the
<PAGE> 10
corporation and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-laws directed or required to be
exercised or done by the stockholders.
3.4 The Board of Directors of the corporation may hold meetings, both
regular and special, either within or without the State of Delaware.
3.5 Regular meetings of the Board of Directors may be held with or
without notice at such time and at such place as shall from time to time be
determined by the Board.
3.6 Special meetings of the Board may be called by the President on 5
days notice to each Director, either personally or by mail or by telegram;
special meetings shall be called by the President or Secretary in like manner
and on like notice on the written request of two Directors, unless the board
consists of only one Director, in which case, I special meetings shall be called
by the President or Secretary in like manner and on like notice on the written
request of the sole Director.
3.7 At all meetings of the board a majority of the Directors shall
constitute a quorum for the transaction of business and the act of a majority of
the Directors present at any meeting at which there is a quorum present shall be
the act of the Board of Directors, except as may be otherwise specifically
provided by statute or by the Certificate of Incorporation. A Director who
abstains from participation in a particular course of business shall nonetheless
be counted for purposes of determining a quorum. If a quorum shall not be
present at any meeting of the Board of Directors the Directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
<PAGE> 11
3.8 Unless otherwise restricted by the Certificate of Incorporation or
these By-laws, 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 all members of the board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.
3.9 Unless otherwise restricted by the Certificate of Incorporation or
these By-laws, members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in a meeting can hear each
other, and such participation in a meeting shall constitute presence in person
at the meeting.
3.10 At every meeting of the Board of Directors, the Chairman of the
Board of Directors, if there is such an officer, and if not, the President, or
in the President's absence, a Vice President designated by the President, or in
the absence of such designation, a chairman chosen by a majority of the
Directors present, shall preside. The Secretary of the corporation shall act as
Secretary of the Board of Directors. In case the Secretary shall be absent from
any meeting, the chairman may appoint any person to act as Secretary of the
meeting.
3.11 The Board of Directors, by resolution adopted by a majority of the
entire Board, may designate from among its members one or more committees, each
consisting of two or more Directors, and each of which, to the extent provided
in such resolution, shall have all the authority of the Board (except as
otherwise provided by law, the Articles
<PAGE> 12
of Incorporation, as amended, or these By-laws). However, no such committee
shall have authority as to any of the following matters:
(a) the submission to shareholders of any action as to which
shareholders' authorization or approval is required by law, the Articles of
Incorporation, as Amended, or these By-laws;
(b) the filling of vacancies on the Board of Directors or on
any committee;
(c) the fixing of compensation of the Directors for serving on
the-Board or on any committee;
(d) the amendment or repeal of these By-laws, or the adoption
of new By-laws;
(e) the amendment or repeal of any resolution of the Board of
Directors unless, by its terms, it is expressly made so amendable or repealable;
(f) the issuance of any shares or evidence of indebtedness of
the corporation or the declaration of any dividend;
(g) the amendment of the Certificate of Incorporation, (except
that a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors
as provided in Section 151(a) fix any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, and distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation) adopting an agreement of
merger or consolidation;
<PAGE> 13
(h) recommendation to the stockholders of the sale, lease or
exchange of all or substantially all of the corporations property and assets;
and
(i) recommendation to the stockholders of a dissolution of the
corporation or a revocation of dissolution.
3.12 Each committee shall keep regular minutes of its meetings and
report the same to the Board of Directors when required.
3.13 Unless otherwise restricted by the certificate of Incorporation or
these By-laws, the Board of Directors shall have the authority to fix the
compensation of Directors. The Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
Director. No such payment shall preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
3.14 Unless otherwise restricted by the Certificate of Incorporation or
By-laws, any Director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of shares entitled to vote at an
election of Directors.
3.15 The Corporation has outstanding certain 8% Senior Convertible
Notes due 2002 and Series A Convertible Preferred Stock (collectively,
"Convertible Securities") each of which is convertible, on certain terms and
conditions, into Common Stock of the Corporation. The Convertible Securities
contain certain anti-dilution provisions which will result in the reduction of
the conversion price if the Corporation issues Common Stock at a price less than
the conversion price then in effect, subject to the conditions
<PAGE> 14
contained in the Convertible Securities. The directors of this Corporation are
not authorized to, and will not, take any action which would result in the
Convertible Securities being convertible into 20% or more of the then
outstanding Common Stock of the Corporation without obtaining stockholder
consent if NASDAQ Stock Market Rules 4310 (c) (25) (H) requires a stockholder
consent to such issuance upon the conversion of the Convertible Securities. This
provision of the bylaws of the Corporation shall remain in full force and effect
so long as the Convertible Securities remain outstanding.
ARTICLE IV
NOTICES
4.1 Whenever, under the provisions of the statutes or of the
Certificate of Incorporation or of these By-laws, notice is required to be given
to any Director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
Director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to Directors may also be given by telegram or facsimile telephonic
transmission.
4.2 Whenever any notice is required to be given under the provisions of
the statutes or of the Certificate of Incorporation or of 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
equivalent thereto.
<PAGE> 15
ARTICLE V
OFFICERS
5.1 The officers of the corporation shall be chosen by the Board of
Directors and shall be Chairman and Vice-Chairman of the Board of Directors,
President, Chief Executive. Officer, Chief Financial officer and Secretary. The
Board of Directors may also designate persons for the positions of Vice
Presidents, Treasurer, Chief Operating Officer, and Controller, and one or more
Assistant Secretaries and Assistant Treasurers, as they deem necessary. Any
number of offices I may be held by the same person, unless the Certificate of
Incorporation or these By-laws otherwise provide.
5.2 The Board of Directors at its first meeting after each annual
meeting of stockholders shall choose the officers of the Company.
5.3 The Board of Directors may appoint such other officers and agents
as it shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.
5.4 The salaries of all officers and agents of the corporation shall be
fixed by the Board of Directors.
5.5 The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the Board
of Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the corporation
shall be filled by the Board of Directors.
5.6 The Chairman of the Board, if there shall be such an officer,
shall, if present, preside at all meetings of the Board of Directors and
exercise and perform such
<PAGE> 16
other powers and duties as may be from time to time assigned to the Chairman by
the Board of Directors or prescribed by the By-laws.
5.7 The President shall be the Chief Executive Officer of the
corporation, and subject to the provisions of these By-laws and to the direction
of the Board of Directors, shall be responsible for the general management and
control of the business and affairs of the corporation and shall see that all
orders and resolutions of the Board of Directors are carried into effect. He
shall sign stock certificates, execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the corporation.
5.8 In the absence of the President or in the event of his inability or
refusal to act, the Executive Vice Presidents, the Vice Presidents and the
Presidents of Divisions, in the order designated by the Directors, or in the
absence of any designation, then in the order of their election, shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. The Presidents of
Divisions, the Executive Vice Presidents and the Vice Presidents shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
5.9 The Secretary, or in his absence the person appointed to act as
Secretary of the meeting, shall at all meetings of the Board of Directors and
all meetings of the stockholders record all the proceedings of the meetings of
the corporation and of the Board of Directors in a book to be kept for that
purpose and shall perform like duties for
<PAGE> 17
the standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or President, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
Assistant Secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
ARTICLE VI
RESIGNATIONS AND REMOVALS
6.1 Any Director or officer of the corporation, or any member of any
committee, may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time be not specified therein,
then upon receipt thereof. The acceptance of such resignation shall not be
necessary to make it effective.
6.2 The Board of Directors, at any meeting thereof called for the
purpose, may, at any time, remove with or without cause from office or terminate
the employment of any officer, agent or member of any committee, and may remove
with cause any Director.
The shareholders entitled to vote for the election of Directors may
remove any Director with or without cause.
<PAGE> 18
ARTICLE VII
CERTIFICATES FOR SHARES
7.1 The shares of the corporation shall be represented by a certificate
or shall be uncertificated. Certificates shall be signed by, or in the name of
the corporation by, the Chairman or the President, or the Secretary of the
corporation.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to Sections 151, 156, 202(a) or 218(a) or 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 preferences and/or
rights.
7.2 Any or all of the signatures on a certificate may be facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
7.3 The Board of Directors may direct a new certificate or certificates
or uncertificated shares to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates or uncertificated
shares, the Board of Directors may, in its discretion and as a condition
<PAGE> 19
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
7.4 Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Upon receipt of proper transfer instructions from the registered owner of
uncertificated shares such uncertificated shares shall be cancelled and issuance
of new equivalent uncertificated shares or certificated shares shall be made to
the person entitled thereto and the transaction shall be recorded upon the books
of the corporation.
7.5 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 60 nor less than 10 days before the date of such
meeting, nor more than 60 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
<PAGE> 20
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
7.6 The corporation shall be entitled to recognize the exclusive right
of a person registered on its books as the owner of shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Dividends upon the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the Certificate of Incorporation.
8.2 Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the Directors shall think conducive
<PAGE> 21
to the interest of the corporation, and the Directors may modify or abolish any
such reserve in the manner in which it was created.
8.3 The Board of Directors shall present at each annual meeting, and at
any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
8.4 All checks or demands for money and notes of the corporation shall
be signed by such officer or officers or such other person or persons as the
Board of Director may from time to time designate.
8.5 The fiscal year of the corporation shall begin on January 1 and end
on December 31.
8.6 The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. No written act of the Company
shall be declared invalid for lack of a seal if signed by the duly authorized
officer of the Company.
8.7 All deeds, bonds, mortgages, contracts and other instruments or
documents requiring a seal may be signed in the name of the corporation by the
President or by any other officer authorized to sign such instrument or document
by the Board of Directors, and such authority may be general or confined to
specific instances.
<PAGE> 22
ARTICLE IX
AMENDMENTS
9.1 These By-laws may be altered, amended or repealed or new By-laws
may be adopted by the stockholders or by the Board of Directors at any regular
meeting of the stockholders or of the Board of Directors or at any special
meeting of the stockholders or of the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new By-laws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal By-laws
is conferred upon the Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal By-laws.
ARTICLE X
INDEMNIFICATION
10.1 The corporation shall indemnify its officers, Directors, employees
and agents to the full extent permitted by the General Corporation Law of
Delaware, as amended from time to time.
Any person who was or is a party or is threatened to be made a party to
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (whether or not by or in the
right of the Corporation) by reason of the fact that he is or was a Director,
officer, incorporator, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a Director, officer, incorporator,
employee, partner, trustee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise (including an employee benefit plan),
<PAGE> 23
shall be entitled to be indemnified by the corporation to the full extent then
permitted by law against expenses (including attorney's fees), judgments, fines
(including excise taxes assessed on a person with respect to an employee benefit
plan), and amounts paid in settlement incurred by him in connection with such
action, suit, or proceeding. Such right of indemnification shall inure whether
or not the claim asserted is based on matters which antedate the adoption of
this Section 10.1. Such right of indemnification shall continue as to a person
who has ceased to be a Director, officer, incorporator, employee, partner,
trustee, or agent and shall inure to the benefit of the heirs and personal
representatives of such a person. The indemnification provided by this Section
10.1 shall not be deemed exclusive of any other rights which may be provided now
or in the future under any provision currently in effect or hereafter adopted by
the Bylaws, by any agreement, by vote of stockholders, by resolution of
disinterested Directors, by provision of law, or otherwise.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF MULTIMEDIA ACCESS CORPORATION AND SUBSIDIARIES AS
OF SEPTEMBER 30, 1998 (UNAUDITED) AND THE RELATED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 131,340
<SECURITIES> 0
<RECEIVABLES> 3,063,313
<ALLOWANCES> 152,000
<INVENTORY> 2,890,744
<CURRENT-ASSETS> 6,250,609
<PP&E> 2,078,211
<DEPRECIATION> 821,409
<TOTAL-ASSETS> 10,246,838
<CURRENT-LIABILITIES> 5,774,242
<BONDS> 1,360,000
0
36
<COMMON> 1,069
<OTHER-SE> 3,111,491
<TOTAL-LIABILITY-AND-EQUITY> 10,246,838
<SALES> 6,897,458
<TOTAL-REVENUES> 7,049,173
<CGS> 3,614,300
<TOTAL-COSTS> 3,614,300
<OTHER-EXPENSES> 2,601,232
<LOSS-PROVISION> 98,485
<INTEREST-EXPENSE> 579,033
<INCOME-PRETAX> (5,305,915)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,305,913)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,305,913)
<EPS-PRIMARY> (0.60)
<EPS-DILUTED> (0.60)
</TABLE>
