SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-KSB
Annual Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended
March 31, 1998
Commission file number
0-24368
Micropoint, Inc.
(Exact name of registrant as specified in its charter)
Delaware 33-0615178
(State or other jurisdiction of (IRS employer identification no.)
incorporation)
6906 South 300 West Midvale, UT 84047 (801) 568-5111
Address of principal executive offices) (Registrant's telephone
number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, $.001 Par Value None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such 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. [x] Yes [ ] No
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
The issuer's revenues for its most recent fiscal year were $9,769.
The aggregate market value of the voting stock held by non-affiliates of
the issuer as of March 31, 1998 was not determinable since, to the knowledge
of management, there is no public trading market for the issuer's common
stock.
The number of shares outstanding of the issuer's common stock as of June
23, 1998 was 15,860,279 shares the common stock, $.001 par value.
<PAGE>
Micropoint, Inc.
TABLE OF CONTENTS TO ANNUAL REPORT
ON FORM 10-KSB
YEAR ENDED MARCH 31, 1998
PART I
Item 1. Description of Business .................................3
Item 2. Description of Properties................................8
Item 3. Legal Proceedings .......................................8
Item 4. Submission of Matters to a Vote of Security Holders .....9
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.................................10
Item 6. Management's Discussion and Analysis or Plan of
Operation ..........................................11
Item 7. Financial Statements ...................................13
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure ................13
PART III
Item 9. Directors and Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the
Exchange Act .......................................14
Item 10. Executive Compensation .................................15
Item 11. Security Ownership of Certain Beneficial Owners
and Management .....................................17
Item 12. Certain Relationships and Related Transactions..........18
Item 13. Exhibits and Reports on Form 8-K .......................19
PART I
Item 1. Description of Business.
Company Background
The registrant was incorporated in 1992 as a Delaware corporation under
the name Nanotech Corporation. The registrant had no operations until April
1998. On that date, the registrant acquired Sensitron, Inc. ("Sensitron"), a
Utah corporation, through a merger with a subsidiary of the registrant (the
"Acquisition"). The registrant changed its name to "Micropoint, Inc."
("Micropoint") and Sensitron became a wholly owned subsidiary of Micropoint.
At the closing of the Acquisition, the officers and directors of Micropoint
resigned and the nominees of Sensitron were appointed as the officers and
directors of Micropoint. In addition, the outstanding securities of Sensitron
became outstanding securities of Micropoint. Prior to the Acquisition, neither
Sensitron nor any affiliate of Sensitron had an interest in Micropoint.
Sensitron is engaged in the business, through Flexpoint, Inc. ("Flexpoint")
and Technology and Machine Company, Inc. ("Tamco") which are wholly owned
subsidiaries of Sensitron, of developing manufacturing and marketing
proprietary patented sensor technology know as the Bend Sensor TM technology
(the "Technology"). Except as otherwise stated or implied by the context, all
references to the "Company" herein will be deemed to refer to Micropoint,
Sensitron, Flexpoint and Tamco on a consolidated basis.
Sensitron and Flexpoint were incorporated in 1995 as Utah corporations.
Since 1995 Sensitron and Flexpoint have been engaged in the research and
further development of the Technology. The Company has four issued United
States patents and four pending applications for patents in the United States.
The Company also owns one related patent in Canada and three patent
applications in other countries. All the patents and patent applications
relate to Bend Sensor TM technology and vehicle horn systems employing Bend
Sensor TM technology. The Technology measures changes in deflection and
allows for electronic devices to respond to such changes by registering a
signal or other response. The Company has entered into an exclusive agreement
to use and sell and sublicense the technology with Ohio Art, Inc.
(manufacturers of Etch-A-Sketch) with respect to the toy industry. Management
believes the Technology has a wide variety of potential applications,
including automobile horn assemblies, seat sensors, instrument controls,
surgical equipment and in other products.
Tamco was incorporated in 1990 as a Utah corporation. Tamco is an
operating manufacturing and machining company which machines metal parts and
injection molds based on custom orders for third parties. Generally, Tamco
receives orders for molds and tools then used by Tamco's customers to produce
a final product. The Company uses Tamco to perform machining and manufacturing
for Flexpoint products and for its manufacturing facilities. Tamco also
operates its third party business to the extent that excess capacity remains
after servicing Flexpoint.
The Company's principal executive offices are located at 6906 South 300
West, Midvale, Utah 84047. Its telephone number is (801) 568-5111.
The Sensor Business
Sensing devices can be used to measure or sense changes in deflection and
are typically used to trigger an electronic device when the sensor is
activated. The current standard used in the industry include heat sensors and
light sensors. However, these types of sensors cannot be used in the products
being marketed and proposed to be marketed by the Company. Force transducer
sensors and certain fiber optic sensors are comparable to the Technology.
However, management believes that force transducer sensors are not as reliable
nor do they measure range of motion as the Bend Sensor TM and the fiber optic
sensors are not as cost effective as the Technology.
The worldwide market for sensing devices has grown significantly as a
result of better technology and new applications for sensing technology. This
growth has resulted in a corresponding increase in demand for high performance
sensing products. Management believes this worldwide market growth will
continue.
Management believes the potential market for the Technology includes
using the Technology to replace or upgrade devices used in automobile horn
assemblies, smart airbag systems, instrument switches, computer switch
devices, transmissions and commercial vending devices. Management also
believes the Technology can be used to adjust devices in a reaction to changes
in temperature and to more effectively measure wear and effectiveness of
brakes on cars. The Company has not determined what market may exist for other
applications of the Technology.
The Company's principal strategy is to identify specific applications of
the Technology and to develop products utilizing the Technology that address
such needs. Further, the Company intends to diversify its field of application
and customers. Management believes that the Company's combination of
innovative product features, OEM relationships and technical support will
position the Company to take advantage of the sensor market.
The Company is currently manufacturing sensor products under the Ohio
Art, Inc. agreement. The Company is not otherwise manufacturing sensor
products in marketable quantities. Consistent with its strategy of integrating
emerging technologies with innovative products, the Company intends to
continue its research and development efforts on new products.
The Bend Sensor TM Potentiometer
The Bend Sensor TM potentiometer is a product consisting of a coated
substrate such as plastic that changes in electrical conductivity as it is
bent. Electronic systems can connect to the sensor and measure with fine
detail the amount of bending or movement that occurs. Certain applications of
the Bend Sensor TM potentiometer have been patented, including automobile horn
switches. Other patents applications, such as accelerometers, automobile seat
sensors and function controls, are pending.
An example of a potentiometer application is one where a sensor is
attached to a door. As the door is opened one can measure how far the door has
opened and how fast it is moving. Management believes the Bend Sensor TM
potentiometer is light weight, small, easily packaged and reliable. The
breadth of the applications for the Bend Sensor TM product is limited only by
the customer's imagination
A typical potentiometer functions through the means of metal contacts
swiping or rubbing across a resistive element. The Bend Sensor TM
potentiometer is a single layer with no mechanical assembly making it more
reliable, significantly smaller and lighter weight than mechanical
potentiometers. Management believes there are applications that can be
improved by utilizing the Bend Sensor TM products and there are new products
only possible with the Bend Sensor TM Technology.
Research and Development
The applications and requirements of the Bend Sensor TM product are wide
spread. The Bend Sensor coatings can be applied to many different substrates
from metal wire to plastic film. Industries with potential applications range
from aerospace to toys.
Although Sensitron holds the patent to the base Bend Sensor TM product
as well as other applications there will be others working to develop
competing technologies. To stay on the forefront of the technology, and to
serve the needs of the customer, the Company will need to aggressively pursue
improvements to existing systems and develop new systems as well. In the
fiscal years ended March 31, 1997 and 1996, Micropoint did not fund any
research and development activities. There can be no assurance that the
Company will be successful in pursuing improvements to existing systems and/or
developing new systems.
Production Contracts and Specific Applications
Currently the Bend Sensor TM has been chosen for use in a new line of
plush toys. The first product for production will be interactive plush toys to
be sold in 1998. A toy company has executed and paid for a limited exclusive
license to use and sell the Bend Sensor TM in toy products. Based upon
estimates from customers, management currently projects that over $600,000 in
revenues will be generated from toy sensor purchases in 1998. The Company does
not have firm orders for such quantities, however, and many factors could
affect actual sales, such as demand for the end products and unanticipated
production delays. There can be no assurance that such sales levels will be
sustained.
The Company has targeted the automobile industry as a major potential user
of the Technology. Although management is highly confident that significant
contracts can be obtained, there can be no assurance as to future sales levels
of the Company.
Business Strategy
Management believes that its success will depend upon its ability to
coordinate its product design, manufacturing, distribution and service
strategies in a long-term business model. The Company's immediate product
strategy is to incorporate initial products into substantially complete value-
added assemblies. Development of other Company products will focus on
replacing old single flexible film switch and potentiometer products with
Company products. The Company anticipates selling primarily to OEMs initially
in the United States and eventually worldwide. For the international and
smaller volume domestic customers, the Company plans to contract, sell and
distribute its products through various manufacturer representatives and
distributors.
Since the Company's intended customers are typically high level
technology companies, the design phase of the sales cycle is extremely
important. The Company anticipates that typically, the OEM will approach the
Company with a conceptual input device which will then require the Company to
produce a prototype. The prototype will then be tested in the environment in
which the ultimate product will be placed. During this process, customer
contact with the Company's application engineers and internal sales support
individuals will be critical for a successful design to occur.
In the long term the Company will attempt to add value to its product
applications which may allow cross selling of the customer base through
features of similar complementary electronic components or parts. These
product lines, when combined, could create a much larger value added profit
margin. There is, however, no assurance that such profit margins will be
achieved. Eventually, by adding circuit boards, enclosures, etc., management
expects to integrate to a more extensive product line.
Marketing, Distribution, Sales and Customers
The Company will principally market its products to OEMs. The Company's
primary marketing objectives are to generate demand for its products, enhance
name recognition and support OEMs. Management believes that the successful use
of its products by OEMs will create additional demand for higher quantity of
existing products. Management also anticipates that if the Company's existing
products are successful it will assist the Company in introducing new products
to the market.
The Company will seek to support OEMs through telephone access to the
Company's in-house sales force and regular mailing of product. The Company
will also seek to generate interest and explore additional applications of its
Technology through attendance and participation at trade shows and publicity
in trade magazines.
Management believes that its relationship with OEMs is an important part
of its overall sales strategy. Currently, the Company has only sold test
products to its OEMs. Management believes that the OEMs will initiate purchase
orders for the initial products, but there can be no assurance that the
Company will receive any purchase orders. The loss of any of the major OEMs
with which the Company has developed a relationship could have a significant
adverse effect on its results of operations until alternative distribution
channels could be established. There is no assurance that the Company can
successfully develop additional distribution channels. In addition, because
the Company does not anticipate selling directly to end users, the Company is
dependent, in part, on its OEM for information about retail product sales.
Accordingly, any rapid cessation of purchases or switch to other companies'
products by end users may not be immediately evident to the Company, and could
result in increased product returns.
The Company intends to develop a field sales force to generate OEM
customers. The size of the sales force will depend on sales. The Company
currently has no field sales force and there can be no assurance that the
Company will successfully develop a field sales force.
Manufacturing and Suppliers
The Company owns equipment enabling it to manufacture up to 25 million
finger size Bend Sensors TM per year. The Company anticipates purchasing
equipment to manufacture auto seat size Bend Sensors TM, sometimes referred to
as the Bend Sensor TM Mat, if and when related OEM contracts materialize.
There is no assurance, however, that such OEM contracts will materialize. If
such contract materialize, there is no assurance that they will be on terms
that are advantageous to the Company or that they will result in sufficient
volume to sustain reasonable profitable levels.
The Company purchases all components used in its products, except sensor
ink, from outside suppliers. The Company intends to establish long-term
contractual relationship with certain strategic suppliers which require these
suppliers to maintain increased inventory levels of materials provided to the
Company. In keeping with the Company's goal of producing quality products at a
low cost, the Company will also work with its strategic suppliers to minimize
component cost.
The Company uses standard components for its products and has taken steps
to eliminate dependence on components which can be obtained from a single or a
limited number of sources. Currently, all components necessary to manufacture
the products, other than ink, are standard components available from several
sources. Flexpoint has developed its own proprietary inks for the Flexpoint
products.
Certain domestic and international organizations set recognized standards
for production quality and certify manufacturers who are able to comply with
those standards. Those standards are commonly known in the industry as
International Standards of Organization ("ISO"). There are different ISO
levels. The automotive industry has embraced the ISO standards but the
organization has augmented these requirements. The organization developed what
is known as QS 9000 compliance for automotive suppliers. The Company is
seeking QS 9000 quality certifications for its manufacturing facilities and
those of its contract manufacturers. In order to obtain a QS 9000
certification, the Company must apply to the organization that sets those
standards and prove to the organization that those standards have been met.
Management believes it has built its operating foundation on such principles
and will be able to obtain the appropriate certification within 18 months.
However, there is no guarantee the Company will obtain the required
certification.
Competition
The sensor business is highly competitive and competition is expected to
continue to increase. The Company will compete directly with firms that have
longer operating histories, more experience, substantially greater financial
resources, greater size, more substantial research and development and
marketing organizations, established distribution channels and that are better
situated in the market than the Company. The Company does not have an
established customer base and is likely to encounter a high degree of
competition in developing a customer base.
The Technology is not currently in use by any competitor. Management
believes that the Company's products will be sufficiently distinguishable from
the existing products so that it will not compete directly with existing
sensor products. A majority of all sensing devices require physical contacts.
The Company is aware of one other manufacturer who utilizes similar
potentiometer technology related to the toy industry, but to management's
knowledge such use is not widespread. Certain force transducer sensors and
fiber optic sensors are comparable to the Company's bend sensors. However,
management believes that the force transducer sensor is not as reliable as the
Company's bend sensor and that the fiber optic sensors are not as cost
effective as the bend sensor. As this new area grows, additional manufacturers
may attempt to introduce similar products and competition could intensify.
In the sensor field the Company's competitors are numerous membrane
switch and mechanical switch manufacturers. In the medical electronics field
the Company's competitors are the numerous potentiometer manufacturers. In the
auto seat field the Company's competitors are the numerous capacitive, piezo,
infrared, and ultrasonic sensor manufacturers. Such competitors may use their
economic strength to influence the market to continue to buy their existing
products. One or more of these competitors could use their resources to
improve their current products or develop new products that may compete more
effectively with the Company's products. New competitors may emerge and may
develop products which compete with the Company's products. No assurance can
be given that the Company will be successful in competing in this industry.
The Company intends to compete on the basis of early entry into the
market with its products, enhanced features, performance, ease of use,
compatibility, reliability, price, marketing, distribution, quality and
support. Management also believes its intellectual property provides it an
advantage over its competitors. Although management believes that its products
will be well received in its markets because of innovative features,
performance characteristics and cost-effective pricing, there can be no
assurance that comparable or superior products incorporating more advanced
technology or other features or having better price/performance
characteristics will not be introduced by competitors.
Intellectual Property
The Company regards certain of its product designs as proprietary and
attempts to protect them with patents, trade secret laws and restrictions on
disclosures. The Company has four issued United States patents and four
additional pending applications for patents in the United States. The Company
owns one related patent in Canada and has three applications for patents in
other countries. All patents and patent applications relate to the Bend Sensor
TM Technology and vehicle horn systems employing Bend Sensor TM Technology.
There can be no assurance that the protection provided by patents and
patent applications, if issued, will be broad enough to prevent competitors
from introducing similar products or that such patents, if challenged, will be
upheld by the courts of any jurisdiction. Patent infringement litigation,
either to enforce the Company's patents or defend the Company from
infringement suits, would be expensive and, if it occurs, could divert Company
resources from other planned uses. Any adverse outcome in such litigation
could have a material adverse effect on the Company. Patent applications filed
in foreign countries and patents in such countries are subject to laws and
procedures that differ from those in the United States. Patent protection in
such countries may be different from patent protection under U.S. laws and may
not be as favorable to the Company. The Company also attempts to protect its
proprietary information through the use of confidentiality agreements and by
limiting access to its facilities. There can be no assurance that the
Company's program of patents, confidentiality agreements and restricted access
to its facilities will be sufficient to protect the Company's proprietary
technology.
Management believes that because of the rapid pace of technological
change in its markets, legal protection of its proprietary information is less
significant to the Company's competitive position than factors such as
continuing product innovation in response to evolving industry standards,
technical and cost-effective manufacturing expertise, effective product
marketing strategies and customer service. Without legal protection, however,
it may be possible for unauthorized third parties to exploit commercially the
proprietary aspects of the Company's products.
Business of Tamco
Tamco is an operating manufacturing and machining company. It derives
its revenue from contracting machining services to third parties. Generally,
Tamco receives orders for molds and tools used by Tamco's customers to produce
final products. The Company uses Tamco for its manufacturing facilities and to
perform machining and manufacturing for Flexpoint products and to outside
parties to the extent excess capacity remains. Tamco's business is extremely
competitive. Competitors range from small part-time shops to large shops with
significantly greater resources.
Employees
As of June 23, 1998, the Company had seventeen full-time employees. On
that date, the Company and its subsidiaries were also utilizing approximately
thirty-two temporary employees, including two in engineering, two in
accounting and twenty-eight in manufacturing.
Although there is competition for qualified personnel in the business
operated by the Company, to date the Company has not had significant problems
recruiting and retaining qualified personnel. None of the Company's employees
are subject to collective bargaining agreements, and the Company has
experienced no work stoppages. Management believes that its employee relations
are good.
Item 2. Description of Properties.
The Company's principal offices are located at 6906 South 300 West,
Midvale, Utah, under terms of a lease which expires in October 1999, with a
monthly rent of approximately $4,900. The lease covers approximately 13,000
square feet of space which is anticipated to accommodate the manufacture of up
to 12 million Bend Sensor TM units per year. The Company also leases
approximately 2,050 square feet of space at a different location under a lease
expiring in May 1999, with a monthly rent of approximately $900 per month. If
and when product orders increase the Company anticipates leasing additional
facilities.
Item 3. Legal Proceedings.
On February 13, 1998, Private Equity Partners LLC ("PEP") filed suit
against Sensitron in the Third Judicial District Court in Salt Lake County,
Utah. PEP alleges, among other things, that Sensitron owes PEP investment
banking fees and warrants with respect to an agreement, and that Sensitron's
refusal to pay such fees constitutes fraud. The suit seeks to obtain
investment banking fees equal to 6.5% of all money raised by Sensitron,
warrants to purchase 2% of Sensitron's equity, punitive damages of $5,000,000
and other relief. The Company intends to vigorously defend this action.
In October, 1996, John Clayton and Blaine Taylor filed suit against
Sensitron, Flexpoint and certain of their officers in the Third Judicial
District Court in Salt Lake County, Utah. The suit alleges, among other
things, that the plaintiffs had a binding agreement pursuant to which the bend
sensor technology of Gordon Langford would be transferred to a public shell
company for which the plaintiffs would raise investment capital. The
plaintiffs seek a declaratory judgment that they own a 21.72% interest in the
company that owns the Langford technology, or actual and punitive damages.
Sensitron has responded that there was no binding agreement with the
plaintiffs, and that in any event the plaintiffs failed to perform. The suit
is not being actively prosecuted. If the plaintiffs begin actively pursuing
the suit, the Company intends to vigorously defend the action.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the security holders during the 4th
quarter of the fiscal year covered by this report.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
Share Price History
To the knowledge of management, there is no public trading market for the
Company's common stock.
Dividend Policy
To date, the Company has not paid dividends on its common stock. The
payment of dividends, if any, in the future is within the discretion of the
Company's Board of Directors (the "Board") and will depend upon the Company's
earnings, its capital requirements and financial condition, and other relevant
factors. See "Management's Discussion and Analysis or Plan of Operation." The
Board does not intend to declare any dividends in the foreseeable future, but
instead intends to retain all earnings, if any, for use in the Company's
operations.
Holders of Record
At June 23, 1998, there were 332 holders of record of the Company's
Common Stock. The number of holders of record was calculated by reference to
the Company's stock transfer agent's books.
Issuance of Securities
In April 1998, the Company completed a private placement (the "Private
Placement") wherein it raised gross proceeds of $2,924,922 through the sale of
3,899,896 shares of common stock to qualified investors for $.75 per share.
The common stock was issued under Rule 506 of Regulation D and Section 4(2) of
the Securities Act of 1933, as amended (the "Securities Act"). The Company did
not use an underwriter in connection with the Private Placement.
In connection with the Private Placement, the Company completed the
Acquisition in April 1998. As part of the Acquisition, the 758,483 shares of
Sensitron common stock issued and outstanding immediately prior to the
effective date of the Acquisition were converted into 9,860,279 shares of
Micropoint common stock. In addition, on the effective date of the Acquisition
options to purchase 370,900 shares of Sensitron common stock, warrants to
purchase 107,020 shares of Sensitron common stock and debt convertible into
18,927 shares of Sensitron common stock were respectively converted into the
right to acquire 4,821,700, 1,391,260 and 246,051 shares of Micropoint common
stock with a corresponding price adjustment and without any other substantial
changes to the terms of such instruments. These securities were issued under
Rule 506 of Regulation D and Section 4(2) of the Securities Act.
In December 1997, the Company issued 726,200 shares of common stock in
connection with the conversion of certain convertible debentures, dated April
1, 1995, in the principal amount of $2,421. These securities were issued under
Rule 506 of Regulation D and Sections 3(9) and 4(2) of the Securities Act. The
Company did not use an underwriter in connection with the conversion of the
convertible debentures.
Item 6. Management's Discussion and Analysis or Plan of Operation.
The following discussion provides information which management believes
is relevant to an assessment and understanding of the Company's plan of
operation. The discussion should be read in conjunction with the consolidated
financial statements and notes thereto. Wherever in this discussion the term
"Company" is used, it should be understood to refer to Micropoint and its
subsidiaries, on a consolidated basis, except where the context clearly
indicates to the contrary.
Plan of Operation
Prior to the April 1998 Acquisition, Micropoint has no business
operations and has not had revenues from operations in either of the last two
fiscal years. Micropoint's business plan was to seek one or more potential
business ventures that, in the opinion of management, warranted involvement by
Micropoint. Micropoint's principal business objective was to seek long-term
growth potential in the business venture in which it participates rather than
to seek immediate, short-term earnings. In seeking to attain its business
objective, Micropoint did not restrict its search to any particular business
or industry, but sought opportunities to participate in business ventures of
essentially any kind or nature.
Consistent with its business objective, in April 1998 Micropoint
completed the Acquisition whereby it acquired Sensitron through a merger with
a subsidiary of Micropoint. At the closing of the Acquisition, the officers
and directors of Micropoint resigned and the nominees of Sensitron were
appointed as the offices and directors of Micropoint. In addition, the
outstanding securities of Sensitron became outstanding securities of
Micropoint. Prior to the Acquisition, neither Sensitron nor any affiliate of
Sensitron had an interest in Micropoint. The Company now involved in
developing, manufacturing and marketing proprietary patented sensor technology
know as the Bend Sensor TM Technology. See "Business."
As of April 1998, the Company is primarily engaged in the sensor
business. Sensing devices can be used to measure or sense changes in
deflection and are typically used to trigger an electronic device when the
sensor is activated. The worldwide market for sensing devices has grown
significantly as a result of better technology and new applications for
sensing technology. This growth has resulted in a corresponding increase in
demand for high performance sensing products. Management believes this
worldwide market growth will continue.
In May 1997, the Company entered into the Sensitron License agreement
(the "Agreement") whereby the Company granted to Ohio Art the exclusive
worldwide right to sell products incorporating the Technology in the toy,
traditional games and video game markets. The Agreement provided for certain
up front fees and minimum royalties in order for Ohio Art to maintain such
exclusive rights. Based upon estimates from customers, management currently
projects that over $600,000 in revenues will be generated from toy sensor
purchases in 1998. The Company does not have firm orders for such quantities,
however, and many factors could affect actual sales, such as demand for the
end products and unanticipated production delays. There can be no assurance
that such sales levels will be sustained.
The Company's plans to continue in the development and to prepare for the
manufacturing and marketing of the Technology in fields outside the toy,
traditional games and video markets. Management believes the potential market
for the Technology includes using the Technology to replace or upgrade devices
used in automobile horn assemblies, smart airbag systems, instrument switches,
computer switch devices, transmissions and commercial vending devices.
Management also believes the Technology can be used to adjust devices in a
reaction to changes in temperature and to more effectively measure wear and
effectiveness of brakes on cars. The Company has not determined what market
may exist for other applications of the Technology.
The Company's principal strategy is to identify specific applications of
the Technology and to develop products utilizing the Technology that address
such needs. Further, the Company intends to diversify its field of application
and customers. Management believes that the Company's combination of
innovative product features, OEM relationships and technical support will
position the Company to take advantage of the sensor market. There can be no
assurance that the Company will be successful in developing products that
utilize the Technology, or that if such products are developed that such
product will be or can be sold on terms that are favorable to the Company.
The Company is currently manufacturing sensor products under the Ohio
Art, Inc. agreement. The Company is not otherwise manufacturing sensor
products in marketable quantities. Consistent with its strategy of integrating
emerging technologies with innovative products, the Company intends to
continue its research and development efforts on new products. The Company is
currently committing resources to the development of a Bend Sensor TM mat to
be incorporated into an automobile seat as part of a weight based airbag
suppression system and is continuing development its automobile horn switches.
Management may undertake development of one or more additional applications of
the Technology. There is no assurance that the Company will be successful in
its research and development activities.
Liquidity and Capital Resources
In April 1998, Micropoint raised gross proceeds of $2,924,922. Upon
completion of raising such proceeds, Micropoint acquired Sensitron through a
merger with a subsidiary of Micropoint. The Company's working capital and
other capital requirements for the foreseeable future will vary based upon a
number of factors, which include the costs to complete development and bring
commercial viability to the Technology and to increase the level of sales and
marketing for products utilizing the Technology. Management believes that
existing funds and funds generated from current royalties and sales will be
sufficient to support the Company's operations and planned capital
expenditures through March 31, 1999. The Company may, however, raise
additional funds through a subsequent public or private offering or by
borrowing funds if, in the opinion of management, the Company is in need of
additional funding. There is no assurance that any such offering and/or loan
will be completed or that, if completed, the terms of such offering and/or
loan will be favorable to the Company.
In addition, the Company is in the development stage and has reported
losses each year since inception. The Company's products are in various stages
of production, pre-production, development and research. The Company has made
only limited sales of products utilizing the Technology. There is no assurance
that the Company's products will be commercially viable and no assurance can
be given that the Company will become profitable. In addition, prospects for
the Company's profitability will be affected by expenses, operational
difficulties and other factors frequently encountered in the development of a
business enterprise in a competitive environment, many of which factors may be
unforeseen and beyond the Company's control.
Year 2000
Management believes that the Company's accounting and operational systems
are year 2000 compliant.
Employees
As of June 23, 1998, the Company had seventeen full-time employees. On
that date, the Company and its subsidiaries were also utilizing approximately
thirty-two temporary employees, including two in engineering, two in
accounting and twenty-eight in manufacturing.
Although there is competition for qualified personnel in the business
operated by the Company, to date the Company has not had significant problems
recruiting and retaining qualified personnel. None of the Company's employees
are subject to collective bargaining agreements, and the Company has
experienced no work stoppages. Management believes that its employee relations
are good.
Forward-Looking Statements
When used in this Form 10-K, in filings by the Company with the SEC, in
the Company's press releases or other public or stockholder communications, or
in oral statements made with the approval of an authorized executive officer
of the Company, the words or phrases "would be," "will allow," "intends to,"
"will likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any forward
looking statements, which speak only as of the date made, are based on certain
assumptions and expectations which may or may not be valid or actually occur,
and which involve various risks and uncertainties, including but not limited
to risk of product demand, market acceptance, economic conditions, competitive
products and pricing, difficulties in product development, commercialization,
and technology, and other risks. Furthermore, manufacturing delays may result
from product redesigns or otherwise. In addition, sales and other revenues may
not commence as anticipated due to delays or otherwise and sales may not reach
the levels anticipated. As a result, the Company's actual results for future
periods could differ materially from those anticipated or projected.
Unless otherwise required by applicable law, the Company does not
undertake, and specifically disclaims any obligation, to update any forward-
looking statements to reflect occurrences, developments, unanticipated events
or circumstances after the date of such statement.
Item 7. Financial Statements
See attached financial statements.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
On June 23, 1998, the Board elected to retain Hansen Barnett & Maxwell
("HBM") as its independent auditor. Micropoint did not have a prior
independent auditor. The decision to retain HBM was recommended by the Board.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Set forth below is certain information concerning each of the directors
and executive officers of the Company as of June 23, 1998.
With
Name Age Position Company Since
- -------------------- -- -------------------------- -------------
Douglas M. Odom 38 President, Chief Executive 1995
Officer and Director
Jeffrey A. Coleman 37 Director 1998
Don M. Jackson, Jr. 63 Director 1998
_____________
Douglas M. Odom. Mr. Odom has been the President, Chief Executive Officer
and Director of Micropoint since April 1998, and has held the same positions
with respect to Flexpoint since 1995 and with respect to Sensitron since 1996.
From 1993 to 1995, Mr. Odom served as the Marketing and Sales Manufacturing
Director of Xymox Technologies, Inc. Xymox Technologies, Inc. is one of the
world's largest manufacturers of membrane switches and related electronic
interface devices. Prior to his employment at Xymox Technologies, Inc., Mr.
Odom was a key executive in the reorganization of EEC, Inc. from a public
company in bankruptcy to private company posting profits and positive cash
flow. From 1985 to 1990, Mr. Odom was Vice president of Operations of Comptec,
Inc., a world-wide plastic injection molder and electronic device corporation.
From 1983 to 1985, Mr. Odom was the manager of manufacturing engineering at
AMP Keyboard Technologies. Mr. Odom received a bachelors degree in General
Science/Chemistry from Grinnell College, Grinnell, Iowa in 1982. He completed
his masters studies at the American Graduate School of International
Management in Glendale, Arizona and furthered graduate studies at Harvard
University, Cambridge, MA.
Jeffrey A. Coleman. Mr. Coleman has been a director of Micropoint since
April 1998, and served as a director of Sensitron since January 1998. Mr.
Coleman has been managing member of Coleman Capital Partners, a private equity
investment group, since 1996. From 1985 to 1997 he was Director of Operations
for the Pyramid Group, a national real estate development, investment and
management firm. From 1982 to 1983 he was a consultant in the Management
Information Consulting Division of Arthur Andersen & Co. Mr. Coleman received
an MBA from the Amos Tuck School of Business at Dartmouth College and a BA
(honors) from Stanford University.
Don M. Jackson, Jr., PhD. Dr. Jackson has been a director of Micropoint
since April 1998, and served as a director of Sensitron since January 1998.
Dr. Jackson founded Global Semiconductor Technology, LLC, in May 1996. Global
Semiconductor Technology, LLC is in the semiconductor materials and equipment
business and Dr. Jackson has been President and Chairman since inception of
that company. Dr. Jackson has been active in the founding and operating of a
number of semiconductor equipment and materials companies since 1976 when he
founded ASM America in Phoenix. From 1960 until 1976, Dr. Jackson held a
number of technical and management positions in the semiconductor industry,
specifically Motorola and General Electric Corporation. Dr. Jackson is a
director of M & I Thunderbird Bank in Phoenix and three other high-technology
corporations. He received a Ph.D. in Electrical Engineering from Arizona
State University, an M.S. in Physics from Iowa State University and a B.A. in
Physics from William Jewell College.
Executive officers of the Company are elected by the Board on an annual
basis and serve at the discretion of the Board.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officer, directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Such persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms filed by such persons.
Based solely on the Company's review of such forms furnished to the
Company and representations from certain reporting persons, management
believes that all filing requirements applicable to the Company's executive
officers, directors and more than 10% stockholders were complied with during
the fiscal year ended March 31, 1998, except for Mr. Jehu Hand has not
reported the conversion of an outstanding promissory note into approximately
242,066 shares of the Company's common stock in December 1997.
Item 10. Executive Compensation.
The tables below set forth certain information concerning compensation
paid by the Company to its Chief Executive Officer and all other executive
officers with annual compensation in excess of $100,000 (determined for the
year ended March 31, 1998) (the "Named Executive Officers"). The tables
include information related to stock options granted to the Named Executive
Officers.
Summary Compensation Table. The following table provides certain
information regarding compensation paid by the Company to the Named Executive
Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
-------------------- -----------------------------
Securities
Restricted Underlying All Other
Name and Other Annual Stock Options LTIP Compensa-
Principal Position Year Salary($) Bonus Compensation($) Awards($) SARs(#) Payouts($) tion ($)
- ------------------ ---- -------- ----- -------------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Douglas M. Odom<F1> 1996 103,750 -- -- -- 65,000<F2> -- -
President, CEO and 1997 120,000 -- -- 195,000<F2> - -
Director 1998 120,000 10,000 -- -- 65,000<F3> -- -
________________________________
<F1> Note Summary Compensation Table reflects salary and bonus compensation paid by Flexpoint to Mr.
Odom. Mr. Odom received no compensation from Micropoint, Sensitron or TAMCO during the periods
specified.
<F2> All of said options have vested.
<F3> All of said options vest on October 31, 1998.
</TABLE>
Option/SAR Grants in Last Fiscal Year. The following table provides certain
information regarding option/SAR grants to the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Percent of
securities total
underlying options/SARs
options/ granted to
SARs employees in Exercise or base price Expiration
Name granted(#) fiscal year ($/Sh) date
- ------------- ------------ ------------ ---------------------- ----------
<S> <C> <C> <C> <C>
Douglas M. Odom(1) 455,000 22.92% $1.00 2008
_______________
(1) Options to acquire 325,000 shares of common stock are currently vested and
options to acquire 65,000 shares of common stock vest on October 31, 1998. Options
to acquire an additional 130,000 of common stock vest on March 31, 1999, 2000 and
2001 provided Company achieves certain performance criteria to be determined by the
Board. These options became obligations of Micropoint as part of the Acquisition.
</TABLE>
Compensation of Directors
No cash fees or other consideration was paid to directors of Micropoint
for service on the Board during the fiscal year ended March 31, 1998. During
the fiscal year ended March 31, 1999 and for the next three years thereafter,
it is anticipated that the non-employee directors will be compensated for
service on the Board through the grant of stock options to purchase 80,000
shares of the Company's common stock which stock options will likely be
exercisable at fair market value on the date of grant. An initial 20,000
options will vest for current services on the Board and the remaining options
will vest annually at a rate of 20,000 options per year. Directors of the
Company who are also officers or employees of the Company are not expected to
receive any additional compensation for their service as directors. All
directors are entitled to reimbursement for reasonable expenses incurred in
the performance of their duties as Board members. The Company has made no
other agreements regarding compensation of directors.
Employment Agreements
Effective December 31, 1997, Flexpoint entered into an employment
agreement with Mr. Odom as its Chief Executive Officer. Under the Employment
Agreement, Flexpoint pays Mr. Odom an annual base salary of $120,000 per year
plus such discretionary bonus as the Flexpoint Board of Directors may deem
appropriate. The Employment Agreement has an initial term of three years and
will be automatically renewed for one or more successive one-year terms (the
"Renewal Terms") unless terminated by either party. The Employment Agreement
also provides the Mr. Odom with options to acquire 455,000 shares of common
stock of Micropoint at an exercise price between $.15 and $.77 per share under
the Micropoint Omnibus Stock Option Plan (the "Plan"). Of said options,
options to acquire 65,000 shares of common stock vested on October 31, 1998
and options to acquire 325,000 shares of common stock have vested. Options to
acquire an additional 130,000 of common stock vest on March 31, 1999, 2000 and
2001 provided Company achieves certain performance criteria to be determined
by the Board. These options became obligations of Micropoint as part of the
Acquisition. The Company does not have employment agreements with any of its
other employees.
Indemnification for Securities Act Liabilities
Delaware law authorizes, and the Company's Bylaws and Indemnity
Agreements provide for, indemnification of the Company's directors and
officers against claims, liabilities, amounts paid in settlement and expenses
in a variety of circumstances. Indemnification for liabilities arising under
the Act may be permitted for directors, officers and controlling persons of
the Company pursuant to the foregoing or otherwise. However, the Company has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Stock Options and Warrants
The Company has adopted an Omnibus Stock Option Plan for the benefit of
officers, directors, employees and consultants of the Company. An aggregate of
5,037,500 shares of common stock of Micropoint under the Plan. The Plan will
permit the Company to grant "non-qualified stock options" and/or "incentive
stock options" to acquire shares of the Company's common stock. The total
number of shares authorized for the Plan may be allocated between the non-
qualified stock options and the incentive stock options from time to time,
subject to certain requirements of the Internal Revenue Code of 1986, as
amended (the "Code").
The Plan is currently being administered by the Board, which will select
optionees and determine the number of shares of common stock subject to each
option. The Plan provides that no option which is to be a qualified option may
be granted at an exercise price less than the fair market value of the common
stock of the Company on the date of the grant and in all cases the term of the
stock option shall not exceed ten years. Options to acquire 3,189,550 shares
of common stock at exercise prices ranging from $.16 to $.77 are presently
outstanding under the Plan.
Compensation Committee Interlocks and Insider Participation
No executive officers of the Company serve on the Compensation Committee
(or in a like capacity) for the Company or any other entity.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of June 23, 1998,
for: (i) each person who is known by the Company to beneficially own more than
5 percent of the Company's common stock, (ii) each of the Company's directors,
(iii) each of the Company's Named Executive Officers (defined below), and (iv)
all directors and executive officers as a group. As of June 23, 1998, the
Company had 15,860,279 shares of common stock outstanding.
Shares
Name and Address Beneficially Percentage
of Beneficial Owner(1) Owned(2) Total(2) Position
- ---------------------- ------------- ----------- ----------------
Douglas Odom 390,000(3) 2.4% President, CEO and
Director
Jeffrey A. Coleman 195,000(4) 1.2% Director
Don M. Jackson, Jr. -- -- Director
All officers and directors
as a group (3 persons) 585,000 3.6%
Bull Ventures, Ltd.
Katerina Court
101 E Hill Place
Nassau, Bahamas 1,957,111(5) 12.3%
Northridge Investment, LLC
47 E. 7200 South, #221
Midvale, UT 84047 1,982,500(5) 12.5%
John Sindt
47 E. 7200 South, #221
Midvale, UT 84047 3,955,471(6) 24.9%
Jules A. deGreef
47 E. 7200 South, #201
Midvale, UT 84047 5,174,611(6) 30.3%
(1) Except where otherwise indicated, the address of the beneficial owner is
deemed to be the same address as the Company.
(2) Beneficial ownership is determined in accordance with SEC rules and
generally includes holding voting and investment power with respect to
the securities. Shares of Common Stock subject to options or warrants
currently exercisable, or exercisable within 60 days, are deemed
outstanding for computing the percentage of the total number of shares
beneficially owned by the designated person, but are not deemed
outstanding for computing the percentage for any other person.
(3) Includes vested options to purchase 390,000 shares. Does not include
options to purchase 65,000 shares that vest on October 31, 1998 or
options to acquire an additional 130,000 of common stock vest on March
31, 1999,2000 and 2001 provided Company achieves certain performance
criteria to be determined by the Board.
(4) Includes 195,000 shares owned by a limited liability company controlled
by Coleman Capital Partners, of which Mr. Coleman is a partner.
(5) On information and belief, these shares are also beneficially owned by
Mr. John Sindt and Mr. Jules A. deGreef as described in footnote 6 below.
(6) Includes 1,957,111 shares held by Bull Ventures, Ltd. and 1,982,500
shares held by Northridge Investments, LLC, which entities, on information
and belief, are controlled by Mr. Sindt and Mr. deGreef who are thus
deemed to beneficially own such shares. Mr. Sindt's ownership also
includes warrants to purchase 15,860 shares held by him and Mr. deGreef's
ownership also includes options and warrants to purchase 1,235,000 shares
held by him.
The Company is not aware of any arrangements, the operation of which may,
at a subsequent date, result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
Mr. Jehu Hand, an officer and director of Micropoint prior to the April
1998 Acquisition, acted as legal counsel for Micropoint. In December 1997, the
Company issued 726,200 shares of common stock in connection with the
conversion of certain convertible debentures held by Mr. Hand, dated April 1,
1995, in the principal amount of $2,421.
Item 13. Exhibits and Reports on Form 8-K.
Exhibits
Listed on page 21 hereof.
Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the fourth quarter
ended March 31, 1998.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Micropoint, Inc.
(Registrant)
By: /s/ Douglas M. Odom
---------------------
Date: June 29, 1998 Douglas M. Odom
President, Chief Executive
Officer and Director
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
--------- -------- -------
/s/ Douglas M. Odom President, Chief Executive June 29, 1998
- -------------------- Officer and Director (Principal
Douglas M. Odom Executive Officer)
/s/ Jeffrey Coleman Director June 29, 1998
- -------------------
Jeffrey Coleman
/s/ Don M. Jackson Director June 29, 1998
- --------------------
Don M. Jackson
/s/ Thomas N. Strong Comptroller (Principal Financial June 29, 1998
- -------------------- and Accounting Officer
Thomas N. Strong
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT
No.
- ------- ---------------------
2.1 Agreement and Plan of Reorganization (Schedules are omitted)
(Incorporated by referenced to Exhibit 2.1 of the Company's Current
Report on Form 8-K, dated April 9, 1998).
3(i).1 Certificate of Incorporation of Micropoint (Incorporated by reference
to Exhibit 3.1 of the Company's Registration Statement on Form 10-SB,
dated June 17, 1994).
3(i).2 Certificate of Amendment to Certificate of Incorporation
(Incorporated by referenced to Exhibit 3.1 of the Company's Current
Report on Form 8-K, dated April 9, 1998).
3(i).3 Articles of Incorporation of Sensitron.
3(i).4 Articles of Incorporation of Flexpoint.
3(i).5 Articles of Incorporation of Tamco.
3(ii).1 Restated of Micropoint (Incorporated by reference to Exhibit 3.2 of
the Company's Registration Statement on Form 10-SB, dated June 17,
1994).
3(ii).2 Bylaws of Sensitron.
3(ii).3 Bylaws of Flexpoint.
3(ii).4 Bylaws of Tamco.
10.1 Employment Agreement with Douglas M. Odom (Incorporated by reference
to Exhibit 10.1 of the Company's current report on Form 8-K, dated
April 9, 1998).
10.2 Lease Agreement between 72nd South Associates and the Company
(Incorporated by reference to Exhibit 10.2 of the Company's current
report on Form 8-K, dated April 9, 1998).
10.3 Agreement between Ohio Art and the Company (Incorporated by reference
to Exhibit 10.3 of the Company's current report on Form 8-K, dated
April 9, 1998).
21.1 Schedule of Subsidiaries.
27.1 Financial Data Schedule
<PAGE>
MICROPOINT, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
March 31, 1998
MICROPOINT, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheet - March 31, 1998 F-3
Statements of Operations for the Years Ended March 31, 1998 and
1997, and for the Cumulative Period from June 11, 1992 (Date
of Inception) through March 31, 1998 F-4
Statements of Stockholders' Equity (Deficit) for the Period from
June 11, 1992 (Date of Inception) through March 31, 1996, and for
the Years Ended March 31, 1997 and 1998 F-5
Statements of Cash Flows for the Years Ended March 31, 1998 and
1997, and for the Cumulative Period from June 11, 1992 (Date
of Inception) through March 31, 1998 F-6
Notes to Financial Statements F-7
<PAGE>
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East 300 South, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and the Board of Directors
Micropoint, Inc.
We have audited the accompanying balance sheet of Micropoint, Inc. (a
development stage enterprise) as of March 31, 1998 and the related statements
of operations, stockholders' deficit, and cash flows for the years ended March
31, 1998 and 1997, and for the cumulative period from June 11, 1992 (date of
inception) through March 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Micropoint, Inc.
as of March 31, 1998, and the results of its operations and its cash flows for
the years ended March 31, 1998 and 1997, and for the cumulative period from
June 11, 1992 (date of inception) through March 31, 1998, in conformity with
generally accepted accounting principles.
/s/ Hansen, Barnett & Maxwell
------------------------------
HANSEN, BARNETT & MAXWELL
June 25, 1998
Salt Lake City, Utah
MICROPOINT, INC.
(A Development Stage Enterprise)
BALANCE SHEET
MARCH 31, 1998
ASSETS
Current Assets
Cash and cash equivalents $ 1,442,906
Investment in securities available-for-sale 330,033
Receivable from escrow agent 64,965
Receivable from Sensitron Inc. 1,000,000
---------------
Total Current Assets 2,837,904
---------------
Total Assets $ 2,837,904
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued income taxes $ 83,762
Deferred income taxes 105,344
---------------
Total Current Liabilities 189,106
---------------
Stockholders' Equity
Common stock $0.001 par value; 20,000,000 shares
authorized; 5,411,230 shares issued and outstanding 5,411
Additional paid-in capital 2,637,102
Retained earnings 6,285
---------------
Total Stockholders' Equity 2,648,798
---------------
Total Liabilities and Stockholders' Equity $ 2,837,904
===============
The accompanying notes are an integral part of these financial statements.
<PAGE>
MICROPOINT, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative from
June 11, 1992
For the Years Ended (Date of Inception)
March 31, Through
1998 1997 March 31, 1998
-------------- ------------- -------------------
<S> <C> <C> <C>
Interest income $ 13,139 $ - $ 13,139
-------------- ------------- ------------------
General and administrative
expenses 327 509 3,545
Amortization expense 14 56 280
-------------- ------------- ------------------
Total Expenses 341 565 3,825
-------------- ------------- ------------------
Income (Loss) before income taxes 12,798 (565) 9,314
Income tax expense 3,029 - 3,029
-------------- ------------- ------------------
Net Income (Loss) $ 9,769 $ (565) $ 6,285
============== ============= ==================
Basic Income (Loss) Per
Common Share $ 0.00 $ (0.00) $ 0.00
============== ============= ==================
Weighted Average Number
of Common Shares Used in
Per Share Calculation 1,633,916 1,273,800 1,319,252
============== ============= ==================
The accompanying notes are an integral part of these financial statements.
<PAGE>
MICROPOINT, INC.
(A Development Stage Enterprise)
STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
</TABLE>
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Common Stock Additional During the Stockholders'
---------------------- Paid-In Development Equity
Shares Amount Capital Stage Deficit)
---------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance - June 11, 1992
(Date of Inception) - $ - $ - $ - $ -
Issuance for cash, June 1992,
$0.00 per share 1,200,000 1,200 (700) - 500
Contribution to capital, 1993 - - 500 - 500
Issuance for cash, September 30,
1993, $0.00 per share 73,800 74 172 - 246
Cumulative net loss from
inception through
March 31, 1996 - - - (2,919) (2,919)
---------- ----------- ---------- ----------- -------------
Balance - March 31, 1996 1,273,800 1,274 (28) (2,919) (1,673)
Net loss - - - (565) (565)
---------- ----------- ---------- ----------- ------------
Balance - March 31, 1997 1,273,800 1,274 (28) (3,484) (2,238)
Conversion of accounts payable,
December 31, 1997,
$0.00 per share, 726,200 726 1,695 - 2,421
Issuance for cash and investment
in securities, January through
March 1998, $077 per share 3,411,230 3,411 2,635,435 - 2,638,846
Net income - - - 9,769 9,769
--------- ---------- ----------- ---------- -------------
Balance - March 31, 1998 5,411,230 $ 5,411 $2,637,102 $ 6,285 $ 2,648,798
========= =========== ========== =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
MICROPOINT, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative from
June 11, 1992
For the Years Ended (Date of
March 31, Inception)Through
1998 1997 March 31, 1998
------------- ------------- -----------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 9,769 $ (565) $ 6,285
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation and amortization 14 56 280
Changes in operating assets and
liabilities:
Accounts payable 169 509 2,421
Accrued income taxes 83,762 - 83,762
Deferred income taxes (80,733) - (80,733)
------------- ------------- ----------------
Net Cash Provided By Operating
Activities 12,981 - 12,015
------------- ------------- ----------------
Cash Flows From Investing
Activities
Proceeds from sale of investment in
securities available-for-sale 298,167 - 298,167
Bridge loan to Sensitron Inc. (1,000,000) - (1,000,000)
Cash paid for organizational costs - - (280)
------------- ------------- ----------------
Net Cash Used By Investing
Activities (701,833) - (702,113)
------------- ------------- ----------------
Cash Flows From Financing Activities
Proceeds from issuance of common
stock 2,131,758 - 2,132,504
Contribution to capital - - 500
-------------- ------------- ----------------
Net Cash Provided By Financing
Activities 2,131,758 - 2,133,004
-------------- ------------- ----------------
Net Change In Cash 1,442,906 - 1,442,906
Cash Beginning of Period - - -
-------------- ------------- ----------------
Cash End of Period $ 1,442,906 $ - $ 1,442,906
============== ============= ================
Supplemental cash flow information and noncash investing and financing activities
Note 5
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
MICROPOINT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Nanotech Corporation (the "Company") was incorporated under the
laws of the State of Delaware on June 11, 1992, for the purpose of seeking out
business opportunities, including acquisitions. The Company is considered a
development stage enterprise. On April 9, 1998, the shareholders of the
Company approved a 3-for-1 stock split and changed its name from Nanotech
Corporation to Micropoint, Inc. The accompany financial statements have been
restated for the effects of the stock split for all periods presented.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts in financial statements and accompanying
notes. Actual results could differ from those estimates.
Financial Instruments - The amounts reported as cash, investment in securities
available-for-sale and receivables are considered to be reasonable
approximations of their fair values. The fair value estimates were based on
market information available to management and subsequent exchanges for cash
of which management was aware of at the time of the preparation of the
financial statements. The Company has cash in excess of federally insured
limits at March 31, 1998 of $214,898.
Investments in Securities Available-For-Sale - Securities received in exchange
for common stock are carried at market value and are classified as available-
for-sale. Cost was equal to market value at March 31, 1998. Sales of
securities during the year ended March 31, 1998, were at cost in the amount of
$298,167.
Basic Income (Loss) Per Share - In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No.128, Earnings Per Share. Statement No. 128 specifies the computation,
presentation, and disclosure requirements for earnings per share and was
adopted as of March 31, 1998. Loss per share for the year ended March 31,
1997 and income per share for the cumulative period from inception through
March 31, 1998 were restated; however, the effect of the change to income
(loss) per share for those periods was not material. Basic income (loss) per
common share is computed by dividing net income (loss) by the number of common
shares outstanding during the period.
NOTE 2--REORGANIZATION SUBSEQUENT TO YEAR END
On December 30, 1997, Sensitron Inc. ("Sensitron") entered into an agreement
with Micropoint, Inc. (Micropoint) whereby Sensitron Acquisition Corporation,
a newly-formed wholly-owned subsidiary of Micropoint, was to be merged into
Sensitron. The agreement required Micropoint to raise capital of approximately
$3,000,000 in a private placement before the merger was to occur. The
$3,000,000 was raised and the merger was consummated April 9, 1998. As a
result, the Sensitron shareholders became the majority shareholders of
Micropoint in a transaction intended to qualify as a tax-free reorganization.
The merger will be accounted for by the purchase method of accounting with
Sensitron being considered the acquiring enterprise.
The terms of the agreement were established on December 30, 1997 and the
investments in Micropoint's common stock from that date through the closing of
the reorganization agreement were with the intent to ultimately invest in
Sensitron. As of December 30, 1997, Micropoint was a "clean shell corporation"
with 2,000,000 shares of common stock outstanding. The business combination
has, therefore, been considered the acquisition of Micropoint at the
historical cost of its net liabilities in exchange for 2,000,000 shares of
common stock with no goodwill being recognized in connection with the
transaction. From January 1, 1998 through April 9, 1998, investors contributed
approximately $3,000,000 of assets to Micropoint in exchange for 4,000,000
shares of Micropoint's common stock. This transaction has been accounted for
as the issuance of 4,000,000 shares of common stock by the post-merger
Company.
The shareholders of Sensitron exchanged each of their shares of common stock
for 13 shares of Micropoint common stock in connection with the merger
agreement which resulted in Micropoint issuing 9,860,279 shares of its common
stock to the Sensitron shareholders.
NOTE 3--INCOME TAXES
The Company is a Delaware corporation in which it pays no state income tax.
Federal tax expense is as follows:
For the Years
Ended March 31,
----------------------
1998 1997
---------- ----------
Current $ 83,762 $ -
Deferred (80,733) -
---------- ----------
Total Income Tax Expense $ 3,029 $ -
========== ==========
The deferred tax liability as of March 31, 1998 was comprised of investment in
securities available-for-sale of in the amount of $105,344. These securities
were transferred to the Company by shareholders in exchange for common stock
in a transaction which is intended to be tax free. Accordingly, the
shareholders' tax basis in the securities was transferred to Company. The
securities were recorded, however, at their fair value on the date
transferred. The difference in the recorded value and the tax basis gave rise
to the deferred tax liability.
The following is a reconciliation of the amount of tax that would result from
applying the federal statutory rate to pretax income with the provision for
income taxes for the years ended March 31:
1998 1997
------------- -----------
Tax at statutory rate (34%) $ 4,351 $ (192)
Deferred tax asset valuation change (523) 192
Effect of lower tax rates (799) -
-------------- -----------
Total Income Tax Expense $ 3,029 $ -
============== ===========
NOTE 4 BRIDGE LOAN TO SENSITRON INC.
During March 1998, the Company transferred $1,000,0000 to Sensitron Inc. as a
bridge loan in anticipation of the consummation of the merger agreement which
occurred on April 9, 1998. The bridge loan was non-interest bearing and was
settled on the date of the reorganization.
NOTE 5--NONCASH INVESTING AND FINANCING ACTIVITIES
During the year ended March 31, 1998, the Company converted accounts payable
owed to a former officer into common stock in the amount of $2,241. The
Company received securities available-for-sale in the amount of $628,200,
before deferred income taxes of $$186,077, in exchange for the issuance of
common stock during 1998. A former officer of the Company received cash
proceeds from the issuance of common stock in 1998 and remitted all but
$64,965 to the Company by March 31, 1998.
Exhibit 3(i).3
ARTICLES OF INCORPORATION
OF
SENSITRON INC.
The undersigned person, acting as incorporator of a corporation
pursuant to the provisions of the Utah Revised Business Corporation Act,
hereby adopts the following Articles of Incorporation for such corporation:
ARTICLE I
NAME
The name of the Corporation hereby created shall be:
Sensitron Inc.
ARTICLE II
PURPOSES
The purpose or purposes for which the Corporation is organized are:
To act as a holding company of other corporations primarily
engaged in production of flexible sensors, printing and related services, but
which may be engaged in any business or enterprise for which corporations may
be organized under the laws of the State of Utah.
To engage in any and all other acts and activities related to or
in connection with the aforesaid purpose.
To engage in any other business or enterprise and any other acts
or activities for which corporations may be organized under the Utah Revised
Business Corporation Act and to exercise such other powers and engage in all
transactions as permitted by the laws of the State of Utah.
ARTICLE III
CAPITALIZATION
The Corporation shall have authority to issue a total of
20,000,000 shares, consisting of 5,000,000 preferred shares (hereinafter the
"Preferred Shares"), and 15,000,000 common shares (hereinafter the "Common
Shares"). The powers, preferences and rights and the qualifications,
limitations, or restrictions thereof, of the shares of each class which the
Corporation shall be authorized to issue are as follows:
A. Preferred Shares: Preferred Shares may be issued from
time to time in one or more series as may from time to time to be determined
by the board of directors. Each series shall be distinctly designated so as
to distinguish the shares thereof from all other series or classes. All
shares of any one series of the Preferred Shares shall be alike in every
particular. The rights of each such series and qualifications, limitations,
or restrictions thereon, if any, may differ from those of any and all other
series at any time outstanding subject to the limitations set forth in this
paragraph. No series of Preferred Shares shall be entitled to vote as a class
or otherwise on matters voted on by the shareholders of the Corporation,
except to the extent designated by the board of directors or on those matters
in which the consent of the holders of the Preferred Shares is specifically
required by the provisions of the Utah Revised Business Corporation Act, as
now existing or as hereafter amended. Subject to the provisions of this
paragraph, the board of directors of this Corporation is hereby expressly
granted authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of each particular series of Preferred Shares, the
designations, rights, preferences, qualifications, limitations, and
restrictions, if any, of such series, and to adopt amendments to these
Articles without shareholder approval providing for such designations, rights,
preferences, qualifications, limitations, or restrictions, if any, for such
series, as set forth below:
(i) The distinctive designation of the series and the
number of Preferred Shares that shall constitute the series, which number may
be increased (except as otherwise fixed by the board of directors) or
decreased (but not below the number of shares thereof outstanding) from time
to time by action of the board of directors;
(ii) The rate and times at which, and the terms and
conditions on which, dividends, if any, on the shares of the series shall be
paid and the preferences, if any, over any other class or classes as to the
payment of dividends;
(iii) The right, if any, of the holders of the shares of
the same series to convert the same into, or exchange the same for, any other
class or classes of shares of this Corporation (except a class having prior or
superior rights and preferences as to dividends or distribution of assets on
liquidation) and the terms and conditions of such conversion or exchange;
(iv) Whether shares of the series shall be subject to
redemption, and the redemption price or prices, including, without limitation,
a redemption price or prices payable in Common Shares, cash, or other property
and the time or times at which, and the terms and conditions on which, shares
of the series may be redeemed;
(v) The rights and preferences of the holders of the shares
in the series in the assets of the Corporation over any other classes, if any,
on voluntary or involuntary liquidation, merger, consolidation, distribution
or sale of assets, dissolution, or winding up of this Corporation;
(vi) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for shares of the series; and
(vii) The voting powers, if any, of the holders of the
series or the limitations or denials of such voting rights, with full
discretion to fix and establish such rights, limitations, and denials to the
full extent permitted by the Utah Revised Business Corporation Act as now
existing or as hereafter amended.
B. Common Shares: The Common Shares of the Corporation shall
be non-assessable and shall have the following powers, preferences, rights,
qualifications, limitations, and restrictions:
(i) After the requirements with respect to preferential
dividends of Preferred Shares, if any, shall have been met and after this
Corporation shall comply with the requirements, if any, with respect to the
setting aside of funds as sinking funds or redemption or purchase accounts and
subject further to any other conditions which may be affixed in accordance
with the provisions hereof, then but not otherwise, the holders of Common
Shares shall be entitled to receive such dividends, if any, as may be declared
from time to time by the board of directors; and
(ii) After distribution in full of the preferential amount,
if any, to be distributed to the holders of Preferred Shares in the event of a
voluntary or involuntary liquidation, distribution or sale of assets,
dissolution, or winding up of this Corporation, the holders of the Common
Shares shall be entitled to receive all of the remaining assets of the cor-
poration, tangible and intangible, of whatever kind available for distribution
to shareholders, ratably in proportion to the number of shares of Common
Shares held by each.
(iii) Except as otherwise expressly provided by law or by
this Article III, each outstanding Common Share shall be entitled to one (1)
vote on each matter to be voted upon by the shareholders of the Corporation.
(iv) All rights accruing to the outstanding shares of the
Corporation not expressly provided for the contrary herein or in the
Corporation's bylaws or in any amendment hereto or thereto shall be vested in
the Common Shares.
ARTICLE IV
DIRECTORS
Provisions for the regulation of the internal affairs of the
Corporation are as follows:
The affairs and management of this Corporation shall be under the
control of a board of directors consisting of not less than one (1) nor more
than nine (9) members as determined, from time to time, by the board of
directors, but in no event may the number of directors be less than three (3),
unless there are less than three shareholders of the corporation, and then the
number of directors must at least equal the number of shareholders. The
original board of directors shall be comprised of three (3) persons. The
names and residence addresses of the persons who are to serve as directors
until the first annual meeting of the shareholders and until their successors
are elected and shall qualify are as follows:
Jules A. deGreef 7490 South Magic Hills Drive
Salt Lake City, Utah 84121
Michael Gilano 223 Marasala
Newport Beach, California 92660
Gordon Langford 11193 South Star Circle
Sandy, Utah 84092
ARTICLE V
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the Corporation is:
47 East 7200 South, Suite 201
Midvale, Utah 84047
and the name of its initial registered agent at such address is:
Jules A. deGreef
and appointment as registered agent is hereby accepted:
By
Jules A. deGreef
ARTICLE VII
LIMITATIONS OF LIABILITY
The personal liability of a director to the Corporation or its
shareholders for monetary damages for any action taken or any failure to take
any action is hereby eliminated to the fullest extent permitted by the Utah
Revised Business Corporation Act or any other applicable law as now in effect
or as it may hereafter be amended.
Neither any amendment nor appeal of this Article VII nor the
adoption of any provision in these Articles of Incorporation inconsistent with
this Article VII, shall eliminate or reduce the effect of this Article VII in
respect of any matter occurring, or any cause of action, suit or claim that,
but for this Article VII, would accrue or arise, prior to such amendment,
repeal or adoption of an inconsistent provision.
ARTICLE VIII
INDEMNIFICATION
Nothing in these articles of incorporation shall limit the
Corporation's right or obligation to indemnify any of its officers, directors,
employees, agents, or fiduciaries to the fullest extent permitted or required
by the Utah Revised Business Corporation Act or any other applicable law as
now in effect or as it may hereafter be amended. The Corporation's Bylaws may
contain additional provisions regarding indemnification of any of its
officers, directors, employees, agents or fiduciaries not inconsistent with
these articles of incorporation or the Utah Revised Business Corporation Act
or any other applicable law as now in effect or as it may hereafter be
amended.
ARTICLE IX
GREATER QUORUM OR VOTING REQUIREMENTS
The shareholders of the Corporation may, by way of bylaw, provide
for a greater quorum or voting requirement for shareholders, or voting group
of shareholders, than is provided for by Utah Code Ann. '16-10a-725.
ARTICLE X
CONTROL SHARES ACQUISITION ACT
The Corporation elects not to be subject to the requirements of
the Utah Control Shares Acquisition Act, Utah Code Ann. '61-6-1 et seq., or
any similar or successor statutes to the full extent allowed by law.
ARTICLE X
INCORPORATOR
The name and residence address of the incorporator is:
Jules A. deGreef, 47 East 7200 South, Suite 201, Midvale, Utah
84047
Dated this 5th day of January, 1995.
INCORPORATOR:
/s/ Jules deGreef
--------------------
Jules A. deGreef
Exhibit 3(i).4
ARTICLES OF INCORPORATION
OF
FLEXPOINT, INC.
The undersigned natural person, being at least eighteen years of age,
acting as incorporator of a corporation under the Utah Revised Business
Corporation Act adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
The name of this corporation is Flexpoint, Inc.
ARTICLE II
The corporation is organized to engage in any lawful acts, activities and
pursuits for which a corporation may be organized under the Utah Revised
Business Corporation Act.
ARTICLE III
The number of shares of Common Stock that this corporation is authorized
to issue is One Hundred Thousand (100,000). The Common Stock shall have
unlimited voting rights as provided in the Utah Revised Business Corporation
Act and shall be entitled to receive the net assets of the corporation upon
dissolution.
ARTICLE IV
The street address of the initial registered office of the corporation is
47 East 7200 South, Suite 201, Midvale, Utah 84047. The name of the
corporation's initial registered agent at that office is Jules A. deGreef.
ARTICLE VI
To the fullest extent permitted by the Utah Revised Business Corporation
Act or any other applicable law as now in effect or as it may hereafter be
amended, a director of this corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for any action taken or
any failure to take any action, as a director.
The corporation shall indemnify to the full extent permitted by law any
person who is made, or threatened to be made, a party to any action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact he or she, his or her testator or intestate is or was a
director, officer, employee or agent of the corporation or serves or served
any other enterprise at the request of the corporation.
ARTICLE VII
The name and address of the incorporator is:
Michael Gilano
223 Marsala
Newport Beach, California 92660
DATED this 5 day of January, 1995.
/s/ Michael Gilano
----------------------------
Michael Gilano
Incorporator
The undersigned hereby accepts and acknowledges appointment as the
initial registered agent of the corporation named above, and confirms that the
undersigned meets the requirements of Section 501 of the Utah Revised Business
Corporation Act.
/s/ Jules A. deGreef
------------------------------
Jules A. deGreef
Registered Agent
Exhibit 3(i).5
ARTICLES OF INCORPORATION
OF
TECHNOLOGY AND MACHINE COMPANY, INC.
The undersigned individuals acting as incorporators under the laws of the
State of Utah, adopt the following Articles of Incorporation for Technology
and Machine Company, Inc.
ARTICLE 1
CORPORATE NAME
The name of this corporation is: Technology and Machine Company, Inc.
ARTICLE 2
CORPORATE EXISTENCE
The corporation is to have perpetual existence unless dissolved or
terminated according to law.
ARTICLE 3
CORPORATE PURPOSES
The purposes for which the corporation is organized are:
a. To engage in the business of buying, selling, renting,
manufacturing, fabricating, investing and conducting a general
investment business for the production of income.
b. To purchase, hold, sell and transfer the shares of its own stock.
c. To engage in any and all activities and pursuits which
may be reasonably related to the foregoing and following
purposes.
d. To organize or cause to be organized a corporation or corporations
under the laws of any State in the United States to further the business
operations of the corporation, and to operate the same, and to liquidate,
merge or consolidate such corporation or corporations or to cause the same to
be dissolved, wound-up, liquidated, merged or consolidated.
e. To enqage in any and all other lawful purposes, activities and
pursuits, whether similar or dissimilar to the foregoing, and the corporation
shall have all powers allowed by law.
ARTICLES IV
SHARES
The aggregate number of shares which this corporation shall have
authority to issue is 50,000, which shall be without par value. All stock of
the corporation shall be of the same class and have the same right and
preferences.
ARTICLE V
COMMENCING BUSINESS
This corporation will not commence business until consideration of a
value of at least $1,000.00, has been received for the issuance of shares.
ARTICLES VI
PRE-EMPTIVE RIGHTS AND CUMULATIVE VOTING
The authorized stock of this corporation may be issued at such time, upon
such terms and conditions, and for such consideration as the board of
directors shall determine. Stockholders shall, have neither pre-emptive nor
cumulative voting rights.
ARTICLE VII
INTERNAL AFFAIRS
The board of directors of the corporation shall adopt bylaws for the
regulation of the internal affairs of the corporation, which bylaws may be
amended from time to time or repealed pursuant to law. The shareholders may
adopt bylaws for the regulation of the internal affairs of the corporation,
which bylaws may be amended from time to time or repealed pursuant to law.
ARTICLES VIII
INTERNAL REGISTERED OFFICE AND AGENT
The name and address of this corporation's initial registered agent for
service of process is as follows:
Name: Donald E. Shelley
Address: 5284 South 320 West C-280
Salt Lake City, Utah 84107
___________________________
Registered Agent' Signature
ARTICLE IX
DIRECTORS
The board of directors shall consist of a variable number of three to
five members, as the board of directors may itself from time to time
determine. Until determination is made in the future by the board of
directors, the board shall consist of three directors. The names and addresses
of the initial directors are:
Name: Richard Allen
Address: 10834 Whirlaway Lane, Sandy, Utah 84092
Name: Phyllis Allen
Address: 10834 Whirlaway Lane, Sandy, Utah 84092
Name: Donald E. Shelley
Address: 5284 South 320 West, C-280,
Salt Lake City, Utah 84107
ARTICLE X
INCORPORATOR
The name and address of the incorporators are as follows:
Name: Richard Allen
Address: 10834 Whirlaway Lane, Sandy, Utah 84092
Name: Clara McNeill
Address: 5284 South 320 West, C-280
Salt Lake City, Utah 84107
Name: Phyllis Allen
Address: 10834 Whirlaway Lane, Sandy, Utah 84092
Dated this 19th day of November, 1990.
/s/ Richard Allen
-----------------
Incorporator
/s/ Clara McNeill
-----------------
Incorporator
/s/ Phyllis Allen
-----------------
Incorporator
STATE OF UTAH
COUNTY OF SALT LAKE
On this 19th day of November, 1990, before me a Notary Public in and for
said State personally appeared Richard Allen, Phyllis Allen and Clara McNeill
known or identified to me to be the person who signed the foregoing document
as incorporator and acknowledge to me that they executed the foregoing
Articles of Incorporation as incorporators.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal the day and year in this instrument first above written.
Commission Expires:
/s/ Richard Allen
-----------------
Notary Public
Residing at:
Exhibit 3(ii).2
BYLAWS
OF
SENSITRON INC.
ARTICLE I. OFFICES
Section 1. Principal Office. The principal office of the corporation
shall initially be located in Salt Lake City, Utah. The corporation may from
time to time change the location of its principal office, within or without
the State of Utah, by designating the new address with the Utah Division of
Corporations and Commercial Code. The corporation may have such other
offices, either within or without the State of Utah, as the business of the
corporation may require from time to time.
Section 2. Registered Office. The registered office of the corporation
required by the Utah Revised Business Corporation Act (the "Act) to be
maintained in the State of Utah may be, but need not be, identical with the
principal office in the State of Utah, and the address of the registered
office may be changed from time to time by the board of directors.
ARTICLE II. SHAREHOLDERS
-------------------------
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held on the first Monday in the month of June in each year, beginning
with the year 1995, at the hour of 10:00 o'clock a.m., or at such other time
on such other day within such month as shall be fixed by the board of
directors, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday in the State of Utah, such meeting
shall be held on the next succeeding business day. If the election of
directors shall not be held on the day designated herein or any annual meeting
of the shareholders, or at any adjournment thereof, the board of directors
shall cause the election to be held at a special meeting of the shareholders
as soon thereafter as is convenient.
Section 2. Special Meetings. Special meetings of the shareholders,
for any purpose or purposes described in the meeting notice, unless otherwise
prescribed by statute, may be called by the president, the chairman of the
board of directors or by the board of directors, and shall be called by the
president at the request of the holders of outstanding shares of the
corporation representing at least ten percent of all the votes entitled to be
cast on any issue proposed to be considered at the special meeting, if such
shareholders sign, date, and deliver to the corporation=s secretary one or
more written demands for the meeting, stating the purpose or purposes for
which it is to be held.
Section 3. Place of Meeting. The board of directors may designate
any place, either within or without the State of Utah, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If the special meeting is called by the president or the chairman
of the board of directors, the officer calling the special meeting may
designate any place, either within or without the State of Utah, as the place
for that special meeting. If a special meeting is called by the president at
the request of shareholders, the board of directors, or, if the board of
directors fails to act, the president, may designate a place, either within or
without the State of Utah, as the place of meeting for any special meeting. A
waiver of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the State of Utah, as the place
for the holding of such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the principal
office of the corporation.
Section 4. Notice of Meeting.
(a) Required Notice. Written notice stating the place, day and
time of the meeting and, in case of a special meeting, the purpose or purposes
for which the meeting is called, shall, unless otherwise prescribed by
statute, be delivered not less than ten (10) or more than sixty (60) days
before the date of the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or the persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his address as it appears
on the stock transfer books of the corporation, with postage thereon prepaid.
(b) Adjourned Meetings. If an annual or special meeting is
adjourned to a different date, time or place, notice need not be given of the
new date, time, or place if the new date, time, or place is announced at the
meeting prior to adjournment. If a new record date is or must be fixed under
the Utah Revised Business Corporation Act, new notice of the adjourned meeting
must be given to all shareholders of record who are entitled to vote at the
meeting.
(c) Waiver of Notice. The shareholder may waive notice of the
meeting (or any notice required by the Utah Revised Business Corporation Act,
articles of incorporation, or bylaws), by a writing signed by the shareholder
entitled to the notice, which is delivered to the corporation (either before
or after the date and time stated in the notice) for inclusion in the minutes
or filing with the corporate records.
A shareholder's attendance at a meeting:
(1) waives objection to lack of notice or defective notice of
the meeting, unless the shareholder at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting because of lack of
notice or defective notice; and
(2) waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the
meeting notice, unless the shareholder objects to considering the matter when
it is presented.
(d) Contents of Notice. The notice of each special shareholder
meeting shall include a description of the purpose or purposes for which the
meeting is called. Except as provided in this Article II, Section 4(d), the
corporation's articles of incorporation, or otherwise in the Utah Revised
Business Corporation Act, the notice of an annual shareholder meeting need not
include a description of the purpose or purposes for which the meeting is
called.
If a purpose of any shareholder meeting is to consider either: (1) a
proposed amendment to the articles of incorporation (including any restated
articles requiring shareholder approval); (2) a plan of merger or share
exchange; (3) the sale, lease, exchange or other disposition of all, or
substantially all of the corporation's property outside the ordinary course of
business; (4) if all or substantially all of the corporation's assets consists
of its interest in an entity it controls, the sale, lease, exchange or other
disposition of all or substantially all of the property owned by that entity,
outside the ordinary course of business; (4) the dissolution of the
corporation; or (5) the removal of a director, the notice must so state and be
accompanied by respectively a copy or summary of the: (1) articles of
amendment; (2) plan of merger or share exchange; and (3) transaction for
disposition of the corporation's property. If the proposed corporate action
creates dissenters' rights, the notice must state that shareholders are, or
may be, entitled to assert dissenter's rights, and must be accompanied by a
copy of Part 13 of the Utah Revised Business Corporation Act.
Section 5. Fixing of Record Date.
(a) By Board of Directors. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or shareholders 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 of the corporation may fix in advance a
date as the record date. Such record date shall not be more than 70 days
prior to the day on which the meeting is held or on which the action is taken.
(b) By Operation of Bylaw. If no record date is so fixed by the
board for the determination of shareholders entitled to notice of, or to vote
at a meeting of shareholders, or shareholders entitled to receive a share
dividend or distribution, the record date for determination of such
shareholders shall be at the close of business on:
(1) With respect to an annual shareholder meeting or any special
shareholder meeting called by the board or any person specifically authorized
by the board or these bylaws to call a meeting, the day before the first
notice is delivered to shareholders;
(2) With respect to a special shareholder's meeting demanded by
the shareholders, the president shall fix in advance a date as the record
date, which record date shall not be more than 70 days prior to the date on
which the meeting is held;
(3) With respect to the payment of a share dividend, the date
the board authorizes the share dividend;
(4) With respect to actions taken in writing without a meeting,
the date the first shareholder signs a consent;
(5) And with respect to a distribution to shareholders, (other
than one involving a repurchase or reacquisition of shares), the date the
board authorizes the distribution.
(c) Record Date Following Adjournment. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof unless the board of directors fixes a new record date which it must
do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting.
Section 6. Shareholder Lists. After a record date for a
shareholder's meeting has been fixed, the officer or agent having charge of
the transfer books for shares of the corporation shall make a complete list of
the shareholders entitled to be given notice of that meeting, arranged in
alphabetical order, with the address of and the number of shares held by each.
The list must be arranged by voting group and within each voting group by
class or series of shares. The shareholder list must be available for
inspection by any shareholder, beginning on the earlier of ten days before the
meeting for which the list was prepared or two business days after notice of
the meeting is given and continuing through the meeting, and any meeting
adjournments. The list shall be available at the corporation's principal
office or at a place identified in the meeting notice in the city where the
meeting is to be held. A shareholder, his agent, or attorney is entitled on
written demand to inspect and to copy the list at his or her expense during
regular business hours and during the period it is available for inspection.
The corporation shall maintain the shareholder list in written form or in
another form capable of conversion into written form within a reasonable time.
Section 7. Shareholder Quorum and Voting Requirements.
(a) Action by Separate Voting Group. If the articles of
incorporation or the Act provides for voting by a single voting group on a
matter, action on that matter is taken when voted upon by that voting group.
(b) Quorum Requirements for Voting Groups. Shares entitled to
vote as a separate voting group may take action on a matter at a meeting only
if a quorum of those shares exists with respect to that matter. Unless the
articles of incorporation or the Act provide otherwise, a majority of the
votes entitled to be cast on the matter by the voting group constitutes a
quorum of that voting group for action on that matter.
(c) Action by Two or More Voting Groups. If the articles of
incorporation or the Act provide for voting by two or more voting groups on a
matter, action on that matter is taken only when voted upon by each of those
voting groups counted separately. Action may be taken by one voting group on
a matter even though no action is taken by another voting group entitled to
vote on the matter.
(d) Share Presence. Once a share is represented for any purpose
at a meeting, it is deemed present for quorum purposes for the remainder of
the meeting and for any adjournment of that meeting unless a new record date
is or must be set for that adjourned meeting.
(e) Voting Requirements. If a quorum exists, action on a matter
(other than the election of directors) by a voting group is approved if the
votes cast within the voting group favoring the action exceed the votes cast
opposing the action, unless the articles of incorporation or the Act require a
greater number of affirmative votes.
Section 8. Proxies. At all meetings of shareholders, a shareholder
may vote in person or by proxy. A shareholder may appoint a proxy to vote or
otherwise act for that shareholder by signing an appointment form either
personally or by its duly authorized attorney-in-fact. The shareholder may
appoint a proxy by transmitting or authorizing the transmission of telegram,
teletype, or other electronic transmission, provided that the transmitted
appointment shall set forth or be transmitted with evidence from which it can
be determined that the shareholder transmitted or authorized the transmission
of the appointment. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided
in the proxy.
Section 9. Voting of Shares.
(a) One Share One Vote. Unless otherwise provided in the
articles of incorporation, each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
(b) Shares Held by Another Corporation. Except as provided by
specific court order, no shares held by another corporation, if a majority of
the shares entitled to vote for the election of directors of such other
corporation are held by the corporation, shall be voted at any meeting or
counted in determining the total number of outstanding shares at any given
time for purposes of any meeting. Provided, however, the prior sentence shall
not limit the power of the corporation to vote any shares, including its own
shares, held by it in a fiduciary capacity.
(c) Voting of Redeemable Shares. Redeemable shares are not
entitled to vote after notice of redemption is mailed to the holders and a sum
sufficient to redeem the shares has been deposited with a bank, trust company,
or other financial institution under an irrevocable obligation to pay the
holders the redemption price on surrender of the shares.
Section 10. Corporation's Acceptance of Votes.
(a) Shareholder's Name Signed. If the name signed on a vote,
consent, waiver, proxy appointment or proxy revocation corresponds to the name
of a shareholder, the corporation if acting in good faith, is entitled to
accept the vote, consent, waiver, proxy appointment or proxy revocation and
give it effect as the act of the shareholders.
(b) Other Than Shareholder's Name Signed. If the name signed on
a vote, consent, waiver, proxy appointment or proxy revocation does not
correspond to the name of a shareholder, the corporation, if acting in good
faith, is nevertheless entitled to accept the vote, consent, waiver, proxy
appointment or proxy revocation and give it effect as the act of the
shareholder if:
(1) the shareholder is an entity as defined in the Act and the
name signed purports to be that of an officer or agent of the entity;
(2) the name signed purports to be that of an administrator,
executor, guardian, or conservator representing the shareholder and, if the
corporation requests, evidence of fiduciary status acceptable to the
corporation has been presented with respect to the vote, consent, waiver,
proxy appointment or proxy revocation;
(3) the name signed purports to be that of a receiver or trustee
in bankruptcy of the shareholder and, if the corporation requests, evidence of
this status acceptable to the corporation has been presented with respect to
the vote, consent, wavier proxy appointment or proxy revocation;
(4) the name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory's authority
to sign for the shareholder has been presented with respect to the vote,
consent, waiver, proxy appointment or proxy revocation; or
(5) two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all the co-
owners.
(c) Rejection. The corporation is entitled to reject a vote,
consent, waiver proxy appointment or proxy revocation if the secretary or
other officer or agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the shareholder.
(d) No Liability for Accepting or Rejecting. The corporation
and its officer or agent who accepts or rejects a vote, consent, waiver, proxy
appointment or proxy revocation in good faith and in accordance with the
standards of this section are not liable in damages to the shareholder for the
consequences of the acceptance or rejection.
(e) Action Presumed Valid. Corporate action based on the
acceptance or rejection of a vote, consent, waiver, proxy appointment or proxy
revocation under this section is valid unless a court of competent
jurisdiction determines otherwise.
Section 11. Informal Action by Shareholders.
(a) Written Consents. Any action required to be taken at a
meeting of the shareholders, or any action which may be taken at a meeting of
the shareholders, may be taken without a meeting and without prior notice if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to take the action at a meeting at which all shares
entitled to vote thereon were present and voted, and delivered to the
corporation for inclusion in the minute book.
(b) Notice When Not Unanimous. Unless the written consents of
all shareholders entitled to vote have been obtained, notice of any
shareholder approval without a meeting shall be given at least ten days before
the consummation of the action authorized by the approval to:
(1) those shareholders entitled to vote who have not consented
in writing; and
(2) those shareholders not entitled to vote and to whom the Act
requires that notice of the proposed action be given.
(c) Contents of Notice. The notice must contain or be
accompanied by the same material that would have been required to be sent in a
notice of meeting at which the proposed action would have been submitted to
the shareholders for action.
(d) Revocation of Consent. Any shareholder giving a written
consent, or the shareholder's proxy holder, or a transferee of the shares or a
personal representative of the shareholder or their respective proxy holder,
may revoke the consent by a signed writing describing the action and stating
that the shareholder's prior consent is revoked, if the writing is received by
the corporation prior to the effectiveness of the action.
(e) Time Limitation. An action taken pursuant to this Section is
not effective unless all written consents on which the corporation relies are
received within a sixty (60) day period and not revoked.
(f) Effective Date of Action by Consent. An action taken
pursuant to this Section is effective as of the date the last written consent
necessary to effect the action is received by the corporation unless all of
the consents necessary to effect the action specify a later date as the
effective date and that date is not more than 70 days after the date the first
shareholder signed the written consent.
(g) Election of Directors. Directors may not be elected by
written consent except by unanimous written consent of all shares entitled to
vote for the election of directors.
Section 12. Voting for Directors. Unless otherwise provided in the
articles of incorporation, directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election at a meeting at which a
quorum is present.
Section 13. Shareholder's Rights to Inspect Corporate Records.
(a) Minutes and Accounting Records. The corporation shall keep
as permanent records minutes of all meetings of its shareholders and board of
directors, a record of all actions taken by the shareholders or board of
directors without a meeting, and a record of all actions taken by a committee
of the board of directors in place of the board of directors on behalf of the
corporation, and a record of all waivers of notices of meetings of
shareholders, meetings of the board of directors, or any meetings of
committees of the board of directors. The corporation shall maintain
appropriate accounting records.
(b) Absolute Inspection Rights of Records Required at Principal
Office. If a shareholder gives the corporation written notice of the
shareholder's demand at least five business days before the date on which the
shareholder wishes to inspect and copy, a shareholder (or the shareholder's
agent or attorney) has the right to inspect or copy, during regular business
hours any of the following records, all of which the corporation is required
to keep at its principal office:
(1) its articles or restated articles of incorporation and an
amendments to them currently in effect,
(2) its bylaws or restated bylaws and all amendments to them
currently in effect;
(3) all financial statements prepared for the periods ending
during the last three years that show in reasonable detail the corporation's
assets and liabilities and the results of its operations;
(4) the minutes of all shareholder's meetings, and records of
all action taken by shareholders without a meeting, for the past three years;
(5) all written communications within the past three years to
shareholders as a group or to the holders of any class or series of shares as
a group;
(6) a list of the names and business addresses of its current
directors and officers; and
(7) its most recent annual report delivered to the Department
of Commerce, Division of Corporations and Commercial Code.
(c) Conditional Inspection Right. In addition, if a
shareholder gives the corporation a written demand made in good faith and for
a proper purpose at least five business days before the date on which the
shareholder wishes to inspect a copy, the shareholder describes with
reasonable particularity the shareholder's purpose or purposes and the records
the shareholder desires to inspect, and the records are directly connected
with the shareholder's purposes, a shareholder of the corporation (or the
shareholder's agent or attorney) is entitled to inspect and copy, during
regular business hours at a reasonable location specified by the corporation,
any of the following records of the corporation:
(1) excerpts from minutes of any meeting, records of any action
taken by the board of directors, or of a committee of the board of directors
while acting on behalf of the corporation in place of the board of directors,
minutes of any meeting of the shareholders, and records of action taken by the
shareholders without a meeting, and waivers of notices of any meeting of the
shareholders, or any meeting of the board of directors, or of any meeting of a
committee of the board of directors;
(2) accounting records of the corporation; and
(3) the record of shareholders (compiled no earlier than the
date of the shareholders demand.)
(d) Copy Costs. The right to copy records includes, if
reasonable, the right to receive copies made by photographic, xerographic, or
other means. The corporation may impose a reasonable charge, covering the
costs of labor and material, for copies of any documents provided to the
shareholder. The charge may not exceed the estimated cost of production or
reproduction of the records.
(e) Shareholder Includes Beneficial Owner. For purposes of this
Section 13, the term "shareholder" shall include a beneficial owner whose
shares are held in a voting trust or by a nominee on his behalf.
Section 14. Financial Statements. Upon the written request of any
shareholder, the corporation shall mail to him or her, its most recent annual
or quarterly financial statements showing in reasonable detail its assets and
liabilities and the results of its operations.
ARTICLE III. BOARD OF DIRECTORS
--------------------------------
Section 1. General Powers. Unless the articles of incorporation or
a shareholder agreement executed by all shareholders pursuant to Section 16-
10a-732 of the Act have dispensed with or limited the authority of the board
of directors by describing who will perform some or all of the duties of a
board of directors, all corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed
under the direction of the board of directors.
Section 2. Number, Tenure and Qualifications. The number of
directors of the corporation shall be not less than the number of shareholders
entitled to vote for the election of directors, if the corporation has fewer
than three such shareholders, nor more than nine (9) as determined, from time
to time, by the shareholders or the board of directors. Each director shall
hold office until the next annual meeting of shareholders or until removed.
If a director's term expires, he or she shall continue. to serve until his
successor shall have been elected and qualified or until there has been a
decrease in directors. Directors need not be residents of the State of Utah
or shareholders of the corporation. The board of directors may elect from its
own number a chairman of the board, who shall preside at all meetings of the
board of directors, and shall perform such other duties as may be prescribed
from time to time by the board of directors.
Section 3. Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this by-law immediately
after, and at the same place as, the annual meeting of shareholders. The
board of directors may provide, by. resolution, the time and place, either
within or without the State of Utah, for the holding of additional regular
meetings without other notice than such resolution. Such meetings may be held
by telephone or by any other means of communication by which all directors
participating may hear each other during the meeting.
Section 4. Special Meetings. Special meetings of the board of
directors may be called by or at tile request of the president or the chairman
of the board of directors or any two directors. The person or persons
authorized to call special meetings of the board of directors may fix any
place, either within or without the State of Utah, as the place for holding
any special meeting of the board of directors called by them. Such meetings
may also be held by telephone or by any other means of communication by which
all directors participating may hear each other during the meeting.
Section 5. Notice.
(a) General Provisions. Regular meetings of the board of
directors may be held without notice of the date, place, time and purpose of
the meeting. Notice of any special meeting, however, shall be given at least
two days previously thereto by written notice delivered personally or mailed
to each director at his business address, or by telegram or telephonic
facsimile. If mailed, such notice shall be deemed to be effective at the
earlier of, (1) when received; (2) five days after deposited in the United
States mail, addressed to the director's business office, with postage thereon
prepaid; or (3) the date shown on the return receipt if sent by registered or
certified mail, return receipt requested, and the receipt is signed by or on
behalf of the director. If notice is given by telegram such notice shall be
deemed to be effective when the telegram is delivered to the telegraph
company. If notice is given by telephonic facsimile, such notice shall be
deemed to be effective when the transmission is confirmed by or on behalf of
the director. If notice is given by private courier, such notice shall be
deemed to be effective when acknowledgment of delivery is signed by or on
behalf of the director.
(b) Waiver. Any director may waive notice of any meeting.
Except as provided in this section 5(b), the waiver must be in writing, signed
by the director entitled to the notice and filed with the minutes or corporate
records. The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business and at the
beginning of the meeting, or promptly upon the director's arrival, objects to
holding the meeting or transacting business at the meeting because of lack of
notice or defective notice, and does not thereafter vote for or assent to
action taken at the meeting.
(c) Content. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
Section 6. Quorum. A majority of the number of directors fixed
pursuant to Section 2 of this Article III shall constitute a quorum for the
transaction of business at any meeting of the board of directors, but if less
than such majority is present at a meeting, a majority of the directors
present may adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting.
(a) Voting Requirements. The affirmative vote of a majority of
the directors present at a meeting at which a quorum is present shall be the
act of the board of directors, unless the articles of incorporation, these
bylaws, or the Act require a greater percentage.
(b) Appropriate Means of Communication. Unless the articles of
incorporation provide otherwise, any or all directors may participate in a
regular or special meeting by, or conduct the meeting through the use of, any
means of communication by which all directors participating may simultaneously
hear each other during the meeting. A director participating in a meeting by
this means is deemed to be present in person at the meeting.
(c) Effect of Presence at Meeting. A director who is present at
a meeting of the board of directors or a committee of the board of directors
when corporate action is taken is deemed to have assented to the action taken
unless: (1) he objects at the beginning of the meeting (or promptly upon his
arrival) to holding it or transacting business at the meeting; or (2) his
dissent or abstention from the action taken is entered in the minutes of the
meeting; or (3) he delivers written notice of his dissent or abstention to the
presiding officer of the meeting before its adjournment or to the corporation
immediately after adjournment of the meeting. This right of dissent or
abstention is not available to a director who votes in favor of the action
taken.
Section 8. Director Action Without a Meeting. Unless the articles
of incorporation, these bylaws, or the Act provide otherwise, any action
required or permitted to be taken by the board of directors at a meeting may
be taken without a meeting if all directors consent to the action in writing.
Action taken by consents is effective when the last director signs a writing
describing the action taken, unless, prior to that time, any director has
revoked a consent by a writing signed by the director and received by the
secretary or other person authorized by the board of directors to receive a
revocation, or unless the consent specifies a different effective date. A
signed consent has the effect of a meeting vote and may be described as such
in any document.
Section 9. Removal of Directors. The shareholders may remove one
or more directors at a meeting called for that purpose if notice has been
given that a purpose of the meeting is such removal. The removal may be with
or without cause unless the articles provide that directors may only be
removed with cause. If a director is elected by a voting group of
shareholders, only the shareholders of that voting group may participate in
the vote to remove him. If cumulative voting is authorized, a director may
not be removed if the number of votes sufficient to elect him under cumulative
voting is voted against his removal. If cumulative voting is not authorized,
a director may be removed only if the number of votes cast to remove him
exceeds the number of votes cast not to remove him.
Section 10. Vacancies.
(a) Who May Fill Vacancy. Unless the articles of incorporation
provide otherwise, if a vacancy occurs on the board of directors, including a
vacancy resulting from an increase in the number of directors:
(1) the shareholders may fill the vacancy;
(2) the board of directors may fill the vacancy; or
(3) if the directors remaining in office constitute fewer
than a quorum of the board, they may fill the vacancy by the affirmative vote
of a majority of all the directors remaining in office.
(b) Directors Elected by a Voting Group. Unless otherwise
provided in the articles of incorporation, if the vacant office was held by a
director elected by a voting group of shareholders:
(1) if one or more directors are elected by the same voting
group, only they are entitled to vote to fill the vacancy if it is filled by
the directors; and
(2) only the holders of shares of that voting group are entitled
to vote to fill the vacancy if it is filled by the shareholders.
(c) Filling Future Vacancies. A vacancy that will occur at a
specific later date, by reason of a resignation effective at a later date or
otherwise, may be filled before the vacancy occurs, but the new director may
not take office until the vacancy occurs.
(d) Term of New Director. The term of a director elected to
fill a vacancy expires at the next shareholders' meeting at which directors
are elected. However, if his term expires, he shall continue to serve until
his successor is elected and qualifies or until there is a decrease in the
number of directors.
Section 11. Compensation. By resolution of the board of directors,
each director may be paid his expenses, if any, of attendance at each meeting
of the board of directors, and may be paid a stated salary as director or a
fixed sum for attendance at each meeting of the board of directors or both.
No such payment shall preclude any director from serving the corporation in
any other capacity and receiving compensation therefor.
Section 12. Director Committees.
(a) Creation of Committees. The board of directors may create
one or more committees and appoint members of the board of directors to serve
on them. Each committee must have two or more members, who serve at the
pleasure of the board of directors.
(b) Selection of Members. The creation of a committee and
appointment of members to it must be approved by the greater of (1) a majority
of all the directors in office when the action is taken or (2) the number of
directors required by the articles of incorporation or bylaws to take such
action.
(c) Required Procedures. Provisions of this Article III, which
govern meetings, action without meetings, notice and waiver, of notice, quorum
and voting requirements of the board of directors, apply to committees and
their members.
(d) Authority. Each Committee may exercise those aspects of the
authority of the board of directors which the board of directors confers upon
such committee in the resolution creating the committee.
ARTICLE IV. OFFICERS
----------------------
Section 1. Number. The officers of the corporation shall be a
president and a secretary, each of whom shall be elected by the board of
directors. Such other officers and assistant officers, including a chairman
of the board, treasurer and any vice presidents, as may be deemed necessary
may be elected or appointed by the board of directors. If specifically
authorized by the board of directors, an officer may appoint one or more
officers or assistant officers. Any two or more offices may be held
simultaneously by the same person.
Section 2. Appointment and Term of Office. The officers of the
corporation shall be appointed by the board of directors for a term as
determined by the board of directors. The designation of a specified term
grants to the officer no contract rights, and the board can remove the officer
at any time prior to the termination of such term. If no term is specified,
they shall hold office until they resign, die, or until they are removed in
the manner provided hereafter.
Section 3. Removal. Any officer or agent may be removed by the
board of directors at any time, with or without cause. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer or agent shall not of itself create contract rights.
Section 4. Resignation. An officer may resign at any time by
giving written notice of the resignation to the corporation. The resignation
is effective when the notice is received by the corporation, unless a later
effective date is specified. If the resignation is effective at a later date,
the board of directors may remove the officer at any time before the effective
date and fill the resulting vacancy, or the board may allow the officer to
remain in office until the effective date and fill the pending vacancy before
the effective date if the board provides that the successor does not take
office until the effective date.
Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term.
Section 6. Chief Executive Officer. The board of directors may
designate one of the officers as chief executive officer. He shall have,
subject to the supervision and direction of the board of directors, general
supervision of the business, property, and affairs of the corporation and the
powers vested in him by the board of directors, by law or by these bylaws or
which usually attach or pertain to such office.
Section 7. Chairman of the Board. If appointed, the chairman of
the board shall have the powers and duties vested in him by the board of
directors, by law or by these Bylaws. He shall preside at meetings of the
board of directors.
Section 8. The President. The president shall be the principal
executive officer of the corporation and, subject to the control of the board
of directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings
of the shareholders. He may sign, with the secretary or any other proper
officer of the corporation thereunto authorized by the board of directors,
certificates for shares of the corporation, any deeds, mortgages, bonds,
contracts, or other instruments which the board of directors has authorized to
be executed, except in cases where the signing and execution thereof shall be
expressly delegated by the board of directors or by these bylaws to some other
officer or agent of the corporation, or shall be required by law to be
otherwise signed or executed; and in general shall perform all duties incident
to the office of president and such other duties as may be prescribed by the
board of directors from time to time.
Section 9. The Vice-President. If appointed, in the absence of the
president or in the event of his death, inability or refusal to act, the
vicepresident (or in the event there be more than one vice-president, the
vice-presidents in the order designated at the time of their appointment, or
in the absence of any designation, then in the order of their appointment)
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. Any
vice-president may sign, with the secretary or an assistant secretary,
certificates for shares of the corporation; and shall perform such other
duties as from time to time may be assigned to him by the president or by the
board of directors.
Section 10. The Secretary. The secretary shall: (a) keep the
minutes of the proceedings of the shareholders and of the board of directors
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these bylaws or as required by
law; (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its seal
is duly authorized; (d) when requested or required, authenticate any records
of the corporation, (e) keep a register of the post office address of each
shareholder; (f) sign with the president, or a vice-president, certificates
for shares of the corporation, the issuance of which shall have been
authorized by resolution of the board of directors; (g) have general charge of
the stock transfer books of the corporation; and (h) in general perform all
duties incident to the office of secretary and such other duties as from time
to time may be assigned to him by the President or by the board of directors;
provided that the Secretary may delegate the responsibilities set forth in
clauses (e) and (g) above to the duly appointed stock transfer agent of the
corporation.
Section 11. The Treasurer. If appointed, the treasurer shall: (a)
have charge and custody of and be responsible for all funds and securities of
the corporation; (b) receive and give receipts for moneys due and payable to
the corporation from any source whatsoever, and deposit all such moneys in the
name of the corporation in such banks, trust companies or other depositories
as shall be selected in accordance with the provisions of Article V; (c) in
general perform all of the duties incident to the office of treasurer and such
other duties as from time to time may be assigned to him by the president or
by the board of directors; and (d) if there is no vice-president, then the
Treasurer shall perform such duties of the president. If required by the
board of directors, the treasurer shall give a bond for the faithful discharge
of his duties in such sum and with such surety or sureties as the board of
directors shall determine.
Section 12. Assistant Secretaries and Assistant Treasurers. The
assistant secretaries, when authorized by the board of directors, may sign
with the president or a vice-president certificates for shares of the
corporation the issuance of which shall have been authorized by a resolution
of the board of directors. The assistant treasurers shall, respectively, if
required by the board of directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the board of directors
shall determine. The assistant secretaries and assistant treasurers, in
general, shall perform such duties as shall be assigned to them by the
secretary or the treasurer, respectively, or by the president or the board of
directors.
Section 13. Salaries. The salaries of the officers shall be fixed
from time to time by the board of directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------------------
Section 1. Contracts. The board of directors may authorize any
officer or officers, agent or agents to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contacted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the board of directors. Such authority
may be general or confined to specific instances.
Section 3. Checks, Drafts, Etc. 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 such officer or officers, agent
or agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the board of directors
may select.
ARTICLE VI. INDEMNIFICATION
-----------------------------
Section 1. Indemnification of Directors.
(a) Mandatory Indemnification. Unless limited by the articles
of incorporation, the corporation shall indemnify a director who was
successful, on the merits or otherwise, in the defense of any proceeding, or
in the defense of any claim, issue, or matter in the proceeding, to which he
or she was a party because he or she is or was a director of the corporation,
against reasonable expenses incurred by him or her in connection with the
proceeding or claim with respect to which he or she has been successful.
(b) Other Authority to Indemnify. If not covered by subsection
(a), and unless otherwise provided in the articles of incorporation, the
corporation shall indemnify any individual made a party to a proceeding
because he or she is or was a director of the corporation, against liability
incurred in the proceeding, but only if the corporation has authorized the
payment in accordance with Utah Code Ann. Section 16-10a-906(l) and a
determination has been made in accordance with the procedures set forth in
Utah Code Ann. Section 16-10a-906(2) that the director met the standards of
conduct in paragraph (1) below.
(1) Standard of Conduct. The individual shall demonstrate that:
(i) he conducted himself in good faith; and
(ii) he reasonably believed that his conduct was in, or
not opposed to, the corporations best interests; and
(iii) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(2) No Indemnification Permitted in Certain Circumstances. The
corporation shall not indemnify a director under this Section l(b)of Article
VI:
(i) in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation;
or
(ii) in connection with any other proceeding charging
improper personal benefit to him, whether or not involving action in his
official capacity, in which he was adjudged liable on the basis that personal
benefit was improperly received by him.
(3) Indemnification in Derivative Actions Limited.
Indemnification permitted under this Section 1(b) of Article VI in connection
with a proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
Section 2. Advance Expenses for Directors. If a determination is
made that the director has met the following requirements; and if an
authorization of payment is made, following the procedures and standards set
forth in Utah Code Ann. Section 16-10a-906(l) then, unless otherwise provided
in the articles of incorporation, the corporation shall pay for or reimburse
the reasonable expenses incurred by a director who is a party to a proceeding
in advance of final disposition of the proceeding, if:
(a) the director furnishes the corporation a written affirmation
of his good faith belief that he has met the standard of conduct described in
Section 1(b) of this Article VI;
(b) the director furnishes the corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it
is ultimately determined that he did not meet the standard of conduct (which
undertaking must be an unlimited general obligation of the director but need
not be secured and may be accepted without reference to financial ability to
make repayment); and
(c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under Section 1(b)
of this Article VI or the Utah Revised Business Corporation Act.
Section 3. Indemnification of Officers, Agents, and Employees Who
are Not Directors.
(a) Unless the articles provide otherwise, an officer is
entitled to mandatory indemnification to the same extent as a director under
Section l(a) of this Article VI.
(b) Unless otherwise provided in the articles of incorporation,
the board of directors may indemnify and advance expenses to any officer,
employee, fiduciary, or agent of the corporation, who is not a director of the
corporation, to any extent consistent with public policy, including to a
greater extent than that allowed by law for directors, as determined by the
general or specific action of the board of directors by contract.
Section 4. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
fiduciary or agent of the corporation, or who, while serving as a director,
officer, employee, fiduciary or agent of the corporation, is or was serving at
the request of the corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of another corporation, person, partnership,
joint venture, trust, employee benefit plan or other enterprise against any
liability asserted against him and incurred by him in any such capacity or
arising out of his status in any such capacity, whether or not the corporation
would have the power to indemnify him against any such liability under the
provisions of this Article VI or the laws of the State of Utah, as the same
may hereafter be amended or modified.
ARTICLE VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares.
(a) Content. Certificates representing shares of the
corporation shall at minimum, state on their face the name of the issuing
corporation and that it is formed under the laws of Utah, the name of the
person to whom issued; and the number and class of shares and the designation
of the series, if any, the certificate represents; and be in such form as
determined by the board of directors. Such certificates shall be signed
(either manually or, if countersigned by the duly appointed stock transfer
agent of the corporation, by facsimile) by the president or a vice-president
and by the secretary or an assistant secretary and may be sealed with a
corporate seal of a facsimile thereof. Each certificate for shares shall be
consecutively numbered or otherwise identified.
(b) Legend as to Class or Series. If the corporation is
authorized to issue different classes of shares or different series within a
class, the designations, relative rights, preferences and limitations
applicable to each class and the variations in relative rights, preferences
and limitations determined for each series (and the authority of the board of
directors to determine variations for any existing or future class or series)
must be summarized on the front or back of each certificate. Alternatively,
each certificate may state conspicuously on its front or back that the
corporation will furnish the shareholder this information on request in
writing and without charge.
(c) Restrictions on Transfer. Any restriction on the transfer or
registration of transfer of shares must be noted conspicuously on the front or
back of the share certificate.
(d) Shareholder List. The name and address of the person to whom
the shares represented thereby are issued, with the number of shares and date
of issue, shall be entered on the transfer books of the corporation.
(e) Transferring Shares. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost, destroyed, or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the corporation as the board of directors may prescribe.
Section 2. Registration of the Transfer of Shares. Registration of
the transfer of shares of the corporation shall be made only on the transfer
books of the corporation. To register a transfer, the record owner shall
surrender the shares to the corporation for cancellation, properly endorsed by
the appropriate person or persons with reasonable assurances that the
endorsements are genuine and effective. Unless the corporation has
established a procedure by which a beneficial owner of shares held by a
nominee is to be recognized by the corporation as the owner, the person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
Section 3. Restrictions on Transfer of Shares.
(a) Restrictions Permitted. The board of directors (or
shareholders) may impose restrictions on the transfer or registration of
transfer of shares (including any security convertible into, or carrying a
right to subscribe for or acquire shares). A restriction does not affect
shares issued before the restriction was adopted unless the holders of the
shares are parties to the restriction agreement or voted in favor of the
restriction.
(b) Authorized Purposes for Restrictions. A restriction on the
transfer or registration of transfer of shares may be authorized:
(1) to maintain the corporations status when it is dependent on
the number or identity of its shareholders;
(2) to preserve entitlements, benefits, or exemptions under
federal, state or local laws;
(3) to provide continuity in the ownership and management of the
corporation; or
(4) for any other reasonable purpose.
(c) Types of Restrictions Authorized. A restriction on the
transfer or registration of transfer of shares may:
(1) obligate the shareholder first to offer the corporation or
other persons (separately, consecutively, or simultaneously) an opportunity to
acquire the restricted shares;
(2) obligate the corporation or other persons (separately,
consecutively, or simultaneously) to acquire the restricted shares;
(3) require the corporation, any of its shareholders or any one
or more persons to approve the transfer or registration of transfer of the
restricted shares, if the requirement is not manifestly unreasonable;
(4) require the shareholder to establish compliance with federal
and state laws regarding registration of the offer and sale of securities; or
(5) prohibit the transfer or the registration of a transfer of
the restricted shares to designated persons or classes of persons, if the
prohibition is not manifestly unreasonable.
(d) Disclosure of Restrictions Required. A restriction on the
transfer or registration of transfer of shares is valid and enforceable
against the holder or a transferee of the holder if the restriction is
authorized by this section or the Act and its existence is noted conspicuously
on the front or back of the share certificate or is contained in the
information statement required by Section 2 of this Article VII with regard to
shares issued without certificates. Unless so noted, a restriction is not
enforceable against a person without knowledge of the restriction.
Section 4. Corporations Acquisition of Shares.
(a) Acquisition Authorized. Subject to the restrictions
contained in Utah Code Ann. Section 16-10a-640(3), the corporation may acquire
its own shares and the shares so acquired constitute authorized but unissued
shares.
(b) When Amendment of Articles Required. If the articles of
incorporation prohibit the reissue of acquired shares, the number of
authorized shares is reduced by the number of shared acquired, effective upon
amendment of the articles of incorporation, which amendment shall be adopted
by the board of directors without shareholder action. The articles of
amendment must be delivered to the Utah Department of Commerce, Division of
Corporations and Commercial Code and must set forth:
(1) the name of the corporation;
(2) the reduction in the number of authorized shares, itemized
by class and series;
(3) the total number of authorized shares, itemized by class and
series, remaining after reduction of the shares; and
(4) a statement that the amendment was adopted by the board of
directors without shareholder action and that shareholder action was not
required.
ARTICLE VIII. FISCAL YEAR
---------------------------
The fiscal year of the corporation shall begin on the first day of
March and end on the last day of February in each year.
ARTICLE IX. DISTRIBUTIONS
--------------------------
The board of directors may authorize, and the corporation may make,
distributions (including dividends on its outstanding shares) in the manner,
and upon the terms and conditions provided by law and the corporations
articles of incorporation.
ARTICLE X. CORPORATE SEAL
---------------------------
The board of directors may in its discretion provide a corporate
seal.
ARTICLE XI. AMENDMENTS
-----------------------
Section 1. Restrictions on Amendments. The corporations board of
directors may amend or repeal the corporation bylaws unless:
(a) the articles of incorporation or the Act reserve this power
exclusively to the shareholders in whole or in part; or
(b) the shareholders in adopting, amending, or repealing a
particular bylaw provide expressly that the board of directors may not amend
or repeal that bylaw.
Section 2. Amendment by Shareholders. The corporations
shareholders may amend or repeal the corporations bylaws even though the
bylaws may also be amended or repealed by its board of directors.
ARTICLE XI. EMERGENCY BYLAWS
------------------------------
The following provisions shall be effective during an emergency
which is defined as when a quorum of the corporations directors cannot be
readily assembled because of some catastrophic event.
During such emergency:
(a) Notice of Board Meetings. Any one member of the board
of directors or any one of the following officers: president, any vice
president, secretary, or treasurer, may call. a meeting of the board of
directors. Notice of such meeting need to given only to those directors whom
it is practicable to reach, and may be given in any practical manner,
including by publication and radio. Such notice shall be given at least six
hours prior to commencement of the meeting.
(b) Temporary Directors and Quorum. One or more officers of the
corporation present at the emergency board meeting, as is necessary to achieve
a quorum, shall be considered to be directors for the meeting, and shall. so
serve in order of rank, and within the same rank, in order of seniority. In
the event that less than a quorum of the directors are present (including any
officers who are to serve as directors for the meeting), those directors
present (including the officers serving as directors) shall. constitute a
quorum.
(c) Actions Permitted to be Taken. The board as constituted in
paragraph (b), and after notice as set forth in paragraph (a) may:
(1) Officers' Powers. Prescribe emergency powers to any officer
of the corporation;
(2) Delegation of Any Power. Delegate to any officer or
director, any of the powers of the board of directors;
(3) Lines of Succession. Designate lines of succession of
officers and agents, in the event that any of them are unable to discharge
their duties;
(4) Relocate Principal Place of Business. Relocate the principal
place of business, or designate successive principal places of business;
(5) All Other Action. Take any other action, convenient,
helpful, or necessary to carry on the business of the corporation.
ARTICLE XIII. PROCEDURE FOR CONDUCTING MEETINGS
-------------------------------------------------
All shareholder and director meetings shall be conducted in accordance
with the rules and procedures set forth in the most current edition of Roberts
Rules of Order.
A true copy adopted by the board of directors the 5th day of January,
1995.
ATTEST:
/s/ Jehu Hand
-------------
Secretary
Exhibit 3(ii).3
BY-LAWS
OF
FLEXPOINT, INC.
ARTICLE I - OFFICES
The principal office of the corporation in the State of Utah shall be
located at 11193 S. Star Circle, Sandy, Utah 84092. The corporation may have
such other offices, either within or without the State of incorporation as the
board of directors may designate or as the business of the corporation may
from time to time require.
ARTICLE II - SHAREHOLDERS
1. ANNUAL MEETING.
The annual meeting of the shareholders shall be held on the 15th day of
January in each year, beginning with the year 1996 at the hour of 5:00 o'clock
p.m., for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday such meeting shall be held on the next
succeeding business day.
2. SPECIAL MEETINGS.
Special meetings of the shareholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the president after
written demand to the secretary of the corporation by at least 10 percent of
all the outstanding shares of the corporation entitled to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place, either within or without the
State unless otherwise prescribed by statute, as the place of meeting for any
annual meeting or for any special meeting called by the directors. A waiver
of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the state unless otherwise
prescribed by statute, as the place for holding such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal office of the corporation.
4. MEETING BY TELECOMMUNICATION.
Shareholders may participate in any annual or special meeting through
any means of communication in accordance with Utah Code Annotated 16-10a-708
(1992).
5. NOTICE OF MEETING.
Written or printed notice stating the place, day and hour of the
meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten nor more than
sixty days before the date of the meeting, either personally or by mail, by or
at the direction of the president, or the secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his/her
address as it appears on the stock transfer books of the corporation, with
postage thereon prepaid.
6. QUORUM.
At any meeting of shareholders a majority of the outstanding shares of
the corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than said number of
the outstanding shares is represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time without further
notice. 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. The shareholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
7. PROXIES.
At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his/her duly authorized attorney
in fact. Such proxy shall be filed with the secretary of the corporation
before or at the time of the meeting.
8. VOTING.
Each shareholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled
to vote held by such shareholders. Upon the demand of any shareholder, the
vote for directors 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 Certificate of Incorporation or the
laws of this State.
9. ORDER OF BUSINESS.
The order of business at all meetings of the shareholders, shall be as
follows:
1. Roll Call.
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meeting.
4. Reports of Officers.
5. Reports of Committees.
6. Election of Directors.
7. Unfinished Business.
8. New Business.
10. INFORMAL ACTION BY SHAREHOLDERS.
Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its
board of directors. The directors shall in all cases act as a board, and they
may adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS.
The number of directors of the corporation shall be three (3). Each
director shall hold office until the next annual meeting of the shareholders
and until his/her successor shall have been elected and qualified.
3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice
than this by-law immediately after, and at the same place as, the annual
meeting of shareholders. The directors may provide, by resolution, the time
and place for the holding of additional regular meetings without other notice
than such resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of
the president or any director. The person or persons authorized to call
special meetings of the directors may fix the place for holding any special
meeting of the directors called by them.
5. NOTICE.
Notice of any special meeting shall be given at least three days
previously thereto by written notice delivered personally, or by telegram or
mailed to each director at his/her business address. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. The attendance of a director at a meeting shall constitute
a waiver of notice of such meeting, except where a director attends a meeting
for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
6. QUORUM.
At any meeting of the directors a majority of the directors shall
constitute a quorum for the transaction of business, but if less than said
number is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORSHIP AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the
removal of directors without cause may be filled by a vote of a majority of
the directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled
by vote of the shareholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the
unexpired term of his/her predecessor.
9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
shareholders or by action of the board. Directors may be removed without
cause only by vote of the shareholders.
10. RESIGNATION.
A director may resign at any time by giving written notice to the
board, the president or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the board or such officer, and the acceptance of the resignation
shall not be necessary to make it effective.
11. COMPENSATION.
No compensation shall be paid to directors, as such, for their
services, but by resolution of the board a fixed sum and expenses for actual
attendance at each regular or special meeting of the board may be authorized.
Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of the
directors at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless his/her dissent shall be entered
in the minutes of the meeting or unless he/she shall file his/her written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered
mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in
favor of such action.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members an
executive committee and other committees, each consisting of two or more
directors. Each such committee shall serve at the pleasure of the board.
ARTICLE IV - OFFICERS
1. NUMBER.
The officers of the corporation shall be a president, vice president,
and secretary/treasurer, each of whom shall be elected by the directors. Such
other officers and assistant officers as may be deemed necessary may be
elected or appointed by the directors.
2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the shareholders. Each officer shall hold office until his/her
successor shall have been duly elected and shall have qualified or until
his/her death or until he/she shall resign or shall have been removed in the
manner hereinafter provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may be
removed by the directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the
unexpired portion of the term.
5. PRESIDENT.
The president shall be the principal executive officer of the
corporation and, subject to the control of the directors, shall in general
supervise and control all of the business and affairs of the corporation.
He/she shall, when present, preside at all meetings of the shareholders and of
the directors. He/she may sign, with the secretary or any other proper
officer of the corporation thereunto authorized by the directors, certificates
for shares of the corporation, any deeds, mortgages, bonds, contracts, or
other instruments which the directors have authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated
by the directors or by these by-laws to some other officer or agent of the
corporation, or shall be required by laws to be otherwise signed or executed;
and in general shall perform all duties incident to the office of president
and such other duties as may be prescribed by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the president or in the event of his/her death,
inability or refusal to act, the vice-president 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 vice-president shall perform
such other duties as from time to time may be assigned to him/her by the
President or by the directors.
7. SECRETARY.
The secretary shall keep the minutes of the shareholders' and of the
directors' meetings in one or more books provided for that purpose, see that
all notices are duly given in accordance with the provisions of these by-laws
or as required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each shareholder
which shall be furnished to the secretary by such shareholder, have general
charge of the stock transfer books of the corporation and in general perform
all duties incident to the office of secretary and such other duties as from
time to time may be assigned to him/her by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his/her duties in such sum and with such surety or
sureties as the directors shall determine. He/she shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with these by-laws and in general perform all of the
duties incident to the office of treasurer and such other duties as from time
to time may be assigned to him/her by the president or by the directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by
reason of the fact that he/she is also a director of the corporation.
ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any officer or officers, agent or agents,
to enter into any contract or execute and deliver any instrument in the name
of and on behalf of the corporation, and such authority may be general or
confined to specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the directors. Such authority may be general or confined to
specific instances.
3. CHECKS, DRAFTS, ETC.
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 such officer or officers, agent or agents of the corporation and
in such manner as shall from time to time be determined by resolution of the
directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the directors may select.
ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES.
Certificates representing shares of the corporation shall be in such
form as shall be determined by the directors. Such certificates shall be
signed by the president and by the secretary or by such other officers
authorized by law and by the directors. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
shareholders, the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the corporation as the directors may prescribe.
2. TRANSFERS OF SHARES.
(a) 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, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered
on the transfer book of the corporation which shall be kept at its principal
office.
(b) The corporation shall be entitled to treat the holder of record of
any share as the holder in fact thereof, and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share on the
part of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of this state.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of
January in each year.
ARTICLE VIII - DIVIDENDS
The directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the corporation under the provisions
of these by-laws or under the provisions of the articles of incorporation, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE X - AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may
be adopted by a vote of the shareholders representing a majority of all the
shares issued and outstanding, at any annual shareholders' meeting when the
proposed amendment has been set out in the notice of such meeting.
IN WITNESS WHEREOF, I, Jules A. deGreef, Recording Secretary of
Flexpoint, Inc., a Utah corporation, hereby attest that these By-Laws are
approved by a majority vote of the Board of Directors held this 6th day of
January, 1995, at Salt Lake City, Utah.
/s/ Jules de Greef
________________________________
Recording Secretary
Exhibit 3(ii).4
BYLAWS
OF
TECHNOLOGY AND MACHINE COMPANY, INC.
ARTICLE I. OFFICES
The principal office of the corporation in the State of Utah shall be located
in Salt Lake City, Utah. The corporation may have such other offices, either
within or without the state, as the Board of Directors may designate or as the
business of the corporation may require from time to time.
The registered office of the corporation required by law to be maintained in
the state may be, but need not be, identical with the principal office and the
address of the registered office may be changed from time to time by the Board
of Directors.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders shall be
held during the first week in the month of April each year, for the purpose of
electing Directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the state such meeting shall be held on the next succeeding
business day. If the election of Directors shall not be held on the day
designated herein or any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as is
convenient.
Section 2. Special Meeting. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or by the Board of Directors, and shall be called by the
President at the request of the holders of not less than ten percent of all
outstanding shares of the corporation entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors may designate any place,
either within or without the state as the place of meeting for any annual
meeting or for any special meeting called by the Board of Directors. A waiver
of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the State of Utah, as the place
of the holding of such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the principal
office of the corporation in the state.
Section 4. Notice of Meeting. Written notice stating the place, day and hour
of the meeting and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall, unless otherwise prescribed by statute, be
delivered not less than ten nor more than fifty days before the date of the
meeting, either personally or by mail, by or at the direction of the
President, or the Secretary, or the person, calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address at it appears on the stock
transfer books of the corporation, with postage thereon prepaid.
Section 5. Closing of Transfer Books of Fixing of Record Date.
For the purpose of determining shareholders entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any proper purpose, the Board of Directors
of the corporation may provide that the stock transfer books shall be closed
for a stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting. In
lieu of closing the stock transfer-books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.
Section 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make a complete list of the
shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with the address of and
the number of shares held by each. Such list shall be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder during the whole time of the meeting for the purposes thereof.
Section 7. Quorum. A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. If less than a majority of the outstanding
shares are represented at a meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice. 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 noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 8. Proxies. At all meetings of shareholders, a shareholder may vote
in person or by proxy executed in writing by the shareholder or by his duly
authorized attorney in fact. Such proxy shall be filed with the secretary of
the corporation before or at the time of the meeting. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided
in the proxy.
Section 9. Voting of Shares. Each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders, unless provided otherwise in the corporation's articles of
incorporation.
Section 10. Voting of Shares by Certain Holders. Shares outstanding in the
name of another corporation may be voted by such officer, agent or proxy as
the by-laws of such corporation may prescribe, or, in the absence of such
provision, at the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither shares of its own stock held by the corporation, nor those held by
another corporation if a majority of the shares entitled to vote for the
election of directors of such other corporation are held by the corporation,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time for purposes of any meeting.
Section 11. Informal Action by Shareholders. Any action required to be taken
at a meeting of the shareholders, or any action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the corporation shall
be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number of directors of the
corporation shall be not less than three nor more than five. Each Director
shall hold office until the next annual meeting of shareholders and until his
successor shall have been elected and qualified. Directors need not be
residents of the state or shareholders of the corporation. The Board of
Directors may elect-from its own number a chairman of the Board, who shall
preside at all meetings of the Board of Directors, and shall perform such
other duties as may be prescribed from time to time by the Board of Directors.
Section 3. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this by-law immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Utah, for the holding of additional regular meetings without other
notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of Directors may
be called by or at the request of the President or any two Directors. The
person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the State of Utah, as
the place for holding any special meeting of the Board of Directors called by
them.
Section 5. Notice. Notice of any special meeting shall be given at least two
days previously thereto by written notice delivered personally or mailed to
each Director at his business address, or by telegram. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail, so
addressed, with postage thereon prepaid. If notice be given by telegram such
notice shall be deemed to be delivered when the telegram if delivered to the
telegraph company. Any Director may waive notice of any meeting. The
attendance of a Director at a meeting shall constitute a waiver of notice of
such meeting. Any Director may waive notice of any meeting. The attendance of
a Director at a meeting shall constitute a waiver of notice of such meeting,
except where a Director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
Section 6. Quorum. A majority of the number of Directors fixed by Section 2.
of this Article III shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors, but if less than such majority is
present at a meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
Section 7. Manner of Action. The act of the majority of the Directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors. Any action which may be taken at a meeting of the directors may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the Directors.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining Directors though
less than a quorum of the Board of Directors. A Director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
Directors may be filled by election by the Board of Directors for a term of
office continuing only until the next election of Directors by the
shareholders.
Section 9. Compensation. By resolution of the Board of Directors, each
Director may be paid his expenses, if any, of attendance at each meeting of
the Board of Directors or both. No such payment shall preclude any Director
form serving the corporation in any other capacity and receiving compensation
therefore.
Section 10. Presumption of Assent. A Director of the corporation who is
present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a Director who voted in favor of such action.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the corporation shall be a President,
Vice-Presidents (the number thereof, if any, to be determined by the Board of
Directors), a Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of Directors. Any
two or more offices may be held by the same person, except the offices of
President and Secretary.
Section 2. Election and Term of Office. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death-or until he
shall resign or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment, the best interest of the corporation will
be served thereby, but any such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of
an officer or agent shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filed by the Board of Directors
for the unexpired portion of the term.
Section 5. President. The President shall be the principal executive officer
of the corporation, and subject to the control of the Board of Directors,
shall in general supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of the
shareholders and of the Board of Directors, unless the Directors have
designated a Chairman in accordance with Article III, Section 2.,of these
Bylaws. He may sign, with the Secretary or any other proper officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation, any deeds, mortgages, bonds, contracts, or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated
by the Board of Directors or by these Bylaws to some other officer or agent of
the corporation, or shall be required by law to be otherwise signed or
executed; and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board of Directors
from time to time.
Section 6. The Vice-Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice-President, if any,
(or in the event there be more than one Vice-President, the Vice-Presidents in
the order designated at the time of their election, 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. Any Vice-President may sign, with
the Secretary or an Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
Section 7. The Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more
books provided for that purpose;(b) see that all notices are duly given in
accordance with the provisions of these By-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation and see that the seal of the corporation is
affixed to all documents the execution of which on behalf of the corporation
under its seal is duly authorized; (d) keep a register of the post office
address of each shareholder; (e) sign with the President, or a Vice-President,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the corporation; and (g) in general
perform all duties incident to the office of Secretary and such other duties
as from time to time may be assigned to him by the President or by the Board
of Directors.
Section 8. The Treasurer. The Treasurer shall: (a) have charge and custody of
and be responsible for all funds and securities of the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation
in such banks, trust companies or other depositories as shall be selected in
accordance with the provisions of Article V.
Section 9. Assistant Secretaries and Assistant Treasurer. The Assistant
Secretaries, when authorized by the Board of Directors, may sign with the
President or a Vice-President certificates for shares of the corporation the
issuance of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall respectively, if required by the
Board of Directors, give bonds for the faithful discharge of their duties in
such sums and with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties as shall be' assigned to them by the Secretary of the Treasurer,
respectively, or by the President or the Board of Directors.
Section 10. Salaries. The salaries of the officers shall be fixed from time
to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
Section 3. Checks, Drafts, etc. 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 such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of the
corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a
Vice-President and by the Secretary or an Assistant Secretary and sealed with
the corporate seal or a facsimile thereof. The signatures of such officers
upon a certificate may be a facsimiles if the certificate is countersigned by
a transfer agent, or registered by a registrar, other than the corporation
itself or one of its employees. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until the former
certificates for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefore upon such terms and indemnity to the
corporation as the Board of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the corporation shall be
made only on the stock transfer books of the corporation by the holder of
record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the corporation
shall be deemed by the corporation to be the owner thereof for all purposes.
ARTICLE VII. FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January and
end on the last day of December in each year.
ARTICLE VIII. DIVIDENDS
The Board of Directors may, from time to time, declare and the corporation may
pay dividends on its outstanding shares in the manner, and upon the terms and
conditions provided by law and its articles of incorporation.
ARTICLE IX. CORPORATE SEAL
The corporation shall adopt a corporate seal which when required will be
affixed by the corporate secretary or assistant secretary.
ARTICLE X. AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted by the Board of Directors at any regular or special meeting of the
Board of Directors.
ARTICLE XI. SHARE RIGHTS OF THE CORPORATION
Section 1. Repurchase of Shares/First Right of Refusal. The corporation shall
have the first right of refusal to purchase any of the shares of the
corporation offered for sale at any time by any shareholder.
This first right of refusal shall exist with regard to all or any portion of
the shares of stock in the corporation, that is to say that the corporation
need not purchase all of the stock of a shareholder, but may purchase any
portion thereof as the corporation deems desirable under the circumstances.
The purchase price for the stock so purchased shall be the book value of the
stock as determined from the last financial statement prepared by the
independent accountant for the corporation adjusted for those items so
recommended by such accountant to make the statement fairly representative of
the operations of the corporation.
The corporation may waive its first right of refusal provided that it is
unanimously agreed to by the shareholders of the corporation. The payment for
the shares of stock purchased pursuant to the terms of this first right of
refusal shall be paid over a period of five years at an interest rate of ten
percent, with the first payment to be due at the time that the corporation
exercises its option pursuant to this Article.
Only after the terms of the foregoing bylaw have been strictly complied with,
and the corporation has waived its right to purchase in a writing signed by
all of the shareholders of the corporation, may a shareholder offer
his/hers/its shares of stock in the corporation for sale on the open market.
ARTICLE XII. PROCEDURE FOR CONDUCTING MEETINGS
All shareholder and director meetings shall be conducted in accordance with
the rules and procedures set forth in the most current edition of "Robert's
Rules of Order" unless otherwise agreed among the directors.
A true copy adopted by the Board of Directors the 19th day of November, 1990.
Directors: ATTEST:
____________________________ ________________________________
Secretary
____________________________
____________________________
EXHIBIT 21.1
(Schedule of Subsidiaries)
SCHEDULE OF SUBSIDIARIES
1. Sensitron, Inc. (incorporated in the State of Utah).
2. Flexpoint, Inc. (incorporation in the State of Utah), a wholly subsidiary
of Sensitron, Inc.
3. Technology and Machine Company, Inc. (incorporated in the State of Utah), a
wholly owned subsidiary of Sensitron, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,507,871
<SECURITIES> 330,033
<RECEIVABLES> 1,000,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,837,904
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,837,904
<CURRENT-LIABILITIES> 189,106
<BONDS> 0
0
0
<COMMON> 5,411
<OTHER-SE> 2,643,387
<TOTAL-LIABILITY-AND-EQUITY> 2,837,904
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 341
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (13,139)
<INCOME-TAX> 3,029
<INCOME-CONTINUING> 9,769
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,769
<EPS-PRIMARY> 0.006
<EPS-DILUTED> 0.006
</TABLE>
