PRELIMINARY COPIES
PROXY
WANDERLUST INTERACTIVE, INC.
5301 Beethoven Street
Los Angeles, California 90066
This Proxy is solicited on behalf of the Board of Directors.
The undersigned, revoking all proxies, hereby appoints
Catherine Winchester and Jay Smith III and each of them, proxies
with power of substitution to each, for and in the name of the
undersigned to vote all shares of Common Stock of Wanderlust
Interactive, Inc. (the "Company") which the undersigned would be
entitled to vote if present at the Annual Meeting of Shareholders
of the Company to be held on January 14, 1998, at 10:00 A.M. at
the offices of the Company, 5301 Beethoven Street, Los Angeles,
California, and any adjournments thereof, upon the matters set
forth in the Notice of Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual
Meeting, Proxy Statement and the Company's 1997 Annual Report.
1. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD Authority to
below (except as marked vote for all nominees
to the contrary below) listed below
(INSTRUCTION: To withhold authority to vote for an individual
nominee, strike a line through such nominee's name in the list
below.)
JAY SMITH III, CATHERINE WINCHESTER and THOMAS A. SCHULTZ
2. APPROVAL TO CHANGE THE COMPANY'S NAME TO ADRENALIN
INTERACTIVE, INC.:
FOR AGAINST WITHHOLD
3. APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF
COMMON STOCK TO 20,000,000:
FOR AGAINST WITHHOLD
4. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
FOR AGAINST WITHHOLD
PLEASE SIGN ON THE NEXT PAGE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
and when properly executed will be voted as directed herein. If
no direction is given, this Proxy will be voted FOR proposals 1,
2, 3 and 4.
DATED: , 1997
(Signature)
(Signature, if held jointly)
Where stock is registered in the
names of two or more persons ALL
should sign. Signature(s) should
correspond exactly with the name(s)
as shown above. Please sign, date
and return promptly in the enclosed
envelope. No postage need be affixed
if mailed in the United States.
<PAGE>
PRELIMINARY COPIES
WANDERLUST INTERACTIVE, INC.
(a Delaware Corporation)
Notice of 1998 Annual Meeting
of Shareholders to be held
at 10:00 A.M. on January 14, 1998
To the Shareholders of
WANDERLUST INTERACTIVE, INC.
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of
Shareholders (the "Meeting") of WANDERLUST INTERACTIVE, INC. (the
"Company") will be held on January 14, 1998 at 10:00 A.M. at the
offices of the Company, 5301 Beethoven Street, Los Angeles,
California, to consider and vote on the following matters
described under the corresponding numbers in the attached Proxy
Statement:
1. Election of three directors;
2. Approval to change the Company's name to Adrenalin
Interactive, Inc.;
3. Approval of an amendment to the Company's Certificate
of Incorporation to increase the authorized number of
shares of Common Stock to 20,000,000; and
4. Such other matters as may properly come before the
Meeting.
The Board of Directors has fixed November 18, 1997, at the
close of business, as the record date for the determination of
shareholders entitled to vote at the Meeting, and only holders of
shares of Common Stock of the Company of record at the close of
business on that day will be entitled to vote. The stock
transfer books of the Company will not be closed.
A complete list of shareholders entitled to vote at the
Meeting shall be available for examination by any shareholder,
for any purpose germane to the Meeting, during ordinary business
hours from December 12, 1997 until the Meeting at the offices of
the Company. The list will also be available at the Meeting.
Whether or not you expect to be present at the Meeting,
please fill in, date, sign, and return the enclosed Proxy, which
is solicited by management. The Proxy is revocable and will not
affect your vote in person in the event you attend the Meeting.
By Order of the Board of Directors,
Jay Smith III, Secretary
Date: December 1, 1997
Request for additional copies of proxy material and the Company's
Annual Report for its fiscal year ended June 30, 1997 should be
addressed to Shareholder Relations, 5301 Beethoven Street, Los
Angeles, California 90066. This material will be furnished
without charge to any shareholder requesting it.
<PAGE>
PRELIMINARY COPIES
WANDERLUST INTERACTIVE, INC.
5301 Beethoven Street
Los Angeles, California 90066
Proxy Statement
The enclosed proxy is solicited by the management of
Wanderlust Interactive, Inc. (the "Company") in connection with
the 1998 Annual Meeting of Shareholders (the "Meeting") to be
held on January 14, 1998 at 10:00 A.M. at the Company, 5301
Beethoven Street, Los Angeles, California and any adjournment
thereof. The Board of Directors has set November 18, 1997 as the
record date for the determination of shareholders entitled to
vote at the Meeting. A shareholder executing and returning a
proxy has the power to revoke it at any time before it is
exercised by filing a later proxy with, or other communication
to, the Secretary of the Company or by attending the Meeting and
voting in person.
The proxy will be voted in accordance with your directions
as to:
(1) The election of the persons listed herein as directors
of the Company;
(2) Approval to change the Company's name to Adrenalin
Interactive, Inc.;
(3) Approval of an amendment to the Company's Certificate
of Incorporation to increase the authorized number of shares of
Common Stock to 20,000,000; and
(4) Such other matters as may properly come before the
Meeting.
In the absence of direction, the proxy will be voted in
favor of management's proposals.
The entire cost of soliciting proxies will be borne by the
Company. The costs of solicitation, which represent an amount
believed to be normally expended for a solicitation relating to
an uncontested election of directors, will include the costs of
supplying necessary additional copies of the solicitation
materials and the Company's Annual Report to Shareholders for its
fiscal year ended June 30, 1997 ("Fiscal 1997")(the "Annual
Report") to beneficial owners of shares held of record by
brokers, dealers, banks, trustees, and their nominees, including
the reasonable expenses of such record holders for completing the
mailing of such materials and Annual Reports to such beneficial
owners.
Only shareholders of record of the Company's 5,472,891
shares of Common Stock (the "Common Stock") outstanding at the
close of business on November 18, 1997 will be entitled to vote.
Each share of Common Stock is entitled to one vote. Holders of a
majority of the outstanding shares of Common Stock must be
represented in person or by proxy in order to achieve a quorum.
The proxy statement, the attached notice of meeting, the enclosed
form of proxy and the Annual Report are being mailed to
shareholders on or about December 1, 1997.
1. ELECTION OF DIRECTORS
Three directors are to be elected by a majority of the votes
cast at the Meeting, each to hold office until the next Annual
Meeting of Shareholders and until his respective successor is
elected and qualifies. The persons named in the accompanying
proxy have advised management that it is their intention to vote
for the election of the following nominees as directors unless
authority is withheld:
Jay Smith III
Catherine Winchester
Thomas A. Schultz
Management has no reason to believe that any nominee will be
unable to serve. In the event that any nominee becomes
unavailable, the proxies may be voted for the election of such
person or persons who may be designated by the Board of
Directors.
The following table sets forth certain information as to the
persons nominated for election as directors of the Company at the
Meeting, all of whom are presently directors of the Company:
Position
with the Director
Name Age Company Since
Jay Smith III 58 Chief February 1997
Executive and
Financial
Officer,
Secretary
and Director
Catherine Winchester 34 Director August 1994
Thomas A. Schultz 46 None October 1997
Jay Smith III. Mr. Smith has been a director of the Company
since February 1997. In May 1997 and September 1997, Mr. Smith
was appointed Chief Executive and Financial Officer and Secretary
of the Company, respectively. Founder, owner and President of
Smith Engineering, Western Technologies Inc. and Adrenalin
Entertainment, Mr. Smith has over thirty years' experience in
engineering, invention and research and development in the
electronic toy and game industry and mechanical and electronic
consumer products. Former affiliations include being a founding
partner of California R&D Center, VP of Engineering of Innova,
Inc., a toy and doll designer for Mattel Toys, and a member of
the Space Program Technical staff at TRW, Inc. Mr. Smith holds a
BS Degree in Engineering Mechanics from Virginia Technology and
an MS Degree in Applied Mechanics with California Technology.
Catherine Winchester. Ms. Winchester, a co-founder of the
Company, has been a director since August 1994. Ms. Winchester
was formerly President and Chief Executive Officer of the Company
until May 1997. In 1989, Ms. Winchester formed InterOptica
Publishing Limited ("InterOptica"), a developer of interactive
multimedia software CD-ROM titles. Ms. Winchester served as
chief executive and worked at InterOptica until December 1993,
overseeing various aspects of InterOptica, including product
development, sales, marketing finance and administration. From
December 1993 until May 1994, Ms. Winchester was the President of
Take-2 Interactive Software Inc., the successor to InterOptica.
Ms. Winchester graduated from Barnard College, Columbia
University, in 1984.
Thomas A. Schultz. Mr. Schultz became a director in October
1997. Mr. Schultz, a consultant to the Company, has been the
President and Chief Executive Officer of Vista Technologies,
Inc., a public surgical center since February 1996. Mr. Schultz
was a founder and the Chairman/Chief Executive Officer of
Crystallume Inc. from February 1986 to January 1996. Mr. Schultz
received his M.B.A. with distinction from Harvard Business School
and his B.E.S. (summa cum laude) from Johns Hopkins University.
Mr. Smith and Ms. Winchester may be deemed to be promoters
of the Company as such term is defined in the rules and
regulations promulgated under the Securities Act.
Directors serve until the next annual meeting of
stockholders and until their respective successors are elected
and qualify.
During the fiscal year ended June 30, 1997 ("Fiscal 1997"),
the Board of Directors met on six occasions and acted five times
by unanimous consent.
<PAGE>
OTHER EXECUTIVE OFFICERS
Position Position
with the Held
Name Age Company Since
Michael 46 President of February
Cartabiano R&D for 1997
Adrenalin Toys
Mark Miller 34 Executive July
Producer 1997
Michael Cartabiano. Mike Cartabiano's association with the
Company began in 1994 as Vice President and in February 1997,
became the President of R&D for the Toy and Game Group. Mr.
Cartabiano has over 23 years of experience in the consumer
products industry having previously held the position of Vice
President of Design for Mattel Toys in El Segundo, CA from 1987
to 1993. Mr. Cartabiano has held R&D management positions at
Tonka Toys in Minnetonka, MN; Milton Bradley Games in East
Longmeadow, MA; and at Hasbro Products in Pawtucket, RI. Mr.
Cartabiano earned his Bachelor of Science degree from the
University of Bridgeport in Connecticut in 1973.
Mark Miller. Mark Miller began with the Company in July
1993, starting as a programmer for Sega NES, PC, Interactive TV
Applications and Win95 games. In October 1995, Mr. Miller became
producer for the development of the bowling game "Ten Pin Alley"
in Sony PlayStation, Sega Saturn and PC CD-ROM. Recently, he was
promoted to executive producer, overseeing the development of all
entertainment software on various consumer platforms. He
previously worked with Showscan, from 1991 to 1993, a company
founded by legendary special effects wizard, Douglas Trumbull, as
lead software developer. Mr. Miller holds a BSEE degree from
Washington University.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934.
During Fiscal 1997, the Company believes all of its officers
and directors timely filed all required reports under Section 16
of the Securities Exchange Act of 1934.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information relating to the
cash compensation received during the Company's last three fiscal
years by the Company's executive officers:
SUMMARY COMPENSATION TABLE
Name and Annual Com- Other Annual
Principal Fiscal pensation- Compensation/
Position Year Salary ($) Bonus ($)
Jay Smith III, 1997 57,775(1) 42,159(2)
Chief Executive &
Financial Officer &
Secretary
Catherine Winchester, 1997 150,000 25,000
Former Chief Executive 1996 92,639 25,000
Officer 1995 49,452 31,359(3)
__________________
(1) Reflects salary from February 1997 to June 30, 1997.
(2) Reflects amount earned pursuant to a license agreement
entered into January 1997 between Western and Mr. Smith (See
"Certain Transactions").
(3) Includes $6,359 as the value of 10,003 shares of Common
Stock distributed as a bonus during Fiscal 1995.
Employment, Consulting and Settlement Agreements
Mr. Smith entered into a three-year employment agreement
(the "Agreement") with Western Technologies, Inc. ("Western"), a
wholly-owned subsidiary of the Company effective on February 4,
1997. The Agreement provides that he will serve as President of
Western and receive for his services a base salary of $150,000
per year, plus annual cost of living increases. The Agreement
provides that Mr. Smith will devote substantially all of his
business time, attention and energy to Western and be subject to
a one year covenant not to directly compete with Western after
his relationship with Western ends. Pursuant to the Agreement,
Mr. Smith is also entitled to bonuses as the Company's Board of
Directors may from time to time determine. Mr. Smith is also
entitled to participate in all group health and insurance
programs and other fringe benefit or retirement plans available
to executive and other employees of the Company.
Mr. Smith also entered into a settlement agreement in July,
1997, with Western and the Company (the "Settlement Agreement")
whereby the Company agreed to make to Mr. Smith a non-recourse
loan of up to $100,000 for up to three years at 6% interest per
annum solely to allow Mr. Smith to purchase up to $100,000 worth
of shares of Common Stock offered by the Company in the first
private offering of securities after July 1997 in which shares
are issued. The Settlement Agreement also provides for the
cancellation of Mr. Smith's entitlement to receive up to 600,000
additional shares of Common Stock of the Company upon the
happening of certain events pursuant to the acquisition agreement
dated as of December 30, 1996 among Mr. Smith, Western and the
Company (the "Parties"). In addition, the Parties entered into
general releases between Mr. Smith and Western, on the one hand,
and the Company, on the other.
Ms. Winchester entered into a settlement agreement (the
"Settlement") with the Company, effective on June 30, 1997. The
Settlement provides for the cancellation of Ms. Winchester's
employment agreement with the Company dated as of November 7,
1995 and the cancellation of her stock option agreement to
purchase 200,000 shares of Common Stock dated January 20, 1997.
Pursuant to the Settlement, the Company agreed to retain Ms.
Winchester as a consultant for a period of one year and agreed to
issue 50,000 shares of Common Stock to Ms. Winchester. The
Settlement also provides for the mutual general releases of the
Company and Ms. Winchester. Ms. Winchester also agreed to a
covenant not to compete with the Company for a period not
exceeding six months after the termination of her consultancy
with the Company.
Ms. Winchester entered into a consulting agreement (the
"Consulting Agreement") with the Company, effective on July 1,
1997. The Consulting Agreement provides that Ms. Winchester
shall make herself available for up to 20 hours per month for a
period of one year and shall be paid a fee of $5,000 per month.
Pursuant to the Consulting Agreement, Ms. Winchester is also
obligated not to disclose any confidential information of the
Company, not to acquire as her own, any program, discovery,
process or invention she makes or develops during her engagement
by the Company, and not to compete with the Company for a period
of six months following the termination of her consultancy with
the Company.
STOCK OPTION PLANS
The Company currently has two stock option plans. The 1995
Stock Option Plan was adopted by the Company's Board of Directors
and stockholders in September 1994 (the "1995 Plan"). The 1995
Plan was amended in September 1995 to increase the number of
shares for which options could be granted to 360,000. The
Company's stockholders approved the 1995 Plan, as amended, in
September 1995. The 1996 Stock Option Plan was adopted by the
Board of Directors on July 25, 1996 and was approved by the
shareholders of the Company on February 18, 1997 (the "1996
Plan") (the 1995 Plan and the 1996 Plan are collectively referred
to as the "Plans") pursuant to which options to purchase up to an
aggregate of 360,000 shares of Common Stock may be granted. No
options may be issued under the 1995 Plan and the 1996 Plan after
April 1, 2004 and July 25, 2006, respectively. The Plans provide
that options may be granted to employees, consultants or
directors. Options granted under the Plans may be incentive or
non-qualified options, or both, as such terms are defined in the
Internal Revenue Code of 1986, as amended. All directors and
advisors to the Company's Board of Directors who are not
employees of the Company shall automatically receive a grant of
10,000 non-qualified options upon election or appointment to the
Board, provided that the director is elected or appointed
subsequent to the date the Plans were approved by the Company's
stockholders (September 13, 1995 and February 18, 1997). The
Plans are administered by the Board, which has the authority to
determine the person to whom options may be granted, the number
of shares of Common Stock to be covered by each option, the time
or times at which the options may be granted or exercised and for
the most part, the terms and provisions of the options. The
exercise price of options granted under the Plans may not be less
than the fair market value of the shares of Common Stock on the
date of grant (110% of the fair market value if granted to a
person owning in excess of ten percent of the Company's
securities).
On May 20, 1997, the Board adopted an Option Exchange
Program pursuant to which certain employees and consultants were
given the one-time option to amend their options so that, as
amended, the revised options would be for 90% of the previous
number of shares covered by the options, exercisable at $.625 per
share, the market price on the date the Option Exchange Program
was approved. Mr. Smith was given the right and did participate
in the Option Exchange Program.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Number of
Securities
Underlying Value of
Unexercised Unexercised
Options In-the-Money
Shares Ac- At FYE Options At FYE
quired On Value Exercisable/ ($) Exercisable/
Name Exercise Realized Unexercisable Unexercisable (1)
Jay Smith, - - 10,000/22,500 150/338
III
__________________
(1) Represents fair market value of Common Stock at June 30,
1997 of $.64 as reported by NASDAQ, less the exercise price.
COMPENSATION OF DIRECTORS
Directors are no longer compensated for the time spent on
Company matters, including attendance at directors' and other
meetings. During Fiscal 1997, Mr. Melnick and Mr. Kalin, both
former directors, each received $6,000. In addition, Kalin &
Banner, a law firm in which Mr. Kalin is a partner, received
approximately $125,000 in fees and reimbursement of expenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of October 20, 1997, the
number of shares of Common Stock held of record or beneficially
(i) by each person who held of record, or was known by the
Company to own beneficially, more than five percent of the
outstanding shares of the Common Stock, (ii) by each director
and (iii) by all officers and directors as a group:
Percent of
Names and Address Number of Outstanding Shares
of Beneficial Owner Shares Owned (1) of Common Stock
Jay Smith III 742,462(2) 13.5%
5301 Beethoven St.
Los Angeles, CA 90066
Catherine Winchester 597,878(3) 10.9%
258 Broadway, # 6A
New York, N.Y. 10007
Richard S. Kalin 475,999(4) 8.6%
P.O. Box 462
Bridgehampton, N.Y. 11932
All officers and 24.4%
directors as a
group (two persons) 1,340,340(2)(3)
(1) All shares owned directly unless otherwise noted.
(2) Mr. Smith's shares are owned by the Jay and Susan Smith
Trust. Includes an option to purchase 10,000 shares of
Common Stock at an exercise price of $.625 per share. Does
not include an option to purchase 22,500 shares of Common
Stock at an exercise price of $.625 per share.
(3) Includes 166,732 shares of Common Stock owned by Mr. Simon
Winchester, Ms. Winchester's husband, as to which she
disclaims beneficial ownership. Includes an option to
purchase 10,000 shares of Common Stock at an exercise price
of $.625 per share.
(4) Includes 84,199 shares of Common Stock owned by Ms. Noelle
Makenzie, Mr. Kalin's wife, and 25,836 shares of Common
Stock owned by Mr. Kalin's minor child, as to all of which
he disclaims beneficial ownership. Includes options to
purchase 25,000 and 20,000 shares of Common Stock at
exercise prices of $.625 and $5.00 per share, respectively.
Does not include an option to purchase 20,000 shares of
Common Stock at an exercise price of $5.00 per share.
CERTAIN TRANSACTIONS
In January 1997, a license agreement was entered into
between Western and Mr. Smith (the "License Agreement") in which
Mr. Smith granted to Western the exclusive right to use and
market patents and license agreements owned by Mr. Smith. The
License Agreement provides that 75% of the revenues from such
patents and licenses will be retained by Western and 25% will be
retained by Mr. Smith until Mr. Smith receives an aggregate
revenue from such patents and licenses of $2,000,000, at which
time no further revenue will inure to Mr. Smith. During Fiscal
1997, Mr. Smith earned $ 42,159 pursuant to the License
Agreement.
2. APPROVAL TO CHANGE COMPANY'S
NAME TO ADRENALIN INTERACTIVE, INC.
THE BOARD OF DIRECTORS IS RECOMMENDING APPROVAL TO CHANGE
THE COMPANY'S NAME TO "ADRENALIN INTERACTIVE, INC."
On June 3, 1997, the Board of Directors of the Company
approved a resolution authorizing the Company to change its name
to "Adrenalin Interactive, Inc."
The reason the Company desires to amend its name is to
better reflect its new image as a developer and licensor of video
games, interactive multimedia software, entertainment titles on
CD-ROM and interactive television programming. The general
effect of such amendment would be to broaden the image of the
Company in the market place to reflect its broader base of
products.
Section 242 of the Delaware General Corporation Law requires
this amendment to the Company's Certificate of Incorporation be
approved by a majority of the Company's outstanding shares of
stock entitled to vote at the Meeting.
3. AMENDMENT TO INCREASE COMMON STOCK
TO 20,000,000 SHARES
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE TO
AUTHORIZE AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK TO 20,000,000.
On June 3, 1997, the Board of Directors approved and
recommended that the shareholders of the Company approve an
amendment to the Company's Certificate of Incorporation providing
for the increase in the number of authorized shares of Common
Stock which the Company shall have authority to issue, from
10,000,000 shares to 20,000,00 shares, all of which shall be
Common Stock, par value $.001 per share.
The Company is presently authorized to issue a maximum of
10,000,000 shares of Common Stock. As of October 20, 1997,
5,472,891 shares of Common Stock were issued. The Company has
obligations to set aside approximately 3,430,624 shares of Common
Stock for the exercise of outstanding warrants, options or other
contractual commitments.
The Company is proposing to amend Article Fourth of the
Company's Certificate of Incorporation so that, as amended,
Article Fourth shall read as follows:
"The maximum number of shares which the
corporation shall have authority to issue is
Twenty Million One Hundred Thousand
(20,100,000), of which Twenty Million
(20,000,000) shares shall be Common Stock
having a par value of $.001 per share
("Common Stock") and One Hundred Thousand
(100,000) shares shall be preferred stock,
having a par value of $.01 per share."
In order for the shareholders of the Company to authorize
adoption of the aforementioned amendment, a majority of the
shares of outstanding Common Stock must vote in favor of this
proposal.
The Company believes that the increase in the authorized
number of shares of Common Stock to 20,000,000 will allow the
Company (i) to honor its contractual commitments to issue shares
as mentioned above, and (ii) grant it greater flexibility in the
future if it is presented with an opportunity to raise additional
capital.
The Company currently is conducting a private placement
offering whereby a minimum of 5 Units and a maximum of 10 Units,
each Unit consisting of 100,000 shares of Common Stock of the
Company and 25,000 Warrants to purchase one share of Common Stock
of the Company for $.25 per share, at a price of $50,000 per
Unit, is being offered under Section 4(2) of the Securities Act
of 1933, as amended, pursuant to Regulation D.
The Company is also exploring other financial options. It
is likely that it will be crucial to issue shares of Common Stock
in connection with any of these other financing arrangements the
Company may enter into to fund the Company's operations.
Other than upon exercise of presently outstanding options,
warrants or the private offering referred to above, the Company
has no present plans, and is not engaged in negotiations, to
issue any additional shares of Common Stock or Preferred Stock.
If shares of Common Stock or Preferred Stock are issued in the
future, the Company is not required and presently does not intend
to solicit the shareholders of the Company for authorization. In
the event any of these shares are issued, the general effect
thereof upon the rights of existing holders of Common Stock would
be to decrease the earnings and book value per share of Common
Stock, unless the Company's earnings and book value increased
sufficiently to offset the effect of these additional outstanding
shares of Common Stock or Preferred Stock.
4. OTHER MATTERS
The Board of Directors has no knowledge of any other matters
which may come before the Meeting and does not intend to present
any other matters. However, if any other matters shall properly
come before the Meeting or any adjournment thereof, the persons
named as proxies will have discretionary authority to vote the
shares of Common Stock represented by the accompanying proxy in
accordance with their best judgment.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Drucker Math & Whitman,
independent certified public accountants, auditors of its
financial statements for its fiscal year ended June 30, 1997, as
the auditors of the financial statements of the Company for its
current fiscal year ending June 30, 1998. A member of such firm
is expected to be at the Meeting and will be given the
opportunity to make a statement and to answer questions any
shareholders may have.
SHAREHOLDERS' PROPOSALS
Any shareholder of the Company who wishes to present a
proposal to be considered at the next annual meeting of
shareholders of the Company and who wishes to have such proposal
presented in the Company's Proxy Statement for such meeting must
deliver such proposal in writing to the Company at 5301 Beethoven
Street, Los Angeles, California 90066 on or before August 20,
1998.
By Order of the Board of Directors
Jay Smith III,
CEO, CFO &
Secretary
Dated: December 1, 1997
cdkidz\Pxy.97
