UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
RADIANT TECHNOLOGY CORPORATON
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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4) Date Filed:
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RADIANT TECHNOLOGY CORPORATION
1335 South Acacia Avenue
Fullerton, California 92831
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 2002
1:00 p.m.
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Notice is hereby given that the Annual Meeting of Shareholders of Radiant
Technology Corporation will be held at 1335 South Acacia Avenue, Fullerton,
California 92831, on Monday, April 22, 2002, at 1:00 p.m. to consider and vote
upon:
1. The election of a Board of Directors consisting of five (5) directors. The
Proxy Statement which accompanies this Notice includes the names of the
nominees to be presented by the Board of Directors for election;
2. The approval of the Radiant Technology 2002 Stock Option Plan; and
3. The transaction of such other business as may properly come before the
Annual Meeting.
The Board of Directors has fixed the close of business on March 18, 2002 as
the record date for determination of shareholders entitled to notice of, and to
vote, at the Annual Meeting. To assure that your shares will be represented at
the Annual Meeting, please mark, sign, date and promptly return the accompanying
proxy card in the enclosed envelope. You may revoke your proxy at any time
before it is voted.
Shareholders are cordially invited to attend the meeting in person. Please
indicate on the enclosed proxy whether you plan to attend the meeting.
Shareholders may vote in person if they attend the meeting even though they have
executed and returned a proxy.
By Order of the Board of Directors,
Mercy Gingrich
Secretary
Dated: March 22, 2002
RADIANT TECHNOLOGY CORPORATION
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
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INTRODUCTION
This Proxy Statement is furnished by the Board of Directors of Radiant
Technology Corporation, a California corporation, (the "Company") in connection
with the solicitation of proxies for use at the Annual Meeting of Shareholders
to be held on April 22, 2002 and at any adjournments thereof. The Annual Meeting
has been called to consider and vote upon the election of five (5) Directors, to
approve the Radiant Technology 2002 Stock Option Plan and to consider such other
business as may properly come before the Annual Meeting. This Proxy Statement
and the accompanying Proxy are being sent to shareholders on or about March 22,
2002.
Persons Making the Solicitation
The Proxy is solicited on behalf of the Board of Directors of the Company.
The original solicitation will be by mail. Following the original solicitation,
the Board of Directors expects that certain individual shareholders will be
further solicited through telephone or other oral communications from the Board
of Directors. The Board of Directors does not intend to use specially engaged
employees or paid solicitors. The Board of Directors intends to solicit proxies
for shares which are held of record by brokers, dealers, banks or voting
trustees, or their nominees, and may pay the reasonable expenses of such record
holders for completing the mailing of solicitation materials to persons for whom
they hold shares. All solicitation expenses will be borne by the Company.
Terms of the Proxy
The enclosed Proxy indicates the matter to be acted upon at the Annual
Meeting and provides boxes to be marked to indicate the manner in which the
shareholder's shares are to be voted with respect to such matter. By
appropriately marking the boxes, a shareholder may specify whether the proxies
shall vote for or against or shall be without authority to vote the shares
represented by the Proxy. The Proxy also confers upon the proxies discretionary
voting authority with respect to such other business as may properly come before
the Annual Meeting.
If the Proxy is executed properly and is received by the proxies prior to
the Annual Meeting, the shares represented by the Proxy will be voted. Where a
shareholder specifies a choice with respect to the matter to be acted upon, the
shares will be voted in accordance with such specification. Any Proxy which is
executed in such a manner as not to withhold authority to vote for the election
of the specified nominees as directors (see "Matter To Be Acted Upon -- Election
of Directors") shall be deemed to confer such authority. A Proxy may be revoked
at any time prior to its exercise by giving written notice of the revocation
thereof to Mercy Gingrich, Secretary, Radiant Technology Corporation, 1335 South
Acacia Avenue, Fullerton, California 92831, by attending the meeting and
electing to vote in person, or by a duly executed proxy bearing a later date.
VOTING RIGHTS AND REQUIREMENTS
Voting Securities
The securities entitled to vote at the Annual Meeting consist of all of the
issued and outstanding shares of the Company's common stock, no par value per
share. The close of business on March 18, 2002 has been fixed by the Board of
Directors of the Company as the record date. Only shareholders of record as of
the record date may vote at the Annual Meeting. As of the record date, there
were 2,081,678 issued and outstanding shares of the Company's common stock
entitled to vote at the Annual Meeting and approximately 400 holders of record
of the Company's common stock.
Cumulative Voting
Each shareholder of record as of the record date will be entitled to one
vote for each share of the Company's common stock held as of the record date.
Cumulative voting is permitted in the election of directors. Every shareholder
complying with certain conditions set forth below may cumulate votes and give
one candidate a number of votes equal to the number of directors to be elected
(five) multiplied by the number of votes to which the shareholder's shares are
normally entitled, or distribute the shareholder's votes on the same principle
among the candidates as the shareholder thinks fit. Under California law, a
shareholder can cumulate votes only if the candidate's names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to voting of the shareholders' intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.
Discretionary authority to invoke cumulative voting and to cumulate votes
represented by Proxies is solicited by the Board of Directors because, in the
event nominations are made in opposition to the nominees of the Board of
Directors, it is the intention of the persons named as proxies in the enclosed
Proxy to cumulate votes represented by Proxies for individual nominees in
accordance with their best judgment allocated among as many of the five nominees
of the Board of Directors as possible, unless such authority is withheld as to
any nominee. In that event, those votes will be cumulated for the remaining
nominees of the Board of Directors.
If cumulative voting is invoked by any shareholder in accordance with
California law, shareholders who attend the meeting and vote in person will be
entitled to personally exercise their right to cumulate votes among the nominees
for director. However, because a shareholder who votes by Proxy grants the
proxies discretionary authority to cumulate votes, the proxies and not the
shareholder who has executed a Proxy will have the sole authority to cumulate
votes, unless the shareholder revokes the Proxy and votes in person at the
meeting.
Quorum
The presence at the Annual Meeting of the holders of a number of shares of
the Company's common stock and proxies representing the right to vote shares of
the Company's common stock in excess of one-half of the number of shares of the
Company's common stock outstanding as of the record date will constitute a
quorum for transacting business.
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of March 18, 2002, with
respect to the ownership of the Company's common stock by: (i) each person known
by the Company to be the beneficial owner of more than 5% of the Company's
common stock; (ii) by each director; (iii) by each nominee for director; and
(iv) by all officers and directors of the Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner(1) Beneficial Ownership(2) of Class
------------------- ----------------------- --------
Lawrence R. McNamee 808,890(3) 35.9%
Joseph S. Romance 144,329(4) 6.9%
Carson T. Richert 197,587(5) 9.4%
Peter D. Bundy 50,000 2.4%
Robert B. Thompson --- ---
Raymond Kruzek 152,813(6) 7.3%
Mercy Gingrich 115,286 5.5%
All Directors and Officers
as a group (7 persons) 1,468,905(7) 64.1%
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(1) The address of each named person is 1335 South Acacia Avenue, Fullerton,
California 92831.
(2) Unless otherwise indicated, each person has sole voting and investment
power over the common stock shown as beneficially owned, subject to
community property laws where applicable and the information contained in
footnotes to this table.
(3) Includes 171,666 shares issuable pursuant to stock options all of which are
currently exercisable.
(4) Includes 57,372 shares held in a living trust with his wife, over which Mr.
Romance may be deemed to have shared investment power, and an aggregate of
5,895 shares owned by his immediate family.
(5) Includes 20,000 shares issuable pursuant to presently exercisable stock
options.
(6) Includes 20,000 shares issuable pursuant to presently exercisable stock
options.
(7) Includes 211,666 shares issuable pursuant to presently exercisable stock
options.
MATTERS TO BE ACTED UPON
ITEM 1: ELECTION OF DIRECTORS
Directors
The Company's Bylaws give the Board the power to set the number of
directors at no less than three nor more than seven. The size of the Company's
Board is currently set at five. The directors so elected will serve until the
next Annual Meeting of Shareholders. Five (5) directors are to be elected at the
Annual Meeting to be held on April 22, 2002. All of the nominees are currently
directors of the Company. The Board knows of no reason why any nominee for
director would be unable to serve as a director. In the event that any of them
should become unavailable prior to the Annual Meeting, the proxy will be voted
for a substitute nominee or nominees designated by the Board of Directors, or
the number of directors may be reduced accordingly.
The following table sets forth the name and age of each nominee for
director, the year he was first elected a director and his position(s) with the
Company.
NAME AGE DIRECTOR SINCE POSITION(S) HELD
---- --- -------------- ----------------
Lawrence R. McNamee 70 1991 Chairman of the Board and
Chief Executive Officer
Carson T. Richert 61 1972 President and Director
Joseph S. Romance 70 1972 Director
Peter Bundy 70 1995 Director
Robert B. Thompson 66 1996 Director
Lawrence McNamee joined the Company in September 1990 and was elected
Chairman of the Board of Directors in March 1991. Mr. McNamee has 15 years prior
experience in working as a consultant with companies in turnaround management.
Mr. McNamee was previously associated with Booz-Allen and Hamilton and Arthur P.
Little, Inc.
Carson T. Richert was a founder of the Company and has been a director
since its incorporation in 1972. Mr. Richert was Vice President - Marketing of
the Company from 1972 until 1981 when he was elected Executive Vice President.
Mr. Richert was elected President in August 1990. Carson T. Richert and Joseph
S. Romance are first cousins.
Joseph S. Romance was a founder of the Company and was the Chairman of the
Board of Directors from the Company's incorporation 1972 until March of 1991.
From 1972 to October 1980 and again from July 1981 to February 1988, he also
served as President. Joseph S. Romance and Carson T. Richert are first cousins.
Peter D. Bundy was elected to the Board of Directors in January 1995. Mr.
Bundy is an investor and consultant. His expertise is in marketing. He was a
partner with Howard Hirsh Group, a designer and manufacturer of several apparel
lines. Prior to that he was a Vice President of Associated Department Stores.
Robert B. Thompson was elected to the Board of Directors in July 1996. Mr.
Thompson is Vice Chairman and a Director of InspecTech, Inc., a company engaged
in the business of providing and franchising building inspection services in
connection with the transfer of real property. Mr. Thompson is also an investor
and consultant with expertise in the banking industry. Mr. Thompson has
previously served as President of Western Federal Bank in California.
The executive officer of the Company as of March 18, 2002 who is not also a
director is as follows:
Mercy Gingrich, the Secretary of the Company, age 60, who has been the
Secretary of the Company since September 1990. Ms. Gingrich joined the Company
in June 1990 and has held positions of Administrative Assistant and Director of
Human Resources within the Company.
Board of Directors Meetings and Committees
During the fiscal year ended September 30, 2001, there were four meetings
of the Board of Directors. No director was absent from more than one meeting. In
addition, actions were taken with the unanimous written consent of the
directors. The Board of Directors does not have a standing nominating committee.
Nominating functions are performed by the entire Board of Directors. Joseph S.
Romance, Peter D. Bundy and Robert B. Thompson, the Company's three outside
directors, serve on the Company's audit committee and compensation committee.
All committee members attended the one compensation and audit committee meeting
held during the fiscal year ended September 30, 2001.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who beneficially own more than 10%
of a registered class of the Company's equity securities to file reports of
securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than 10%
beneficial owners are also required by rules promulgated by the SEC to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company, or representations that no Form 5 filings were required, the Company
believes that during the period from October 1, 2000 through September 30, 2001,
its officers, directors and greater than 10% beneficial owners complied with all
Section 16(a) requirements applicable to them.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
The following table sets forth the compensation (cash and non cash), for
the Chief Executive Officer and all the executive officers who earned in excess
of $100,000 per annum during any of the Company's last three fiscal years.
Long-Term
Compensation Awards
------------------------
Annual Compensation
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Securities
Other Annual Restricted Underlying
Name and Fiscal Compensation Stock Awards Stock Options LTIP All Other
Principal Position Year Salary Bonus($) ($) ($) (#) Payouts($) Compensation
------------------ ---- ------ -------- --- --- --- ---------- ------------
Lawrence R. McNamee 2001 $ 104,000 --- --- --- --- --- ---
Chairman of the Board 2000 $ 104,000 --- --- --- --- --- ---
and Chief Executive 1999 $ 108,000 --- --- --- --- --- ---
Officer
Option Exercise and Fiscal Year-End Values
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND OPTION VALUES AT SEPTEMBER 30, 2001
Number of Securities Value of Unexercised
Underlying Unexercised Options "In-the-Money" Options at
at September 2001(#) September 2001($)(1)
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Shares Acquired on Value
Name Exercise(Shares) Realized($) Exercisable Unexercisable Exercisable(2) Unexercisable
---- ---------------- ----------- ----------- ------------- --------------- -------------
Lawrence R. McNamee --- --- 171,666 --- $ 63,516 ---
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(1) Options are "in-the-money" at the fiscal year end if the fair market value
of the underlying securities on such date exceeds the exercise or base
price of the option.
(2) The fair market value of unexercised "in-the-money" options was based on
trading prices for the Company's shares at June 26, 2001, the last day
prior to September 30, 2001 on which the Company's common stock traded. The
Company's common stock is thinly traded and it is not possible to determine
the accuracy of this fair market value projection.
Director Compensation
Directors who are not directly employed by the Company receive a fee of
$800 quarterly for their attendance at board meetings. All directors are
reimbursed for expenses connected with attendance at the meetings of the Board
of Directors.
Employment Agreement
Lawrence R. McNamee is employed under a renewable one-year employment
agreement commencing January 1, 1991 pursuant to which he is entitled to earn an
annual salary of $156,000.
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
Compensation Philosophy
The executive compensation philosophy of the Company is to (i) attract and
retain qualified management to run the business efficiently and guide the
Company's growth in both existing and new markets throughout the country, (ii)
establish a link between management compensation and the achievement of the
Company's annual and long-term performance goals, and (iii) recognize and reward
individual initiative and achievement.
Base Salaries
Base salaries for new management employees are based primarily on the
responsibilities of the position and the experience of the individual, with
reference to the competitive marketplace for management talent, which is
measured in terms of executive compensation offered by comparable companies in
related businesses.
Stock Options
The Company has granted stock options to its Chief Executive Officer as
part of his employment agreement. The option exercise prices were equal to the
fair market value of the Company's common stock on the grant date and the
options are fully vested. The exercise price of the options was subsequently
adjusted. No options have been exercised to date. Because the amount of
compensation which will be realized from these options is directly related to
the price of the Company's stock, this form of compensation is directly related
to the performance of the Company and the results of its operations.
Conclusion
Through the option described above, a significant portion of the Company's
Chief Executive Officer's compensation is linked directly to Company
performance. The Compensation Committee will continually review all compensation
practices and make changes as appropriate.
Sincerely,
Joseph S. Romance
Peter D. Bundy
Robert B. Thompson
COMPENSATION COMMITTEE
REPORT OF THE AUDIT COMMITTEE
The Company's audit committee consists of the Company's three outside
directors, Joseph S. Romance, Peter Bundy and Robert B. Thompson. The members of
the audit committee are independent. The Board of Directors has not adopted a
written charter for the audit committee. The audit committee has reviewed and
discussed the audited financial statements with management. The audit committee
plans to discuss with the independent auditors the matters required to be
discussed by SAS 61. The audit committee has received the written disclosures
and the letter from the independent accountants required by Independence
Standards Board Standard No. 1 (Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees), as may be modified or
supplemented, but has not yet discussed with the independent accountant the
independent accountant's independence. Based on the review, the audit committee
recommended to the Board of Directors that the audited financial statements be
included in the company's Annual Report on Form 10-K for the last fiscal year
for filing with the Securities and Exchange Commission.
Sincerely,
Joseph S. Romance
Peter Bundy
Robert B. Thompson
Audit Fees
The aggregate fees billed for professional services rendered for the audit
of the registrant's annual financial statements for the most recent fiscal year
and the reviews of the financial statements included in the registrant's
quarterly reports on Form 10-Q for that fiscal year was $23,005.
Financial Information Systems Design and Implementation Fees
No fees were billed for professional services directly or indirectly
operating, or supervising the operation of, the audit client's information
system or managing the audit client's local area network or for designing or
implementing a hardware or software system that aggregates source data
underlying the financial statements or generates information that is significant
to the audit client's financial statements taken as a whole or for appraisal or
valuation services or fairness opinions rendered by the principal accountant for
the most recent fiscal year.
All Other Fees
The aggregate fees billed for other services rendered by the principal
accountant were $1,275 for the most recent fiscal year. The audit committee has
not yet considered whether the provision of other services is compatible with
maintaining the principal accountant's independence.
ITEM 2: APPROVAL OF 2002 STOCK OPTION PLAN
On March 19, 2002, the Board of Directors of the Company adopted, subject
to obtaining shareholder approval, the Radiant Technology Corporation 2002 Stock
Option Plan (the "2002 Plan"). The 2002 Plan provides for the grant to
employees, officers, directors, consultants and independent contractors of
non-qualified stock options as well as for the grant of stock options to
employees that qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986 ("Code"). Although the Company has approximately
48 employees technically eligible to participate in the 2002 Plan, it is
anticipated the stock options will be granted only to a limited number of
management level personnel. The 2002 Plan terminates on March 18, 2012. The
purpose of the 2002 Plan is to enable the Company to attract and retain
qualified persons as employees, officers and directors and others whose services
are required by the Company, and to motivate such persons by providing them with
an equity participation in the Company. The 2002 Plan reserved 150,000 shares of
the Company's common stock for issuance pursuant to the 2002 Plan.
The 2002 Plan is administered by a committee made up of the members of the
Board of Directors (the "Committee"), which has, subject to specified
limitations, the full authority to grant options and establish the terms and
conditions under which they may be exercised. The exercise price of incentive
stock options granted under the 2002 Plan is required to be not less than the
fair market value of the common stock on the date of grant (110% in the case of
a greater than 10% shareholder). The exercise price of non-qualified stock
options can be no less than 85% of the fair market value on the date of grant.
Options may be granted for terms of up to ten (10) years (five (5) years in the
case of incentive stock options granted to greater than 10% shareholders). No
optionee may be granted incentive stock options such that the fair market value
of the options which first become exercisable in any one calendar year exceeds
$100,000. If an optionee ceases to be employed by, or ceases to have a
relationship with the Company, such optionee's options expire one (1) year after
termination of the employment or consulting relationship by reason of permanent
disability, immediately upon termination for cause and three (3) months after
termination for death or any other reason.
In order to exercise an option granted under the 2002 Plan, the optionee
must pay the full exercise price of the shares being purchased. Payment may be
made either: (i) in cash; (ii) at the discretion of the Committee, by delivering
shares of common stock already owned by the optionee and having a fair market
value equal to the applicable exercise price; or (iii) such other consideration
as may be determined by the Committee and permitted by applicable law.
Subject to the foregoing, the Committee has broad discretion to describe
the terms and conditions applicable to options granted under the 2002 Plan. The
Committee may at any time discontinue granting options under the 2002 Plan or
otherwise suspend, amend or terminate the 2002 Plan and may, with the consent of
an optionee, make such modification of the terms and conditions of such
optionee's option as it shall deem advisable; except that the Committee shall
have no authority to make any amendment or modifications to the 2002 Plan or any
outstanding option which would: (i) increase the maximum number of shares which
may be purchased pursuant to options granted under the 2002 Plan, either in the
aggregate or by an optionee; (ii) change the designation of the class of
employees eligible to receive qualified options; (iii) extend the term of the
2002 Plan or the maximum option period thereunder; (iv) decrease the minimum
qualified option price or permit reductions of the price at which shares may be
purchased for qualified options granted under the 2002 Plan; or (v) cause
qualified stock options issued under the 2002 Plan to fail to meet the
requirements of incentive stock options under Section 422 of the Code. Any such
amendment or modification shall be effective immediately, subject to shareholder
approval thereof within twelve (12) months before or after the effective date.
No option may be granted during any suspension or after termination of the 2002
Plan.
The 2002 Plan is designed to meet the requirements of an incentive stock
option plan as defined in Code Section 422. As a result, an optionee will
realize no taxable income, for federal income tax purposes, upon either the
grant of an incentive stock option under the 2002 Plan or its exercise, except
that the difference between the fair market value of the stock on the date of
exercise and the exercise price is included as income for purposes of
calculating Alternative Minimum Tax. If no disposition of the shares acquired
upon exercise is made by the optionee within two (2) years from the date of
grant or within one (1) year from the date the shares are transferred to him,
any gain realized upon the subsequent sale of the shares will be taxable as
capital gain. In such case, the Company will be entitled to no deduction for
federal income tax purposes in connection with either the grant or the exercise
of the option. If, however, the optionee disposes of the shares within the
period mentioned above, the optionee will realize earned income in an amount
equal to the excess of the fair market value of the shares on the date of
exercise (or the amount realized on disposition if less) over the exercise
price, and the Company will be allowed a deduction for a corresponding amount.
The Company adopted similar plans in 1991 and 1998. There are 150,000
options outstanding under these prior plans and 108,000 additional shares
available for option grants.
Vote Required
The approval of the 2002 Plan will require the affirmative vote of the
holders of at least a majority of the outstanding shares of the Company's common
stock present or represented at the meeting.
ITEM 3: OTHER MATTERS
Except for the matters referred to in the accompanying Notice of Annual
Meeting, management does not intend to present any matter for action at the
Annual Meeting and knows of no matter to be presented at the meeting that is a
proper subject for action by the shareholders. However, if any other matters
should properly come before the meeting, it is intended that votes will be cast
pursuant to the authority granted by the enclosed Proxy in accordance with the
best judgment of the person or persons acting under the Proxy.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for the fiscal year ended
September 30, 2001 were Cacciamatta Accountancy Corporation, Independent Public
Accountants. A representative of that firm is expected to be present at the
meeting and will be available to make a statement or respond to appropriate
questions.
ANNUAL REPORT
The annual report to shareholders covering the Company's fiscal year ended
September 30, 2001 is being mailed to shareholders with this Proxy Statement.
The Company's annual report on Form 10-K under the Securities Exchange Act of
1934 for the year ended September 30, 2001, including the financial statements
and schedules thereto, which the Company has filed with the Securities and
Exchange Commission will be made available to beneficial owners of the Company's
securities upon request. The annual report does not form any part of the
material for the solicitation of the Proxy.
SHAREHOLDER PROPOSALS
All shareholder proposals that are intended to be presented at the 2003
Annual Meeting of shareholders and to be included in the proxy materials for
that meeting should be received by the Company's Secretary not later than
November 22, 2002. If the Company receives notice of a shareholder proposal to
be voted on at the next Annual Meeting of Shareholders after November 22, 2002,
the persons named as proxies in the Company's proxy statement and form for such
meeting will have discretionary authority to vote on the proposal.
REQUEST TO RETURN PROXIES PROMPTLY
A Proxy is enclosed for your use. Please mark, date, sign and return the
Proxy at your earliest convenience. The Proxy requires no postage if mailed in
the United States in the postage-paid envelope provided. A prompt return of your
Proxy will be appreciated.
By Order of the Board of Directors,
Mercy Gingrich,
Secretary
Fullerton, California
March 22, 2002
RADIANT TECHNOLOGY CORPORATION PROXY - 2002 ANNUAL MEETING
Solicited on behalf of the Board of Directors for the Annual Meeting April 22,
2002
The undersigned, a shareholder of Radiant Technology Corporation, a California
corporation, appoints Mercy Gingrich his, her or its true and lawful agents and
proxies, with full power of substitution, to vote all the shares of stock that
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of Radiant Technology Corporation to be held at its
corporate office, 1335 South Acacia Avenue, Fullerton, California 92831, on
Monday, April 22, 2002, at 1:00 p.m., and any adjournment thereof, with respect
to the following matters which are more fully explained in the Proxy Statement
of the Company dated March 22, 2002 receipt of which is acknowledged by the
undersigned:
ITEM 1: ELECTION OF DIRECTORS.
______ FOR all nominees ______ WITHHOLD AUTHORITY
(Except as listed below.) (As to all nominees.)
---
Nominees: Lawrence R. McNamee, Carson T. Richert, Joseph S. Romance,
Peter D. Bundy and Robert B. Thompson.
Instruction: To withhold authority to vote for any individual nominee(s),
write that nominee's name in the space provided below.
---------------------------------------------
ITEM 2: 2002 STOCK OPTION PLAN
____ FOR ____ AGAINST ____ ABSTAIN
ITEM 3: OTHER MATTERS. The Board of Directors at present knows of
no other matters to be brought before the Annual Meeting.
This proxy will be voted in accordance with the instructions given. If no
direction is made, the shares represented by this proxy will be voted FOR the
election of the directors nominated by the Board of Directors and will be voted
in accordance with the discretion of the proxies upon all other matters which
may come before the Annual Meeting.
DATED: __________________________, 2002
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Signature of Shareholder
--------------------------------------------
Signature of Shareholder
PLEASE SIGN AS YOUR NAME APPEARS ON THE PROXY
Trustees, Guardians, Personal and other Representatives,
please indicate full titles.
IMPORTANT: PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE
RADIANT TECHNOLOGY CORPORATION
2002
ANNUAL REPORT
TO SHAREHOLDERS
An OTC publicly traded Company
Management's Discussion and Analysis of Financial Condition and Results of
Operations: below and elsewhere in this Annual Report includes "forward looking
statements" within the meaning of Section 27A of the Securities Act, and is
subject to the safe harbor created by that section. Factors that could cause
actual results to differ materially from those contained in the forward looking
statements include changes in general economic conditions, industry trends,
customer requirements, customer capital expenditures and product developments by
competitors.
PREFACE
Radiant Technology Corporation completed its fiscal 2001 year posting a
loss. Although sales increased, competitive forces in the market place and
cancellation charges contributed to the loss.
SALES
During the fiscal years ended September 30, 2001, 2000, and 1999, the
Company's revenues were derived from sales of the following products:
Gross Sales
- -----------
(in thousands) 2001 2000 1999
- -------------- ---- ---- ----
$ % $ % $ %
------------------------------------------------
Conveyorized Infrared
Ovens and Furnaces 4,696 93 4,331 92 2,313 70
Field Service & Parts 373 7 386 8 971 30
Total 5,069 100 4,717 100 3,284 100
The Company is engaged in the marketing, design, manufacture and service of
highly precision thermal processing systems that are primarily used by
manufacturers of electronic componentry. The Company's conveyorized (belt) ovens
and furnaces are in demand, worldwide, to meet ever-changing process
requirements in the semiconductor packaging, photovoltaic (solar cell), flat
panel display, hybrid thick film firing, and printed circuit board assembly
industries. New and inventive uses of the product line for other applications
continue to be discovered.
The nature and high intensity of the infrared heat produced in the
Company's furnaces permits a high rate of heat absorption by the electronic
parts processed through them, making them more adaptable to the exacting
tolerances and high-speed heating requirements of certain industrial users.
Operating costs for RTC units are significantly lower than for conventional
ovens and furnaces. Since these ovens and furnaces can be brought up to
operating temperatures in a shorter time span, operate at a faster conveyor belt
speed, require less floor space and use less electric energy.
To obtain financial growth and stability the Company concentrates on
managing the following key elements of its business:
Technological Leadership: The Company is constantly in contact with its
customers soliciting their input for both continued product improvement and new
product development. The Company encourages customers anticipating new thermal
processing requirements to contact it regarding their new opportunities and
needs.
The Company's new products are: A conduction furnace for the wafer bump
manufacturing step of the growing flip chip assembly market. RTC's new TriBeltTM
tool incorporates three conveyor belts in series; one for each of the major
stages of the wafer bump process. This design provides a more thermally reliable
and cost effective process than other equipment being offered for the
nitrogen-enhanced environment. It is complimentary to and augments the RTC
hydrogen furnaces being offered to customers whose products require this method
of production.
A new furnace extending the thermal processing range of RTC equipment from
1000(Degree)C higher to 1300(Degree)C in either a nitrogen or oxygenated
environment. Until now customers who required higher temperature furnaces where
required to look to other suppliers. Now they can stay with RTC as their
preferred and primary vendor.
A furnace incorporating ultra-violet enhanced heating in conjunction with or
separated from infrared heating. This was the result of the expression of a high
degree of interest in the potential value of UV enhancement by solar cell
industry. RTC has orders for three such systems from as many customers. The
company expects to sell other units to the industry in the near future; and also
finds requests from other customer areas interested in this new technology.
Customer Diversity: Customers from different facets of the electronics industry
are sought and maintained. As demand for the various manufacturing elements in
the electronics high technology industry shifts, RTC works to position itself to
be ready to be immediately responsive to changing market emphasis.
Service: The Company concentrates on providing timely, high quality,
responsiveness to its customer base. Most service concerns are handled by Phone,
FAX or E-mail immediately. Customer Service Engineers, when needed, are
dispatched within the day. Internationally, the Company retains Sales/Service
representatives, factory trained, to provide the same level of dedication in
placing the concerns and needs of the customer first. Modems are installed in
customers equipment, making it possible to analyze and implement customer
requests online from Company headquarters.
MARKETS AND PRODUCTS:
The Company's near infrared processing systems are principally in demand
for the following applications:
SemiConductor Packaging: In recent years, flip chip packaging technology has
gained widespread acceptance. The first process, called wafer bumping, involves
a reflow solder process to form the solder balls on all of the input/output
(I/O) pads on the wafer. Because of the extremely small geometries involved, in
some instances this process is best accomplished in a hydrogen atmosphere. RTC
offers a high temperature furnace for this application, equipped with the
hydrogen package, providing a reflow process in a 100% hydrogen atmosphere. For
a second process, called "chip joining", RTC offers both a near infrared or
forced convection oven. RTC's D-series ovens are well suited for low temperature
curing applications such as "under-fill" epoxy or curing epoxy glob tops for
chip on board manufacturers.
For more traditional chip packaging technologies, RTC offers an AG-series
furnace designed specifically for the silver-glass die attach process. A
critical thermal profile is required to achieve the proper mechanical and
thermal properties of the silver-glass material. Other packaging thermal
processes such as final lid sealing (metal or glass) and lead frame embed or pin
brazing are easily accomplished in RTC's furnaces.
Photovoltaics: For well over a decade, RTC has been the major supplier of
sintering furnaces used by photocell manufacturers for firing metallized inks to
form the front-side contacts and the back-side fields on the individual solar
cells. The product ideally suited for sintering of the metallized inks is our
C-series furnace. In recent years, existing RTC customers have been
experimenting with using a modified version of our S-series furnace for
phosphorus diffusion, which is the first thermal process in the manufacture of
solar cells. An extremely precise thermal process is required for phosphorus
diffusion as this step ultimately determines the cell's efficiency in generating
power when exposed to sunlight.
Flat Panel Display: While the flat panel display market has been primarily in
Japan, it is a relatively new market for US equipment manufacturers. RTC has
developed, in close cooperation with a flat panel manufacturer, one of the first
US built systems for processing large glass panels. The RTC furnace can handle
glass panels up to 58 inches wide. In addition to the challenges of achieving
uniform heating over the entire panel, there were unique mechanical challenges
for handling the large glass panels while loading and unloading the furnace.
Printed Circuit Board: RTC offers both infrared and forced convection heating
technology for printed circuit board assembly. These ovens are used for mass
reflow soldering of surface mount components to a printed circuit assembly.
Hybrid Thick Film: Hybrid thick film technology involves the firing of various
types of "inks" screen printed on ceramic substrates to form conductors and
resistors. Precise thermal profiles are required to achieve the desired resistor
value, or electrical properties of the conductors. RTC offers furnaces for
firing thick film inks in air, and for firing thick film materials in a
controlled, inert atmosphere having a low oxygen content.
MARKETING, SALES AND CUSTOMERS
The Company sells its products throughout the world, primarily to
organizations engaged in the manufacture of electronic components and
assemblies. RTC maintains factory direct sales in the United States.
Internationally the Company is represented through independent sales/service
organizations.
Customers evaluate furnace vendors on their technological leadership resulting
in high process yield of material produced. This primary benefit combined with
high up time, low meantime between failure, (MTBF) quick reliable service and
spare parts response time combine to produce low cost of equipment ownership.
The Company does not experience a seasonal demand for its product. Rather the
demand for product, is dependent on the demand for new manufacturing equipment.
HISTORY AND PROFITS
Radiant Technology Corporation was incorporated in the State of California
in 1972.
Net sales of $5,069,280 increased 7.5% for the fiscal year ended September
2001. Net sales of $4,717,346 increased $1,380,642 or 41% for the fiscal year
ended September 30, 2000.
OPERATING DATA
- --------------
(in thousands) YEAR ENDED SEPTEMBER 30
----------------------------------------------
2001 2000 1999 1998 1997
Net Sales $5,069 $4,717 $3,336 $4,686 $4,412
Income (loss) from
Continuing Operations (157) 301 (476) 416 592
Total Assets 2,967 4,551 4,061 $4,063 4,102
Long-term debt 0 0 0 0 0
Per Share Information
Income(loss) from
Continuing Operations (.08) .15 (.25) .22 .32
Cash Dividends 0 0 0 0 0
In Fiscal 2001 the Company suffered a loss of $157,210 after taxes or $.08
per share.
Cost of Sales were up, due to competitive forces and order cancellation
costs. Selling and G & A costs were up.
Interest was booked as income, rather than expense. Borrowing is preserved
only for short-term requirements.
Research and Development costs were reduced slightly over prior years.
These costs are essential to the Company's long term future. A future that can
move very quickly in the high technology field. New products initiated this year
and should help secure future years income.
LIQUIDITY AND CAPITAL RESOURCES
During 2001, cash decreased by $409,753. The Company anticipates that it
has sufficient cash to fund planned sales growth in 2002 without any long term
borrowing. There may be occasional periods when short- term borrowing will be
accommodated, although little of this type of activity is foreseen. Furthermore,
the Company anticipates having sufficient cash to purchase planned capital
equipment requirements.
MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTER
The Company's common stock, symbol RTNC, is quoted by the National
Quotation Bureau, Inc. ("NQBI") on the "Pink Sheets". The table below sets forth
the representative high and low bid prices for the common stock each calendar
period indicated. The Quotations represent interdealer prices without
adjustments for retail mark-ups, mark-downs or commissions and consequently do
not necessarily reflect actual transactions.
Holders of shares of Common Stock are entitled to receive such dividends,
if any, as may be declared by the Board of Directors of the Company out of funds
legally available therefore and, upon the liquidation, dissolution or winding up
of the Company are entitled to share ratably in all net assets available for
distribution to such share holders. The Company has never paid any dividends. It
is anticipated that all earnings, if any, will be retained for development of
working capital to grow the business of the Company and there is no present
intention to declare dividends in the foreseeable future.
Shareholders of Record: As of September 30, 2001, the number of recorded
holders of the Company's Common Stock was 402.
STOCK PRICE
- -----------
HIGH LOW
---- ---
2001
1st Quarter................. $ 1.03 $ .375
2nd Quarter................. 2.50 .375
3rd Quarter................. 1.75 .35
4th Quarter................. 1.12 1.12
2000
1st Quarter............... $1.438 $ .938
2nd Quarter................. 1.797 1.375
3rd Quarter................. .656 .625
4th Quarter................. .75 .75
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders
Radiant Technology Corporation
We have audited the accompanying balance sheets of Radiant Technology
Corporation as of September 30, 2001 and 2000, and the related statements of
operations, stockholders' equity and cash flows for each of the years in the
three year period ended September 30, 2001. 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits 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 audits provide 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 Radiant Technology Corporation
as of September 30, 2001 and 2000 and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 2001 in
conformity with accounting principles generally accepted in the United States.
CACCIAMATTA ACCOUNTANCY CORPORATION
Irvine, California
December 17, 2001
RADIANT TECHNOLOGY CORPORATION
Balance Sheet
September 30,
-------------
2001 2000
---- ----
ASSETS
Current assets:
Cash and equivalents ............................ $ 1,118,630 $ 1,528,383
Accounts receivable ............................. 407,814 1,844,418
Inventories ..................................... 845,823 689,133
Prepaid expenses ................................ 53,467 42,411
Deferred taxes .................................. 283,500 170,000
------- -------
Total current assets ........................... 2,709,234 4,274,345
Property and equipment ............................ 252,243 265,671
Patents ........................................... 5,035 11,443
----- ------
$ 2,966,512 $ 4,551,459
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt ................................. $ -- $ 500,000
Accounts payable ................................ 274,582 410,164
Accrued expenses ................................ 216,080 254,754
Customer deposits ............................... 200,663 967,269
------- -------
Total current liabilities ..................... 691,325 2,132,187
------- ---------
Stockholders' equity:
Preferred stock ................................. -- --
Capital stock ................................... 1,167,608 1,154,483
Retained earnings ............................... 1,107,579 1,264,789
--------- ---------
Total stockholders' equity .................... 2,275,187 2,419,272
--------- ---------
$ 2,966,512 $ 4,551,459
=========== ===========
RADIANT TECHNOLOGY CORPORATION
Statements of Operations
Year Ended September 30,
------------------------
2001 2000 1999
---- ---- ----
Net sales $5,069,280 $4,717,316 $3,336,674
Cost of Sales 3,820,550 3,086,122 2,283,801
--------- --------- ---------
Gross profit 1,248,730 1,631,194 1,052,873
--------- --------- ---------
Operating expenses:
Selling, general and administrative 1,206,277 954,525 1,290,047
Engineering, research and development 365,372 413,480 282,766
------- ------- -------
Total operating expenses 1,571,649 1,368,005 1,572,813
--------- --------- ---------
Income/(loss) from operations (322,919) 263,189 (519,940)
Interest income, net 52,209 37,540 44,120
------ ------ ------
Income/(loss) before provision for
income taxes (270,710) 300,729 (475,820)
Provision (benefit) for income taxes (113,500) 13,000 --
-------- ------ ------
Net income/(loss) $(157,210) $287,729 $(475,820)
========= ======== =========
Basic earnings per share:
Net income/(loss) $ (0.08) $ 0.15 (0.25)
========= ======== =====
Diluted earnings per share:
Net income/(loss) $ (0.08) $ 0.13 $ (0.25)
========= ======== ========
Basic number of common shares outstanding: 2,040,445 1,901,594 1,895,678
========= ========= =========
Diluted number of common shares outstanding: 2,040,445 2,188,764 1,895,678
========= ========= =========
RADIANT TECHNOLOGY CORPORATION
Statements of Stockholders' Equity
Years Ended September 30, 2001, 2000 and 1999
Total
Capital Stock Retained Stockholders'
-------------
Shares Amount Earnings Equity
------ ------ -------- ------
Balance, September 30, 1998 $1,895,678 $1,153,108 $1,452,880 $2,605,988
Net loss .............. - - (475,820) (475,820)
---------- ----------- ----------- -----------
Balance, September 30, 1999 1,895,678 153,108 977,060 2,130,168
Exercise of options ... 11,000 1,375 - 1,375
Net income ............ - - 287,729 287,729
---------- ---------- ----------- -----------
Balance, September 30, 2000 1,906,678 1,154,483 1,264,789 2,419,272
---------- ---------- ----------- -----------
Exercise of options ... 175,000 13,125 - 13,125
Net income (loss) ..... - - (157,210) (157,210)
---------- ----------- ----------- -----------
Balance, September 30, 2001 $2,081,678 $1,167,608 $1,107,579 $2,275,187
=========== ========== ========== ===========
RADIANT TECHNOLOGY CORPORATION
Statements of Cash Flows
Year Ended September 30,
------------------------
2001 2000 1999
---- ---- ----
Cash flows from operating activities:
Net income/ (loss) $ (157,210) $ 287,729 $ (475,820)
Adjustments to reconcile net income/(loss) to net cash
provided by operating activities:
Bad debt expense - - 183,807
Depreciation and amortization 133,884 193,113 195,011
Inventory obsolescence 26,000 40,000 40,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 1,436,604 (1,253,112) (209,336)
Inventory (182,690) (305,227) (30,299)
Deferred taxes (113,519) - -
Other assets 406 7,260 (14,549)
Increase (decrease) in:
Accounts payable (135,582) 221,041 115,083
Accrued expenses (38,674) 18,713 38,157
Income taxes payable - 13,000 (38,640)
Customer deposits (766,606) 948,522 (140,719)
-------- ------- --------
Net cash provided by/(used in) operating activities 202,613 171,039 (337,305)
------- ------- --------
Cash flows from investing activities:
Capital expenditures (125,491) (28,933) (105,718)
-------- ------- --------
Cash flows from financing activities:
Issuance of common stock 13,125 1,375 -
Borrowing on short-term debt - 500,000 500,000
Repayment on short-term debt (500,000) (1,500,000) -
-------- ---------- ----------
Net cash provided by (used in) financing activities (486,875) (998,625) 500,000
-------- -------- -------
Net increase in cash and equivalents (409,753) (856,519) 56,977
Cash and equivalents, beginning of year 1,528,383 2,384,902 2,327,925
--------- --------- ---------
Cash and equivalents, end of year $1,118,630 $1,528,383 $ 2,384,902
========== ========== =============
(continued)
RADIANT TECHNOLOGY CORPORATION
Statements of Cash Flows (continued)
Supplemental disclosures of cash flow information and non-cash investing and
financing activities:
2001 2000 1999
---- ---- ----
Cash paid during the year for:
Interest ............... $ - $ 429 $ 4,614
Income taxes ............ $ 8,070 $ - $ 34,286
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
September 30, 2001
1 Summary of significant accounting policies
- -----------------------------------------------
Nature of Operations
--------------------
Radiant Technology Corporation (the "Company") is engaged in the
manufacturing and marketing of infrared conveyorized ovens and furnaces
used primarily by the microelectronics manufacturing industry.
All of the Company's operations are located in California. Sales to
entities located outside the United States are as follows:
Countries 2001 2000 1999
--------- ---- ---- ----
European $1,047,596 $ 966,723 $ 640,511
Asia 549,073 316,235 178,170
Other international 377,243 126,666 482,161
$1,973,912 $1,409,624 $1,300,842
Revenue Recognition
-------------------
The Company recognizes revenue from product sales upon shipment or upon
completion when the customer requests the unit to be held at the facility
for later shipment.
Cash and Cash equivalents
-------------------------
For purposes of the statement of cash flows, cash equivalents include time
deposits, certificates of deposit and all highly liquid debt instruments
with original maturities of three months or less.
Accounts Receivable
-------------------
The allowance for doubtful accounts includes management's estimate of the
amount expected to be lost on specific accounts and for losses on other
unidentified accounts included in accounts receivable. In estimating the
allowance component for unidentified losses, management relies on
historical experience. The amounts the Company will ultimately realize
could differ materially in the near term from the amounts assumed in
arriving at the allowance for doubtful accounts in the accompanying
financial statements.
Inventories
-----------
Inventories include material, direct labor and manufacturing overhead and
are reported at the lower of cost (determined on the first-in-first-out
method) or market. Allowances for slow moving and obsolete inventory are
based on management's estimate of the amount considered obsolete based on
specific review of inventory items. In estimating the allowance, management
relies on its knowledge of the industry as well as its current inventory
levels.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
1. Summary of significant accounting policies (continued)
- -----------------------------------------------------------
Equipment
---------
Equipment is stated at cost, less accumulated depreciation. Depreciation is
calculated using the straight-line method over the estimated useful lives
of the related assets or over the lesser of the term of the lease or the
estimated useful life for leasehold improvements.
Intangibles
-----------
The cost of patents are being amortized using the straight line method over
their estimated lives of five years. Amortization expense charged to
operations in 2001, 2000 and 1999 was $11,939, $8,712, and $8,716,
respectively.
Research and Development
------------------------
Research and development is expensed as incurred. Research and development
expenses were $260,330, $230,599, and $282,766 in fiscal 2001, 2000, and
1999, respectively.
Software development costs
--------------------------
The Company capitalizes internal software development costs in accordance
with Statement of Financial Accounting Standards No. 86. The capitalization
of these costs begins when a product's technological feasibility has been
established and ends when the product is available for general release to
customers. The Company uses the working model approach to establish
technological feasibility. Amortization is computed on an individual
product group on the straight-line method over the estimated economic life
of the product. Currently, the Company is using an estimated economic life
of three years for all capitalized software costs. Amortization expense was
$31,001, $77,213, and $106,550 for 2001, 2000, and 1999, respectively.
Customer deposits
-----------------
The Company often requires a deposit from customers before commencing work
on a furnace. It is the Company's policy to record the deposit as a
receivable with a corresponding deferred liability at the time the sales
order is written. When the deposit is received, the receivable is relieved.
Income taxes
------------
Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and
their financial reporting amounts at each year-end based on enacted tax
laws and statutory rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. The provision for income taxes represents the tax
payable for the period and the change during the period in deferred tax
assets and liabilities.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
1. Summary of significant accounting policies (continued)
- -----------------------------------------------------------
Earnings per common share
-------------------------
Earnings per common share is computed by dividing reported earnings by the
weighted average number of common shares outstanding during the respective
periods. Common stock equivalents were excluded from the computation of
earnings per share in 2001 and 1999 because the effect of including such
equivalents in the computation would have been anti-dilutive.
Fair value of financial instruments
-----------------------------------
The fair value of financial instruments, consisting principally of
short-term debt payable is based on interest rates available to the Company
and comparison to quoted prices. The fair value of these financial
instruments approximates carrying value.
Stock based compensation
------------------------
The Company accounts for compensation costs related to employee stock
options and other forms of employee stock-based compensation plans in
accordance with the requirements of Accounting Principles Board Opinion 25
("APB 25"). The Company adopted the provisions of pro forma disclosure
requirements of Statement of Financial Accounting Standards 123, Accounting
for Stock-Based Compensation in fiscal 1997. Options granted to
non-employees are recognized at their estimated fair value at the date of
grant.
Use of estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Reclassifications
-----------------
Certain items in the 2000 and 1999 financial statements have been
reclassified to conform with the 2001 presentation.
2. Concentration of credit risk and significant customers
- -----------------------------------------------------------
The Company, from time to time, has cash deposits at financial institutions
in amounts in excess of federally-insured limits. The Company believes that
credit risk related to its cash deposits is limited due to the quality of
the financial institutions.
The Company's customers are located in several geographic markets,
primarily in the United States, Middle East, Europe and Pacific Rim
countries and are concentrated within three industries. To minimize the
risk of loss, the Company routinely assesses the financial strength of its
customers, and may require a substantial downpayment prior to commencing
machine production.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
3. Accounts receivable (continued)
- -----------------------------------
Net accounts receivable by geographic markets are as follows:
Countries 2001 2000
--------- ---- ----
United States ...... 48% 73%
Asia .............. 26% -
European .......... 9% 14%
Other International 17% 13%
-- --
100% 100%
=== ===
During 2001, 2000, and 1999, the five largest customers represented 65, 51,
and 52 percent of revenues, respectively. At September 30, 2001 and 2000
the five largest balances represented 70 and 82 percent, respectively, of
total accounts receivable.
2001 2000
----------- -----------
Trade receivables ............ $ 412,814 $ 1,849,418
Allowance for doubtful accounts (5,000) (5,000)
------ ------
$ 407,814 $ 1,844,418
=========== ===========
Activity relating to the allowance for doubtful accounts and sales returns
is as follows:
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 5,000 $ 210,817 $ 37,500
Provision (490) -- 183,807
Recoveries (Write offs) 490 (205,817) (10,490)
--- -------- -------
Balance at end of year $ 5,000 $ (5,000) $ 210,817
======= ========= =========
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
4. Inventories
- ---------------
2001 2000
---- ----
Raw materials $ 471,882 $ 384,727
Work in process 313,090 313,357
Finished goods 216,851 121,049
------- -------
1,001,823 819,133
Allowance for obsolescence (156,000) (130,000)
-------- --------
$ 845,823 $ 689,133
========= =========
Activity relating to the allowance for obsolescence is as follows:
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 130,000 $ 140,000 $ 100,000
Provision 56,000 40,000 40,000
Write offs (30,000) (50,000) --
------- ------- -------
Balance at end of year $ 156,000 $ 130,000 $ 140,000
========== ========== ==========
5. Property and Equipment
Life in years 2001 2000
------------- ---- ----
Machinery and equipment 7 $ 419,685 $ 387,530
Office furniture and equipment 7 70,105 68,847
Leasehold improvements 5 67,934 67,934
Vehicles 5 15,050 15,050
Capitalized computer software 3 475,145 405,542
------- -------
1,047,919 944,902
Less: accumulated depreciatio (795,676) (679,231)
-------- --------
$ 252,243 $ 265,671
=========== ==========
Depreciation expense for 2001, 2000, and 1999 was $121,945, $184,401, and
$186,295, respectively.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
6. Accrued expenses
- --------------------
2001 2000
---- ----
Payroll and related items $ 126,785 $ 109,499
Commissions 39,682 89,959
Warranties 30,000 40,000
Other 19,613 15,296
------ ------
$ 216,080 $ 254,754
========= =========
7. Commitments and contingencies
- ---------------------------------
Operating leases
----------------
In November 1996 the Company signed a five year lease on a building in
Fullerton, California, expiring on February 28, 2002. The Company is
negotiating the terms of an existing option to extend the lease. Base
monthly rent is $11,395 plus common area charges of approximately $2,649
per month. The Company also leases office equipment under operating leases
expiring in January, 2002. Minimum future lease payments under
non-cancelable operating leases are:
Year ending September 30,
2002 $ 71,660
============
Rent expense for 2001, 2000 and 1999 was $146,112, $168,650, and $172,228,
respectively.
8. Environmental Matters
- -------------------------
The Company, like others in similar businesses, is subject to federal,
state and local environmental laws and regulations. Although Company
environmental policies and practices are designed to ensure compliance with
these laws and regulations, future developments and increasingly stringent
regulation could require the Company to make unforeseen environmental
expenditures.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
9. Stockholders' equity
- ------------------------
Preferred stock
----------------
At September 30, 2001 and 2000 there were 5,000,000 authorized shares of
preferred stock, of which no shares were issued and outstanding.
Common stock
------------
The Company has authorized 24,000,000 shares of no par value common stock.
At September 30, 2001 and 2000, 2,081,678 and 1,906,678 shares were issued
and outstanding, respectively.
Employee stock options
----------------------
Incentive and non-statutory option plan
---------------------------------------
The Company adopted an incentive and non-statutory stock option plan which
provides for granting options to key employees and officers. Under the
plan, options up to 1,000,000 shares may be granted at a price not less
than the fair market value of such shares on the date of the grant, and the
maximum term of each option may not exceed ten years. With respect to any
participant who owns stock possessing more than 10% of the voting rights of
the Company's outstanding capital stock, the exercise price of any stock
option must not be less than 110% of the fair market value on the date of
the grant and the maximum term may not exceed five years. On January 22,
1998, April 15, 1999, and January 2, 2001 the Board authorized options to
purchase 70,000, 100,000, and 55,000 shares, respectively. These shares
were granted at an exercise price that was at or above the market price on
the date of the grant. The options vest on January 5, 2000, January 2,
2002, and January 2, 2003 and expire three years from the vesting date. As
of September 30, 2001 314,666 of these options remained outstanding.
Non-statutory director options
------------------------------
On September 30, 1996, the Company granted 20,000 non-statutory options to
each of three outside board members. The options vested immediately and
expire 50% at September 30, 2000 and 50% at September 30, 2001. The option
price is $.48 per share, which was equal to the market price at the date of
the grant. At September 30, 2001, none of these options remain outstanding.
Lawrence McNamee
----------------
Mr. McNamee held options to acquire 346,666 shares at $.075 per share
issued to him in lieu of salary in 1992; 175,000 of these options were
exercised in 2001, resulting in options for 171,666 shares outstanding at
September 30, 2001. These options have no expiration date.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
9. Stockholders' equity (continued)
- ------------------------------------
The following table summarizes the activities under the Plan and outside
the Plan:
Weighted Number
Number of Price Average of Shares
Shares Per Share Exercise price Exercisable
------ --------- -------------- -----------
September 30, 1999 595,666 $.0625 - 1.175 $0.32 446,666
------- ------ ----- ----- -------
Exercised (11,000) $.0625 - 0.75 $0.13
Canceled (85,000) $.48 - 1.175 $0.94
------- ---- ----- -----
September 30, 2000 499,666 $.075 - 0.75 $0.23 459,666
------- ----- ---- ----- -------
Granted 55,000 $0.525 $0.525
Exercised (175,000) $0.075 $0.075
Canceled (65,000) $.48 - 0.75 $0.55
------- ---- ---- -----
September 30, 2001 314,666 $.075-.75 $0.30 229,666
======= ===== === ===== =======
The following information applies to employee options outstanding at
September 30, 2001:
Weighted Average Weighted
Remaining Average
Range of Number of Contractual Exercise
exercise price Shares Life (Years) Price
-------------- ------ ------------ -----
$0.075 171,666 N/A $0.075
$0.48 50,000 2.5 $0.48
$0.525 55,000 3.6 $0.525
$0.75 38,000 1.25 $0.75
----- ------ ---- -----
314,666 $0.30
======= =====
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
9. Stockholders' equity (continued)
- -------------------------------------
Stock options (continued)
-------------------------
Had compensation cost for the plan been determined based on the fair value
of the options at the grant dates consistent with the method of SFAS 123,
the Company's net income/(loss) and earnings/(loss) per share would have
been:
2001 2000 1999
---- ---- ----
Net income/(loss):
As reported $ (157,210) $ 287,729 $ (475,820)
Pro forma $ (169,952) $ 284,444 $ (507,110)
Basic earnings per share:
As reported $ (0.8) $ 0.15 $ (0.25)
Pro forma $ (0.8) $ 0.15 $ (0.27)
Diluted earnings per share:
As reported $ (0.8) $ 0.13 $ (0.25)
Pro forma $ (0.8) $ 0.13 $ (0.27)
These pro forma amounts may not be representative of future disclosures
because they do not take into effect pro forma compensation expense related
to grants made before 1996. In addition, potential deferred tax benefits of
approximately $12,500, $12,500, and $15,000 in 2001, 2000 and 1999
respectively, have not been reflected in the pro forma amounts due to the
uncertainty of realizing any benefit. The fair value of these options was
estimated at the date of grant using the Black-Scholes option-pricing model
with the following weighted average assumptions for 2001, 2000 and 1999:
Expected life (years) 4
Risk-free interest rate 6.00%
Volatility 100%
Expected dividends None
The weighted fair value of options granted during the years ended September
30, 2001 and 2000 for which the exercise price approximated the market
price on the grant date was $.41 and $.21, respectively.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
10. Income taxes
- -----------------
Income tax expense (benefit) consisted of the following:
2001 2000 1999
---- ---- ----
Current tax expense $ - $ 13,000 $ -
Deferred tax benefit (113,500) - -
--------- --------- ---------
Net income tax expense $(113,500) $ 13,000 $ -
========= ======== ========
Income tax expense (benefit) differed from the amounts computed by applying
the U.S. federal income tax rate of 34% to pretax income from continuing
operations in 2001, 2000 and 1999 as a result of the following:
2001 2000 1999
---- ---- ----
Continuing operations:
Federal expected tax expense (benefit) $ (87,768) $ 102,000 $(167,000)
State expected tax expense (benefit) (25,732) 28,000 (48,000)
Inventory allowance 12,000 (4,000) (40,000)
Accounts receivable allowance - (76,000) (42,000)
------- ------- -------
Depreciation timing differences 20,000 33,000 20,000
Deferred tax valuation allowance (32,000) - 277,000
Use of NOL carryforwards - federal - (64,000) -
Use of NOL carryforwards - state - (6,000) -
------ ------ ------
$(113,500) $ 13,000 $ -
========= ========= =======
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at September 30, 2001 and
2000 are as follows:
2001 2000
---- ----
Net operating loss carryforwards $ 514,000 $ 441,000
Allowance for slow moving inventories 72,000 60,000
Allowance for doubtful accounts 2,000 2,000
Other - -
------ ------
Deferred tax assets 588,000 503,000
Less valuation allowance (304,500) (333,000)
-------- --------
Net deferred tax asset $ 283,500 $ 170,000
========= =========
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
10. Income taxes (continued)
- ------------------------------
At September 30, 2001, the Company had net operating loss carryforwards for
federal and state income tax purposes expiring as follows:
Federal State
------- -----
2007 $ 247,175 $ -
2009 620,976 -
2011 - 121,000
2014 167,361
2021 220,000 -
------- -------
$1,255,512 $ 121,000
========== =========
Federal investment credit and other general business credit carryforwards
total $35,600 and $105,500, respectively, and expire at various dates
through 2003.
11. Employee benefit plan
- --------------------------
The Company's 401(k) plan was re-activated during fiscal 1996. All
employees are eligible as long as they are 21 years of age and have
completed one year of employment. The plan provides for contributions by
the Company in such amounts as management may determine. Contribution
expense charged to operations in 2000 and 1999 were $12,474 and $13,027
respectively. No expense was charged to operations in 2001.
RADIANT TECHNOLOGY CORPORATION
Notes to financial statements
12. Basic and diluted earnings/(loss) per share
The following tables illustrate the required disclosure of the
reconciliation of the numerators and denominators of the basic and diluted
earnings/(loss) per share computations.
2001 2000 1999
---- ---- ----
Basic earnings/(loss) per share:
Numerator
Net income/(loss) $ (157,210) $ 287,729 $ (475,820)
=========== =========== ===========
Denominator
Basic weighted average number of common
shares outstanding during the period 2,040,445 1,901,594 1,895,678
========= ========= =========
Basic net income/(loss) per share $ (0.08) $ 0.15 $ (0.25)
=========== =========== ===========
Diluted earnings/(loss) per share:
Denominator
Weighted average number of common
shares used in basic earnings per share 2,040,445 1,901,594 1,895,678
Effect of dilutive securities:
Stock options (1) -- 287,170 --
Weighted number of common shares
and dilutive potential common stock
used in diluted earnings per share 2,040,445 2,188,764 1,895,678
========= ========= =========
Diluted earnings/(loss) per share $ (0.08) $ (0.25) $ 0.18
=========== =========== ===========
(1) Stock options were anti-dilutive for the years ended September 30, 2001
and 1999. See Note 9 for stock option activity .......
BOARD OF DIRECTORS
Lawrence R. McNamee
Chairman of the Board,
Chief Executive Officer,
President
Carson T. Richert
Executive Vice President
Peter D. Bundy
Investor-Consultant
Joseph S. Romance
Consultant
Robert B. Thompson
Investor-Consultant
OFFICERS
Lawrence R. McNamee,
Chairman of the Board,
Chief Executive Officer,
President
Carson T. Richert
Executive Vice President
Raymond G. Kruzek, PhD
Vice President
Open
Controller
Mercy Gingrich
Corporate Secretary
AUDITORS
Cacciamatta Accountancy Corporation
2600 Michelson Drive, Suite 490
Irvine, CA 92612
COUNSEL
Oppenheimer, Wolf & Donnelly, LLP
840 Newport Center Drive
Suite 700
Newport Beach, CA 92660
REGISTRAR AND TRANSFER AGENT
U. S. Stock Transfer Corporation
1745 Gardena Avenue
Second Floor
Glendale, CA 91204
The financial statements and related notes, which appear herein, have been
reported to the Securities and Exchange Commission.
A copy of Form 10-K will be made available without charge to beneficial owners
of stock, upon your written request to the company at the following address:
Radiant Technology Corporation
Shareholder Relations
1335 South Acacia Avenue
Fullerton, CA 92831
TEL: (714) 991-0200
FAX: (714) 991-0600
E-Mail: general@radianttech.com