Securities and Exchange Commission
Washington, D.C. 20549
Form 10K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended February 29, 1996
Commission File No. 1-9542
TECHKNITS, INC.
(Exact Name of Company as specified in its Charter)
New York 11-2343548
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10 Grand Avenue, Brooklyn, New York 11205
(Address of Principal Executive Offices)
The Company's telephone number including area code: (718) 875-3299
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of Each Class Name of each exchange on which registered
Common Stock NASDAQ
(Par Value $.003 per Share)
Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of March 15, 1996, 1,900,064 shares of Common Stock were outstanding of
which 906,731 were held by non-affiliates of the Company. The aggregate
market value of the Common Stock held by non-affiliates of the Company as
of March 15, 1996 was $1,360,096 (based upon the closing bid price on such
date on the NASDAQ).
As of March 15, 1996, no shares of Preferred Stock were outstanding.
Documents incorporated by reference include:
None
Item 1. Business
(a) General Development of Business
The business of the Company was founded in 1975 by Simon Taub as a
producer of knit sweaters. Prior to 1985, it produced apparel as a
contractor to apparel wholesalers, who supplied the necessary raw materials
to the Company. In 1985 it began manufacturing some knitted women's
sweaters for its own account for sale directly to retailers, and by 1986 it
was manufacturing women's sweaters solely for its own account. In 1986 the
Company also expanded its product line to include knitted skirts and pants.
In 1988 the Company again expanded its product line to include
manufacturing children's sweaters. In 1991, the Company again expanded its
product line to include manufacturing men's sweaters.
The Company purchases raw yarn in bulk and designs and manufactures
apparel therefrom. The Company knits the yarn into fabrics, cuts and sews
the fabrics into apparel and markets the apparel on a pre-order basis to
multi-unit stores and to wholesalers that sell under their own private
labels.
(b) Financial Information About Industry Segments
Not applicable.
(c) Narrative Description of Business:
Purchasing
Raw materials used by the Company consist of cotton, polyester,
acrylic and pre-colored yarns. Yarns are purchased direct from a number of
domestic manufacturers and through import brokers. Purchases are usually
in full container loads, rather than in broken lots, on a regular
pre-ordered weekly minimum basis in order to achieve lowest material costs.
Approximately 20% of the yarn purchased is acrylic, and 80% cotton.
The Company has no significant continuing contracts with any of its
suppliers and its relationship with them may be terminated by either party
at any time. The Company is not dependent upon any particular supplier or
suppliers for its raw materials. The Company has not encountered and does
not envisage any difficulty in obtaining sufficient merchandise for its
needs in the future.
Manufacturing
The Company's styles are generally designed by its in-house staff of
designers based upon trends it perceives in the market. In some instances,
the Company receives designs from customers and is asked to reproduce them.
The Company's design staff meets from time to time with customer
merchandising representatives and production staff members to discuss
garment construction and product mix in order to plan its lines. During
fiscal 1996, approximately 300 sweater styles were designed by the Company
priced to sell at retail from $20 to $40 per sweater.
Fabric designs are graphically produced by the Company's in house
computer. The computers are used to display fabric designs on video
screens for customers and to run the Company's computerized knitting
machines that produce programmed quantities of knitted fabrics
incorporating the designs contained on the disks.
In season, the Company's knitting machines operate on a three-shift,
24 hour per day, six days per week basis. One employee oversees the
operations of up to four machines on one shift. The Company's computer
system records the amount of time in each shift that each machine has
operated (and the time that the machine is not operating) and the name of
the employee supervising the machine. Each machine has a targeted
operation rate for each shift. If the machines supervised by an employee
on a weekly basis exceed the target, the employee receives an incentive
bonus based on the percentage that the machines exceeded the target.
The manufacturing operations performed by the Company at its facility
are supervised by Mark Terkeltaub, a Vice President of the Company,
including knitting the raw yarn into piece goods, cutting, sewing, packing
and shipping.
Customers select the styles they want and place orders for apparel
specifying quantities, colors, designs, fabrics, sizes and delivery
schedules. The Company then knits the fabrics and, thereafter, cuts and
sews the fabrics into apparel. Styles and fabric patterns selected by any
customer are made exclusively for that customer and not any other customer.
The Company manufactures approximately 10% in excess of each order so as to
be able to fill re-orders on an immediate basis. The Company requires a
time period of approximately 30 to 60 days between order and delivery. The
Company produced approximately 180,000 dozen sweaters, pants and skirts in
the fiscal year ended February 29, 1996.
Sales and Marketing
The Company's selling operations are performed in its facility in New
York City. Sales are made by the Company's in-house sales staff and are
supervised by Simon Taub, Chairman of the Board. The Company does not
employ outside regional sales offices, has a minimum sales force and does
not supply outside salespersons with samples. This sales structure enables
management to control the Company's selling operation more effectively as
well as to deal directly with and be readily accessible to major customers.
The Company assists its customers in allocating their purchasing budgets
among the different styles offered by the Company and monitors retail sales
in order to assess consumer response to its products. The Company believes
it is in a position to respond quickly to changing consumer demand. The
Company does no advertising and does not participate with customers in
cooperative advertising programs.
The Company assists customers in designing and planning their
presentations. The Company adjusts its product mix to the four seasons in
order to reduce the effects of peaks and valleys in shipments. Although
the Company sells its apparel throughout the year, the Company has greater
sales in the fall/winter selling season (June through November) than in the
summer/spring selling season (December through May).
Buyers for specialty chain stores have budgets to spend and delivery
schedules to meet. In buying made-to-order merchandise as distinguished
from shelf (already completed) merchandise, the buyer requires assurance
that the manufacturer can timely deliver the merchandise ordered in perfect
condition. The Company offers buyers the opportunity to place their orders
only 30 to 60 days prior to delivery date as compared to lead times of four
to eights months required by competing foreign producers. Certain other
competing companies that produce apparel in the United States also offer
similarly short lead times. Buyers of the Company's products thus have
added flexibility due to the relatively short turnaround time between
ordering and delivery of finished product to respond to changing consumer
demand. Customers can also order smaller number of units of each style than
is customary in the private label trade. The Company can do this since it
controls its production of fabrics and thus avoids the hazard of not having
sufficient fabrics for any particular item on hand for any apparel
production run or re-order. Customers of the Company usually place initial
orders for a limited number of items with the Company and then increase the
number of items ordered each year after it has been assured that the
Company can produce and deliver in accordance with the purchase order.
At present the Company has approximately 40 customers. For the years
ended February 28, 1995 and February 28, 1996, revenues derived from sales
to two customers each, each exceeded 10% of net sales. The Company has no
contracts with any of its customers other than the orders for made-to-order
products and its relationships with them may be terminated by either party
at any time.
In fiscal 1996, the Company expanded its production capacity by
purchasing additional computerized knitting machines and other equipment to
increase its production capacity by approximately 10%, and thus enabled it
to expand its product line so as to include children's sweaters.
Management believes that the expansion of its product line to include
children's sweaters would not result in any changes in the mode of its
operations. The raw materials purchased would be the same and the
manufacturing would be the same. The marketing, however, may be to
different customers and could result in an increase in the Company's
customer base.
The Company's merchandise inventories consist of raw yarns, knitted
fabrics, supplies, work-in process and finished garments. The Company
finances its merchandise inventories from its own equity and from short
term bank loans. The Company currently finances most of its accounts
receivable from its own funds, or if same are not sufficient, from
short-term unsecured bank borrowings.
Employees
At March 15, 1996, the Company employed 300 full time employees. Of
such employees, 15 were engaged in management and internal administration,
5 in design, 274 in production, 6 in sales and 5 in shipping.
Competition
The women's and children's apparel business is highly competitive
consisting of many manufacturers, importers, and distributors, many of
which are larger and have substantially greater resources than the Company.
The Company's sweaters, skirts and pants compete with products sold by
distributors who import apparel from abroad, with domestic retailers having
established foreign manufacturing capabilities, and with companies which
domestically produce apparel.
The Company believes that an ability to effectively anticipate, gauge
and respond to changing consumer demand and tastes is necessary to compete
successfully in the women's sweaters field. Consumer and customer
acceptance and support, which depend upon styling, pricing, quality (both
in material and production) are also important aspects of competition in
this industry. The Company believes that its continued success will depend
upon its ability to remain competitive in these areas. The Company
believes that by integrating all design, fabric, and manufacturing
operations in a vertical operation and by marketing its product line on a
made-to-order basis under private labels without an outside sales staff or
advertising program it is better able to effectively compete with other
producers and has better capabilities to respond to changing consumer
demand. However, the Company is but a very minor factor in the field in
which it competes, and there can be no assurance that it will be able to
compete successfully.
Officers and Directors
The following table sets forth the names, ages and positions with
the Company of each director and officer.
Name Age Position
Simon Taub 48 Chairman of the Board,
President, and Chief
Executive Officer
Moshe Taub 74 Director, Vice President,
Treasurer, and Chief Financial
Accounting Officer
Mark Terkeltaub 40 Vice President and Secretary,
Director
Edwin Schwimmer 64 Director
Set forth below is a biographical description of each officer and
director.
Simon Taub has served as Chairman of the Board, Chief Executive
Officer and President of the Company since its inception in 1975. He
devotes full time to the business of the Company and is in charge of
manufacturing and marketing for the Company.
Moshe Taub served as a Director, Vice President, Treasurer and Chief
Financial and Accounting Officer of the Company since its inception in
1975. He devotes full time to the business of the Company and is in charge
of purchasing for the Company.
Mark Terkeltaub has served as a Director, Vice President and Secretary
of the Company since 1984. From 1982 to 1984, he was general manager of
Conway Stores, a chain of retail apparel stores. He is in charge of
warehouse and shipping matters and devotes full time to the business of the
Company.
Edwin Schwimmer has served as a Director of the Company since 1987.
He has been a member of the law firm of Gitomer, Schwimmer, Berns & Elliott
and its predecessors, for over 30 years and will devote such time to the
affairs of the Company as are necessary for the performance of his services
as director.
Simon Taub and Mark Terkeltaub are brothers, and Moshe Taub is their
father.
Directors of the Company are elected to serve until the next annual
meeting of shareholders or until their respective successors are elected.
The Company has not paid any direct remuneration for services to any of its
directors. All officers serve at the discretion of the Board of Directors
subject to the terms of their employment agreements.
Executive Compensation
The following table sets forth the cash compensation paid or accrued
for fiscal year ended February 29, 1996 to each of the Company's officers
whose compensation exceeded $60,000 and for all officers and directors as a
group:
Name of Individual or Capacities in Cash
Number in Group Which Served Compensation
Simon Taub Chairman of the Board, $130,000
Chief Executive Officer
and President
Mark Terkeltaub Vice President, Secretary $ 82,762
and Director
All officers and directors as a group All $220,919
(4 persons)
The Company has no pension plan, profit sharing plan or stock option
plan.
(d) Financial Information About Foreign and Domestic
Operations and Export Sales
Not applicable.
Item 2. Property
The Company leases an entire building (65,000 square feet) from 10
Grand Realty Corp., a company owned by the President of the company, at 10
Grand Avenue, Brooklyn, New York, for manufacturing, administration and
executive offices. The lease expires on July 31, 1999 and provides for an
annual base rent of $165,000, plus real estate taxes assessments,
insurance, repairs and utilities.
The Company leases a building from the President of the Company with
7,500 square feet of space, at 17 Grand Avenue, Brooklyn, New York for
warehousing and shipping. This lease expires on July 31, 1999 and provides
for an annual base rent of $48,000 plus real estate taxes, assessments,
insurance, utilities and repairs.
The Company leases another building from the President of the Company
with 15,000 square feet of space at 23-27 Grand Avenue, Brooklyn, New York,
for an annual base rent of $84,000. The lease expires July 31, 1999. The
Company leases a showroom in New York City at an annual base rent of
$31,200. The lease expires on January 31, 1998.
The Company leases another building from the President of the Company
with 16,000 square feet at 6 Grand Avenue, Brooklyn, New York for an annual
base rent of $72,000. The lease expires July 31, 1999.
Item 3. Legal Proceedings
There are no legal proceedings pending against the Company except the
following:
In March 1993, TechKnits, Inc. and its President Simon Taub were added
as defendants to an action brought by Chubb & Son, Inc. in the United
States District Court for the Eastern District of New York for conspiracy
against four Claims Representatives who were employed by Chubb, six
individual Public Adjusters, together with the four corporations through
which they operated, a Salvor corporation and two of its employees, two
commercial firms who held business insurance policies issued by Chubb,
seven officers and employees of commercial firms insured by Chubb, and
fourteen individuals who held homeowner policies issued by Chubb. The basis
of the claim against the Company in the amount of $1,200,000 plus punitive
damages, is that Chubb paid the Company an excessive sum for fire, water,
and smoke damage based on inflated figures in an amount to be determined at
trial. The claims are against all defendants for RICO, Common Law, Fraud,
Breach of Fiduciary Duty and Aiding and Abetting said breach, Conversion,
Unjust Enrichment and Money Paid by Mistake. The Company and Mr. Taub have
denied the allegations of the Complaint in their answer and intend to
defend against the claims.
Item 4. Submission of Matter to a Vote of Security Holders
No matters were submitted to a vote of the Company's security holders
during the last quarter of the fiscal year ended February 29, 1996.
PART II
Item 5. Market Information Concerning the Company's Securities
The Company's Common Stock is traded in the over-the-counter market on
the National Association of Securities Dealers' Automated System ("NASDAQ")
under the symbol KNIT. Trading on NASDAQ commenced on July 1, 1987.
The following table lists the closing high and low bid prices of the
Common Stock as reported by NASDAQ for each quarter since January 1, 1994.
High Low
1994
First Quarter. . . . . . . . . . . . . . . . 2 3/8 2
Second Quarter . . . . . . . . . . . . . . . 2 1/4 1 3/8
Third Quarter. . . . . . . . . . . . . . . . 1 7/16 1 1/4
Fourth Quarter . . . . . . . . . . . . . . . 2 1/8 1 3/8
1995
First Quarter. . . . . . . . . . . . . . . . 1 5/8 3/8
Second Quarter . . . . . . . . . . . . . . . 1 13/16 1 1/4
Third Quarter. . . . . . . . . . . . . . . . 1 13/16 1 3/8
Fourth Quarter . . . . . . . . . . . . . . . 1 13/16 1 1/4
On March 15, 1996, the closing low bid prices for the Common Stock was
$1 1/2.
Shareholders
As of March 15, 1996, the Company had 1,900,064 shares of Common Stock
outstanding and no shares of Preferred Stock outstanding.
As of March 15, 1996, the Company had 220 shareholders of record, but
has been advised by its Transfer Agent that it also has approximately 1200
beneficial shareholders whose shares are held in street name by brokerage
houses.
The Company will furnish, without charge, on the written request of any
shareholder, a copy of the Company's Annual Report on form 10-K for the
year ended February 29, 1996 including the financial statements and
schedules thereto. Shareholders wishing a copy may present their request to
the Company at 10 Grand Avenue, Brooklyn, New York 11211.
Dividend Policy
The Company paid a special dividend of 7 cents per share of Common
Stock in fiscal 1996.
The Company had not previously paid any dividends on its Common Stock
and currently intends to retain all earnings to finance the development and
expansion of its business.
ADDITIONAL INFORMATION
Certain Information
The Company is presently subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission.
Transfer Agent
The transfer agent for the Company's securities is American Stock
Transfer & Trust Company, 99 Wall Street, New York, New York 10005.
Item 6. Selected Financial Data
The following table summarizes certain selected financial data and is
qualified in its entirety by the more detailed financial statements
included elsewhere herein.
(In thousands, except per share data)
Income Statement Data:
Year Ended February 29,
1993 1994 1995 1996
Revenue - Net. . . . . $16,367 15,319 19,307 14,191
Costs and expenses:
Cost of goods sold . . 13,641 13,274 16,465 12.096
Selling, general and
administrative . . . 1,679 2,070 2,111 1,603
Interest and finance
expense - net . . . . 433 323 419 360
Total . . . . . . 15,753 15,667 18,995 14,059
Income (loss) before income
taxes . . . . . . . . 614 (348) 312 132
Provision for income
taxes (or benefits) . . 288 (130) 136 48
Net income (loss). . . . $ 326 $ 218 $ 176 $ 84
Income per share . . . $ .17 $ (.12) $ .10 $ .05
Weighted average of common
shares outstanding . . 1,871,000 1,850,000 1,822,427 1,736,389
Balance Sheet Data:
Year Ended February 29,
1993 1994 1995 1996
Working capital. . . . . . . $ 4,506 $ 4,332 $ 4,555 $ 4,840
Total assets . . . . . . . . $ 12,513 $ 13,702 $ 12,587 $ 13,198
Total indebtedness . . . . . $ 4,984 $ 6,414 $ 4,929 $ 5,595
Shareholders' equity . . . . $ 7,530 $ 7,288 $ 7,658 $ 7,603
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Years Ended February 29, 1996 and February 28, 1995
Net revenues decreased in the fiscal year ended February 29, 1996 to
$14,191,292 from $19,307,010 in the year ended February 28, 1995.
Cost of goods sold as a percentage of net sales stayed as a constant
85% in both fiscal 1996 and 1995.
Years Ended February 28, 1995 and February 28, 1994
Net revenues increased in the fiscal year ended February 28, 1995 to
$19,307,010 from $15,318,354 in the year ended February 28, 1994.
Cost of goods sold as a percentage of net sales increased to 85% in
fiscal 1995 from 83% in 1994.
Liquidity and Capital Resources
The Company meets its working capital requirements from internally
generated funds, and from short term bank loans. As of February 29, 1996,
the Company had $2,235,000 outstanding under a total bank line of credit of
$6,000,000 from its banks. The Company believes that its internally
generated funds and available credit will be sufficient to meet currently
anticipated cash and capital needs for fiscal 1995. If the current backlog
increases further, additional financing may be required.
Inflation
Inflation has not had any significant adverse effects on the Company's
business, and the Company does not believe it will have any significant
effect on its future business.
PART III
Item 10. Directors and Executive Officers of the Registrant
See "Item 1. Business (c) Narrative Description of Business-Officers and
Directors."
The Board of Directors of the Company had a total of four quarterly
meetings during the fiscal year ended February 28, 1993. The Board of
Directors has established Simon Taub, Moshe Taub and Mark Terkeltaub as an
Executive Committee, and Edwin Schwimmer and Monte Wolfson as an Audit
Committee. No member of the Board of Directors attended fewer than 75% of
the number of meetings of the Board in the fiscal year ended February 29,
1992.
Item 11. Executive Compensation
The following table sets forth the cash compensation paid or accrued
for fiscal year ended February 29, 1996 to each of the Company's officers
whose compensation exceeded $60,000 and for all officers and directors as a
group:
Name of Individual or Capacities in Cash
Number in Group Which Served Compensation
Simon Taub Chairman of the Board, $130,000
Chief Executive Officer
and President
Mark Terkeltaub Vice President, Secretary $ 82,762
All officers and directors as a group All $220,919
(4 persons)
The Company has no pension plan, profit sharing plan or stock option
plan.
Item 12. Security Ownership of Certain Beneficial Owners and Management
To the Company's knowledge, no nominee for director, other than Mr.
Simon Taub, beneficially owns in excess of 5% of the Capital Stock of the
Company. Set forth below is information concerning stock ownership of Mr.
Simon Taub and all other nominees for directors and all directors as a
group, based upon the number of shares of Common Stock outstanding as of
May 15, 1996, according to information furnished to the Company.
Name and Address Shares Owned Percent Owned(1)
Simon Taub 950,000 50.0
10 Grand Avenue
Brooklyn, New York 11205
Name and Address Shares Owned Percent Owned(1)
Moshe Taub 33,333 1.7
10 Grand Avenue
Brooklyn, New York 11205
Mark Terkeltaub 6,667 0.4
10 Grand Avenue
Brooklyn, New York 11205
Edwin Schwimmer 3,334 0.2
118-21 Queens Blvd.
Forest Hills, NY 11379
All directors as a group 993,334 52.3
(four persons)
(1) Excludes effects of outstanding Underwriters' Warrants.
Item 13. Certain Relationships and Related Transactions
The Company leases an entire building (65,000 square feet) from 10
Grand Realty Corp., a company owned by a principal of the Company, in a
seven story building at 10 Grand Avenue, Brooklyn, New York, which is used
for manufacturing, administration and executive offices. The lease for
this facility expires on July 31, 1999 and provides for an annual base rent
of $165,000 plus 73% of real estate taxes, assessments, insurance, repairs
and utilities and repairs.
The Company also leases a building of 7,500 square feet of space from
Simon Taub, a principal of the Company, at 17 Grand Avenue, Brooklyn, New
York (not far from its manufacturing facility), used for warehousing and
shipping. The lease for this facility expires on July 31, 1999 (with
option for further renewal) and provides for an annual base rent of $48,000
plus real estate taxes, assessments, insurance, utilities and repairs.
The Company further leases an entire building with 15,000 square feet
of space from Simon Taub, a principal of the Company, at 23-27 Grand
Avenue, Brooklyn, New York, for an annual base rent of $84,000. The lease
expires July 31, 1999.
The Company leases another building from the President of the Company
with 16,000 square feet at 6 Grand Avenue, Brooklyn, New York for an annual
base rent of $72,000. The lease expires July 31, 1999.
Management believes that its rentals for these facilities are not
higher than prevailing rates for comparable properties in the area in which
the facility is located and are fair to the Company.
PART IV
Item 14. Exhibit, Financial Statement Schedules and Reports on Form 8K
A. The following documents are filed as part of this report:
a. Financial Statements and Supplementary Data
1. Report of Independent Certified Public Accountants
2. Consolidated Balance Sheets at February 29, 1996 and
February 28, 1995
3. Consolidated Statements of Operations - For the Three
Years ended February 29, 1996, February 28, 1995 and
February 28, 1994
4. Consolidated Statements of Shareholders' Equity - For
the Three Years ended February 29, 1996, February 28,
1995 and February 28, 1994
5. Consolidated Statements of Cash Flows for the Three
Years ended February 29, 1996, February 28, 1995 and
February 28, 1994
6. Notes to Financial Statements
b. Financial Statement Schedules
II Amounts due from Directors, Officers and Principal
Holders of Equity Securities for the Years ended February
29, 1996, February 28, 1995 and February 28, 1994.
V Property, Plant, and Equipment
VI Accumulated Depreciation of Property, Plant and
Equipment
X Supplementary Income Statement Information for the
Years ended February 29, 1996, February 28, 1995 and
February 28, 1994.
All other Schedules have been omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto. Columns omitted
from schedules filed have been omitted because the
information is not applicable.
c. Exhibits * (numbers below reference Regulation S-K)
(3) (a) Certificate of Incorporation filed January 29,
1975.
(b) Certificate of Amendment to Certificate of
Incorporation dated April 8, 1987.
(c) Certificate of Amendment to Certificate of
Incorporation dated December 19, 1990.
(d) Action by Unanimous Consent of Directors and
Shareholders dated March 2, 1987 fixing Preferred
Stock designation, preferences and voting rights.
(e) By-Laws.
(4) (a) Specimen Common Stock Certificate.
(b) Form of Underwriter Warrants to be sold to L.C.
Wegard & Co., Inc.
(10) (a) Employment Agreement dated as of March 1, 1987
between Registrant and Simon Taub.
(b) Financing Agreements with Chase Bank.
(c) Lease Agreement between Registrant and Simon Taub.
(d) Lease Agreement between Registrant and 10 Grand
Avenue Realty Corp.
(f) Agreement between Registrant and Local 17-18,
United Production Workers Union.
B. No reports on Form 8-K have been filed during the last quarter
covered by this report
C. Reference is made to Item 14(A)(3) above
D. Reference is made to Item 14(A)(2) above
______________________
* All Exhibits are Incorporated by reference to Registrant's
Registration Statement on Form S-1 dated May 11, 1987 (Reg. No. 33-14156 as
amended) except for Exhibits 3(c) and 10(d) which were filed with Form 10-K
for year ended February 28, 1992.
INDEPENDENT AUDITORS' REPORT
60 E. 42nd Street
New York NY 10165
(212) 370-6702
Board of Directors:
TechKnits, Inc. & Subsidiary
Brooklyn, New York
We have audited the accompanying consolidated balance sheet of TechKnits,
Inc. & Subsidiary as of February 29, 1996 and February 28, 1995, and the
related consolidated statements of operations, shareholders' equity and
cash flows for the two years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of TechKnits, Inc. & Subsidiary at
February 29, 1996 and February 28, 1995, and the results of its operations
and cash flows for each of the years in the three year period ended
February 29, 1996, in conformity with generally accepted accounting
principles.
Respectfully submitted,
Mayer Rispler & Company, P.C.
Certified Public Accountants
May 27, 1996
New York, New York
TECHKNITS, INC. & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
February 29, February 28,
1996 1995
Current Assets
Cash $ 133,644 $ 112,615
Certificate of deposit (Note 5) 2,570,648 2,439,865
Accounts receivable, (net of allowance for
doubtful accounts of $29,388 and $14,548 in
1996 and 1995, respectively)(Notes 2 & 5) 1,174,175 303,679
Inventories (Notes 3 & 5) 4,833,332 4,804,838
Prepaid expenses and other current assets 228,045 99,829
Loan receivable - officer (Note 11) 95,863 175,000
Total Current Assets $9,035,707 $ 7,935,826
Property and Equipment - Net (Notes 4 & 6) 3,946,975 4,277,427
Other assets 215,001 235,747
Loan receivable - officer (Net of Current Portion)- 0 - 137,910
TOTAL ASSETS $ 13,197,683 $ 12,586,910
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable bank (Note 5) $ 2,235,000 $ 2,050,000
Accounts payable and accrued expenses 1,533,031 857,900
Current maturities of long-term debt and
capital leases (Note 6) 116,153 132,361
Income taxes payable (Note 10) 311,341 340,080
Total Current Liabilities $ 4,195,525 $ 3,380,341
Long-term debt and capital leases (Note 6) 539,037 648,429
Deferred income taxes (Note 10) 860,441 900,634
TOTAL LIABILITIES $ 5,595,003 $ 4,929,404
Commitments and Contingencies (Notes 8 and 9)
Shareholders' Equity (Note 12)
Preferred stock, $.003 par value 2,500,000
shares authorized, none issued.
Common stock, $.003 par value 10,000,000
shares authorized, 1,900,000 shares issued
and outstanding $ 5,700 $ 5,700
Additional paid-in capital 4,648,729 4,648,729
Retained earnings 3,257,217 3,227,317
Less: Treasury stock, 179,562 and 124,662
shares of common stock - at February 29, 1996
and February 28, 1995, respectively, at cost (308,966) ( 224,240)
TOTAL SHAREHOLDERS' EQUITY 7,602,680 7,657,506
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $13,197,683 $12,586,910
The accompanying notes are an integral part of this financial statement.
TECHKNITS, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED
February 29, February 28, February 28,
1996 1995 1994
Revenues - Net (Note 2) $ 14,191,292 $ 19,307,010 $ 15,318,354
Cost of Goods Sold 12,096,245 16,465,146 13,273,279
Gross Profit 2,095,047 2,841,864 2,045,075
Operating Expenses
Selling and shipping expenses 871,102 1,218,829 1,176,345
General & administrative expenses 731,845 892,260 893,938
Total Operating Expenses 1,602,947 2,111,089 2,070,283
Operating Income (Loss) 492,100 730,775 ( 25,208)
Other Income (Expense)
Interest income (Note 5) 138,997 95,110 65,941
Interest expense ( 498,969) ( 514,123 ) ( 388,821)
Total ( 359,972) ( 419,013 ) ( 322,880)
Income (Loss) Before
Income Tax Provision (Benefit) 132,128 311,762 ( 348,088)
Provision (Benefit) for
Income Taxes (Note 10) 47,921 135,837 ( 129,658)
NET INCOME (LOSS) $ 84,207 $ 175,925 $( 218,430)
Earnings (Loss) Per Share $ .05 $ .10 $( .12)
Average Number of Common Shares
Outstanding During the Period 1,736,389 1,822,427 1,850,000
The accompanying notes are an integral part of this financial statement.
TECHKNITS, INC. & SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED
February 29, February 28, February 28,
1996 1995 1994
Cash Flows From Operating Activities
Net income (loss) $ 84,207 $ 175,925 $( 218,430)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 603,452 570,552 537,031
Deferred income taxes ( 40,193) - 0 - 10,618
Decrease (Increase) In Assets:
Accounts receivable ( 870,496 ) 1,229,356 (1,155,243)
Inventory ( 28,494 ) 451,836 ( 406,573)
Prepaid expenses and
other current assets ( 128,216 ) 56,360 ( 81,093)
Increase (Decrease) In Liabilities:
Accounts payable &
accrued expenses 675,131 ( 684,826) 363,962
Income taxes payable ( 28,739) ( 30,179) ( 150,203)
Net Cash Provided By (Used in)
Operating Activities 266,652 1,769,024 (1,099,931)
Cash Flows From Investing Activities
Acquisition of fixed assets ( 270,318) ( 730,231) ( 344,166)
Other assets 18,064 ( 53,101) ( 27,702)
Cash Used in Investing
Activities (252,254) ( 783,332) ( 371,868)
Cash Flows From Financing Activities
(Repayment) Proceeds of bank loan 185,000 (1,000,000) 1,300,000
Borrowings - 0 - 387,170 - 0 -
Payments on long-term debt ( 125,600) ( 156,673) ( 94,237)
Loans receivable officer - net 217,047 74,330 ( 22,922)
Purchase of Treasury Stock ( 84,726) ( 126,844) - 0 -
Dividends ( 54,307) ( 67,131) - 0 -
Net Cash (Used In) Provided By
Financing Activities 137,414 ( 889,148) 1,182,841
NET INCREASE (DECREASE) IN CASH
AND CERTIFICATE OF DEPOSIT 151,812 96,544 ( 288,958)
CASH AND CERTIFICATE OF DEPOSIT,
BEGINNING OF YEAR 2,552,480 2,455,936 2,744,894
CASH AND CERTIFICATE OF DEPOSIT,
END OF YEAR $2,704,292 $ 2,552,480 $ 2,455,936
The accompanying notes are an integral part of this financial statement.
TECHKNITS, INC. & SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED
Supplemental Disclosures of Cash Flow Information:
February 29, February 28, February 28,
1996 1995 1994
Operating activities:
Cash paid during the year for:
Interest $ 489,418 $ 512,971 $ 428,657
Income taxes $ 77,093 $ 223,928 $ 8,882
Supplemental Schedule of Noncash
Investing and Financing Activities:
Capital lease obligations incurred
for purchase of
fixed assets $ - 0 - $ 387,170 $ - 0 -
The accompanying notes are an integral part of this financial statement.
TECHKNITS, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED FEBRUARY 29, 1996, FEBRUARY 28, 1995 AND
FEBRUARY 28, 1994
Additional
Capital Stock Paid-In Retained
Shares Dollars Capital Earnings
Balance - February 28, 1993 1,900,000 $5,700 $4,648,729 $3,336,953
Net loss ( 218,430)
Increase in loans receivable officer________ _____ _________ __________
Balance - February 28, 1994 1,900,000 $5,700 $4,648,729 $ 3,118,523
Net Income 175,925
Purchase of Treasury Stock
Recharacterization of loans
receivable officer (Note 11)
Constructive Dividend
(Pursuant to an Internal Revenue Service
audit of officer's personal return)____ _____ _________ (67,131)
Balance - February 28, 1995 1,900,000 $5,700 $4,648,729 $ 3,227,317
Net Income 84,207
Purchase of Treasury Stock
Dividend (Note 13) _________ _____ _________ (54,307)
Balance - February 29, 1996 1,900,000 $5,700 $4,648,729 $3,257,217
TECHKNITS, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED FEBRUARY 29, 1996, FEBRUARY 28, 1995 AND
FEBRUARY 28, 1994
(CONTINUED)
Treasury Loans
Stock Receivable
Shares Dollars Officer Totals
Balance - February 28, 1993 50,334 $(97,396 ) $(364,318 ) $7,529,668
Net loss ( 218,430)
Increase in loans receivable
officer ________ ______ ( 22,922) ( 22,922)
Balance - February 28, 1994 50,334 $(97,396 ) $(387,240) $7,288,316
Net Income 175,925
Purchase of Treasury Stock 74,328 (126,844 ) (126,844)
Recharacterization of loans
receivable officer (Note 11) 320,109 320,109
Constructive Dividend
(Pursuant to an Internal Revenue Service
audit of officer's personal return)______ _____ 67,131 _________
Balance - February 28, 1995 124,662 $(224,240 ) $ - 0 - $7,657,506
Net Income 84,207
Purchase of Treasury Stock 54,900 (84,726 ) ( 84,726)
Dividend (Note 13) _______ ______ _______ ( 54,307)
Balance - February 29, 1996 179,562 $308,966 ) $ - 0 - $ 7,602,680
The accompanying notes are an integral part of this financial statement.
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF OPERATIONS
The Company is a vertically integrated manufacturer of knitted
sweaters, which it markets throughout the U.S.A. on a pre-order basis to
multi-unit stores and to wholesalers that sell under their own private
labels.
2. SIGNIFICANT ACCOUNTING POLICIES
Concentration of Credit Risk - The Company maintains credit insurance
on most of its accounts. For those accounts which are not insured the
Company monitors its exposure for credit losses and maintains allowances
for anticipated losses.
Inventories - Inventories consist of finished garments, work in
progress, yarns, fabrics and supplies. Inventories are stated at the
lower of cost or market, using a first-in first-out (FIFO) basis.
Property and Equipment - Property and equipment is stated at cost.
Depreciation and amortization are computed on the straight-line method
over estimated useful lives:
Leasehold Improvements - Life of the related lease, which is not
in excess of the estimated useful life.
Furniture, Fixtures and Office Equipment - 6 to 10 years.
Manufacturing Equipment - 12 years.
Revenue Recognition - The Company recognizes revenue at the time goods
are shipped and title to goods sold passes to the customer.
Principles of Consolidation - The consolidated financial statements
include the results of operations of the Company and its subsidiary.
All intercompany transactions and balances have been eliminated in
consolidation.
Earnings Per Share - Earnings (loss) per share is calculated by
dividing net income (loss) by the weighted average number of shares of
common stock outstanding during the year.
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Income Taxes - Income taxes are provided for all transactions,
regardless of the year the transactions are reported for income tax
purposes. The differences in the timing of recognition of income and
expenses for income tax purposes are reflected as deferred income
taxes.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of the
revenues and expenses during the reported period. Actual results could
differ from those estimates.
3. INVENTORIES
Inventories consist of the following:
February 29, February 28,
1996 1995
Raw materials and supplies $2,064,189 $1,162,731
Finished goods 2,521,187 3,115,298
Work in progress 247,856 526,809
Total $4,833,232 $4,804,838
4. Property and equipment
Balances of major classes of assets and allowances for depreciation
and amortization are as follows:
February 29, February 28,
1996 1995
Factory machinery and equipment $7,153,109 $6,954,130
Leasehold improvements 1,138,100 1,087,425
Furniture and fixtures 158,529 145,050
Computers 126,085 118,900
Property and equipment - at cost 8,575,823 8,305,505
Less accumulated depreciation 4,628,848 4,028,078
Property and equipment - net $3,946,975 $4,277,427
Depreciation expense for the years ended February 29, 1996, and
February 28, 1995 were $600,770 and $567,871, respectively.
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. LOAN PAYABLE TO BANK
The Company has a $6,000,000 line-of-credit agreement (the
"Agreement") with a bank expiring September 1, 1996 which provides for
funds to be advanced based on a specific formula. At February 29,
1996, the Company had outstanding borrowings under this agreement of
$2,235,000. Such loan bears interest at the rate of 3/4 percent above
the bank prime rate (prime rate being 8 1/4 percent at February 29,
1996) and is collateralized by a certificate of deposit and related
interest, accounts receivables, work in process and finished goods,
inventory and certain machinery as well as assignment of Keyman's life
insurance, and credit insurance covering accounts receivable. The
loan is also guaranteed by the President of the Company.
6. LONG TERM DEBT
Long term debt for the purchase and financing of knitting machinery
consists of the following:
Monthly Principal
Annual Installments Amounts Payable At
Financial Interest (Including February February
Institution Rate Interest) 29, 1996 28, 1995
New York Business
Development Corp.(1) 7.5% $ 4,857 $395,846 $422,909
Various 12.25% - 15.5% 8,464 259,344 357,881
Totals $13,321 $655,190 $780,790
(1) In 1990, the Company obtained from New York Business Development
Corp. a term loan to purchase machinery, repayable at the rate of
$4,857 per month, including interest at the rate of 7.5 percent per
annum. The loan is secured by a first mortgage on real property, at
10 Grand Avenue, owned by the Company's President and a first security
interest in certain machinery. The loan is also guaranteed by the
Company's President and by 10 Grand Realty Corporation. The loan
agreement has various stipulations, which include minimum net current
assets, minimum net worth, and maximum officers' compensation.
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Annual maturities of long term debt are as follows:
Year Ending
February 28,
1997 116,153
1998 112,392
1999 112,531
2000 56,443
Thereafter 257,671
Total 655,190
Less Current Portions 116,153
Long term debt $539,037
7. CONCENTRATION
For the years ended February 29, 1996 and February 28, 1995, revenues
derived from sales to customers accounting for at least 10 percent of
total sales amounted 65 percent and 57 percent, respectively.
8. COMMITMENTS AND CONTINGENCIES
The Company leases an entire building (totalling 65,000 sq. ft.) at 10
Grand Avenue, Brooklyn, New York, with 10 Grand Realty Corp., a
company owned by the President of the Company, for manufacturing,
administrative and executive offices. This lease, which expires July
31, 1999, provides for an annual base rent of $165,000 plus real
estate taxes, assessments, insurance, utilities and repairs.
The Company also leases space in various buildings from the President
of the Company as follows:
Annual Rent
Square Excluding Real Estate Taxes
Location Feet and Other Expenses
17-21 Grand Ave. 7,500 $48,000
23-27 Grand Ave. 15,000 84,000
6 Grand Ave. 16,000 72,000
All leases expire July 31, 1999.
The Company leases a showroom in New York City at an annual base rent
of $31,200. The lease expires January 31, 1998.
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Future minimum lease payments for rental of manufacturing, warehousing
and administrative offices are as follows:
Minimum
Rental
Year Commitment
1997 $400,200
1998 397,600
1999 369,000
2000 153,750
Rent charged to operations excluding related expenses in years ended
February 29, 1996, February 28, 1995 and February 28, 1994 were
$406,850, $330,367, and $251,780, respectively.
9. LEGAL PROCEEDINGS
In March 1993, the Company and its President were added as defendants
to an action brought by Chubb & Son, Inc., in the United States
District Court for the Eastern District of New York, for conspiracy.
The basis of the claim against the Company, in the amount of
$1,200,000 plus punitive damages, is that Chubb paid the Company an
excessive sum for fire, water and smoke damage based on inflated
figures in an amount to be determined at trial. The Company and its
President have denied the allegations of the complaint and intend to
defend against the claims. As per company counsel, the claims have no
merit and are vigorously being contested.
10. INCOME TAXES
The components of income tax expense (benefit) are as follows:
Years Ended
February February February
29, 1996 28, 1995 28, 1994
Income (loss) before taxes: $132,128 $311,762 $(348,088 )
Current:
Federal provision (benefit) $29,836 $ 104,837 $( 89,431 )
State and local 19,629 31,000 - 0 -
Deferred:
Federal (1,136 ) - 0 - ( 14,139 )
State and Local ( 408 ) - 0 - - 0 -
Provision for 1989 IRS audit
assessment - 0 - - 0 - 120,637
Benefit from abatement of City
Corporation tax assessment
previously provided for - 0 - - 0 - (146,725 )
Income tax expense (benefit) $ 47,921 $135,837 $(129,658)
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. INCOME TAXES (CONTINUED)
Deferred income taxes consists primarily of accelerated depreciation
recognized in different periods for financial reporting and income tax
purposes.
The provision (benefit) for income taxes differs from amounts computed
at statutory rates as follows:
1996 1995 1994
Federal statutory income tax
(benefit) rate 22.0% 34.0% (34.0%)
Tax on non-deductible expenses - 0 - - 0 - 4.0%
State and local corporate tax
net of net operating loss benefit
for 95 and 94 14.0% 9.5% - 0 -
Prior period IRS audit - 0 - - 0 - 34.7%
Abatement of City Corporation
tax assessment - 0 - - 0 - (42.0%)
Total effective tax (benefit) rates 36.0% 43.5% (37.3%)
The Company has adopted Financial Accounting Standard No. 109
"Accounting for Income Taxes", which does not have a material effect on
the Company's financial statements.
11. RELATED PARTY TRANSACTIONS
For fiscal years ended, February 29, 1996, 1995 and 1994, the Company
was owed by its President non interest bearing loans of $95,863,
$312,910 and $387,240, respectively. Effective June 15, 1995, these
loans are being repaid at a rate of $25,000 a month including interest
at 7%.
During the years ended February 29, 1996, 1995 and 1994, the Company
incurred professional fees of $15,324, $7,553 and $14,989,
respectively, to Edwin Schwimmer, Esq., a member of the Board of
Directors of the Company.
TECHKNITS, INC. & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
12. SHAREHOLDERS' EQUITY
In December 1990, the Company's shareholders approved a resolution of
the Board of Directors authorizing a one for three reverse stock split
(of three old shares of common stock par value $.001 per share for one
new share of common stock par value $.003 per share). Accordingly,
the number of shares of common stock outstanding was reduced to
1,900,000 shares $.003 par value per share. At the same time, the
Company amended its Certificate of Incorporation to change the number
of authorized shares from 20,000,000 shares $.001 par value per share
to 12,500,000 shares $.003 par value per share.
In connection with its public offering in July of 1987, the Company
issued to the Underwriters 100,000 five-year Underwriters' Warrants,
each warrant entitling the Underwriters to purchase a Unit for $7.50.
Each Unit consists of 2 shares of Common Stock, $.001 par value, one
Class A Warrant and one Class B Warrant each exercisable at $3.75 and
$4.50 per share, respectively, into one share of Common Stock $.001
par value. In April of 1992, the Company extended the expiration date
of such warrants to July 1, 1995. As of July 1, 1995, none of these
warrants were exercised and they expired.
13. CASH DIVIDEND
On September 15, 1995, the Board of Directors declared a cash dividend
of $.07 per common share to shareholders of record on that date, which
was paid on October 30, 1995.
This special dividend was the result of a constructive dividend given
to an officer of the corporation as determined by an Internal Revenue
Service audit. (see consolidated statement of shareholders' equity)
14. SUBSEQUENT EVENT
On March 11, 1996, the Company sustained inventory losses of $900,000
due to a flood which will be covered by insurance. As of the date of
this report, the Company has received an advance of $250,000 from the
insurance company.
TECHKNITS, INC. & SUBSIDIARY
SCHEDULE II - AMOUNTS DUE FROM DIRECTORS, OFFICERS
AND PRINCIPAL HOLDERS OF EQUITY SECURITIES
FOR THE YEARS ENDED
February 29, February 28, February 28,
1996 1995 1994
Balance at Beginning of Period $312,910 $387,240 $364,318
Additions - 0 - 368,479 112,780
Deductions 217,047 442,809 89,858
Balance at End of Period $ 95,863 $312,910 $387,240
TECHKNITS, INC. & SUBSIDIARY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Balance at Balance
Beginning Additions at End
Description of Property of period at Cost of Period
February 29, 1996:
Machinery and Equipment $6,954,129 $ 198,980 $7,153,109
Leasehold Improvements 1,087,425 50,675 1,138,100
Furniture and Fixtures 145,050 13,479 158,529
Office Computers 118,900 7,185 126,085
Total $8,305,504 $ 270,319 $8,575,823
February 28, 1995:
Machinery and Equipment $6,390,586 $ 563,543 $6,954,129
Leasehold Improvements 932,610 154,815 1,087,425
Furniture and Fixtures 144,300 750 145,050
Office Computers 107,778 11,122 118,900
Total $7,575,274 $ 730,230 $8,305,504
February 28, 1994:
Machinery and Equipment $6,115,914 $ 274,672 $6,390,586
Leasehold Improvements 913,581 19,029 932,610
Furniture and Fixtures 106,812 37,488 144,300
Office Computers 94,801 12,977 107,778
Total $7,231,108 $ 344,166 $7,575,274
TECHKNITS, INC. & SUBSIDIARY
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY,
PLANT AND EQUIPMENT
Balance at Additions/ Balance
Beginning Changes to at End
Description of Property of period Cost & Expenses of Period
February 29, 1996:
Machinery and Equipment $3,432,483 $ 537,442 $3,969,925
Leasehold Improvements 446,864 27,333 474,197
Furniture and Fixtures 81,033 9,272 90,305
Office Computers 67,697 26,723 94,420
Total $4,028,077 $ 600,770 $4,628,847
February 28, 1995:
Machinery and Equipment $2,928,902 $ 503,581 $3,432,483
Leasehold Improvements 422,598 24,266 446,864
Furniture and Fixtures 72,032 9,001 81,033
Office Computers 36,675 31,022 67,697
Total $3,460,207 $ 567,870 $4,028,077
February 28, 1994:
Machinery and Equipment $2,455,417 $ 473,485 $2,928,902
Leasehold Improvements 401,172 21,426 422,598
Furniture and Fixtures 61,370 10,662 72,032
Office Computers 7,900 28,775 36,675
Total $2,925,859 $ 534,348 $3,460,207
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 31st day of May 1996.
TECHKNITS, INC.
Registrant
Simon Taub
Simon Taub
Chairman of the Board