SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-9341
HOWTEK, INC.
(Exact name of registrant as specified in its charter)
Delaware 02-0377419
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
21 Park Avenue, Hudson, New Hampshire 03051
(Address of principal executive offices) (Zip Code)
(603) 882-5200
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (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___.
As of the close of business on October 28, 1998 there were 10,760,206
shares outstanding of the issuer's Common Stock, $.01 par value.
HOWTEK, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Balance Sheets as of September 30, 1998
(unaudited) and December 31, 1997 3
Statements of Operations for the three month
periods ended September 30, 1998 and 1997
(unaudited) and for the nine month periods ended
September 30, 1998 and 1997 (unaudited) 4
Statement of Changes in Stockholders' Equity
for the nine month period ended September 30, 1998
(unaudited) 5
Statements of Cash Flows for the nine month periods
ended September 30, 1998 and 1997 (unaudited) 6
Notes to Financial Statements (unaudited) 7-8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-13
PART II OTHER INFORMATION
Item 5 Other Information 14
Item 6 Exhibits and Reports on Form 8-K 14
Signatures 15
2
HOWTEK, INC.
Balance Sheets
September 30, 1998 December 31, 1997
------------------ -----------------
(unaudited)
Assets
Current assets:
Cash and equivalents $ 229,986 $ 235,326
Accounts receivable:
Trade-net of allowance for doubtful accounts
of $32,933 in 1998 and $70,000 in 1997 1,128,983 1,475,952
Inventory 3,208,656 3,515,993
Prepaid and other 133,443 105,275
------------ ------------
Total current assets 4,701,068 5,332,546
------------ ------------
Property and equipment:
Equipment 2,467,140 2,288,687
Leasehold improvements 27,827 --
Motor vehicles 6,050 6,050
------------ ------------
2,501,017 2,294,737
Less accumulated depreciation and amortization 1,587,008 1,255,317
------------ ------------
Net property and equipment 914,009 1,039,420
------------ ------------
Other assets:
Software development costs, net 608,521 593,879
Debt issuance costs, net 62,771 78,040
Patents, net 20,038 27,409
------------ ------------
Total other assets 691,330 699,328
------------ ------------
Total assets $ 6,306,407 $ 7,071,294
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 944,647 $ 1,200,871
Accrued interest 70,078 16,903
Accrued expenses 434,799 322,448
------------ ------------
Total current liabilities 1,449,524 1,540,222
Loan payable to principal stockholder 300,000 --
Convertible subordinated debentures 2,181,000 2,181,000
------------ ------------
Total liabilities 3,930,524 3,721,222
------------ ------------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value: authorized
25,000,000 shares; issued 10,828,082 in 1998
and 9,128,082 shares in 1997; outstanding
10,760,206 in 1998 and 9,060,206 shares in 1997 108,281 91,281
Additional paid-in capital 47,357,588 45,665,122
Accumulated deficit (44,139,722) (41,456,067)
Treasury stock at cost (67,876 shares) (950,264) (950,264)
------------ ------------
Stockholders' equity 2,375,883 3,350,072
------------ ------------
Total liabilities and stockholders' equity $ 6,306,407 $ 7,071,294
============ ============
See accompanying notes to financial statements.
3
HOWTEK, INC.
Statements of Operations
Three Months Nine Months
September 30, September 30,
-------------------------------- --------------------------------
1998 1997 1998 1997
(unaudited) (unaudited)
Sales $ 1,231,519 $ 2,371,615 $ 3,357,401 $ 5,817,022
Cost of Sales 929,690 1,784,195 2,823,522 4,374,347
------------ ------------ ------------ ------------
Gross Margin 301,829 587,420 533,879 1,442,675
------------ ------------ ------------ ------------
Operating expenses:
Engineering and product development 299,442 361,298 808,807 1,055,016
General and administrative 316,279 372,158 1,005,897 1,310,019
Marketing and sales 450,496 410,752 1,251,652 1,228,875
Unusual charges (note 4) -- -- -- 2,996,971
------------ ------------ ------------ ------------
Total operating expenses 1,066,217 1,144,208 3,066,356 6,590,881
------------ ------------ ------------ ------------
Loss from operations (764,388) (556,788) (2,532,477) (5,148,206)
------------ ------------ ------------ ------------
Interest expense - net 47,169 46,642 151,178 214,988
Income from legal settlement (note 2) -- -- -- (6,000,000)
------------ ------------ ------------ ------------
Income (loss) before tax provision (811,557) (603,430) (2,683,655) 636,806
Provision for income taxes -- -- -- 120,000
------------ ------------ ------------ ------------
Net income (loss) $ (811,557) $ (603,430) $ (2,683,655) $ 516,806
============ ============ ============ ============
Net income (loss) per share $ (0.08) $ (0.07) $ (0.27) $ 0.06
Weighted average number of shares used
in computing earnings per share 10,760,206 9,033,994 9,933,466 9,032,576
See accompanying notes to financial statements.
4
HOWTEK, INC.
Statement of Changes in Stockholders' Equity
Common Stock
--------------------------- Additional
Number of Paid-in Accumulated Treasury Stockholders'
Shares Issued Par Value Capital Deficit Stock Equity
------------- ------------ ------------ ------------ ------------ ------------
Balance at December 31, 1997 9,128,082 $ 91,281 $ 45,665,122 $(41,456,067) $ (950,264) $ 3,350,072
Issuance of common stock for cash 1,700,000 17,000 1,692,466 1,709,466
Net loss -- -- -- (2,683,655) -- (2,683,655)
------------ ------------ ------------ ------------ ------------ ------------
Balance at September 30, 1998 10,828,082 $ 108,281 $ 47,357,588 $(44,139,722) $ (950,264) $ 2,375,883
============ ============ ============ ============ ============ ============
See accompanying notes to financial statements.
5
HOWTEK, INC.
Statements of Cash Flows
Nine Months Nine Months
September 30, 1998 September 30, 1997
------------------ ------------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income (loss) $(2,683,655) $ 516,806
----------- -----------
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation 331,691 787,044
Amortization 165,873 288,595
Asset writedown and reserve increases (note 4) -- 2,996,971
(Increase) decrease:
Accounts receivable 346,969 935,791
Inventory 307,337 (398,387)
Other current assets (28,168) (14,243)
Increase (decrease):
Accounts payable (256,224) (1,209,468)
Accrued expenses 165,526 243,270
----------- -----------
Total adjustments 1,033,004 3,629,573
----------- -----------
Net cash provided by (used for)
operating activities (1,650,651) 4,146,379
----------- -----------
Cash flows from investing activities:
Patents, software development and other (157,875) (281,706)
Additions to property and equipment (206,280) (405,070)
----------- -----------
Net cash used for investing activities (364,155) (686,776)
----------- -----------
Cash flows from financing activities:
Issuance of common stock for cash 1,709,466 37,560
Proceeds (repayment) of loan from principal
stockholder (note 3) 300,000 (3,478,604)
----------- -----------
Net cash provided by financing activities 2,009,466 (3,441,044)
----------- -----------
Increase (decrease) in cash and equivalents (5,340) 18,559
Cash and equivalents, beginning of period 235,326 235,143
----------- -----------
Cash and equivalents, end of period $ 229,986 $ 253,702
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid $ 107,611 $ 885,326
=========== ===========
See accompanying notes to financial statements.
6
HOWTEK, INC.
Notes to Financial Statements
September 30, 1998
(1) Accounting Policies
In the opinion of management all adjustments and accruals (consisting
only of normal recurring adjustments) which are necessary for a fair
presentation of operating results are reflected in the accompanying
financial statements. Reference should be made to Howtek, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997 for a summary of
significant accounting policies. Interim period amounts are not necessarily
indicative of the results of operations for the full fiscal year.
(2) Legal Proceedings
On April 24, 1997, the Company announced that the lawsuit brought by
the Company on June 7, 1994, in the United States District Court, District
of New Hampshire, against TECO Electric and Machinery Co. Ltd., TECO
Information Systems Co., Ltd., Relisys (a TECO subsidiary) and Herman Hsu
had been settled. All existing agreements between the companies have been
terminated. The Company has released the TECO companies, Relisys and Mr.
Hsu from all covenants not to compete and from any claims relating to the
scanner technology involved in the case. TECO, in turn, made a one-time
payment of $6,000,000 to the Company on April 23, 1997, and has released
the Company from any obligation to manufacture scanner products through
TECO. Neither party admitted to any breach of contract or other wrong-doing
in connection with the settlement of this lawsuit.
(3) Loan Payable to Related Party
The Company has a Convertible Revolving Credit Promissory Note ("the
Convertible Note") and Revolving Loan and Security Agreement (the "Loan
Agreement") with Mr. Robert Howard, Chairman of the Company, under which
Mr. Howard has agreed to advance funds, or to provide guarantees of
advances made by third parties in an amount up to $8,000,000. Such
outstanding advances are collateralized by substantially all of the assets
of the Company and bear interest at prime interest rate plus 2%. The
Convertible Note entitles Mr. Howard to convert outstanding advances into
shares of the Company's common stock at any time based on the outstanding
closing market price of the Company's common stock at the time each advance
is made.
As of September 30, 1998, the Company had $8,000,000 available for
future borrowings under the Loan Agreement.
7
HOWTEK, INC.
Notes to Financial Statements
September 30, 1998
(3) Loan Payable to Related Party (continued)
During the first five months of 1998, the Company borrowed, (i)
$400,000 from Mr. Robert Howard, the Company's Chairman, and (ii) $300,000
from Dr. Lawrence Howard, the son of Mr. Robert Howard, pursuant to Secured
Demand Notes and Security Agreements (the "Notes"). Principal on these
Notes were due and payable in full, together with interest accrued and any
penalties provided for, on demand. Under the terms of the Notes the Company
agreed to pay interest at the lower rate of (a) 12% per annum, compounded
monthly or (b) the maximum rate permitted by applicable law.
In May 1998, the Company consummated an agreement with Mr. Robert
Howard and Dr. Lawrence Howard to convert the Notes into an aggregate of
700,000 shares of restricted common stock, par value $.01 per share, of the
Company (the "Common Stock"). The conversions of the Notes were made on the
same per share price as the Company's $1,000,000 private offering of Common
Stock to an unaffiliated individual, which was also consummated in May
1998.
During the third quarter of 1998, the Company borrowed, (i) $200,000
from Mr. Robert Howard, and (ii) $100,000 from Dr. Lawrence Howard,
pursuant to Secured Demand Notes and Security Agreements (the "New Notes").
Principal on these New Notes are due and payable in full, together with
interest accrued and any penalties provided for, on demand. Under the terms
of the New Notes the Company agreed to pay interest at the lower rate of
(a) 12% per annum, compounded monthly or (b) the maximum rate permitted by
applicable law. The New Notes currently bear interest at 12%. Payment of
the New Notes is secured by a security interest in certain assets of the
Company.
4) Unusual Charges
An unusual charge of $2,996,971 was recorded in the second quarter of
1997 consisting of the following: (i) an inventory reserve of $1,750,000
resulting from management's decision in the second quarter of 1997 to
discontinue support of certain products which had reached end of life; (ii)
a bad debt reserve of $750,000 prompted by the bankruptcy filing of a major
European distributor in the second quarter of 1997; (iii) a write-off of
test equipment for non-current products of $224,610; and (iv) a write-off
of software development for non-current products in the amount of $272,361.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
Certain information included in this Item 2. and elsewhere in this Form 10-Q
that are not historical facts contain forward looking statements that involve a
number of known and unknown risks, uncertainties and other factors that could
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievement
expressed or implied by such forward looking statements. These risks and
uncertainties include, but are not limited to, uncertainty of future sales
levels, protection of patents and other proprietary rights, the impact of supply
and manufacturing constraints or difficulties, possible technological
obsolescence of products, competition and other risks detailed in the Company's
Securities and Exchange Commission filings. The words "believe", "expect",
"anticipate" and "seek" and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the statement was
made.
Results of Operations
Recent Developments
In January 1998 the Company commenced a reorganization of its management
and business. The Company developed a three-point plan to improve business and
financial performance. The Company's three point plan is to (1) reduce
breakeven; (2) accelerate the sale of the Company's new MultiRad medical film
scanners; and (3) enhance graphic arts scanner products. Through May 1998, $1.7
million in additional equity was obtained by the Company to support its revised
operating plan.
Since January 1998 the Company has significantly reduced its overhead. In
the second quarter of 1998 the Company showed an increase in its medical film
digitizer business. During the third quarter of 1998 the Company's medical
product sales were $336,000, compared to $155,000 in the same period in 1997.
For the nine months ended September 30, 1998, medical sales were $687,000 in
1998, compared to $384,000 in 1997. The Company expects sales of medical
products to continue to increase during the fourth quarter of 1998.
At the end of the third quarter the Company introduced three new graphic
arts scanner products. The Company believes that these new products will
contribute to sales beginning in the fourth quarter of 1998.
Prior to the introduction of certain new products in September 1998, the
Company's primary graphic arts scanner products utilized photo-multiplier tube
(`PMT"), or "drum scanner" technology to capture and digitize an image. The
technology is characterized by a high degree of accuracy and fidelity in the
acquisition and reproduction of complex images, and is used extensively where
high quality printing (magazine and catalog work, for example) is required.
Historically, the Company competed in the market for drum scanners on the basis
of compact design, comparatively low price, and value.
9
Over the last several quarters, however, competitive scanning products
which use a charge coupled device ("CCD"), or "flatbed" technology, have
increased significantly in image and scanning quality. These devices may be
easier to use than drum scanners and in some cases less expensive, and have
captured a significant portion of the market formerly held by the Company and
other drum scanner manufacturers. The Company's sales of drum scanner products
declined significantly as it competed for business with newer, less expensive
flatbed scanner products which were more suited to many customers' needs.
The Company has now updated and repositioned its drum scanner line and
acquired flatbed scanners for distribution under the Company brand. These
products are sold with the Company's proprietary scanning and color management
software.
In September 1998 the Company introduced the HiResolve(TM) 8000 drum
scanner, the Company's first new drum scanner product in two years, and two new
flatbed, or CCD scanner models to meet specific production and photographic
applications, the HiDemand(TM) 200 and HiDemand(TM) 400.
The HiResolve 8000 is a compact desktop drum scanner that offers `true'
8000 dpi (dots per inch) optical resolution which is sold with the Company's
powerful color management and color separation software, Trident 3.0. HiResolve
scanners permit full resolution scans across the entire imaging area. The
Company believes that the shipment of this new generation of high resolution
desktop scanners will allow it to focus on the special requirements of large
format color printing, as well as addressing today's requirement of five, six
and eight-color printing technologies.
The HiDemand 200 CCD scanner is engineered to provide optimum results in
high volume environments. The Company's new HiDemand 200 model is particularly
suited for scanning a high volume of 35mm to 4"x5" films, at resolutions up to
5600 dpi. Using an innovative vertical optics design and an advanced 8000
element CCD array, the HiDemand 200 is a compact and comparatively inexpensive
professional film scanning solution, which also has the ability to scan
reflective art to letter size, at lower resolutions. The Company markets the
HiDemand 200 on an OEM basis, under agreement with the product's original
manufacturer in Denmark.
The HiDemand 400 model is a premium, yet comparatively affordable large
format flatbed scanner that employs a patented "mirror-free" five-lens optical
system to provide maximum resolution across a range of original sizes. The new
HiDemand 400 is a rugged, floor-standing unit, designed to process up to 200
scans per shift. The HiDemand 400 includes three powerful digital signal
processors and an internal 2 gigabyte hard disk, to speed image capture and
communication to the host computer. The Company acquired the rights to
manufacture and market this product, on an exclusive basis, from a subsidiary of
Microtek, Inc. a large Taiwanese scanner manufacturer.
10
Contributing to the introduction of new scanners, the Company released, in
June 1998, a new software system for control of scanners, automation of color
management and color correction tasks required to use scans in electronic
publishing and four-color separation to prepare images for press. The Company
believes that its new scanner software offers a significant additional benefit
over competitive products, in that it is currently the only professional
scanning software product which operates in the Windows NT, as well as the
Macintosh, computer environment.
The Company believes that these new products provide it with a foundation
for improved performance in the fourth quarter of 1998 and subsequent quarters.
Three and Nine Months Ended September 30, 1998 compared to Three and Nine Months
Ended September 30, 1997
Sales for the three months ended September 30, 1998 were $1,231,519, a
decrease of $1,140,096 or 48% from the comparable period in 1997. Sales for the
nine months ended September 30, 1998 were $3,357,401 a decrease of $2,459,621 or
42% from the comparable period in 1997. The Company attributes the decrease in
sales primarily to increased competition for drum scanners from high-end flatbed
scanners, the maturing of its Scanmaster 2500 product and the economic crisis in
Asia.
Gross margin as a percentage of sales, for the three month period ended
September 30, 1998 increased to 25% from 13% in the second quarter of 1998 and
8% in the first quarter of 1998. The improvement in gross margin is primarily
due to increased sales and better management of indirect production costs.
Engineering and product development costs for the three month period ended
September 30, 1998 decreased 17% from $361,298 in 1997 to $299,442 in 1998.
Engineering and product development costs for the nine month period ended
September 30, 1998 decreased 23% from $1,055,016 in 1997 to $808,807. The
overall decrease in engineering and product development costs results primarily
from planned reductions in manpower and anticipated depreciation expense.
General and administrative expenses in the three month period ended
September 30, 1998 decreased 15% from $372,158 in 1997 to $316,279 in 1998.
General and administrative expenses in the nine month period ended September 30,
1998 decreased 23% from $1,310,019 in 1997 to $1,005,897 in 1998. The decrease
in general and administrative expenses results primarily from the reduction in
personnel, salaries, and legal fees in connection with a lawsuit against a
former contract manufacturer.
Marketing and sales expenses in the three month period ended September 30,
1998 increased 10% from $410,752 in 1997 to $450,496 in 1998. Marketing and
sales expenses in the nine month period ended September 30, 1998 increased
slightly from $1,228,875 to $1,251,652. The increase results primarily from
increases in commissions and costs related to a more aggressive advertising
program.
11
Net interest expense for the three and nine month periods ended September
30, 1998 was $47,169 and $151,178, respectively, compared to $46,642 and
$214,988, respectively, for the comparable period in 1997. The decrease for the
nine month period resulted from the repayment of the notes payable, including
interest, of $4,265,784 on April 25, 1997 to Mr. Robert Howard and Dr. Lawrence
Howard.
In comparing the Company's performance for the nine months ended September
30, 1998 to the nine months ended September 30, 1997, a $6,000,000 legal
settlement granted to the Company in April, 1997, coupled with $2,996,971 in
unusual charges taken during the second quarter of 1997, makes comparison
difficult. After giving effect to extraordinary income and unusual charges,
Howtek earned $516,806, or $0.06 per share for the nine months ended September
30, 1997, on sales of $5,817,022. For the same period in 1998, the Company
recorded a loss of $2,683,655 on sales of $3,357,401.
Liquidity and Capital Resources
At September 30, 1998 the Company had working capital of $3,251,544
compared to working capital of $3,792,324 at December 31, 1997. The ratio of
current assets to current liabilities was 3.2:1 at September 30, 1998.
Accounts receivable decreased by $346,969 during the first nine months of
1998. This decrease is due primarily to the effect of aggressive collections and
reduced sales in the first nine months of 1998.
During the first five months of 1998, the Company borrowed, (i) $400,000
from Mr. Robert Howard, the Company's Chairman, and (ii) $300,000 from Dr.
Lawrence Howard, the son of Mr. Robert Howard, pursuant to Secured Demand Notes
and Security Agreements (The "Notes"). Principal on these Notes were due and
payable in full, together with interest accrued and any penalties provided for,
on demand. Under the terms of the Notes the Company agreed to pay interest at
the lower rate of (a) 12% per annum, compounded monthly or (b) the maximum rate
permitted by applicable law. In May 1998, the Company consummated an agreement
with Mr. Robert Howard and Dr. Lawrence Howard to convert the Notes into shares
of restricted common stock, par value $.01 per share, of the Company (the
"Common Stock").
In May 1998, the Company consummated a private offering of 1,000,000 shares
of Common Stock, to an unaffiliated individual, for gross proceeds of
$1,000,000.
During the third quarter of 1998, the Company borrowed, (i) $200,000 from
Mr. Robert Howard and (ii) $100,000 from Dr. Lawrence Howard, pursuant to
Secured Demand Notes and Security Agreements (The "New Notes"). Principal on
these New Notes are due and payable in full, together with interest accrued and
any penalties provided for, on demand. Under the terms of the New Notes the
Company agreed to pay interest at the lower rate of (a) 12% per annum,
compounded monthly or (b) the maximum rate permitted by applicable law. The New
Notes currently bear interest at 12%. Payment of the New Notes is secured by a
security interest in certain assets of the Company.
12
The Company believes it can adequately fund its working capital and capital
equipment requirements based upon its anticipated level of sales for 1998 and
the line of credit available under the Revolving Loan Agreement with its
Chairman, of which $8,000,000 was available as of September 30, 1998.
Impact of the Year 2000
Many currently installed computer systems and software programs were
designed to use only a two-digit date field. These date code fields will need to
accept four digit entries to distinguish 21st century dates from 20th century
dates. Until the date fields are updated, the systems and programs could fail or
give erroneous results when referencing dates following December 31, 1999. Such
failure or errors could occur prior to the actual change in century. The Company
relies on computer applications to manage and monitor its accounting and
administrative functions. Failure of the Company's software could have a
material, adverse impact on the its business, financial condition and results of
operations and on its ability to achieve sufficient cash flow to service its
indebtedness. The Company is currently assessing alternative manufacturing and
financial control systems. The Company has not yet determined the exposure
related to non-compliance by its suppliers. The Company's products are not date
aware and do not present a year 2000 problem to its customers. Although the
Company does not expect any significant costs or disruption in operations from
its customers' or suppliers' inability to achieve year 2000 compliance, it
cannot predict the effect such noncompliance will have on the Company's business
operations.
13
PART II OTHER INFORMATION
Item 5. Other Information
Effective February 23, 1998, the Nasdaq Stock Market adopted New Listing
and Continued Listing requirements for companies listed on the Nasdaq National
Market and Nasdaq SmallCap Market. As a result of these new requirements the
Company applied for modification in its Nasdaq listing, to the Nasdaq SmallCap
Market. On July 16, 1998 the Company transferred from the Nasdaq National Market
System to the Nasdaq SmallCap Market.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Secured Demand Note and Security Agreement between the Company and Mr.
Robert Howard dated August 28, 1998
10.2 Secured Demand Note and Security Agreement between the Company and
Lawrence A. Howard dated September 8, 1998.
10.3 Secured Demand Note and Security Agreement between the Company and Mr.
Robert Howard dated September 14, 1998.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
14
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Howtek, Inc.
-----------------------------------
(Company)
Date: November 13, 1998 By: /s/ W. Scott Parr
------------------------- -----------------------------------
W. Scott Parr
President, Chief Executive Officer,
Director
Date: November 13, 1998 By: /s/ Robert J. Lungo
------------------------- -----------------------------------
Robert J. Lungo
Vice President Finance,
Chief Financial Officer
15