SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
/X/ Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/ / Definitive Information Statement
PERMA-TUNE ELECTRONICS, INC.
----------------------------
(Name of Registrant As Specified In Its Charter)
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/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
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calculated and state how it was determined):
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/ / Check box if any part of the fee is offset as provided by Exchange Act
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PERMA-TUNE ELECTRONICS, INC.
200 Trade Zone Drive
Ronkonkoma, New York 11779
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on November 21, 2003
To the stockholders of Perma-Tune Electronics, Inc.:
Notice is hereby given that an annual meeting of stockholders of Perma-Tune
Electronics, Inc. (the "Company") will be held on November 21, 2003 at 10:00
a.m. at 200 Trade Zone Drive, Ronkonkoma, New York 11779 for the following
purposes:
1. Election of up to two Directors. The election of Peter Mergenthaler and
Paul Cervino.
2. Approval of plan of merger and name change. The Board of Directors
recommends approval of a Plan of Merger (the "Plan") whereby the Company
will change its domicile from Texas to Nevada by merging into Trans Max
Technologies, Inc. ("Trans Max"), a Nevada corporation and wholly-owned,
direct subsidiary of the Company. As a result of the transactions
contemplated by the Plan, shareholders of the common stock of the Company
will automatically receive two (2) shares of newly issued common stock of
Trans Max in place of one (1) share of common stock of the Company. As a
result of the Plan of Merger, the Company will also change its name to
Trans Max Technologies, Inc. Immediately following the effective date of
the Plan of Merger, the Company's shareholders will own the identical
percentage of the issued and outstanding shares of Trans Max as it owned in
the Company.
3. Ratification of the Appointment of Ham, Langston & Brezina, LLP of Houston,
Texas as the corporation's independent auditors for fiscal year 2003.
4. To transact such other business as may properly come before the annual
meeting.
Common stockholders of record on the close of business on October 14, 2003 are
entitled to notice of the meeting. All stockholders are cordially invited to
attend the meeting in person.
By Order of the Board of Directors,
/s/ Peter Mergenthaler
------------------------
Peter Mergenthaler
Chief Executive Officer and Director
October __, 2003
PERMA-TUNE ELECTRONICS, INC.
200 Trade Zone Drive
Ronkonkoma, New York 11779
INFORMATION STATEMENT
October __, 2003
This Information Statement is furnished by the Board of Directors of
Perma-Tune Electronics, Inc. (the "Company" or "Perma-Tune") to provide notice
of an annual meeting of stockholders of Perma-Tune which will be held on
November 21, 2003.
The record date for determining stockholders entitled to receive this
Information Statement has been established as the close of business on October
14, 2003 (the "Record Date"). This Information Statement will be first mailed
on or about October __, 2003 to stockholders of record at the close of business
on the Record Date. As of the Record Date, there were outstanding 17,667,705
shares of the Company's Common Stock. The holders of all outstanding shares of
Common Stock are entitled to one vote per share of Common Stock registered in
their names on the books of the Company at the close of business on the Record
Date.
The presence at the annual meeting of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the annual meeting is
necessary to constitute a quorum. The Board of Directors is not aware of any
matters that are expected to come before the annual meeting other than those
referred to in this Information Statement.
Directors are required to be elected by a plurality of the votes cast at the
annual meeting. Each of the other matters scheduled to come before the annual
meeting requires the approval of a majority of the votes cast at the annual
meeting. Messrs. Colonel Robert Fyn, Murray H. Stark, Garth S. Bailey and Peter
Mergenthaler (the "Majority Shareholders") own an aggregate 15,177,300 shares,
or 85.9% of our Common Stock, and will be able to approve the matters presented
in this Information Statement. The Company is not soliciting your vote as the
Majority Shareholders already have the vote in hand.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
PROPOSAL 1
THE ELECTION OF UP TO 2 DIRECTORS
Two directors are to be elected to serve until the next annual meeting of
the shareholders and until their successors are elected and shall have
qualified. The Board of Directors has nominated Peter Mergenthaler and Paul
Cervino to serve as directors (the "Nominees," or individually the "Nominee").
Mr. Mergenthaler is currently serving as Director and the Chief Executive
Officer ("CEO") of the Company. Mr. Cervino is currently serving as the Chief
Financial Officer ("CFO") of the Company. The Board of Directors has no reason
to believe that any Nominee will be unable to serve or decline to serve as a
director. Any vacancy occurring between shareholders' meetings, including
vacancies resulting from an increase in the number of directors may be filled by
the Board of Directors. A director elected to fill a vacancy shall hold office
until the next annual shareholders' meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE TO THE BOARD OF DIRECTORS.
The following biographical information is furnished with respect to each of
the Nominees. The information includes the individual's present position with
the Company, period served as a director, and other business experience during
the past five years.
DIRECTORS
Peter Mergenthaler, age 63, has served as Chief Executive Officer,
Secretary and Director of the Company since July 21, 2003. Prior to serving the
Company, Mr. Mergenthaler served as a consultant for HMS Financial, a private
financing company. Mr. Mergenthaler has served as a consultant to various
companies throughout his career. Mr. Mergenthaler served as a partner and
general principal of Gallant Securities, Inc. for approximately seven years. Mr.
Mergenthaler filed a petition in bankruptcy under Chapter 13 of the Bankruptcy
Code on separate occasions, April 26, 1999, March 8, 2000 and June 19, 2002
(collectively referred to as the "Petitions"). The Petitions were subsequently
dismissed on May 27, 1999, March 28, 2000, and November 15, 2002, respectively.
The Pennsylvania Securities Commission issued an Order to Cease and Desist
against Mr. Mergenthaler, to halt the offer and sale of unregistered securities
in Pennsylvania.
Paul M. Cervino, age 49, has served as Chief Financial Officer and Director
of the Company since August 1, 2003. From January 1996 to July 2003, Mr. Cervino
was employed by Allied Devices Corporation where he served in the Various
capacities of President, Chief Operating Officer and Chief Financial Officer.
Prior to 1996, he was employed by Sotheby's Holdings, Inc., an international art
auction house. From 1992 to 1995, he was a member of the European Board of
Directors and Chief Financial Officer of Sotheby's Europe and Asia, operating in
London. From 1985 to 1992, he was a Director and Chief Financial and
Administrative Officer of Sotheby's North America. From 1976 to 1985, he worked
for Sotheby's in various other financial capacities. Mr. Cervino received a B.S.
in Accounting from St. John's University and an M.B.A. in Finance from Pace
University.
All directors of the Company will hold office until the next annual meeting
of the shareholders, and until their successors have been elected and qualified.
Officers of the Company are elected by the Board of Directors and hold office at
the pleasure of the Board.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than 10%
of a class of the Company's equity securities which are registered under the
Exchange Act to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes of ownership of such registered
securities. Such executive officers, directors and greater than 10% beneficial
owners are required by Commission regulation to furnish the Company with copies
of all Section 16(a) forms filed by such reporting persons.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and on representations that no other
reports were required, no person required to file such a report failed to
file on a timely basis during fiscal 2002. Based on stockholder filings with the
SEC, Colonel Robert E. Fyn, Marray H. Stark, and Garth S. Bailey along with
Messrs. Mergenthaler and Cervino are subject to Section 16(a) filing
requirements.
ATTENDANCE OF THE BOARD OF DIRECTORS
During the year ended December 31, 2002, the Board of Directors did not
hold a meeting in person. All of the Directors of the Board of Directors
executed three (3) Consent to Action Without Meeting of Board of Directors. We
have no standing audit, nominating, compensation committee, or any other
committees of the Board of Directors and therefore there were no committee
meetings.
EXECUTIVE COMPENSATION
Compensation paid to Officers and Directors is set forth in the Summary
Compensation Table below. The Company may reimburse its Officers and Directors
for any and all out-of-pocket expenses incurred relating to the business of the
Company.
SUMMARY COMPENSATION TABLE
Name and Position Fiscal Year Salary (1)
- ------------------------ --------------- -----------
Peter Mergenthaler, 2003 $ 42,000
Chief Executive Officer and
Director
Paul M. Cervino, 2003 $ 52,083
Chief Financial Officer
Lonnie Lenarduzzi, former President, 2003 $ 45,000
Chief Executive Officer and 2002 $ 45,500
Director 2001 $ 45,800
2000 $ 51,048
<FN>
(1) The Company anticipates that the amount listed for fiscal year 2003 for each officer and
director or former officer and director will be their compensation for the fiscal year ending
December 31, 2003.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The following table sets forth information as of October 14, 2003, with
respect to the beneficial ownership of the common stock by (i) each director and
officer of the Company, (ii) all directors and officers as a group and (iii)
each person known by the Company to own beneficially 5% or more of the common
stock:
Name and Address of Shares Owned % of Class
Beneficial Owner Beneficially(1) Owned
- ------------------- --------------- -----------
Robert E. Fyn 5,312,055 30.0%
115 6th Street NW
Lynden, Alberta, Canada
T0M 1J0
Murray H. Stark 5,312,055 30.0%
115 6th Street NW
Lynden, Alberta, Canada
T0M 1J0
Garth S. Bailey 2,276,595 12.9%
23960 Madison Street
Torrance, California 90505
Peter Mergenthaler 2,276,595 12.9%
200 Trade Zone Drive
Ronkonkoma, New York 11779
Paul M. Cervino 20,834 *
200 Trade Zone Drive
Ronkonkoma, New York 11779
Lonnie Lenarduzzi 1,597,848(2) 9.0%
3 Grace Court
Center Moriches, New York 11934
Linda Decker 1,597,848(2) 9.0%
3 Grace Court
Center Moriches, New York 11934
All Officers and Directors
as a Group (currently 2 person) 2,297,429 13.0%
------------
*Less than 1%
<FN>
(1) The number of shares of common stock owned are those "beneficially owned" as determined under the rules of the
Securities and Exchange Commission, including any shares of common stock as to which a person has sole or shared voting or
investment power and any shares of common stock which the person has the right to acquire within 60 days through the exercise of
any option, warrant or right. As of October 14, 2003, there were 17,667,705 shares of common stock outstanding. As of such date
there were 137,100 outstanding warrants to purchase shares of common stock, exercisable until December 31, 2003 at $2.00 per
share.
(2) Lonnie Lenarduzzi and Linda Decker hold 1,566,600 of these shares as tenants in common. They are husband and wife and
are both former Directors of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Lonnie Lenarduzzi entered into a Licensing Agreement to license to the
Company all technology developed by him for $1,000 per year. The Licensing
Agreement was entered into on November 30, 1996 and has a term of 25 years,
extending to November 30, 2021.
PROPOSAL 2
APPROVAL OF PLAN OF MERGER
The Board of Directors recommends approval of the Plan of Merger between
the Company and Trans Max Technologies, Inc., a Nevada corporation ("Trans
Max"), (hereinafter the "Plan ), whereby the Company will change its domicile
from Texas to Nevada by merging into Trans Max; thus, redomiciling from Texas to
Nevada. The Plan qualifies under Article 5.04 of the Texas Business Corporation
Act and Section 92A.110 of the Nevada Revised Statutes and constitutes a
so-called "Type A" reorganization within the meaning of section 368(a)(1)(A) of
the Internal Revenue Code.
As a result of the transactions contemplated by the Plan, the Company will
in effect undergo a 2:1 forward stock split whereby the shareholders of the
common stock of the Company will automatically receive two (2) shares of newly
issued common stock of Trans Max in place of one (1) share of common stock of
the Company. In addition, the Company will change its name to Trans Max
Technologies, Inc. and increase its authorized shares. Trans Max is authorized
to issue shares of its preferred stock, as discussed below, whereas the Company
is not authorized to issue shares of preferred stock. Immediately following the
effective date of the Plan, the Company's shareholders will own the identical
percentage of the issued and outstanding shares of Trans Max as they owned in
the Company and the Company will cease to exist. Despite certain differences in
the corporate legal system in Texas and Nevada, your rights as a shareholder in
Trans Max will be substantially the same as your rights as holders in the
Company.
QUESTIONS AND ANSWERS ABOUT THE PLAN OF MERGER
WHAT ARE THE MAJORITY SHAREHOLDERS BEING ASKED TO VOTE ON?
The Majority Shareholders are being asked to vote in favor of a Plan of
Merger by which the Company will merge into Trans Max Technologies, Inc. ("Trans
Max"), a Nevada corporation.. You will automatically receive twice the number of
shares of Trans Max common stock in place of your shares of the Company's common
stock.
WHAT ARE THE BENEFITS TO THE COMPANY OF COMPLETING THE MERGER AND RELATED
TRANSACTIONS?
We believe that the Plan of Merger and related transactions (both of which
are hereinafter collectively referred to as the "Plan of Merger" or the "Plan")
will enable us to realize a variety of potential business, financial and
strategic benefits, including, but not limited to, some or all of the following:
- - more effective management and control of operations;
- - reduction of our effective state and local income tax rate; and
- - enhanced flexibility in the event the Board of Directors determines that
it is necessary or appropriate to raise additional capital through the
sale of securities, to acquire other companies or their businesses or
assets or to establish strategic relationships with corporate
partners.
WILL THE PLAN OF MERGER AND RELATED TRANSACTIONS DILUTE MY OWNERSHIP INTEREST?
No. The Plan of Merger will not dilute your ownership interest in common
stock. Immediately after the Plan of Merger is completed, you will own the same
percentage of Trans Max common stock as you own of Company common stock
immediately prior to the completion of the Plan.
Trans Max, however, is authorized to issue shares of its preferred stock,
as discussed in more detail below, that may be issued with voting power or other
special rights which take preference over similar rights of the shares of common
stock held by you. At this time, we cannot predict with reasonable certainty
whether any shares of preferred stock of Trans Max will be issued or, if issued,
what the rights with respect thereto may be.
WILL THE COMPANY'S SHAREHOLDERS BE TAXED AS A RESULT OF THE PLAN OF MERGER?
For U.S. federal income tax purposes, shareholders who are U.S. persons
will not recognize gain or loss as a result of the merger between the Company
and Trans Max. Furthermore, the Company will not incur U.S. federal income tax
as a result of the Plan of Merger. We are not requesting any ruling from the
Internal Revenue Service regarding the U.S. federal income tax consequences to
you or the Company as a result of the Plan of Merger.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING YOUR PARTICULAR TAX
CONSEQUENCES.
WHEN DO YOU EXPECT TO COMPLETE THE MERGER?
We hope to complete the Plan of Merger shortly after the annual meeting of
the Company's shareholders, assuming that it is approved by the shareholders at
that meeting.
WILL THE PROPOSAL AFFECT CURRENT OPERATIONS? WHAT ABOUT THE FUTURE?
The Plan of Merger should have no material impact on how we conduct
day-to-day operations. The location of future operations will depend, as it
does now, on the needs of the business, independent of our legal domicile.
WHAT VOTE IS REQUIRED TO APPROVE THE PLAN OF MERGER?
In order to have a quorum, the holders of record of the shares entitled to
cast a majority of the Company votes must be represented in person or by proxy
at the annual meeting. The affirmative vote of at least a majority of the votes
cast by holders of shares present in person or represented by proxy at the
annual meeting and entitled to vote as of the record date on the Plan of Merger
is required to approve the Plan.
The Majority Shareholders own an aggregate of 15,177,300 shares, or 85.9%
of our Common Stock, and will be able to approve the Plan of Merger. The
Company is not soliciting your vote as the Majority Shareholders already have
the vote in hand.
RELATED TRANSACTIONS
CHANGE OF NAME TO TRANS MAX TECHNOLOGIES, INC. AND CONTINUATION OF BUSINESS
As a result of the Plan of Merger, the Company will change its name to
Trans Max Technologies, Inc. with respect to all of its property and
obligations. Immediately after the Plan of Merger becomes effective, Trans Max
will be subject to all rights, title, and interest to all property owned by the
Company subject to any existing liens or other encumbrances on the property.
Trans Max will also be subject to all debts and obligations of the Company as
the primary obligor, and only Trans Max will be liable for the debt or
obligation. The Company will cease to exist. The Articles of Incorporation and
the Bylaws of Trans Max will continue in full force until further altered,
amended, or repealed as provided by law or in the Bylaws, respectively. Trans
Max will continue to conduct business with the assets of both parties to the
Plan of Merger as these corporations conducted business immediately prior to the
merger.
CAPITALIZATION
The Company has an authorized capitalization of 50,000,000 shares,
consisting on October 14, 2003, of 50,000,000 shares of common stock, no par
value per share, of which 17,667,705 shares are validly issued, outstanding, and
fully paid, and no shares of preferred stock.
Trans Max has an authorized capitalization of 55,000,000 shares, consisting
on October 14, 2003, of 55,000,000 shares of common stock, $.001 par value per
share, of which one (1) share is validly issued, outstanding, and fully paid,
and 5,000,000 shares of preferred stock, $.001 par value per share, of which no
shares have been issued.
After the effective date of the Plan, Trans Max will have a total of
55,000,000 shares of authorized stock, which are divided into 50,000,000 shares
of common stock, $.001 par value per share and 5,000,000 shares of preferred
stock, $.001 par value per share. After the effective date, the Company will
have 35,335,410 shares of common stock issued and outstanding, which amount
takes into account cancellation of one (1) share of common stock of Trans Max
owned by the Company, and no shares of preferred stock.
INCREASE IN AUTHORIZED SHARES
As a Result of the Plan of Merger, the Board of Directors will adopt
Articles of Amendment to the Articles of Incorporation of Trans Max increasing
the number of authorized shares from 55,000,000 to 110,000,000 shares,
consisting of 100,000,000 shares of common stock, $.001 par value per share, and
10,000,000 shares of preferred stock, $.001 par value per share. The principal
purpose for the additional shares of common and preferred stock is to enhance
flexibility in the event the Board of Directors determines that it is necessary
or appropriate to raise additional capital through the sale of securities, to
acquire other companies or their businesses or assets or to establish strategic
relationships with corporate partners.
The increase in authorized common stock will not have any immediate effect
on the rights of existing stockholders. The Board of Directors has no present
agreement or arrangement to issue any of the shares of common stock for which
approval is sought. If the Plan of Merger is approved, however, the Board will
have the authority to issue the newly authorized common stock without requiring
future stockholder approval of such issuances, except as may be required by
applicable law. As such, the Board of Directors does not intend to solicit
further stockholder approval prior to the issuance of any additional shares of
common stock or securities convertible into common stock, except as may be
required by applicable law.
The increase in authorized preferred stock may have an immediate effect on
the rights of existing stockholders. The Board of Directors anticipates that it
will authorize the issuance of shares of preferred stock of Trans Max in a
specific class or series. The Board of Directors of the Company may issue
shares of preferred stock of Trans Max from time to time in one or more series,
each of which shall have such distinctive designation or title as shall be
determined by resolution of the Board of Directors prior to the issuance of any
shares thereof. The preferred stock may have such voting powers, full or
limited, or no voting powers, and such preferences and relative, participating,
optional or other special rights and such qualifications, limitations or
restrictions thereof, as shall be stated in such resolution or resolutions
providing for the issue of such class or series of preferred stock as may be
adopted from time to time by the Board of Directors prior to the issuance of any
shares thereof. The shares of preferred stock may have voting power or other
special rights, including the right to receive dividends, which take preference
over similar rights of the shares of common stock held by the existing
stockholders. Although the Board of Directors anticipates that it may issue
shares of preferred stock of Trans Max in connection with the Plan of Merger, it
cannot estimate with reasonable certainty the number of shares, if any, that may
be issued or the rights with respect thereto.
CURRENT BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY
The current Board of Directors of the Company will serve as the Board of
Directors of Trans Max until the next annual meeting or until their successors
have been elected and qualified. The present executive and administrative
officers of the Company will become the officers of Trans Max until the Board of
Directors of Trans Max determines otherwise.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
The affirmative vote of a majority of all outstanding shares of common
stock of the Company is required for approval of this proposal. The Majority
Shareholders own an aggregate 15,177,300 shares, or 85.9% of our Common Stock,
and will be able to approve this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
THE PLAN OF MERGER.
PROPOSAL 3
RATIFICATION OF THE APPOINTMENT OF HAM, LANGSTON & BREZINA, LLP
AS THE COMPANY'S INDEPENDENT AUDITORS
The Board of Directors has selected Ham, Langston & Brezina, LLP of
Houston, Texas ("Ham, Langston & Brezina"), as independent auditors for the
Company for fiscal year 2003 and recommends that the shareholders vote for
ratification of such appointment. Ham, Langston & Brezina has served as the
Company's independent auditors since May 6, 2003.
The Company does not anticipate a representative from Ham, Langston &
Brezina to be present at the annual shareholders meeting. In the event that a
representative of Ham, Langston & Brezina is present at the annual meeting, the
representative will have the opportunity to make a statement if he/she desires
to do so and the Company will allow such representative to be available to
respond to appropriate questions.
For the fiscal year ended December 31, 2002 and 2001, the firm of Malone &
Bailey, PPLC ("Malone & Bailey") served as the Company's auditors. Effective
May 6, 2003, the Board of Directors of the Company approved a change of
accountants. On May 6, 2003, management of the Company dismissed Malone &
Bailey and engaged Ham, Langston & Brezina as its independent public accountants
to review its financial statements for the fiscal year ended December 31, 2003.
At no time had the Company previously consulted Ham, Langston & Brezina
regarding any accounting matters. This change is being made to contain the
Company's costs associated with accounting services and in an effort to get more
responsive service.
During the period of engagement of Malone & Bailey, there were no
disagreements between the Company and Malone & Bailey on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements (if not resolved to the satisfaction of
Malone & Bailey) would have caused Malone & Bailey to make reference in
connection with their report to the subject matter of the disagreements. The
accountants' report on the financial statements of the Company for the fiscal
years ended December 31, 2001, and 2002 did not contain any adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty or
audit scope or accounting principles, except to express doubt as to the
Company's ability to continue as a going concern.
The Company requested Malone & Bailey to furnish the Company with a letter
addressed to the Securities and Exchange Commission stating whether Malone &
Bailey agrees with the above statements, which letter was attached to the
filing filed on Form 8-K on May 8, 2003.
AUDIT FEES
The aggregate fees billed by Ham, Langston & Brezina, LLP for professional
services rendered for the review of the Company's financial statements for the
first, second and third quarters of 2003, of which the Company included the
first quarter financial statements in its Quarterly Financial Report on Form
10-QSB for March 31, 2003, were $6,000. The aggregate fees billed by Malone &
Bailey for audit services for fiscal years ended December 31, 2002 and 2001,
were $20,400. The aggregate fees billed by Malone & Bailey for professional
services related to reviews of Form 10QSBs for the fiscal year ended December
2002 were $6,600.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Ham, Langston & Brezina and Malone & Bailey did not render any professional
services to the Company for financial information systems design and
implementation, as described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation
S-X, during the year ended December 31, 2002. Neither Ham, Langston & Brezina
nor Malone Bailey has rendered any such services as of the June 30, 2003.
ALL OTHER FEES
There were no fees billed by Ham, Langston & Brezina, LLP or Malone &
Bailey, PLLC other than those fees discussed in Audit Fees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF HAM, LANGSTON & BREZINA, LLP AS INDEPENDENT ACCOUNTANTS OF
THE COMPANY.
OTHER MATTERS
The Board of Directors does not intend to bring any other matters before
the Annual Meeting and has not been informed that any other matters are to be
presented by others.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter Mergenthaler
------------------------
Peter Mergenthaler, Chief Executive Officer
and Director
October __, 2003