-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WtCUrgMqL9zoQHhcWgTL3ZmIlvRVYB8mDA1yLJ6uGFUbtlR8t5q1r0YzPdV1Nyfb RKRT4cgggt9Scr4EYzHIbQ== 0000926274-06-000119.txt : 20060330 0000926274-06-000119.hdr.sgml : 20060330 20060329180142 ACCESSION NUMBER: 0000926274-06-000119 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060330 DATE AS OF CHANGE: 20060329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIDGEFIELD ACQUISITION CORP CENTRAL INDEX KEY: 0000812152 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 840922701 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16335 FILM NUMBER: 06720007 BUSINESS ADDRESS: STREET 1: 900 THIRD AVE STREET 2: SUITE 201 CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 3033680401 MAIL ADDRESS: STREET 1: 900 THIRD AVE STREET 2: SUITE 201 CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: BIO MEDICAL AUTOMATION INC DATE OF NAME CHANGE: 19990323 FORMER COMPANY: FORMER CONFORMED NAME: OZO DIVERSIFIED AUTOMATION INC /CO/ DATE OF NAME CHANGE: 19920703 10KSB 1 rac-05ksb.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-KSB (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2005 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number 0-16335 RIDGEFIELD ACQUISITION CORP. --------------------------------------------------------- (Name of Small Business Issuer in its Charter) Colorado 84-0922701 ----------------------- ------------------ (State or other juris- (IRS Employer diction of incorpora- Identification No.) tion or organization) 100 Mill Plain Road, Danbury, Connecticut 06877 ------------------------------------------- ----------- (Address of Principal Executive Offices) (Zip Code) Issuer's telephone number: (203) 791-3871 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: None Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ] Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] The issuer's revenues for fiscal year ended December 31, 2005 were: $8,094. As of March 16, 2006, the aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the average bid and ask prices of such stock on that date was $619,562. Shares of common stock held by each officer and director and by each person who owns 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily conclusive and does not constitute an admission of affiliate status. As of March 22, 2006, there were issued and outstanding 1,140,773 shares of the registrant's common stock, par value $.00001 per share. Transitional Small Business Disclosure Format (check one) Yes [ ] No [X] 2 RIDGEFIELD ACQUISITION CORP. FORM 10-KSB Table of Contents Page PART I 4 ITEM 1. DESCRIPTION OF BUSINESS. 4 Employees. 6 Risk Factors Affecting Operating Results and Market Price of Stock. 7 ITEM 2. DESCRIPTION OF PROPERTY. 13 ITEM 3. LEGAL PROCEEDINGS. 13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 13 PART II 14 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. 14 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. 16 ITEM 7. FINANCIAL STATEMENTS. 21 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. 21 ITEM 8A. CONTROLS AND PROCEDURES. 21 ITEM 8B. OTHER INFORMATION. 21 PART III 22 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. 22 ITEM 10. EXECUTIVE COMPENSATION. 24 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. 27 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 28 ITEM 13. EXHIBITS. 28 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. 30 SIGNATURES. 31 3 PART I ITEM 1. DESCRIPTION OF BUSINESS. Ridgefield Acquisition Corp. ("RAC" or the "Company") was incorporated as a Colorado corporation on October 13, 1983. On March 9, 1999, the Company completed the sale of substantially all of its assets to JOT Automation, Inc. (the "JOT Transaction"). As a result of the JOT Transaction, the Company's historical business, the depaneling and routing business, is considered to be a "discontinued operation" and, consequently, provides no benefit to persons seeking to understand the Company's financial condition or results of operations. Following the JOT Transaction the Company devoted its efforts to the development of a prototype micro-robotic device (the "micro-robotic device") to manipulate organic tissues on an extremely small scale. Due to the inability to complete the micro-robotic device, the Company determined that it would cease the development of the micro-robotic device and, as of June 30, 2000, the capitalized costs related to the patent underlying the micro-robotic device have been written off by the Company. The Company has never derived any revenues from the micro-robotic device. Since July 2000, the Company has suspended all operations, except for necessary administrative matters relating to the timely filing of periodic reports as required by the Securities Exchange Act of 1934. Accordingly, during the years ended December 31, 2005 and 2004 and the period from January 1, 2000 through December 31, 2005, the Company has earned no revenues other than interest income and investment income. Acquisition Strategy - -------------------- The Company is primarily engaged in seeking to arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company has not identified a viable operating entity and there can be no assurance that the Company will ever successfully complete a merger, acquisition, business combination or other arrangement. The Company anticipates that the selection of a business opportunity will be a complex process and will involve a number of risks, because potentially available business opportunities may occur in many different industries and may be in various stages of development. Due in part to depressed economic conditions in a number of geographic areas, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking either the limited additional capital which the Company will have or the benefits of a publicly traded corporation, or both. The perceived benefits of a publicly traded corporation may include facilitating or improving the terms upon which additional equity financing may be sought, providing liquidity for principal shareholders, creating a means for providing incentive stock options or similar benefits to key employees, and providing liquidity for all shareholders and other factors. In some cases, management of the Company will have the authority to effect acquisitions without submitting the proposal to the shareholders for their consideration. In some instances, however, the proposed participation in a business opportunity may be submitted to the shareholders for their consideration, either voluntarily by the Board of Directors to seek the shareholders' advice and consent, or because of a requirement of state law to do so. 4 In seeking to arrange a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity, management's objective will be to obtain long-term capital appreciation for the Company's shareholders. There can be no assurance that the Company will be able to complete any merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity. The Company's U.S. Patent - -------------------------- Following the sale of substantially all of the Company's assets in 1999, the Company devoted its efforts to the development of a prototype micro-robotic device (the "micro-robotic device") to manipulate organic tissues on an extremely small scale for microdissection. The Company filed a patent application on December 2, 1998, to protect certain features of the system and method of the micro-robotic device. However, due to the inability of the Company to complete the micro-robotic device, the Company determined that it would cease development of the micro-robotic device and, as of June 30, 2000, the capitalized costs related to the patent underlying the micro-robotic device have been written off by the Company. On March 19, 2002, the Company was awarded United States Patent No. US 6,358,749 B1 for the "Automated System for Chromosome Microdissection and Method of Using Same" (the "Patent"). The Patent may be reviewed at the United States Patent and Trademark Office's website at www.uspto.gov. The Patent will remain in effect until December 2, 2018, which is twenty (20) years after the initial filing date for the Patent, provided all appropriate maintenance fees are paid. The Patent covers an automated system and method for microdissection of samples such as chromosomes or other biological material, and in particular, it relates to a robotic assisted microdissection system and method that significantly reduces the time and skill needed for cellular and sub-cellular dissections. Microdissection is defined as dissection under the microscope; specifically: dissection of cells and tissues by means of fine needles that are precisely manipulated by levers. The system and method covered by the Patent attempts to provide reliability and ease of operation thereby making microdissection widely available to laboratories. While the Company has never derived any revenues from the micro-robotic device, the Company plans to attempt to license or sell the technology covered by the Patent. There can be no assurances that the Company will be able to successfully market the technology covered by the Patent or that the Company will ever derive any revenues from the Patent or the technology covered by the Patent. 5 During the first quarter of 2003, the Board of Directors of the Company authorized the formation of a wholly owned subsidiary of the Company for the purposes of owning, developing and exploiting the Patent. On March 3, 2003, the Company filed Articles of Incorporation with the Secretary of State of the State of Nevada to form Bio-Medical Automation, Inc., a Nevada corporation wholly owned by the Company (the "Subsidiary"). The Articles of Incorporation of Bio-Medical Automation, Inc. a Nevada corporation are attached hereto as Exhibit 3.6 and is incorporated herein by reference. The Board of Directors of the Company authorized management of the Company to transfer and assign the Patent to the Subsidiary in exchange for 5,000,000 shares of the common stock of the Subsidiary. The transfer of the Patent to the Subsidiary became effective in the quarter ended June 30, 2003. The Company plans to develop and exploit the Patent through the Subsidiary. There can be no assurances that the Subsidiary will successfully develop and/or exploit the technology covered by the Patent. Investment Strategy - ------------------- On August 25, 2003, the Board of Directors of the Company authorized the Company to invest a portion of the Company's cash in marketable securities in an effort to realize a greater rate of return than the Company is currently earning in light of historically low interest rates. The Board directed that management maintain at least $40,000 of the Company's cash in a federally insured bank or money market account. In furtherance of the Company's investment strategy the Company opened a brokerage account with Catalyst Financial LLC ("Catalyst"), a broker-dealer registered with the U.S. Securities and Exchange Commission and a member in good standing with the National Association of Securities Dealers, Inc. Catalyst is owned and controlled by Steven N. Bronson, the Company's President. Catalyst has agreed to charge the Company commissions of no more that $.02 per share with a minimum of $75 per trade on securities transactions. The Board approved the commission structure to be charged by Catalyst. Mr. Bronson abstained from voting on all Board resolutions concerning the Company's investment strategy and the Company's arrangements with Catalyst. The Company has investments in a brokerage account with Catalyst. As of December 31, 2005, the Company owned securities valued at $64,500. Such securities had an accumulated other comprehensive gain totaling $4,928 at December 31, 2005 and a realized gain on sale of investments of $3,751 during 2005. The Company's investment in securities is subject to all of the risks associated with equity investing, including a loss of monies invested. There can be no assurance that the Company will be able to obtain a profitable return on its investments. Employees - --------- As of March 22, 2006, the Company had 1 employee, Steven N. Bronson, who serves as the Company's President. The Company does not have any employees that are represented by a union or other collective bargaining group. 6 Risk Factors Affecting Operating Results and Market Price of Stock - ------------------------------------------------------------------ Potential investors should carefully consider the risks described below before making an investment decision concerning the common stock of the Company. The risks and uncertainties described below are not the only ones we face. If any of the following risks actually occur, our business, financial condition or results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline, and investors may lose all or part of their investment. The Company Has Limited Resources - --------------------------------- The Company has limited resources and has had no revenues from operations for the fiscal years ended December 31, 2005 and December 31, 2004. On March 9, 1999, the Company sold substantially all of its assets and essentially ceased all operations. Currently, the primary source of revenue for the Company is interest income. The Company will only earn revenues through the acquisition of or merger(an "Acquisition") with a target company (a "Target") or through the Subsidiary's successful exploitation of the Patent. There can be no assurance that any Target, at the time of the Company's consummation of an Acquisition of the Target, or at any time thereafter, will derive any material revenues from its operations or operate on a profitable basis, or that the Subsidiary will derive any revenues from the Patent. The current revenues of the Company may not be sufficient to fund further Acquisitions or the successful development and exploitation of the Patent. Based on the Company's limited resources, the Company may not be able to effectuate its business plan and consummate an Acquisition or exploit the Patent. There can be no assurance that determinations ultimately made by the Company will permit the Company to achieve its business objectives. The Company Will Need Additional Financing in Order to Execute Its Business Plan - -------------------------------------------------------------------------------- The Company has had only nominal revenues to date and will be entirely dependent upon its limited available financial resources to implement its business plan to complete an Acquisition or to derive any revenues from the Patent. The Company cannot ascertain with any degree of certainty the capital requirements for the execution of its business plan. In the event that the Company's limited financial resources prove to be insufficient to implement its business plan, the Company will be required to seek additional financing. In addition, in the event of the consummation of an Acquisition, the Company may require additional financing to fund the operations or growth of the Target. The Company may also require additional financing to develop and exploit the Patent. Additional Financing May Not Be Available to the Company - -------------------------------------------------------- There can be no assurance that additional financing will be available to the Company on acceptable terms, or at all. To the extent that additional financing proves to be unavailable when needed, the Company would be limited in its attempts to complete Acquisitions and to successfully develop and exploit the Patent. The inability of the Company to secure additional financing, if needed, could also have a material adverse effect on the continued existence of RAC. The Company has no arrangements with any bank or financial institution to secure financing and there can be no assurance that any such arrangement, if required or otherwise sought, would be available on terms deemed to be commercially acceptable and in the best interests of the Company. 7 The Company May Not Be Able to Borrow Funds - ------------------------------------------- While there currently are no limitations on the Company's ability to borrow funds, the limited resources of the Company and limited operating history will make it difficult to borrow funds. The amount and nature of any borrowings by the Company will depend on numerous considerations, including the Company's capital requirements, the Company's perceived ability to meet debt service on any such borrowings and the then prevailing conditions in the financial markets, as well as general economic conditions. There can be no assurance that debt financing, if required or sought, would be available on terms deemed to be commercially acceptable by and in the best interests of the Company. The inability of the Company to borrow funds required to effect or facilitate an Acquisition may have a material adverse effect on the Company's financial condition and future prospects. Additionally, to the extent that debt financing ultimately proves to be available, any borrowings may subject the Company to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest. Furthermore, a Target may have already incurred borrowings and, therefore, the Company will be subjected to all the risks inherent thereto. Competition for Acquisitions - ---------------------------- The Company expects to encounter intense competition from other entities having business objectives similar to those of the Company. Many of these entities, including venture capital partnerships and corporations, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals, are well-established and have extensive experience in connection with identifying and effecting Acquisitions directly or through affiliates. Many of these competitors possess greater financial, technical, human and other resources than the Company and there can be no assurance that the Company will have the ability to compete successfully. The Company's financial resources will be limited in comparison to those of many of its competitors. This inherent competitive limitation may compel the Company to select certain less attractive acquisition prospects. There can be no assurance that such prospects will permit the Company to achieve its stated business objectives. The Company May Be Subject to Uncertainty in the Competitive Environment of a Target - ------------------------------------------------------ In the event that the Company succeeds in effecting an Acquisition, the Company will, in all likelihood, become subject to intense competition from competitors of the Target. In particular, certain industries which experience rapid growth frequently attract an increasingly large number of competitors, including competitors with greater financial, marketing, technical, human and other resources than the initial competitors in the industry. The degree of competition characterizing the industry of any prospective Target cannot presently be ascertained. There can be no assurance that, subsequent to a consummation of an Acquisition, the Company will have the resources to compete effectively in the industry of the Target, especially to the extent that the Target is in a high growth industry. 8 The Company May Pursue an Acquisition with a Target Operating Outside the United States: Special Additional Risks Relating to Doing Business in a Foreign Country - -------------------------------------------------------------------------------- The Company may effectuate an Acquisition with a Target whose business operations or even headquarters, place of formation or primary place of business are located outside the United States. In such event, the Company may face the significant additional risks associated with doing business in that country. In addition to the language barriers, different presentations of financial information, different business practices, and other cultural differences and barriers that may make it difficult to evaluate such a Target, ongoing business risks may result from the internal political situation, uncertain legal systems and applications of law, prejudice against foreigners, corrupt practices, uncertain economic policies and potential political and economic instability that may be exacerbated in various foreign countries. Uncertain Prospects of Technology Covered by Patent - --------------------------------------------------- The Company has never derived any revenues from the technology covered by the Patent and there can be no assurances that the Company or the Subsidiary will be able to derive any revenues from the exploitation of the Patent. The Company through the Subsidiary will attempt to research and develop a commercial application for the technology covered by the Patent. However there can be no assurances that the Subsidiary will be able to find a commercial application for the technology covered by the Patent. Even if the Subsidiary is able to develop a commercial application for the technology covered by the Patent, there can be no assurances that the Subsidiary will be able to successfully market such application. Competition for the Patent - -------------------------- The Company expects to encounter competition from other entities in the medical device business with technology similar to that covered by the Patent. Many of these entities, including large drug and medical companies, bio-technology companies, venture capital partnerships and corporations, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals, are well-established and have extensive experience in connection with developing and exploiting medical technology and devices. Many of these competitors possess greater financial, technical, human and other resources than the Company and there can be no assurance that the Company will have the ability to compete successfully. The Company's financial resources will be limited in comparison to those of many of its competitors. There can be no assurance that such prospects will permit the Company to achieve its stated business objectives. Risks Associated with the Company's Investment Strategy - ------------------------------------------------------- The Company's decision to invest a portion of its cash in marketable securities exposes the Company to potential losses. The Company's investments in marketable securities carry a risk of loss. While the Company will endeavor to invest in securities that have a potential for gain, there can be no assurances that the Company will not suffer losses based on its Investment Strategy. 9 Steven N. Bronson is Critical to the Future Success of the Company - ------------------------------------------------------------------ Steven N. Bronson is the Chairman, C.E.O. and President of the Company. The ability of the Company to successfully carry out its business plan and to consummate additional Acquisitions will be dependent upon the efforts of Mr. Bronson and the Company's directors. Notwithstanding the significance of Mr. Bronson, the Company has not obtained any "key man" life insurance on his life. The loss of the services of Mr. Bronson could have a material adverse effect on the Company's ability to successfully achieve its business objectives. If additional personnel are required, there can be no assurance that the Company will be able to retain such necessary additional personnel. Mr. Bronson Has Effective Control of the Company's Affairs - ---------------------------------------------------------- As of March 22, 2006, Mr. Bronson beneficially owns and controls 976,116 shares of common stock of the Company, including options to purchase 150,000 shares of common stock, representing approximately 75.6% of the issued and outstanding shares of common stock and approximately 75.6% of the voting power of the issued and outstanding shares of common stock of the Company. In the election of directors, stockholders are not entitled to cumulate their votes for nominees. Accordingly, as a practical matter, Mr. Bronson may be able to elect all of the Company's directors and otherwise direct the affairs of the Company. There Exist Conflicts of Interest Relating to Mr. Bronson's Time Commitment to the Company - -------------------------------------------------------- Mr. Bronson is not required to commit his full time to the affairs of the Company. Mr. Bronson will have conflicts of interest in allocating management time among various business activities. As a result, the consummation of an Acquisition may require a greater period of time than if Mr. Bronson devoted his full time to the Company's affairs. However, Mr. Bronson will devote such time as he deems reasonably necessary to carry out the business and affairs of the Company, including the evaluation of potential Targets and the negotiation and consummation of Acquisitions and, as a result, the amount of time devoted to the business and affairs of the Company may vary significantly depending upon, among other things, whether the Company has identified a Target or is engaged in active negotiation and consummation of an Acquisition. 10 There Exist Risks to Stockholders Relating to Dilution: Authorization of Additional Securities and Reduction of Percentage Share Ownership Following Merger - -------------------------------------------------------- The Company's Certificate of Incorporation authorizes the issuance of 5,000,000 shares of common stock. As of March 22, 2006, the Company had 1,140,773 shares of common stock issued and outstanding and 3,859,227 authorized but unissued shares of common stock available for issuance. Although the Company has no commitments as of this date to issue its securities, the Company will, in all likelihood, issue a substantial number of additional shares in connection with or following an Acquisition. To the extent that additional shares of common stock are issued, the Company's stockholders would experience dilution of their ownership interests in the Company. Additionally, if the Company issues a substantial number of shares of common stock in connection with or following an Acquisition, a change in control of the Company may occur which may affect, among other things, the Company's ability to utilize net operating loss carry forwards, if any. Furthermore, the issuance of a substantial number of shares of common stock may adversely affect prevailing market prices, if any, for the common stock and could impair the Company's ability to raise additional capital through the sale of its equity securities. The Company may use consultants and other third parties providing goods and services. These consultants or third parties may be paid in cash, stock, options or other securities of the Company. The Company may in the future need to raise additional funds by selling securities of the Company which may involve substantial additional dilution to the investors. The Company is Authorized to Issue Preferred Stock - -------------------------------------------------- RAC's Articles of Incorporation authorizes the designation and issuance Of 1,000,000 shares of preferred stock (the "Preferred Stock"), with such designations, powers, preferences, rights, qualifications, limitations and restrictions of such series as the Board, subject to the laws of the State of Colorado, may determine from time to time. Accordingly, the Board is empowered, without stockholder approval, to designate and issue Preferred Stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of Common Stock. In addition, the Preferred Stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control. Although we do not currently intend to designate or issue any shares of Preferred Stock, there can be no assurance that we will not do so in the future. It is likely however, that following a merger, new management may issue such preferred stock, and it is possible that one or more series of preferred stock will be designated and/or issued in order to effectuate a merger or financing. As of this date, we have no outstanding shares of Preferred Stock and we have not designated the rights or preferences of any series of preferred stock. The Uncertain Structure of an Acquisition May Result in Risks Relating to the Market for the Company's Common Stock - --------------------------------------------------------------------- The Company may form one or more subsidiary entities to effect an Acquisition and may under certain circumstances, distribute the securities of subsidiaries to the stockholders of the Company. There cannot be any assurance that a market would develop for the securities of any subsidiary distributed to stockholders or, if it did, any assurance as to the prices at which such securities might trade. 11 The Company Expects to Pay No Cash Dividends - -------------------------------------------- The Company presently does not expect to pay dividends. The payment of dividends, if any, will be contingent upon the Company's revenues and earnings, if any, capital requirements, and general financial condition. The payment of any dividends will be within the discretion of the Company's then Board of Directors. The Company presently intends to retain all earnings, if any, to implement its business plan, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future. Indemnification of Officers and Directors - ----------------------------------------- The Company's Certificate of Incorporation provides for the Indemnification of its officers and directors to the fullest extent permitted by the laws of the State of Colorado. It is possible that the indemnification obligations imposed under these provisions could result in a charge against the Company's earnings and thereby affect the availability of funds for other uses by the Company. Taxation Considerations May Impact the Structure of an Acquisition and Post-merger Liabilities - ------------------------------------------------------- Federal and state tax consequences will, in all likelihood, be major considerations for the Company in consummating an Acquisition. The structure of an Acquisition or the distribution of securities to stockholders may result in taxation of the Company, the Target or stockholders. Typically, these transactions may be structured to result in tax-free treatment to both companies, pursuant to various federal and state tax provisions. The Company intends to structure any Acquisition so as to minimize the federal and state tax consequences to both the Company and the Target. Management cannot assure that an Acquisition will meet the statutory requirements for a tax-free reorganization, or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes, which may have an adverse effect on both parties to the transaction. The Company May Be Deemed an Investment Company and Subjected to Related Restrictions - --------------------------------------------- The regulatory scope of the Investment Company Act of 1940, as amended (the "Investment Company Act"), which was enacted principally for the purpose of regulating vehicles for pooled investments in securities, extends generally to companies engaged primarily in the business of investing, reinvesting, owning, holding or trading in securities. The Investment Company Act may, however, also be deemed to be applicable to a company which does not intend to be characterized as an investment company but which, nevertheless, engages in activities which may be deemed to be within the definitional scope of certain provisions of the Investment Company Act. The Company believes that its Investment Strategy may subject the Company to regulation under the Investment Company Act. If the Company is deemed to be an investment company, the Company may be forced to divest its investments or become subject to certain restrictions relating to the Company's activities, including restrictions on the nature of its investments and the issuance of securities. In addition, the Investment Company Act imposes certain requirements on companies deemed to be within its regulatory scope, including registration as an investment company, adoption of a specific form of corporate structure and compliance with certain burdensome reporting, record keeping, voting, proxy, disclosure and other rules and regulations. In the event of the characterization of the Company as an investment company, the failure by the Company to satisfy such regulatory requirements, whether on a timely basis or at all, would, under certain circumstances, have a material adverse effect on the Company. 12 Investors Should Not Rely on Forward-Looking Statements Because They Are Inherently Uncertain - ------------------------------------------------ This document contains certain forward looking statements that involve risks and uncertainties. We use words such as "anticipate," "believe," "expect," "future," "intend," "plan," and similar expressions to identify forward-looking statements. These statements are only predictions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this document. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us and described on the preceding pages and elsewhere in this document. We believe it is important to communicate our expectations to our investors. However, there may be events in the future that we are not able to predict accurately or over which we have no control. The risk factors listed above, as well as any cautionary language in this document, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Before you invest in our common stock, you should be aware that the occurrence of the events described in these risk factors and elsewhere in this document could have a material adverse effect on our business, operating results, financial condition and stock price. ITEM 2. DESCRIPTION OF PROPERTY Since January 5, 2004, the Company has maintained its principal offices at 100 Mill Plain Road, Danbury, Connecticut 06811. The Company is using a portion of the premises occupied by Catalyst Financial LLC, a full service brokerage, investment banking and consulting firm, located at 100 Mill Plain Road, Danbury, Connecticut 06811. Steven N. Bronson, the President of the Company, is the principal and owner of Catalyst Financial LLC. Catalyst Financial LLC has agreed to waive the payment of any rent by the Company for use of the offices. Prior to January 5, 2004, the Company used a portion of the premises located at 10 South Street, Suite 202, Ridgefield, Connecticut 06877, occupied by Catalyst Financial LLC. The Company did not pay any rent to Catalyst Financial LLC for the use of the offices located at 10 South Street, Suite 202, Ridgefield, Connecticut 06877. ITEM 3. LEGAL PROCEEDINGS There are no pending legal proceedings to which the Company is a party or of which any of its property is the subject as of the date of this report and there were no such proceedings during the fiscal years ended December 31, 2005 and December 31, 2004. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of the Company's security holders during the fourth quarter of the year ended December 31, 2005. 13 PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) MARKET INFORMATION. The Company's common stock is quoted on the Over-The-Counter Bulletin Board and traded under the symbol "RDGA". The following table sets forth the range of high and low prices for the Company's common stock for the periods indicated. These prices represent reported transactions between dealers that do not include retail markups, markdowns or commissions, and do not necessarily represent actual transactions. COMMON STOCK ------------------------------------------------------------------ Year/Fiscal Period High ($) Low ($) ------------------ ------------ ----------- 2005 First Quarter 1.05 1.05 Second Quarter 1.05 1.05 Third Quarter 1.05 1.05 Fourth Quarter 3.00 1.05 2004 First Quarter 1.50 .85 Second Quarter 2.00 1.15 Third Quarter 1.75 1.05 Fourth Quarter 1.05 1.05 As of March 16, 2006, the bid and ask price of the Company's common stock was $1.75 and $3.00, respectively. (b) HOLDERS. As of March 16, 2006, the Company had approximately 652 shareholders of record of its common stock, $0.10 par value. (c) DIVIDENDS. The Company has not declared cash dividends on its common stock since its inception, and the Company does not anticipate paying any dividends in the foreseeable future. There are no contractual restrictions on the Company's ability to pay dividends. Recent Sales of Unregistered Securities The following information relates to sales of unregistered securities by the Company during the fiscal year ended December 31, 2005. All of these sales of securities were made in reliance upon an exemption from the registration provisions of the Securities Act of 1933 set forth in Sections 4(2), 4(6) and/or 3(b) thereof and the rules and regulations under the Securities Act of 1933, including Regulation D, as transactions by an issuer not involving any public offering and/or sales to a limited number of purchasers who were acquiring such securities for their own account for investment purposes and not with a view to the resale or distribution thereof. On March 25, 2005, the Board of Directors of the Company resolved to pay the accrued salary owed to Mr. Bronson in the amount of $113,132 through the issuance of 107,745 shares of the Company's common stock at a price of $1.05 per share. 14 On December 8, 2005, the Company entered into a stock purchase agreement (the "Agreement") with RAM Capital Management Trust I ("RAM Capital"). Pursuant to the Agreement, the Company agreed to sell RAM Capital 100,000 restricted shares of the Company's common stock, $.10 par value (the "Shares"), at a purchase price of $1.65 per share. On December 22, 2005, the Company received RAM Capital's check in the amount of $165,000 as payment of the purchase price for the Shares pursuant to the Agreement. The sale of the Shares are restricted securities and were issued by the Company in a private transaction pursuant to Section 4(2) of the Securities Act of 1933. This transaction was previously disclosed by the Company in a current report on Form 8-K, filed on December 27, 2005, and such report is incorporated herein by reference. Section 15(g) of the Exchange Act The Company's shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors. Rule 15g-2 declares unlawful any broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document. Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer the current quotation prices or similar market information concerning the penny stock in question. Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction. Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales person's compensation. The Company's common stock may be subject to the foregoing rules. The application of the penny stock rules may affect our stockholder's ability to sell their shares because some broker-dealers may not be willing to make a market in our common stock because of the burdens imposed upon them by the penny stock rules. 15 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The following plan of operation provides information which the Company's management believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report. Disclosure Regarding Forward Looking Statements - ----------------------------------------------- Except for historical information contained herein, the statements in this report are forward-looking statements that are made pursuant to the safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements when you see words such as "expect," "anticipate," "estimate," "may," "believe," and other similar expressions. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Actual results could differ materially from those projected in the forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. These and other risks are described elsewhere herein and in the Company's other filings with the Securities and Exchange Commission. Acquisition Strategy - -------------------- The Company's plan of operation is to arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company has not identified a viable operating entity for a merger, acquisition, business combination or other arrangement, and there can be no assurance that the Company will ever successfully arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. The Company anticipates that the selection of a business opportunity will be a complex process and will involve a number of risks, because potentially available business opportunities may occur in many different industries and may be in various stages of development. Due in part to depressed economic conditions in a number of geographic areas, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking either the limited additional capital which the Company will have or the benefits of a publicly traded corporation, or both. The perceived benefits of a publicly traded corporation may include facilitating or improving the terms upon which additional equity financing may be sought, providing liquidity for principal shareholders, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity for all shareholders and other factors. In some cases, management of the Company will have the authority to effect acquisitions without submitting the proposal to the shareholders for their consideration. In some instances, however, the proposed participation in a business opportunity may be submitted to the shareholders for their consideration, either voluntarily by the Board of Directors to seek the shareholders' advice and consent, or because of a requirement of state law to do so. In seeking to arrange a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity, management's objective will be to obtain long-term capital appreciation for the Company's shareholders. There can be no assurance that the Company will be able to complete any merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. 16 The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity. Competition to RAC's Acquisition Strategy In connection with its Acquisition Strategy, the Company expects to encounter intense competition from other entities having business objectives similar to those of the Company. Many of these entities, including venture capital firms, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals, are well-established and have extensive experience in connection with identifying and effecting acquisitions directly or through affiliates. Many of these competitors possess greater financial, technical, human and other resources than the Company and there can be no assurance that the Company will have the ability to compete successfully with such entities. The Company's financial resources will be limited in comparison to those of many of its competitors. The Company's limited financial resources may compel the Company to select certain less attractive acquisition prospects. Investment Strategy - ------------------- On August 25, 2003, the Board of Directors of the Company authorized the Company to invest a portion of the Company's cash in marketable securities in an effort to realize a greater rate of return than the Company was currently earning in light of historically low interest rates. The Board directed that management maintain at least $40,000 of the Company's cash in a federally insured bank or money market account. In furtherance of the Company's investment strategy the Company opened a brokerage account with Catalyst Financial LLC ("Catalyst"), a broker-dealer registered with the U.S. Securities and Exchange Commission and a member in good standing with the National Association of Securities Dealers, Inc. Catalyst is owned and controlled by Steven N. Bronson, the Company's Chairman and Chief Executive Officer. Catalyst has agreed to charge the Company commissions of no more that $.02 per share with a minimum of $75 per trade on securities transactions. The Board approved the commission structure to be charged by Catalyst. Mr. Bronson abstained from voting on all Board resolutions concerning the Company's investment strategy and the Company's arrangements with Catalyst. On October 14, 2003, the Company deposited $250,000 in a brokerage account with Catalyst. As of December 31, 2005, the Company owned securities valued at $64,500 and generated investment income of $3,751 and has an accumulated other comprehensive gain of $4,928. The Company's investment in securities is subject to all of the risks associated with equity investing, including a loss of monies invested. There can be no assurance that the Company will be able to obtain a profitable return on its investments. 17 Results of Operations - --------------------- During the year ended December 31, 2005 ("Fiscal 05"), the Company earned no revenues from operations and generated interest income of $4,343, compared to no revenues from operations and interest income in the amount of $1,192 for the year ended December 31, 2004 ("Fiscal 04"). During Fiscal 05, the Company incurred expenses of $47,542, a decrease of $30,029 compared to expenses of $77,571 for Fiscal 04. On December 31, 2005, the Company had invested $64,500 in accordance with its Investment Strategy, and as of that date the Company had investment income of $3,751 and a 2005 unrealized gain of $931 based on its investment in securities. For Fiscal 05 the Company incurred a net operating loss of $39,448 compared to a net operating loss of $48,260 for Fiscal 04. Liquidity and Capital Resources - ------------------------------- During Fiscal 05, the Company satisfied its working capital needs from cash on hand at the beginning of the year, investment income generated from cash and investments and cash proceeds from the sale of common stock (see "Recent Sales of Unregistered Securities" section, below) during the year. As of December 31, 2005, the Company had working capital of $432,248. While this working capital will satisfy the Company's immediate financial needs, it may not be sufficient to provide the Company with sufficient capital to finance a merger, acquisition or business combination between the Company and a viable operating entity or the development and the exploitation of the Patent. The Company may need additional funds in order to complete a merger, acquisition or business combination between the Company and a viable operating entity. The Company or the Subsidiary may also need additional funds to finance the development and exploitation of the Patent. There can be no assurances that the Company will be able to obtain additional funds if and when needed. The Company's future financial condition will be subject to: (1) its ability to arrange for a merger, acquisition or a business combination with an operating business on favorable terms that will result in profitability, or (2) its ability to successfully develop and exploit the Patent. There can be no assurance that the Company will be able to do so or, if it is able to do so, that the transaction will be on favorable terms not resulting in an unreasonable amount of dilution to the Company's existing shareholders. The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity. The Company may need additional funds in order to develop and commercially exploit the Patent, although there is no assurance that the Company will be able to obtain such additional funds, if needed. Even if the Company is able to obtain additional funds there is no assurance that the Company will be able to develop and commercially exploit the Patent. 18 Subsequent Event - ----------------- On January 31, 2006, the Board of Directors of the Company directed the officers of the Company to take and approve the following corporate action with respect to the Company's wholly owned subsidiary Bio-Medical Automation, Inc., a Nevada corporation ("Bio-Medical NV" or the "Subsidiary"): 1. Appoint the following persons to be on the Board of Directors of the Subsidiary for a term of one year or until their successor is appointed and duly qualified: (a) Steven N. Bronson; (b) Alan Rosenberg; and (c) Louis Meade. 2. Appoint Steven N. Bronson as the president, treasurer and secretary of the Subsidiary. 3. Open a bank account at Bank of America or some other banking institution for the Subsidiary. 4. Ratify the By-laws of the Subsidiary in the form that was presented to the Board. Additionally, the Board of Directors of the Company authorized the officers of the Company to deposit $50,000 of the Company's assets in the Subsidiary's bank account. The Company took the foregoing action to further its plans to exploit the Patent owned by the Subsidiary. Additionally, in furtherance of the Company's plan to exploit the Patent, the Company may spinoff the Subsidiary to the Company's shareholders so that the Subsidiary may be better able to obtain the financing necessary to exploit the Patent. As of March 22, 2006, Bio-Medical NV has 45,000,000 shares of capital stock authorized for issuance consisting of (1) 40,000,000 share of common stock par value $.001 per share; and (2) 5,000,000 shares of preferred stock par value $.01 per share. Bio-Medical NV has 5,000,000 shares of its common stock issued and outstanding, all of which are owned by the Company. Bio-Medical NV has no shares of preferred stock issued or outstanding. The following table sets forth the name, age and position of each of the directors, executive officers and significant employees as of March 22, 2006 with respect Bio-Medical NV. Each director will on the Board of Directors of the Subsidiary for a term of one year or until their successor is appointed and duly qualified at the next annual meeting of Subsidiary's stockholders or until his or her successor has been elected and qualified. The Subsidiary's executive officers are appointed by, and serve at the discretion of, the Board of Directors. Name Age Position - ------------------ ----- -------------------- Steven N. Bronson 41 Chairman, President, Treasurer and Secretary Alan Rosenberg 36 Director Louis Meade 50 Director Steven N. Bronson has served as a director of the Company since March 3, 2003. Mr. Bronson is also a director of the Company. Mr. Bronson is also the President of Catalyst Financial LLC, a privately held full service securities brokerage and investment banking firm. Mr. Bronson has held that position since September 24, 1998. During the period of 1991 through September 23, 1998, Mr. Bronson was President of Barber & Bronson Incorporated, a full service securities brokerage and investment banking firm. In addition, Mr. Bronson is an officer and director of 4net Software, Inc., a publicly traded corporation. 19 Alan Rosenberg has served as a director of Bio-Medical NV since January 31, 2006. Mr. Rosenberg currently serves as an Agency Chief Information Officer for the City of New York's Department of Small Business Services. Prior to that, he was a Director in the Office of the CIO for the Department of Information Technology and Telecommunications for the City of New York. He also served as the Deputy Director of Management Information Systems (MIS) for the City of New York, Office of the Mayor. Mr. Rosenberg graduated from Polytechnic University with a MS in the Management of Technology and holds a BA from The Ohio State University. In addition, Mr. Rosenberg is a director of 4net Software, Inc., a publicly traded corporation. Louis Meade has served as a director of Bio-Medical NV since January 31, 2006. Mr. Meade has extensive experience in the development, funding and operation of small businesses. Mr. Meade is currently the Chairman and Chief Executive Officer of Private Company Marketplace, Inc., which offers a centralized information clearinghouse and trading platform for Accredited Investors who have invested in private companies. Mr. Meade brings over twenty-five years experience in private and public companies. Mr. Meade was a founding member and investor in Anthrogenesis, Inc., a company which was sold to Celgene (CELG-Nasdq) in 2002 for $ 70 million dollars. In his dealings with public companies Mr. Meade had worked for the American Stock Exchange for three years and was responsible for listing companies on the American Stock Exchange. He is Series 7 and Series 63 registered. Mr. Meade has also worked on numerous offerings. Mr. Meade holds an M.B.A. from Pace University and has a B.B.A. from Benard M. Baruch College. No director, executive officer, promoter or control person of Bio-Medical NV has, within the last five years: (i) had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) been convicted in a criminal proceeding or is currently subject to a pending criminal proceeding (excluding traffic violations or similar misdemeanors); (iii) been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (iv) been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission (the "Commission") or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. There are no family relationships among any directors and executive officers of the Subsidiary. Bio-Medical NV's Board of Directors does not have any committees. Bio-Medical NV has never paid any compensation it is directors. Bio-Medical NV has not entered into any Employment Agreements. Steven N. Broson, the Chairman and President of the Company serves as the sole officer of Bio-Medical NV without any salary or written employment agreement. A copy of the Articles of Incorporation and By-Laws of Bio-Medical NV are attached hereto as Exhibit 3.6 and Exhibit 3.7, respectively. 20 ITEM 7. FINANCIAL STATEMENTS The financial statements and related notes are included as part of this report as indexed in the appendix on pages F-1 through F-17. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None ITEM 8A. CONTROLS AND PROCEDURES Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate to allow timely decisions regarding required disclosure. Evaluation of disclosure and controls and procedures - ---------------------------------------------------- Based on their evaluation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-KSB the Company's chief executive officer has concluded that the Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and are operating in an effective manner. Changes in internal controls over financial reporting - ----------------------------------------------------- There were no changes in the Company's internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. ITEM 8B. OTHER INFORMATION Subsequent Event - ---------------- On March 14, 2006, the Board of Directors of the Company approved and authorized management to engage Atlas Stock Transfer, Corporation ("Atlas") as its transfer agent and to terminate the Company's engagement of Computershare Investor Services, Inc. Atlas's address is 5899 South State Street, Salt Lake City, Utah 84107 and their telephone number is (801) 266-7151. Attached hereto as Exhibit 10.16 is a copy of the Company's Appointment of Atlas as its transfer agent, which is incorporated herein by reference. 21 PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The following table sets forth the name, age and position of each of our directors, executive officers and significant employees as of December 31,2005. Each director will hold office until the next annual meeting of our stockholders or until his or her successor has been elected and qualified. Our executive officers are appointed by, and serve at the discretion of, the Board of Directors. Name Age Position - ------------------ ----- -------------------- Steven N. Bronson 40 Chairman, Chief Executive Officer and President Leonard Hagan 54 Director Kenneth Schwartz 50 Director Steven N. Bronson has served as a director of the Company since June 1996. From September 1998 to August 11, 2000, Mr. Bronson was the sole officer of the Company. From September 1998 to March 17, 2000, Mr. Bronson was also the sole director of the Company. In September 1996, Mr. Bronson became the Chief Executive Officer and President of the Company. Mr. Bronson is also the President of Catalyst Financial LLC, a privately held full service securities brokerage and investment banking firm. Mr. Bronson has held that position since September 24, 1998. During the period of 1991 through September 23, 1998, Mr. Bronson was President of Barber & Bronson Incorporated, a full service securities brokerage and investment banking firm. In addition, Mr. Bronson is an officer and director of 4net Software, Inc., a publicly traded corporation. Leonard Hagan has served as a director of the Company since March 17, 2000. Mr. Hagan is a certified public accountant and for the past fifteen years has been a partner at Hagan & Burns CPA's, PC in New York. Mr. Hagan received a Bachelors of Arts degree in Economics from Ithaca College in 1974, and earned his Masters of Business Administration degree from Cornell University in 1976. Mr. Hagan is registered as the Financial and Operations Principal for the following broker-dealers registered with the Securities and Exchange Commission: Adelphia Capital LLC, Mallory Capital Group, LLC, Avalon Partners, Inc., K & Z Patners LLC and Fieldstone Services Corp. and Danske Securities (US), Inc. Mr. Hagan is also a director of 4net Software, Inc., a publicly traded corporation. Dr. Kenneth Schwartz has served as a director of the Company since March 25, 2000. Dr. Schwartz has been self-employed as a dentist in New York, New York. Dr. Schwartz received his Bachelor of Sciences from Brooklyn College in 1977 and earned his D.D.S. from New York University College of Dentistry in 1982. No director, executive officer, promoter or control person of the Company has, within the last five years: (i) had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) been convicted in a criminal proceeding or is currently subject to a pending criminal proceeding (excluding traffic violations or similar misdemeanors); (iii) been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (iv) been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission (the "Commission") or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. There are no family relationships among any directors and executive officers of the Company. 22 Meetings and Committees of the Board of Directors - ------------------------------------------------- During the fiscal year ended December 31, 2005, the Board of Directors held 4 meetings. In view of the Company's lack of operations, during the year ended December 31, 2005, the Board of Directors did not form any committees. During the fiscal year ended December 31, 2005, all of the directors then in office attended 100% of the total number of meetings of the Board of Directors and the Committees of the Board of Directors on which they served. Audit Committee - ---------------- The Audit Committee of the Company consists of Steven N. Bronson and Leonard Hagan. The functions of the Audit Committee are to recommend to the Board of Directors the appointment of independent auditors for the Company and to analyze the reports and recommendations of such auditors. The committee also monitors the adequacy and effectiveness of the Company's financial controls and reporting procedures. The Audit Committee does not meet on a regular basis, but only as circumstances require. Due the size of the Company and its lack of current operations, the Audit Committee has not designated a financial expert. Code of Ethics - --------------- At a meeting of the Board of Directors of the Company held on March 25, 2004, Company adopted a Code of Ethics. A copy of the Code of Ethics is attached as Exhibit 14 to the Company's Form 10-KSB for the year ended December 31, 2003. Section 16(a) Beneficial Ownership Compliance - --------------------------------------------- Section 16(a) of the Exchange Act requires the Company's directors and executive officers, and persons who own more than 10% of a registered class of the Company's equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely upon a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2005, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with. 23 ITEM 10. EXECUTIVE COMPENSATION Summary Compensation Table(1) The following summary compensation table sets forth information Concerning the annual and long-term compensation earned by the Company's chief Executive officer and each of the other most highly compensated executive officers(collectively, the "Named Executive Officers"). Name/Position Fiscal year Annual Salary Stock Grants Option Grants - -------------------------------------------------------------------------------- Steven N. Bronson CEO and President 2005 $11,912 0 100,000(2) 2004 $48,000 0 0 2003 $48,000 0 150,000(3) 2002 $48,000 0 0 - ---------------------- (1) The Columns designated by the SEC for the reporting of certain bonuses, long term compensation, including awards of restricted stock, long term incentive plan payouts, and all other compensation have been eliminated as no such bonuses, awards, payouts, grants or compensation were awarded during any fiscal year covered by the table. (2) On March 25, 2005, the Company issued to Mr. Bronson an option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005. Such option vested immediately and was exercisable for a period of 5 years. This option was exercised by Mr. Bronson on February 24, 2006. (3) On March 21, 2003, the Company issued an option to Steven N. Bronson to purchase 150,000 shares of the Company's common stock at the purchase price of $1.65, which was 110% percent of the closing bid price on March 21, 2003. Such option vested immediately and is exercisable for a period of 5 years. On March 25, 2005, the Board of Directors of the Company agreed to pay the accrued salary in the amount of $113,132 to Mr. Bronson through the issuance of 107,745 shares of the Company's common stock at fair market value. Option/SAR Grants in Last Fiscal Year The following table contains certain information regarding grants of stock options to Named Executive Officers during the fiscal year ended December 31, 2005. The stock options listed below were granted without tandem stock appreciation rights. We have no freestanding stock appreciation rights outstanding.
Number of Percent of Securities Total Options/ Underlying SARs Granted to Name Options/SARs Employees Exercise or Expiration Granted (#) in Fiscal Year Base Price ($/Sh) Date - ------------------ ----------- --------------- ----------------- -------------- Steven N. Bronson 100,000(1) 100% $1.16 March 24, 2010 - -------------------
(1) On February 24, 2006, Mr. Bronson exercised this option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16. 24 Other Plans. The Company does not currently have any bonus, profit sharing, pension, retirement, stock option, stock purchase, or other remuneration or incentive plans in effect. Long Term Incentive Plan. The Company has no long-term incentive plan. Aggregate Option Exercises in Fiscal 2005 and Fiscal Year End Option Values The following table contains certain information regarding stock options exercised during and options to purchase common stock held as of December 31, 2005, by each of the Named Executive Officers.
Number Number of Securities Value of Unexercised Of Shares Underlying Unexercised In-the-Money Options Name/ Acquired Value Options at Fiscal Year End at Fiscal Year End Position On Exercise Realized Exercised/Unexercised Exercised/Unexercised (1) - ------------------ ----------- -------- -------------------------- --------------------- Steven N. Bronson Chairman, CEO and President 0 0 250,000 $0 - -------------------
(1) Calculated on the basis of the closing share price of the common stock on the over-the-counter market on the date exercised, less the exercise price payable for such shares. Compensation of Directors - ------------------------- In fiscal year ended December 31, 2005, no cash compensation was paid to our directors for their services as directors. However, on March 25, 2005, the Company issued options to Leonard Hagan and Kenneth Schwartz to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005, for services rendered to the Company. Such options vested immediately and are exercisable for a period of 5 years commencing on March 25, 2005. Subsequent Event - ---------------- On February 24, 2006, Messrs: Hagan and Schwartz each exercised their option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16. 25 Employment Contracts - -------------------- On March 24, 2001, the Company entered into an employment agreement with Steven N. Bronson, the president of the Company. The terms of such Employment Agreement include the following: Name Title Salary/Year Term - ----------------------------------------------------------------- Steven N. Bronson CEO & President $48,000 1 year A copy of Mr. Bronson's 2001 employment agreement is attached as Exhibit 10.13 to the Company's Form 10-QSB for the quarter ended March 31, 2001 and is incorporated by reference. On March 25, 2005, the Board of Directors authorized the renewal of Mr. Bronson's employment agreement with the Company for another one (1) year term, and modified the agreement to provide that Mr. Bronson shall no longer be entitled to receive a salary of $48,000 per year. Also on March 25, 2005, the Board of Directors of the Company agreed to pay the Steven N. Bronson's accrued salary of $113,132 through the issuance of 107,745 shares at fair value of the Company's common stock. Additionally, on March 25, 2005, the Company issued to Mr. Bronson an option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005. Such option vested immediately and is exercisable for a period of 5 years. Subsequent Event - ---------------- On February 24, 2006, Mr. Bronson exercised his option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16. On March 28, 2006, the Company entered into a new employment agreement with Steven N. Bronson appointing Mr. Bronson to serve as the chief executive officer and the president of the Company for the period April 1, 2006 through March 31, 2007. The agreement provides that Mr. Bronson will not receive a salary, however, the Board of Directors may determine to compensate Mr. Bronson. The term of the agreement is for a one (1) year period and the agreement automatically renews for additional one (1) year periods provided it is not terminated. A copy of the agreement is attached hereto as Exhibit 10.17, and is incorporated herein by reference. 26 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth as of March 22, 2006, certain information regarding the beneficial ownership of the common stock outstanding by (i) each person who is known to the Company to own 5% or more of the common stock, (ii) each director of the Company, (iii) certain executive officers of the Company and (iv) all executive officers and directors of the Company as a group. Unless otherwise indicated, each of the stockholders shown in the table below has sole voting and investment power with respect to the shares beneficially owned. Unless otherwise indicated, the address of each person named in the table below is c/o Ridgefield Acquisition Corp., 100 Mill Plain Road, Danbury, Connecticut 06811. Number of Percent Name and Address Company Position Shares owned of class - ---------------- ---------------- ------------ -------- Steven N. Bronson Chairman, CEO 976,116(2)(3) 75.6% and President Kenneth Schwartz Director 32,500(4) 2.8% Leonard Hagan Director 15,000 1.3% RAM Capital Management Trust I(5) Beneficial Owner 100,000 8.8% All directors and executive officers a group (3 persons) 1,123,616 79.8% - ----------------------------- (1) As used in this table, a beneficial owner of a security includes any person who, directly or indirectly, through contract, arrangement, understanding, relationship or otherwise has or shares (a) the power to vote, or direct the voting of, such security or (b) investment power which includes the power to dispose, or to direct the disposition of, such security. In addition, a person is deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days. (2) Includes options to purchase 150,000 shares of common stock at an exercise price of $1.65 per share, and such options are set to expire on March 21, 2008. (3) This amount also includes 34,211 shares of common stock owned by Mr. Bronson's spouse. (4) This amount includes 17,500 shares of common stock owned by Dr. Schwartz's spouse, and Dr. Schwartz expressly disclaims beneficial ownership of the shares owned by his spouse. (5) RAM Capital Management Trust I is a trust organized and existing under the laws of the State of Florida, and has it principal address at 5700 White Hickory Circle, Tamarac, Florida 33319. Subsequent Event - ----------------- On February 24, 2006: (1) Mr. Bronson exercised his option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16; (2) Mr. Hagan exercised his option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16; and (3) Mr. Schwartz exercised his option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16. 27 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Steven N. Bronson is the President of Catalyst Financial LLC f/k/a Catalyst Financial Corp. ("Catalyst"), a full service securities brokerage and investment banking firm. Since March 25, 1999, the Company has utilized a portion of the premises occupied by Catalyst as its executive offices. Due to the reduced level of the Company's operations, Catalyst has, until further notice, waived the payment of rent by the Company. No rent was paid by the Company to Catalyst during the fiscal year ended December 31, 2005. Steven N. Bronson is the owner and principal of Catalyst Financial LLC ("Catalyst Financial"), a full service securities brokerage, investment banking and consulting firm. The Company entered into a Mergers and Acquisitions Advisory Agreement, dated as of November 13, 2001, with Catalyst Financial (the "M&A Advisory Agreement"). Pursuant to the M&A Advisory Agreement, Catalyst Financial agreed to provide consulting services to the Company in connection with the Company's search for prospective target companies for mergers, acquisitions, business combinations and similar transactions, and, if investigation warrants, advising the Company concerning the negotiation of terms and the financial structure of such transactions. For the services rendered pursuant to the M&A Advisory Agreement, Catalyst Financial is entitled to receive a fee in the amount of five percent (5%) of the total consideration of the specific transaction (the "M&A Fee"). The maximum amount of the M&A Fee is $500,000 for any single transaction. The M&A Advisory Agreement expired by its own terms in November 2004. On March 25, 2005, the Board of Directors authorized the renewal of the M&A Advisory Agreement for an additional three years commencing on April 1, 2005. Additionally, under the Board modified the M&A Advisory Agreement to provide that the Company shall pay to Catalyst Financial a monthly retainer fee in the amount of $1,000 per month commencing on April 1, 2005 and continuing throughout the term of the M&A Advisory Agreement. Subsequent Event - ---------------- On January 31, 2006, the Board of Directors of the Company directed the officers of the Company to amend the M&A Advisory Agreement to provide sub-paragraph 3.(A)(entitled Monthly Fee) of the M&A Advisory Agreement shall be amended to provided that monthly fee payable by the Company to Catalyst Financial during the one year period from February 1, 2006 though January 31, 2007 shall be increased from $1,000 per month to $5,000 per month. Thereafter, the Company shall pay a monthly fee in the amount of $1,000 to Consultant on the first day of each month commencing on February 1, 2007 and continuing through March 1, 2008. A copy of the Addendum to the M&A Advisory Agreement is attached hereto as Exhibit 10.18 and is incorporated herein by reference. ITEM 13. EXHIBITS The following exhibits are hereby filed as part of this Annual Report on Form 10-KSB or incorporated by reference. 3.1 Articles of Incorporation, incorporated by reference to Registration Statement No. 33-13074-D as Exhibit 3.1. 3.2 Amended Bylaws adopted June 1, 1987, incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 1987 as Exhibit 3.2. 28 3.4 Articles of Amendment to Restated Articles of Incorporation dated March 7,1991. Incorporated by reference to Annual Report on Form 10-K for fiscal year ended December 31, 1990 as Exhibit 3.4. 3.5 Articles of Amendment to Restated Articles of Incorporation dated March 17, 1999, incorporated by reference to the Company's Current Report on Form 8-K reporting an event of March 9, 1999. 3.6* Articles of Incorporation of Bio-Medical Automation, Inc. a Nevada corporation, the Company's wholly owned subsidiary. 3.7* By-laws of Bio-Medical Automation, Inc. a Nevada corporation, the Company's wholly owned subsidiary. 10.1 OEM Purchase Agreement dated January 15, 1990, between the Company and Ariel Electronics, Inc. incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 1989 as Exhibit 10.1. 10.2 Form of Convertible Promissory Note, 12/30/93 Private Placement incorporated by reference to Annual Report on Form 10-KSB for the fiscal year ended December 31, 1993 as Exhibit 10.2. 10.3 Form of Non-Convertible Promissory Note, 12/30/93 Private Placement incorporated by reference to Annual Report on Form 10-KSB for the fiscal year ended December 31, 1993 as Exhibit 10.3. 10.4 Form of Note Purchaser Warrant Agreement and Warrant, 12/30/93 Private Placement incorporated by reference to Annual Report on Form 10-KSB for the fiscal year ended December 31, 1993 as Exhibit 10.4. 10.5 Form of Promissory Note, April 1, 1996. 10.6 Form of Security Agreement, April 1, 1996. 10.7 Form of Common Stock Purchase Warrant, April 1, 1996. 10.8 Form of Promissory Note, July 1, 1996. 10.9 Form of April 1, 1996 Promissory Note Extension, October 17, 1996. 10.10 Form of Common Stock Purchase Warrant, October 10, 1996. 10.11 Asset Purchase Agreement with JOT incorporated by reference to Form 8-K reporting an event of November 4, 1998, and amendment thereto incorporated by reference to Form 8-K reporting an event of December 15, 1998. 10.12 Stock Purchase Agreement, between Bio-Medical Automation, Inc. and Steven N. Bronson, incorporated by reference to the Current Report on Form 8-K filed on April 6, 2000. 10.13 Employment Agreement between Bio-Medical Automation, Inc. and Steven N. Bronson, dated as of March 24, 2001, incorporated by reference to Quarterly Report on Form 10-QSB for the quarter ended March 31, 2001. 10.14 Mergers and Acquisitions Advisory Agreement, dated as of November 13, 2001, between Bio-Medical Automation, Inc. and Catalyst Financial LLC incorporated by reference to the Annual Report on Form 10-KSB for the year ended December 31, 2001. 10.15 Mergers and Acquisitions Advisory Agreement, dated as of April 1, 2005, between Ridgefield Acquisition Corp. and Catalyst Financial LLC. 29 10.16* Appointment of Atlas Stock Transfer Agent Corporation as the transfer Agent for Ridgefield Acquisition Corp. 10.17* Employment Agreement between Ridgefield Acquisition Corp. and Steven N. Bronson, dated as of March 28, 2006. 10.18* Addendum, dated as of February 1, 2006, to Mergers and Acquisitions Advisory Agreement, dated as of April 1, 2005, between Ridgefield Acquisition Corp. and Catalyst Financial LLC. 14 Code of Ethics 31* President's Written Certification Of Financial Statements Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32* President's Written Certification Of Financial Statements Pursuant to 18 U.S.C. Statute 1350. - -------------------------------- * Filed herewith Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees. - ---------- The aggregate fees billed to the Company for professional services rendered by principal accountants for the audit of our annual financial statements and review of our quarterly financial statements was $9,100 and $8,250 for fiscal years 2005 and 2004, respectively. Audit-Related Fees. - ------------------ None. Tax Fees. - -------- The aggregate fees billed to the Company for professional services rendered by accountants for tax related services is $900 for fiscal years 2005 and 2004. All Other Fees. - -------------- None. The audit committee approved the engagement of Carlin, Charron & Rosen, LLP in the preparation of the Company's tax returns for fiscal year 2005. 30 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: March 28, 2006 RIDGEFIELD ACQUISITION CORP., a Colorado corporation By: /s/ Steven N. Bronson ------------------------------------ Steven N. Bronson, CEO and President Principle Executive Officer as Registrant's duly authorized officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: /s/ Steven N. Bronson /s/ Kenneth Schwartz - ---------------------------------- ---------------------------------- Steven N. Bronson Kenneth Schwartz President, Chief Executive Director Officer and Chairman March 28, 2006 of the Board of Directors Principal Executive Officer March 28, 2006 /s/ Leonard Hagan - --------------------------------- Leonard Hagan Director March 28, 2006 31 EXHIBIT INDEX The following Exhibits are filed herewith: Exhibit Number Description of Document - ------ ----------------------- 3.6 Articles of Incorporation of Bio-Medical Automation, Inc. a Nevada corporation incorporated by reference to the Company's Current Report on Form 8-K reporting an event of March 3, 2003. 3.7 By-laws of Bio-Medical Automation, Inc. a Nevada corporation. 10.16 Appointment of Atlas Stock Transfer Agent Corporation as the transfer Agent for Ridgefield Acquisition Corp. 10.17 Employment Agreement between Ridgefield Acquisition Corp. and Steven N. Bronson, dated as of March 28, 2006. 10.18 Addendum, dated as of February 1, 2006, to Mergers and Acquisitions Advisory Agreement, dated as of April 1, 2005, between Ridgefield Acquisition Corp. and Catalyst Financial LLC. 31 President's Written Certification Of Financial Statements pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 President's Written Certification Of Financial Statements pursuant to 18 U.S.C. Statute 1350. 32 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page Report of Independent Registered Public Accounting Firm F - 2 Consolidated Balance Sheet December 31, 2005 F - 3 Consolidated Statements of Operations and Comprehensive Gain (Loss) Years Ended December 31, 2005 and 2004 and Cumulative Amounts from January 1, 2000 to December 31, 2005 F - 4 Consolidated Statements of Stockholders' Equity Years Ended December 31, 2005, 2004, 2003, 2002, 2001 and 2000 F - 5 - F - 6 Consolidated Statements of Cash Flows Years Ended December 31, 2005 and 2004 and Cumulative Amounts from January 1, 2000 to December 31, 2005 F - 7 - F - 8 Notes to Consolidated Financial Statements F - 9 - F - 17
F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Ridgefield Acquisition Corporation We have audited the accompanying consolidated balance sheet of Ridgefield Acquisition Corporation and subsidiary (the "Company") as of December 31, 2005, and the related consolidated statements of operations and comprehensive gain (loss), stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2005 and for the period from January 1, 2000 to December 31, 2005. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ridgefield Acquisition Corporation and subsidiary as of December 31, 2005, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2005 and for the period from January 1, 2000 to December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has no principal operations or significant revenue producing activities which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Carlin Charron & Rosen LLP Glastonbury, Connecticut March 17, 2006 F-2 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED BALANCE SHEET DECEMBER 31, 2005 ASSETS CURRENT ASSETS Cash and cash equivalents 375,778 Investments 64,500 ----------- Total Assets $ 440,278 =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 8,030 ----------- Total Current Liabilities 8,030 ----------- STOCKHOLDERS' EQUITY Preferred stock - $.10 par value; authorized - 1,000,000 shares; Issued - none -- Common stock - $.10 par value; authorized - 5,000,000 shares; Issued and outstanding - 1,020,773 shares 102,077 Capital in excess of par value 1,852,867 Accumulated deficit (947,820) Deficit accumulated during the development stage (579,804) Accumulated other comprehensive gain 4,928 ----------- 432,248 ----------- Total Liabilities and Stockholders' Equity $ 440,278 =========== The accompanying notes are an integral part of these consolidated financial statements. F-3 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN (LOSS)
Cumulative Amounts from Years Ended January 1, 2000 December 31, to December 31, 2005 2004 2005 REVENUES Interest income $ 4,343 $ 1,192 $ 30,210 Realized gain (loss) on sale of investments 3,751 28,119 31,622 --------- --------- --------- Total Revenues 8,094 29,311 61,832 --------- --------- --------- OPERATING EXPENSES General and administrative 47,542 77,571 492,287 Employee stock options -- -- 130,625 Write-off of patent -- -- 18,724 --------- --------- --------- Total Expenses 47,542 77,571 641,636 --------- --------- --------- NET LOSS (39,448) (48,260) (579,804) --------- --------- --------- OTHER COMPREHENSIVE GAIN (LOSS) Unrealized gain (loss) on securities (3,751) 9,049 2,955 Reclassification adjustment for realized gain/loss 4,682 (2,957) 1,973 --------- --------- --------- Other comprehensive gain (loss) 931 6,092 4,928 --------- --------- --------- COMPREHENSIVE LOSS $ (38,517) $ (42,168) $(574,876) ========= ========= ========= NET LOSS PER COMMON SHARE Basic and dilutive $ (0.04) $ (0.06) $ (0.72) ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic and dilutive 903,164 813,028 808,046 ========= ========= =========
The accompanying notes are an integral part of these consolidated financial statements. F-4 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Deficit) Accumulated Accumulated Common Stock Capital in During Other ----------------- Excess of Note Deferred Accumulated Development Comprehensive Shares Amount Par Value Receivable Compensation (Deficit) Stage Income/(Loss) Totals ------ ------ --------- ---------- ------------ ----------- ----------- ------------- ------ Balance, January 1, 2000 643,128 $ 64,313 $1,312,049 $ -- $ -- ($947,820) $ -- $ -- $428,542 ======= ======== ========== ========= ========= ========= ========= ========= ======== Issuance of common stock to officer for deferred compensation, valued at $.75 per share 64,000 6,400 41,600 -- (48,000) -- -- -- -- Deferred compensation earned -- -- -- -- 37,000 -- -- -- 37,000 Net (loss) -- -- ($108,400) -- -- -- -- -- (108,400) ------- -------- ---------- --------- --------- --------- --------- --------- -------- Balance, December 31, 2000 707,128 $ 70,713 $1,353,649 -- (11,000) (947,820) (108,400) -- 357,142 ======= ======== ========== ========= ========= ========= ========= ========= ======== Issuance of common stock to officerfor deferred compensation, valued at $1.25 per share 38,400 3,840 44,160 -- (48,000) -- -- -- -- Deferred compensation earned -- -- -- -- 48,000 -- -- -- 48,000 Issuance of common stock for services, valued at $1.82 per share 10,000 1,000 17,200 -- -- -- -- -- 18,200 Exercise of common stock warrants for cash at $.75 per share 7,500 750 4,875 -- -- -- -- -- 5,625 Exercise of common stock warrants at $1.00 per share 50,000 5,000 45,000 (50,000) -- -- -- -- -- Net (loss) -- -- -- -- -- -- (92,773) -- 92,773 ------- -------- --------- -------- -------- --------- --------- -------- -------- Balance, December 31, 2001 813,028 81,303 1,464,884 (50,000) (11,000) (947,820) (201,173) -- 336,194 ======= ======== ========== ======== ======== ========= ========= ======== ======== Deferred compensation earned -- -- -- -- 11,000 -- -- -- 11,000 Repayment of note receivable -- -- -- 50,000 -- -- -- -- 50,000 Stock options issued as compensation -- -- 130,625 -- -- -- -- -- 130,625 Net (loss) -- -- -- -- -- -- 204,136) -- (204,136) ------- -------- --------- -------- -------- --------- --------- -------- -------- Balance, December 31, 2002 813,028 $ 81,303 $1,595,509 -- -- ($947,820) ($405,309) -- $323,683 ======= ======== ========== ======== ======== ========= ========= ======== ======== Other Comprehensive Income/Loss Changes in unrealized gain/loss -- -- -- -- -- -- -- (2,095) (2,095) Net Loss -- -- -- -- -- -- (86,787) -- (86,787) ------- -------- --------- -------- -------- --------- --------- -------- -------- Balance, December 31, 2003 813,028 $ 81,303 $1,595,509 -- -- ($947,820) ($492,096) ($2,095) 234,801 ======= ======== ========== ======== ======== ========= ========= ======== ========
F-5 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
Accumulated Accumulated Common Stock Capital in During Other ----------------- Excess of Note Deferred Accumulated Development Comprehensive Shares Amount Par Value Receivable Compensation (Deficit) Stage Income/(Loss) Totals ------ ------ --------- ---------- ------------ ----------- ----------- ------------- ------ Balance, December 31, 2003 813,028 $ 81,303 $1,595,509 -- -- ($947,820) ($492,096) ($2,095) 234,801 ========= ======== ========== ======== ======== ========= ========= ======= ======== Other Comprehensive Income/Loss Changes in unrealized gain/loss -- -- -- -- -- -- -- 6,092 6,092 Net Loss -- -- -- -- -- -- (48,260) -- (48,260) --------- -------- ---------- -------- -------- --------- --------- ------- -------- Balance, December 31, 2004 813,028 $ 81,303 $1,595,509 -- -- ($947,820) ($540,356) $3,997 $192,633 ========= ======== ========== ======== ======== ========= ========= ======= ======== Issuance of Common Stock 207,745 20,774 257,358 -- -- -- -- -- 278,132 Other Comprehensive Income/Loss Changes in unrealized gain/loss -- -- -- -- -- -- -- 931 931 Net Loss -- -- -- -- -- -- (39,448) -- (39,448) --------- -------- ---------- -------- -------- --------- --------- ------- -------- Balance, December 31, 2005 1,020,773 $102,077 $1,852,867 -- -- ($947,820) ($579,804) $4,928 $432,248 ========= ======== ========== ======== ======== ========= ========= ======= ========
The accompanying notes are an integral part of these consolidated financial statements. F-6 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS
Cumulative Amounts from Years Ended January 1, 2000 to December 31, December 31, 2005 2004 2005 CASH FLOWS FROM OPERATING ACTIVITES Net loss $ (39,448) $ (48,260) $(579,804) Adjustments to reconcile net loss to net cash used in operating activities: Stock issuance for salary 11,912 -- 107,912 Stock issuance for professional services -- -- 18,200 Stock options compensation -- -- 130,625 Realized (gain)loss on sales of investments (3,751) (28,119) (31,622) Write-off of patent -- -- 18,724 Changes in assets and liabilities Decrease (increase) in note and interest receivable -- -- 50,000 Increase (decrease) in accounts payable and accrued expenses (1,937) 49,990 93,858 --------- --------- --------- Net cash used in operating activities (33,224) (26,389) (192,107) --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments (187,750) (351,158) (650,863) Proceeds from sales of investments 184,782 378,099 622,912 --------- --------- --------- Net cash (used in) provided by investing activities (2,968) 26,941 (27,951) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Exercise of common stock warrants -- -- 5,625 Issuance of common stock 165,000 -- 165,000 --------- --------- --------- Net cash provided by financing activities 165,000 -- 170,625 --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 128,808 552 (49,433) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIODS 246,970 246,418 425,211 --------- --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIODS $ 375,778 $ 246,970 $ 375,778 ========= ========= =========
The accompanying notes are an integral part of these consolidated financial statements. F-7 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) YEARS ENDED DECEMBER 31, 2005 AND 2004 AND CUMULATIVE AMOUNTS FROM JANUARY 1, 2000 TO DECEMBER 31, 2005 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES During the year ended December 31, 2002, the Company charged to equity the $130,625 value of employee stock options issued to the Company's President. During the year ended December 31, 2005, the Company satisfied its obligations to pay the President's accrued salary of $113,132 through the issuance of 107,745 shares of the Company's common stock at fair value. The accompanying notes are an integral part of these consolidated financial statements. F-8 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Ridgefield Acquisition Corp. (the "Company") was incorporated under the laws of the State of Colorado on October 13, 1983. The Company had been engaged in the design, manufacture and marketing of robotic workstations for the electronics industry, including routing and depaneling workstations predominately to entities in North America and the Pacific Rim. In November 1998 the Company entered into an Asset Purchase Agreement (the "JOT Agreement") with JOT Automation, Inc. (JOT) a wholly owned Texas subsidiary of JOT Automation Group OYJ, a Finnish corporation. Pursuant to the agreement, the Company sold JOT all of its assets relating to its depaneling and routing business in exchange for $920,000 and the assumption of the operating liabilities related to the Company's business assets. The sale was completed on March 9, 1999. Subsequent to the sale to JOT, the Company's sole continuing operation was the continuation of research and development activities on a prototype micro-robotic device to manipulate organ tissues on an extremely small scale. The Company had filed for a patent application for the device. As of December 31, 1999, the Company's research and development activities for the device were suspended, pending assessment of the economic benefit of continuing research and development activities or sale of the patent, as well as assessment of other corporate opportunities. In June 2000, the Company determined not to pursue further development or sale of the proto-type device and has written-off the associated patent costs. On January 14, 2003, in connection with its reinstatement as an active corporation in the State of Colorado, the Company changed its name from Bio-Medical Automation, Inc. to Ridgefield Acquisition Corp. On February 27, 2003, the Board of Directors of the Company authorized the formation of a Nevada corporation named Bio-Medical Automation, Inc. and authorized the management of the Company to transfer the Company's right title and interest in its patent to Bio-Medical Automation, Inc. On March 3, 2003, the Company filed Articles of Incorporation with the Secretary of State of the State of Nevada to form Bio-Medical Automation, Inc., a Nevada corporation wholly owned by the Company. Commencing January 1, 2000, the Company is considered a development stage company as defined by Statement of Financial Accounting Standards (SFAS) No.7, as it has no principal operations nor revenue from any source. PRINCIPLES OF CONSOLIDATION The consolidated financial statements of Ridgefield Acquisition Corp. include the accounts of Bio-Medical Automation, Inc., its wholly owned subsidiary. All intercompany transactions have been eliminated in consolidation. INCOME TAXES The Company has adopted the provisions of SFAS 109, "Accounting for Income Taxes". SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, the deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. F-9 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) LOSS PER COMMON SHARE Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted income per common share is calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive convertible equity instruments consisting of options. There is no difference in the calculation of basic and diluted loss per share for any period presented since the inclusion of potentially dilutive convertible equity instruments would be antidilutive. CASH EQUIVALENTS For purposes of reporting cash flows, the Company considers as cash equivalents all highly liquid investments with a maturity of three months or less at the time of purchase. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. STOCK BASED COMPENSATION The company accounts for its stock-based compensation using Accounting Principles Board's Opinion No. 25 ("APB 25"). Under APB 25, compensation expense is recognized for stock options with an exercise price that is less than the market price on the grant date of the option. For stock options with exercise prices at or above the market value of the stock on the grant date, the Company adopted the disclosure-only provisions of SFAS 123, "Accounting for Stock-Based Compensation." The Company has adopted the disclosure-only provisions of SFAS 123, for the stock options granted to the employees and directors of the Company. On March 25, 2005,the Company issued to Mr. Bronson an option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005 and such option was exercisable for a period of 5 years. On February 24, 2006, Mr. Bronson exercised his option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16. On March 25, 2005, the Company issued options to Leonard Hagan and Kenneth Schwartz to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005, for services rendered to the Company. Such options are exercisable for a period of 5 years commencing on March 25, 2005. On February 24, 2006, Messrs: Hagan and Schwartz each exercised their option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16. In 2003, the Company issued an option to Steven N. Bronson to purchase 150,000 shares of the Company's common stock at the purchase price of $1.65, which was 110% percent of the closing bid price on March 21, 2003 and F-10 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) such option is exercisable for a period of 5 years. Had compensation expense for the options granted been determined based on the fair value at the grant date for the options, consistent with the provisions of SFAS 123,the Company's net loss and net loss per share for the years ended December 31, 2005 and 2004 would have been increased to the pro forma amounts indicated below: 2005 2004 Net loss As reported $ (39,448) $ (48,260) Pro forma (125,932) (48,260) Net loss per share As reported (.04) (.06) Pro forma (.14) (.06) The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants in fiscal 2005: no dividend yield; expected volatility of 90%; risk-free interest rate of 2.28%; and expected life of five years. There were no options granted in 2004. PATENT COSTS The Company had applied for a patent from the U.S. Patent Office for a micro-robotic device under development. The costs associated with obtaining this patent were capitalized and were to be amortized over the life of the patent. The patent was the Company's sole asset of continuing operations. In 1999, the Company incurred research and development costs associated with development of the micro-robotic device underlying the patent and had, as of December 31, 1999, continued to assess the economic benefit of continuing research and development activities or sale of the patent. In February 2000, the Company entered into an agreement with a shareholder which resulted in a change in control of the Company. The agreement specified that the Company owns certain intellectual property consisting of the patent application and a related Technology License Agreement. In June 2000, the Company decided not to pursue further research and development or sale of the patent and wrote off the capitalized costs. In 2002, the Company received its patent for the micro-robotic device from the U.S. Patent Office. F-11 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FAIR VALUE The carrying amount reported in the balance sheet for cash and cash equivalents, investments, accounts payable and accrued expenses approximates fair value because of the immediate or short-term nature of these financial instruments. CONCENTRATIONS OF CREDIT RISK Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash and cash equivalents accounts at two financial institutions. The Company periodically evaluates the credit worthiness of financial institutions, and maintains cash accounts only in large high quality financial institutions, thereby minimizing exposure for deposits in excess of federally insured amounts. RECENT ACCOUNTING PRONOUNCEMENTS In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment". SFAS No. 123 (revised 2004) requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation. That cost will be recognized over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. Subsequent changes in fair value during the requisite service period, measured at each reporting date, will be recognized as compensation cost over that period. SFAS No. 123 (revised 2004) is effective in the first interim or annual period beginning after June 15, 2005. The Company will be required to adopt SFAS No. 123 (revised 2004) in 2006. The Company is currently evaluating the impact of the adoption of SFAS 123(revised 2004)on the Company's financial position and results of operations. In December 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments - an amendment to FASB Statements No. 133 and 140 " and in May 2005, the FASB issued SFAS No. 154 "Accounting and Error Corrections - a replacement of APB opinion No. 20 and FASB Statement No. 3". The Company is not significantly impacted by these statements and does not expect their implementation to have a material impact on the Company's financial statements. F- 12 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - BASIS OF ACCOUNTING / GOING CONCERN The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern which contemplates the realization of assets and extinguishment of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has accumulated a deficit of $947,820 through December 31, 1999 and has incurred a deficit since reentering the development stage, effective January 1, 2000, of $579,804. As discussed in Note 1, the Company, in 1999, sold all of its assets relating to its historical line of business and abandoned, in 2000, its efforts in the research and development of a micro-robotic device. As of December 31, 2005, the Company has no principal operations or revenue producing activities. These factors indicate that the Company may be unable to continue in existence. The Company's financial statements do not include any adjustments related to the carrying value of assets or the amount and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company's ability to establish itself as a going concern is dependent on its ability to merge with another entity or acquire revenue producing activities. NOTE 3 - INVESTMENTS Investments are classified as available for sale according to the provisions of Financial Accounting Standards Board Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Realized gains and losses are calculated using the original cost. Investments at December 31, 2005, are comprised of common stocks which had an aggregate cost of $59,572 and a fair market value of $64,500. Those investments had cumulative unrealized gains of $4,928 at December 31, 2005. During 2005, the Company sold investments that had an aggregate cost of $181,031 and an aggregate sales price of $184,782 which resulted in realized gains of $3,751. During 2004, the Company sold investments that had an aggregate cost of $349,980 and an aggregate sales price of $378,099 which resulted in realized gains of $28,119. NOTE 4 - STOCKHOLDERS' EQUITY COMMON STOCK Common shares issued for non-cash consideration are valued at the trading price of the Company's common stock as of the date the shares were approved for issuance. On December 8, 2005, the Company entered into a stock purchase agreement(the "Agreement") with RAM Capital Management Trust I ("RAM Capital"). Pursuant to the Agreement, the Company agreed to sell RAM Capital 100,000 restricted shares of the Company's common stock, $.10 par value (the "Shares"), at a purchase price of $1.65 per share. On December 22, 2005, the Company received RAM Capital's check in the amount of $165,000 as payment of the purchase price for the shares pursuant to the Agreement (also see Note 6). F-13 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED) OPTIONS The status of outstanding options granted by the Company is as follows: No. Weighted Avg. of Exercise Shares Price Options Outstanding - December 31, 2003 150,000 1.65 (150,000) exercisable) ------- Options Granted in 2004 - - - Options Exercised in 2004 - - - Options Forfeited in 2004 - - - ------ Options Outstanding - December 31, 2004 150,000 1.65 (150,000) exercisable) ------- Options Granted in 2005 - 120,000 1.16 Options Exercised in 2005 - - - Options Forfeited in 2005 - - - ------- Options Outstanding - December 31, 2005 270,000 1.43 (270,000) exercisable) ------- At December 31, 2005, the number of options exercisable was 270,000, the weighted average exercise price of these options was $1.43, and the weighted average remaining contractual life of the options was 3.14 years. At December 31, 2004, the number of options exercisable was 150,000, the weighted average exercise price of these options was $1.65, and the weighted average remaining contractual life of the options was 2.25 years. NOTE 5 - INCOME TAXES At December 31, 2005, the Company has Federal net operating loss carryforwards totaling approximately $1,018,000, that may be offset against future taxable income ratably through 2025. Due to the change in control of the Company in March 2000, the Company's ability to realize the tax benefits from the net operating losses and research and development credits prior to that date may be significantly limited. F-14 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 - INCOME TAXES (CONTINUED) The Company has fully reserved the tax benefits of these operating losses and credits because the likelihood of realization of the tax benefits cannot be determined. These carryforwards and credits are subject to review by the Internal Revenue Service. The approximately $346,000 tax benefit of the loss carryforward has been offset by a valuation allowance of the same amount. Therefore, there is no current or deferred tax expense for the years ended December 31, 2005 and 2004. of the total tax benefit of the loss carryforward, approximately $38,000 and $48,000 is applicable to 2005 and 2004, respectively. Temporary differences between the time of reporting certain items for financial and tax reporting purposes are not considered significant by management of the Company. NOTE 6 - RELATED PARTY TRANSACTIONS During 2005 and 2004 the Company incurred approximately $0 and $270, respectively, in professional fees to a firm managed by a member of the Board of Directors. In November 2001, the Company entered into a Mergers and Acquisitions Advisory Agreement with Catalyst Financial LLC ("Catalyst"), an entity whose owner and principal is the President of the Company. Under the terms of the agreement, Catalyst will earn a fee, as outlined in the agreement, in the event the Company completes a merger. The agreement is for a three year period, terminating November, 2004. On March 25, 2005, the Board of Directors approved the renewal of the Mergers and Acquisitions Advisory Agreement (the "M&A Advisory Agreement") between the Company and Catalyst Financial LLC ("Catalyst") for a period of three (3) years commencing on April 1, 2005 and modified the M&A Advisory Agreement to provide that Catalyst shall receive a monthly retainer fee in the amount of $1,000 commencing on April 1, 2005 and continuing throughout the term of the M&A Advisory Agreement (See Note 8). The President's employment agreement is renewable annually for one year at an annual salary of $48,000. During 2003, the President was granted an option to purchase 150,000 shares of the Company's common stock at an exercise price of 110% of the closing market price as of the date of grant, for a period of five years. On March 25, 2005, the Board of Directors renewed the President's employment agreement through March 23, 2006 with the modification that the President will no longer receive an annual salary of $48,000. The Board also agreed to pay the President's accrued salary of $113,132 through the issuance of 107,745 shares at fair value of the Company's common stock. On March 25, 2005, the Company issued an option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005, to Leonard Hagan one of the Company's independent directors, for his services to the Company. On March 25, 2005, the Company issued an option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005, to Kenneth Schwartz one of the Company's independent directors, for his services to the Company. Such options are exercisable for a period of 5 years commencing on March 25, 2005. On March 25, 2005, the Company issued to Steven N. Bronson, the Company's President, an option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16, which was 110% percent of the closing bid price on March 25, 2005. All of the above described options are exercisable for a period of 5 years and resulted in no expense to the Company. F-15 RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY (A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 - RELATED PARTY TRANSACTIONS (CONTINUED) The Company used a portion of the premises occupied by Catalyst Financial LLC, a full service brokerage, investment banking and consulting firm, as its principal office in 2005 and 2004. Steven N. Bronson, the President of the Company, is the principal and owner of Catalyst Financial LLC. The Company did not pay any rent to Catalyst Financial LLC for the use of the offices in 2005 and 2004. Catalyst Financial LLC has agreed to waive the payment of any rent by the Company for use of the offices. NOTE 7 - SEGMENT REPORTING In June 1997, SFAS 131, "Disclosure about Segments of an Enterprise and Related Information" was issued, which amends the requirements for a public enterprise to report financial and descriptive information about its reportable operating segments. Operating segments, as defined in the pronouncement, are components of an enterprise about which separate financial information is available that is evaluated regularly by the Company in deciding how to allocate resources and in assessing performance. The financial information is required to be reported on the basis that is used internally for evaluating segment performance and deciding how to allocate resources to segments. The Company has no reportable segments at December 31, 2005 and 2004. NOTE 8 - SUBSEQUENT EVENTS On February 24, 2006, Steven N. Bronson, the Company's Chairman and President exercised an option to purchase 100,000 shares of the Company's common stock at the purchase price of $1.16. Based on this exercise the Company received proceeds of $116,000. On February 24, 2006, Leonard Hagan, a director of the Company exercised an option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16. Based on this exercise the Company received proceeds of $11,600. On February 24, 2006, Kenneth Schwartz, a director of the Company exercised an option to purchase 10,000 shares of the Company's common stock at the purchase price of $1.16. Based on this exercise the Company received proceeds of $11,600. On January 31, 2006, the Board of Directors of the Company directed the officers of the Company to amend the M&A Advisory Agreement (see Note 6) to provide sub-paragraph 3.(A)(entitled Monthly Fee) of the M&A Advisory Agreement shall be amended to provided that monthly fee payable by the Company to Catalyst Financial during the one year period from February 1, 2006 through January 31, 2007 shall be increased from $1,000 per month to $5,000 per month. Thereafter, the Company shall pay a monthly fee in the amount of $1,000 to Consultant on the first day of each month commencing on February 1, 2007 and continuing through March 1, 2008. F-16 NOTE 8 (continued) - ---------------------------- On January 31, 2006, the Board of Directors of the Company directed the officers of the Company to take and approve certain corporate action with respect to the Company's wholly owned subsidiary Bio-Medical Automation, Inc., a Nevada corporation (the "Subsidiary"). Those actions were the appointment of Steven N. Bronson, Alan Rosenberg and Louis Meade to be on the Board of Directors of the Subsidiary for a term of one year or until their successor is appointed and duly qualified, the appointment of Steven N. Bronson as the president, treasurer and secretary of the Subsidiary, the opening of a bank account at Bank of America or some other banking institution for the Subsidiary and the ratification of the By-laws of the Subsidiary in the form that was presented to the Board. Additionally, the Board of Directors authorized the officers of the Company to deposit $50,000 of the Company's assets in the Subsidiary's bank account. The Company took the foregoing action to further its plans to exploit the Patent owned by the Subsidiary. Additionally, in furtherance of the Company's plan to exploit the Patent, the Company may spinoff the Subsidiary to the Company's shareholders so that the Subsidiary may be better able to obtain the financing necessary to exploit the Patent. F-17 EX-3.6 2 ex3-6.txt Exhibit 3.6 ARTICLES OF INCORPORATION OF BIO-MEDICAL AUTOMATION, INC. KNOW ALL MEN BY THESE PRESENTS: That I, Jean Sherett the undersigned, for the purpose of forming a corporation under the laws of the State of Nevada, relating to the General Corporation Law, DO HEREBY CERTIFY: FIRST: The name of the corporation is: Bio-Medical Automation, Inc. SECOND: This corporation is authorized to carry on any lawful business or enterprise. THIRD: The amount of the total authorized capital stock of this corporation is 45,000,000 shares, consisting of 40,000,000 common stock at $0.001 par value and 5,000,000 preferred stock at $0.01 par value. Common Stock. The holders of the Common Stock shall vote as a single class on all matters submitted to a vote of the stockholders, with each Share entitled to one vote. The holders of Common Stock are not entitled to cumulate votes in the election of any directors. In the event that the shares of Common Stock shall be listed and quoted on an exchange or other trading system, the Board of Directors of the Corporation shall ensure, and shall have all powers necessary to ensure, that the membership of the Board of Directors and the voting rights of the Holders of Common Stock shall at all times be consistent with the applicable rules and regulations, if any, for the Common Stock to be eligible for listing and quotation on such exchange or other trading system. Preferred Stock. General. Subject to the provisions of these Articles of Incorporation, the Board of Directors is authorized, subject to limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Nevada, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: (a) The number of shares constituting that series and the distinctive designation of that series; (b) The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; (c) Whether that series shall have voting rights, in addition to the voting rights provided by law, and if so, the terms of such voting rights; (d) Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; (e) Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (e) Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; and (g) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series. FOURTH: Liquidation Rights. Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, after payment shall have been made to holders of outstanding Preferred Stock, if any, of the full amount to which they are entitled pursuant to these Articles of Incorporation and any resolutions that may be adopted from time to time by the Corporation's Board of Directors, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock, if any, to share ratably in accordance with the number of Common Stock held by each such holder, in all remaining assets of the Corporation available for distribution among the holders of Common Stock, whether such assets are capital, surplus or earnings. For purposes of this Section, neither the consolidation or merger of the Corporation with or into any other corporation or corporations pursuant to which the stockholders of the Corporation receive capital stock and/or other securities (including debt securities) of the acquiring corporation (or of the direct or indirect parent corporation of the acquiring corporation), nor the sale, lease or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation, shall be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the Corporation as those terms are used in this Section "Fourth". FIFTH: The members of the governing board of this corporation shall be styled directors. The first board of directors shall consist of one member and the name and address is as follows: Steven N. Bronson 10 South Street, Suite 202 Ridgefield, Connecticut 06877 SIXTH: The name and address of the incorporator is as follows: Jean M. Sherett c/o Blumberg Excelsior Corporate Services, Inc. 62 White Street New York, New York 10013 SEVENTH: The period of existence of this corporation shall be perpetual. EIGHTH: The name of the resident agent and the registered office address of the corporation is as follows: XL CORPORATE SERVICES, INC. 88 South "E" Street, Virginia City, Nevada 89440 NINTH: Limitation on Director Liability. No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Nevada General Corporation Law, or (d) for any transaction from which the director derived an improper personal benefit. If the Nevada General Corporation Law hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitations on personal liability provided herein, shall be limited to the fullest extent permitted by the amended Nevada General Corporation law. Any repeal or modification of this Section shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. TENTH: Indemnification. General. Each person who was or is made a party to or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in any other capacity while serving as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Nevada General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided herein, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the Nevada General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers. Failure to Pay a Claim. If an indemnification claim is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Nevada General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Nevada General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Not Exclusive. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trusts or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Nevada General Corporation Law. Definition of the Corporation. As used in this Section, references to "the Corporation" shall include, in addition to the resulting or surviving corporation, any constituent corporation absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees and agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under the provisions of this Section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. Severability. If this Section or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director, officer, employee and agent of the Corporation as to expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including a grand jury proceeding and an action by the Corporation, to the fullest extent permitted by any applicable portion of this Section that shall not have been invalidated or by any other applicable law. TWELVETH: Bylaws. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the bylaws of the Corporation. THIRTEENTH: Amendment. The Corporation reserves the right to amend, alter change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. I, Jean M. Sherett, the undersigned, for the purpose of forming a corporation under the laws of the State of Nevada, do make, file and record this certificate, and do certify that the facts herein stated are true and I have accordingly hereunto set my hand this 3rd day of March, 2003. /s/ Jean M. Sherett ----------------------- By: Jean M. Sherett Incorporator I hereby accept appointment as Resident Agent of Bio-Medical Automation, Inc., and do hereby affix my Signature of acceptance on this 3rd day of March, 2003. /s/ Marc D. Moel ----------------------- By: Marc D. Moel Assistant Secretary For: XL CORPORATE SERVICES, INC. Its agent EX-3.7 3 ex3-7.txt Exhibit 3.7 BYLAWS OF Bio-Medical Automation, Inc. I OFFICES ------- SECTION 1.1 Registered Office. The registered office of Bio-Medical Automation, Inc. (the "Corporation") in the State of Nevada shall be at . The name of the registered agent of the Corporation at that address is XL Corporate Services, Inc. SECTION 1.2 Principal Office. The principal office for the transaction of the business of the Corporation shall be at 100 Mill Plain Road, Danbury, Connecticut 06811. The Board of Directors (the "Board") is hereby granted full power and authority to change said principal office from one location to another. SECTION 1.3 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Nevada, as the Board may from time to time determine or as the business of the Corporation may require. II MEETINGS OF STOCKHOLDERS ------------------------ SECTION 2.1 Annual Meetings. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings shall be held at such place, time and date as the Board shall determine by resolution. SECTION 2.2 Special Meetings. Special meetings of the stockholders for any purpose or purposes may be called by the Board or a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in these Bylaws, include the power to call such meetings. Unless otherwise prescribed by statute or by the Certificate of Incorporation, special meetings may not be called by any other person or persons. No business may be transacted at any special meeting of stockholders other than such business as may be designated in the notice calling such meeting. 1 SECTION 2.3 Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Nevada, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof. SECTION 2.4 Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States and/or Canadian mail, in a postage prepaid envelope, directed to him at his post office address furnished by him to the Secretary of the Corporation for such purpose or, if he shall not have furnished to the Secretary the address for such purpose, then at his post office address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable or telecopier. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. SECTION 2.5 Quorum. Except as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called. 2 SECTION 2.6 Voting. (a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him and registered in his name on the books of the Corporation: (i) on the date fixed pursuant to Section 6.5 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or (ii) if no such record date shall have been so fixed, then (A) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (B) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which the meeting shall be held. (b) Shares of stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the laws of the State of Nevada. (c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in these Bylaws or by law, shall be decided by the vote of a majority of the shares present in person or by proxy and entitled to vote thereat and thereon. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and it shall state the number of shares voted. 3 SECTION 2.7 List of Stockholders. The Secretary of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, at the offices of the Company or at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the duration thereof, and may be inspected by any stockholder who is present. SECTION 2.8 Inspector of Election. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the Board of Directors or the chairman of such meeting may appoint an Inspector of Election to act with respect to such vote. The Inspector of Election so appointed shall first subscribe an oath faithfully to execute the duties of an inspector of election at such meeting with strict impartiality and according to the best of his ability. Such Inspector of Election shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of the Inspector of Election shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The Inspector of Election need not be a stockholder of the Corporation, and any officer or director of the Corporation may be an Inspector of Election on any question other than a vote for or against a proposal in which he shall have a material interest. SECTION 2.9 Conduct of Meeting. The chairman of a meeting of the stockholders, as determined pursuant to Article IV of these Bylaws, shall conduct such meeting in a businesslike and fair manner, but shall not be obligated to follow any technical, formal or parliamentary rules or principles of procedure. The chairman's ruling on procedural matters shall be conclusive and binding on all stockholders, unless at the time of a ruling a request for a vote is made to the stockholders entitled to vote and represented in person or by proxy at the meeting, in which case the decision of a majority of such shares shall be conclusive and binding on all stockholders. Without limiting the generality of the foregoing, the chairman shall have all of the powers usually vested in the chairman of a meeting of stockholders. 4 III BOARD OF DIRECTORS ------------------ SECTION 3.1 General Powers. The property, business and affairs of the Corporation shall be managed by the Board. SECTION 3.2 Number, Qualifications and Term of Office. The authorized number of directors shall be no less than 1 and no more than 8, with the exact number to be determined from time to time by a resolution adopted by a majority of the Board or by the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding shares of voting stock of the Corporation. The initial number of authorized directors shall be three (3). Each director shall be a natural person not less than twenty-one (21) years of age but need not be a resident of Delaware or a shareholder of the Corporation. Each of the directors of the Corporation shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign or shall have been removed in the manner provided herein or at law. SECTION 3.3 Election of Directors. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for cumulative voting. SECTION 3.4 Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 3.5 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided. SECTION 3.6 Place of Meeting and Telephone Meetings. The Board may hold any of its meetings at such place or places within or without the State of Nevada as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice of a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting. 5 SECTION 3.7 First Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required. SECTION 3.8 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given. SECTION 3.9 Special Meetings. Special meetings of the Board may be called by the Chairman of the Board, the Chief Executive Officer, or the President and shall be called by the President or Secretary on the written request of two directors. Notice of all special meetings of the Board shall be given to each director: (a) by first-class mail, postage prepaid, deposited in the United States mail in the city where the principal executive office of the Corporation is located at least five (5) days before the date of such meeting; or (b) by telegram, charges prepaid, such notice to be transmitted by the telegraph company in the city of the principal executive office of the Corporation at least forty-eight (48) hours before the time of holding such meeting; or (c) by personal delivery or telecopier, or orally in person or by telephone, at least twenty-four (24) hours prior to the time of holding such meeting. Notice given in accordance with paragraph (a) above shall conclusively be deemed to be given to a director if addressed to the director at the address the person giving the notice has reason to believe will result in actual notice to the director prior to the time of the meeting. Notice given in accordance with paragraph (b) or (c) above shall conclusively be deemed to be given to a director if delivered in writing or communicated orally either to the director or to a person whom the person giving the notice has reason to believe will deliver or communicate it to the director prior to the time of the meeting. Notice given in accordance with paragraph (a), (b) or (c) above shall conclusively be deemed given to a director if mailed or delivered to the last address provided by the director to the Secretary of the Corporation for such purpose. The notice need not specify the purpose of the meeting, nor need it specify the place of the meeting if the meeting is to be held at the principal executive office of the Corporation. Such notice may be waived by any director at any time. Any meeting shall be a legal meeting without notice having been given if all the directors shall be present thereat or those not present shall, either before or after the meeting, sign a written waiver of notice of, or a consent to, such meeting or shall after the meeting sign the approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the Corporation's records or be made a part of the minutes of the meeting. 6 SECTION 3.10 Quorum and Manner of Acting. Except as otherwise provided in the Certificate of Incorporation or these Bylaws or by law, the presence of a majority of the total number of directors then in office shall be required to constitute a quorum for the transaction of business at any meeting of the Board. Except as otherwise provided in the Certificate of Incorporation or these Bylaws or by law, all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. Except as otherwise provided in the Certificate of Incorporation, these Bylaws or by law, a meeting at which there is a quorum initially present may continue to transact business notwithstanding the withdrawal of a director, so long as any action taken is approved by at least a majority of the required quorum for such meeting. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. SECTION 3.11 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee, if any. SECTION 3.12 Compensation. The directors shall receive only such compensation for their services as directors as may be allowed by resolution of the Board. The Board may also provide that the Corporation shall reimburse each such director for any expense incurred by him on account of his attendance at any meetings of the Board or committees of the Board. Neither the payment of such compensation nor the reimbursement of such expenses shall be construed to preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving compensation therefor. SECTION 3.13 Executive Committee. There may be an Executive Committee appointed by resolution passed by a majority of the Board, who may meet at stated times, or on notice to all by any of their own number, during the intervals between the meetings of the Board; they shall advise and aid the officers of the Corporation in all matters concerning its interests and the management of its business, and generally perform such duties and exercise such powers as may be directed or delegated by the Board from time to time. To the full extent permitted by law, the Board may delegate to such committee authority to exercise all the powers of the Board while the Board is not in session. Vacancies in the membership of the committee shall be filled by the Board at a regular meeting or at a special meeting for that purpose. The Executive Committee shall keep written minutes of its meetings and report the same to the Board when required. The provisions of Sections 3.8, 3.9, 3.10 and 3.11 of these Bylaws shall apply, mutatis mutandis, to any Executive Committee of the Board. 7 SECTION 3.14 Other Committees. The Board may, by resolution passed by a majority of the Board, designate one or more other committees, each such committee to consist of one or more of the directors of the Corporation. To the full extent permitted by law, any such committee shall have and may exercise such powers and authority as the Board may designate in such resolution. Vacancies in the membership of a committee shall be filled by the Board at a regular meeting or a special meeting for that purpose. Any such committee shall keep written minutes of its meetings and report the same to the Board when required. The provisions of Sections 3.8, 3.9, 3.10 and 3.11 of these Bylaws shall apply, mutatis mutandis, to any such committee of the Board. SECTION 3.15 Rights of Inspection. Every director shall have the absolute right at any reasonable time to inspect and copy all books, records, and documents of every kind and to inspect the physical properties of the Corporation and also of its subsidiary corporations, domestic or foreign. Such inspection by a director may be made in person or by agent or attorney and includes the right to copy and obtain extracts. SECTION 3.16 Compensation. By resolution of the Board of Directors, each director may be paid his or her expenses, if any, of attendance at each meeting of the Board of Directors or its committee, and may be paid a fixed sum set from time to time by the Board of Directors for serving on the Board of Directors and/or for attendance at each meeting of the Board of Directors or committee or both. No such payment shall prevent any director from serving the Corporation in any other capacity and receiving compensation therefore, and a director may be a salaried officer or employee of the Corporation. SECTION 3.17 Limits on Liability. A director shall not be held personally liable for monetary damages for any action he or she has taken or any failure to take action, unless (a) the director has breached or failed to perform the duties of his office as defined by Delaware law, and (b) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The provision of this Section 3.17, however, shall not apply to (i) the responsibility or liability of a director pursuant to a criminal statute, or (ii) the liability of a director for the payment of taxes pursuant to local, state or federal law. IV OFFICERS -------- SECTION 4.1 Officers. The officers of the Corporation shall be a Chief Executive Officer, a President, a Secretary and a Treasurer. In addition, the Board may also elect a Chairman of the Board, one or more Vice Presidents, and one or more Assistant Secretaries and Assistant Treasurers. No officer need be a director of the Corporation. A person may hold more than one office. 8 SECTION 4.2 Other Officers. The Board may appoint such other officers as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. SECTION 4.3 Election. Each of the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 4.1, Section 4.2 or Section 4.4 of these Bylaws, shall be chosen annually by the Board and shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or his successor shall be elected and qualified. SECTION 4.4 Removal; Vacancies. Subject to the express provisions of a contract authorized by the Board, any officer may be removed, either with or without cause, at any time by the Board or by any officer upon whom such power of removal may be conferred by the Board. Any vacancy occurring in any office of the Corporation shall be filled by the Board. SECTION 4.5 The Chairman of the Board. The directors of the Corporation shall elect from their own number a chairman of the Board, who may or may not be an officer of the Corporation. The Chairman of the Board shall preside at all meetings of the shareholders and of the directors and shall have such other powers and duties as are provided in these By-laws and as may be prescribed from time to time by the Board of Directors or by applicable law. He shall be an ex- officio member of standing committees, if so provided in the resolutions of the Board appointing the members of such committees. If there is no Chief Executive Officer or President, the Chairman of the Board shall in addition be the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in Section 4.6. SECTION 4.6 The Chief Executive Officer. The Chief Executive Officer, subject to the control of the Board, shall have general supervision, control and management of the business and affairs of the Corporation, and general charge and supervision of all officers, agents and employees of the Corporation; shall see that all orders and resolutions of the Board are carried into effect; in general shall exercise all powers and perform all duties usually vested in the office of chief executive officer of a corporation; and shall have such other powers and duties as may from time to time be assigned to him by the Board or as may be prescribed by these Bylaws or applicable law. He may execute and deliver in the name of the Corporation all deeds, mortgages, bonds, contracts and other instruments, except where required by law or these Bylaws to be otherwise executed and delivered or when such execution and delivery shall be expressly delegated by him or the Board to some other officer or agent of the Corporation. In the absence of the Chairman of the Board, or if there is none, the Chief Executive Officer shall preside at all meetings of the stockholders and, if he is a director, the Board. He shall be an ex-officio member of all the standing committees, including the executive committee, if any. 9 SECTION 4.7 The President. Subject to such supervisory powers, if any, as may be given by the Board or these Bylaws to the Chief Executive Officer or the Chairman of the Board, if there are such officers, the President shall, subject to the control of the Board, have the powers and duties prescribed for the President by the Chief Executive Officer or these Bylaws. In the absence of the Chairman of the Board and the Chief Executive Officer, or if there are none, the President shall preside at all meetings of the stockholders and, if he is a director, the Board. If there is no Chief Executive Officer, the President shall in addition be the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in Section 4.6. The President shall be an ex-officio member of standing committees, if so provided in the resolutions of the Board appointing the members of such committees. SECTION 4.8 The Vice Presidents. The Vice Presidents, if any, shall perform such duties and have such powers as the Board may from time to time prescribe. SECTION 4.9 The Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. He shall disburse the funds of the Corporation as may be ordered by the Board, making proper vouchers for such disbursements, and shall render to the President and the Board, at its regular meetings, or when the Board so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. SECTION 4.10 The Secretary. The Secretary shall attend all meetings of the Board and all meetings of the stockholders and record all the proceedings of the meetings of the stockholders and of the Board in a book to be kept for that purpose and shall perform like duties for the standing and special committees of the Board when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board, and shall perform such other duties as may be prescribed by the Board or the President, under whose supervision he shall act. He shall have custody of the corporate seal of the Corporation and he shall have authority to affix the same to any instrument requiring it and, when so affixed, it may be attested by his signature. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. SECTION 4.11 The Assistant Treasurer and Assistant Secretary. The assistant treasurer and the assistant secretary, if any, shall perform such duties and have such powers as the Board may from time to time prescribe. 10 V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. ---------------------------------------------- SECTION 5.1 Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness payable by the Corporation shall be signed by the CEO, the President, the Treasurer, and/or by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. SECTION 5.2 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the CEO, the President, any Vice President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation. SECTION 5.3 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient. VI SHARES AND THEIR TRANSFER ------------------------- SECTION 6.1 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairman, Vice Chairman or President or a Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any of or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile 11 signature has been placed upon, any such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the shares represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.4. SECTION 6.2 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made on the books of the Corporation by the registered holder thereof, or by his attorney thereupon authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or transfer agent appointed as provided in Section 6.3, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so. SECTION 6.3 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them. SECTION 6.4 Lost, Stolen, Destroyed and Mutilated Certificates. In any case of loss, theft, destruction or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board or the President may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board or the President, it is proper so do to. SECTION 6.5 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders the Board shall not fix such a record date, the 12 record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. VII MISCELLANEOUS ------------- SECTION 7.1 Seal. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Nevada and the year of incorporation. SECTION 7.2 Waiver of Notices. Whenever notice is required to be given by these Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice orally or in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice. SECTION 7.3 Amendments. Subject to the provisions of the Certificate of Incorporation, these Bylaws and applicable law, these Bylaws or any of them may be amended or repealed and new Bylaws may be adopted (a) by the Board, by vote of a majority of the number of directors then in office or (b) by the vote of the holders of not less than a majority of the total voting power of all outstanding shares of voting stock of the Corporation at an annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, repeal or adoption is given in the notice of special meeting. Subject to the provisions of the Certificate of Incorporation, any Bylaws adopted or amended by the stockholders may be amended or repealed by the Board or the stockholders. SECTION 7.4 Voting Stock. Unless otherwise ordered by the Board, the Chief Executive Officer shall have full power and authority on behalf of the Corporation to attend and to act and vote at any meeting of the stockholders of any corporation in which the Corporation may hold stock and at any such meeting shall possess and may exercise any and all rights and powers which are incident to the ownership of such stock and which as the owner thereof the Corporation might have possessed and exercised if present. The Board by resolution from time to time may confer like powers upon any other person or persons. VIII EMERGENCY PROVISIONS -------------------- SECTION 8.1 General. The provisions of this Article shall be operative only during a national emergency declared by the President of the United States or the person performing the President's functions, or in the event of a nuclear, atomic, or other attack on the United States or a disaster making it 13 impossible or impracticable for the Corporation to conduct its business without recourse to the provisions of this Article. Said provisions in such event shall override all other Bylaws of the Corporation in conflict with any provisions of this Article, and shall remain operative so long as it remains impossible or impracticable to continue the business of the Corporation otherwise, but thereafter shall be inoperative; provided that all actions taken in good faith pursuant to such provisions shall thereafter remain in full force and effect unless and until revoked by action taken pursuant to the provisions of the Bylaws other than those contained in this Article. SECTION 8.2 Unavailable Directors. All directors of the Corporation who are not available to perform their duties as directors by reason of physical or mental incapacity or for any other reason or who are unwilling to perform their duties or whose whereabouts are unknown shall automatically cease to be directors, with like effect as if such persons had resigned as directors, so long as such unavailability continues. SECTION 8.3 Authorized Number of Directors. The authorized number of directors shall be the number of directors remaining after eliminating those who have ceased to be directors pursuant to Section 8.2, or the minimum number required by law, whichever is greater.SECTION 8.4 Quorum. The number of directors necessary to constitute a quorum shall be one-third of the authorized number of directors as specified in Section 8.3, or such other minimum number as, pursuant to the law or lawful decree then in force, it is possible for the Bylaws of the Corporation to specify. SECTION 8.5 Creation of Emergency Committee. In the event the number of directors remaining after eliminating those who have ceased to be directors pursuant to Section 8.2 is less than the minimum number of authorized directors required by law, then until the appointment of additional directors to make up such required minimum, all the powers and authorities which the Board could by law delegate, including all powers and authorities which the Board could delegate to a committee, shall be automatically vested in an emergency committee, and the emergency committee shall thereafter manage the affairs of the Corporation pursuant to such powers and authorities and shall have all such other powers and authorities as may by law or lawful decree be conferred on any person or body of persons during a period of emergency. SECTION 8.6 Constitution of Emergency Committee. The emergency committee shall consist of all the directors remaining after eliminating those who have ceased to be directors pursuant to Section 8.2, provided that such remaining directors are not less than three in number. In the event such remaining directors are less than three in number, the emergency committee shall consist of three persons, who shall be the remaining director or directors and either one or two officers or employees of the Corporation, as the remaining director or directors may in writing designate. If there is no remaining director, the emergency committee shall consist of the three most senior officers of the Corporation who are available to serve, and if and to the extent that officers are not available, the most senior employees of the Corporation. 14 Seniority shall be determined in accordance with any designation of seniority in the minutes of the proceedings of the Board, and in the absence of such designation, shall be determined by rate of remuneration. In the event that there are no remaining directors and no officers or employees of the Corporation available, the emergency committee shall consist of three persons designated in writing by the stockholder owning the largest number of shares of record as of the date of the last record date. SECTION 8.7 Powers of Emergency Committee. The emergency committee, once appointed, shall govern its own procedures and shall have the power to increase the number of members thereof beyond the original number, and in the event of a vacancy or vacancies therein, arising at any time, the remaining member or members of the emergency committee shall have the power to fill such vacancy or vacancies. In the event at any time after its appointment all members shall die or resign or become unavailable to act for any reason whatsoever, a new emergency committee shall be appointed in accordance with the foregoing provisions of this Article. SECTION 8.8 Directors Becoming Available. Any person who has ceased to be a director pursuant to the provisions of Section 8.2 and who thereafter becomes available to serve as a director shall automatically become a member of the emergency committee. SECTION 8.9 Election of Board of Directors. The emergency committee shall, as soon after its appointment as is practicable, take all requisite action to secure the election of a board of directors, and upon election all the powers and authorities of the emergency committee shall cease. SECTION 8.10 Termination of Emergency Committee. In the event, after the appointment of any emergency committee, a sufficient number of persons who ceased to be directors pursuant to Section 8.2 become available to serve as directors, so that if they had not ceased to be directors as aforesaid, there would be enough directors to constitute the minimum number of directors required by law, then all such persons shall automatically be deemed to be reappointed as directors and the powers and authorities of the emergency committee shall end. IX APPROVAL OF INSIDER TRANSACTIONS -------------------------------- SECTION 9.1 Any transaction, agreement or understanding between the Corporation or any of its subsidiaries and any of the officers and directors of the Corporation, or any entity in which such officer or director has a material financial interest, which is material to the business of the Corporation, or the applicable subsidiary, must be approved by a majority of the directors of the Corporation who have no interest in such transaction, agreement or understanding. The interested director may be present at the meeting, if any, at which such transaction, agreement or underwriting is approved. 15 EX-10.16 4 ex10-16.txt Exhibit 10.16 RIDGEFIELD ACQUISITION CORP. APPOINTMENT OF ATLAS STOCK TRANSFER CORPORATION Ridgefield Acquisition Corp., a Colorado corporation (the "Company") with its securities traded on the Over-the-Counter Bulletin Board hereby appoints Atlas Stock Transfer Corporation as its Transfer Agent for its common stock, $.10 par value per share and preferred stock, par value $.10 per share. I hereby certify, that: 1. As of March 22, 2006 the Company had: a. 5,000,000 shares of common stock authorized and 1,140,773 shares issued and outstanding, and b. 1,000,000 shares of preferred stock authorized and no shares issued and outstanding. 2. At a meeting of the Board of Directors of the Company, duly called and held on the 14th day of March 2006 at which a quorum was at all times present and voting, the following resolutions were duly and regularly adopted, and remain in full force and effect: First: Atlas Stock Transfer Corporation ("Atlas") be and is hereby appointed Transfer Agent for the Company's above referenced shares. Second: The Secretary of this Company is hereby instructed to file with Atlas; (a) a copy of the Articles of Incorporation of this Company together with all amendments thereto; (b) a copy of the by-laws of this Company and all amendments thereto; (c) specimens of all forms of outstanding certificates for all shares of this Company for which Atlas will act as Transfer Agent and the form approved by the Board of directors; (d) if readily available, or if specifically requested by Atlas, an opinion of counsel with respect to: (i) the due incorporation and continuing existence of this Company; (ii) the validity of its outstanding shares; and (iii) the status of such shares under the Securities Act of 1933 or any, other applicable federal or state statute; (f) copies of latest Forms 10-KSB, 10-QSB or 8-K filed by the Company with the Securities and Exchange Commission which are available on the SEC website at SEC at www.sec.gov; (g) if any certificates or stock for which Atlas will act as Transfer Agent are issued and outstanding; (i) a certified list of all stockholders showing their names, addresses, number of shares held and certificate numbers; (ii) a letter signed by the Secretary of the Company listing all stock certificates against which stop transfer orders are in force, together with the nature and reason for such stop orders or, if no such stop orders are in force, a statement to that effect; a letter signed by the Secretary of the Company giving the numbers of any unused stock certificates and advising that such certificates have been destroyed, canceled or have been changed for use under this Appointment; (h) a certificate as to the authorized and outstanding shares of this Company, its address to which notices may be sent, the names and specimen signatures of its officers who are authorized to sign certificates for shares, or instructions or requests to Atlas on behalf off this Company, the name and address of legal counsel to this Company and the names and addresses of any other transfer agents or registrars of shares of this Company; (i) in the event of any future amendment or change, in respect of any of the foregoing, prompt written notification of such change with copies of all relevant resolutions, instruments or other documents, specimen signatures, certificates, opinions or the like as Atlas may deem necessary or appropriate; and (j) the check of this Company to cover the initial fee payable to Atlas. Third: (a) This Company shall furnish to Atlas as Transfer Agent a sufficient supply of blank share certificates and from this will renew such supply upon the request of Atlas. Such blank share certificates shall be signed manually or by facsimile signatures of officers of this Company authorized by law or by the by-laws of this Company to sign share certificates and, if required, shall bear the corporate seal or a facsimile thereof. Should any officer die, resign or be removed from office prior to the Issuance of any certificates of stock, which bear his signature, Atlas may continue, until written notice to the contrary is received, to issue such certificates as and for the stock certificates of this Company notwithstanding such death resignation or removal, and such certificates when issued shall continue to be and to constitute valid certificates stock of this Company. (b) Atlas as Transfer Agent shall make original issues as shares upon the written request of this Company and upon being furnished with (i) a certified copy of a resolution of the Board of Directors authorizing such issue; (ii) any opinion of counsel required or otherwise utilized in connection with the issuance of the shares; and (iii) any necessary funds for the payment of any original issue or other tax. (c) Transfers of shares shall be registered by Atlas and new certificates issued by Atlas upon surrender of outstanding certificates (i) in a form deemed by Atlas properly endorsed for transfer; (ii) with all necessary endorsers' signatures guaranteed in such manner and form as Atlas may require by a guarantor reasonably believed by Atlas to be responsible; accompanied by (iii) such assurances as Atlas shall deem necessary or appropriate to evidence the genuineness and effectiveness of each necessary endorsement; and (iv) satisfactory evidence of compliance with all applicable laws relating to the collection of taxes. (d) In the case of small estates where no administration is contemplated, Atlas may under agreement for indemnity acceptable to it and without further approval of the of this Company, register transfer of shares standing in the name of decedent where the current value of the shares being transferred does not exceed $500.00. (e) Atlas shall issue replacement certificates for lost, destroyed or stolen share certificates upon the request of record owners of the Company's shares upon being provided an insurance indemnity bond by said record owner deemed adequate by Atlas, in its sole discretion, or upon being provided other indemnification or other assurance against liability deemed adequate by Atlas, in its sole discretion. (f) Atlas is authorized and directed to open and maintain such ledgers and other books and to keep such records as may be required or deemed advisable in the performance of its agency. In case of any request or demand for the inspection of the share records of this Company, Atlas as Transfer Agent shall endeavor to notify this Company and to secure instructions as to permitting or refusing such inspection. However, Atlas may exhibit such records to any person in any case where it is advised by its counsel that is appropriate. (g) This appointment and the authorization in these resolutions shall cover and include any additional shares of any category of stock for which Atlas is authorized as Transfer Agent, which may hereafter be authorized by this Company. (h) When certificates of this Company's stock shall be presented to it for transfer, Atlas is hereby authorized to refuse to transfer the same until it is satisfied that the requested transfer is legally in order; and Atlas shall incur no liability for the refusal in good faith, to make transfers which it, in its judgment are deemed improper or unauthorized. Atlas may rely upon the Uniform Commercial Code or its own counsel in effecting transfers or delaying or refusing to effect transfers. (i) Atlas may deliver from time to time at its discretion, to this Company for safekeeping or disposition by this Company in accordance with law, such records accumulated in the performance of it duties as it may deem expedient and this Company will assume all responsibility thereafter for any paper, record or document so returned; (j) Atlas is authorized to forward certificates of stock scrip and warrants of this Company issued on transfer or otherwise by first class mail under a blanket bond of indemnity covering the non-receipt of such stock, scrip and warrants by any of the stockholders of this corporation, in which bond this Company and Atlas directly or in directly named as obliges. In the event of non-receipt by any stockholder of this Company of certificates of stock, scrip and warrants so mailed, Atlas is authorized to issue new certificates of said stock, scrip and warrants for a like amount in place thereof upon receipt from the stockholders of an affidavit and proof of loss provided for under said blanket bond and the issuance by the Surety Company of an assumption of the loss under said blanket bond, all without further action or approval of the Board of Directors or the officers of this Company. (k) Upon the written request of this corporation, accompanied by such other documents as Atlas may deem necessary or appropriate, Atlas as Transfer Agent shall (i) issue transfer and split up scrip certificates, and issue shares certificates representing full shares upon surrender of the scrip certificates aggregating one full share or more; (ii) issue and mail subscription warrants, certificates representing share dividends, exchanges or split ups, or acting as conversion agent. (l) Upon timely receipt of written notice of the declaration of a dividend, and of funds sufficient for the payment thereof, Atlas shall distribute cash dividends on the outstanding shares of this Company and (i) withhold any tax which may be required under applicable United States revenue laws and report and pay the same as required to the Internal Revenue Service; and (ii) make any and all other reports with respect to such dividend, which may be required under applicable United States revenue laws. (m) Atlas is herby authorized without any further action on the part of this corporation to appoint as successor Transfer Agent any corporation or company which may succeed to the business of Atlas by merger, consolidation or otherwise (such corporation or company being hereinafter called the "Successor"); the Successor to have the same authority and appointment contained in this resolution as if this corporation itself had appointed it Transfer Agent. The Successor shall, when appointed, be the agent of this Company and not an agent of Atlas. Fourth: The acceptance by Atlas of its appointment as Transfer Agent and documents filed with Atlas in connection with such appointment, and thereafter in connection with its agency, shall be subject to the review and approval of counsel for Atlas. Fifth: Resignation or Removal Atlas may resign as Transfer Agent at any time by giving written notice of such resignation to this Company at its last known address and thereupon its duties as such agent shall cease. Atlas may be removed as Transfer Agent at any time by resolution of the Board of Directors of this Company, a certified copy of which shall be furnished to Atlas. Upon resignation or removal, Atlas may, to the extent permitted by the law, deliver to the newly appointed Transfer Agent or to the Company all the transfer records which have been made and maintained by Atlas on behalf of the Company. Sixth: At any time, Atlas may apply to this Company for instructions or may consult counsel for this Company or its own counsel with respect to any matter arising in connection with the agency, and it shall not be liable or accountable for any action taken or omitted by its good faith in accordance with such instructions or based upon the opinion of either such counsel. Atlas shall be protected (i) in acting upon any paper or document reasonably believed by it to be genuine and to have been signed by the proper person or persons; and (ii) in recognizing share certificates that it reasonably believes to bear the proper manual or facsimile signature of the officers this Company and the proper countersignature of a transfer agent or registrar. Atlas shall not be held to have notice of any change of authority of any officer, employee, or agent of this Company until receipt of written notification thereof from the Company. Seventh: So long as Atlas acted in good faith, this Company assumes full responsibility and shall indemnify Atlas and save harmless from and against any and all actions and suits, whether groundless or otherwise; and from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising directly or indirectly out of its agency relationship to this Company which will be billed by Atlas to the Company in the ordinary course of business as such amounts arise. Atlas shall not be under any obligation to prosecute or defend any action or suit in respect of such agency relationship that in the opinion of its counsel may involve it in expense or liability, unless the Company shall, as so reasonably requested, furnish Atlas with satisfactory indemnity against such expense or liability. Further, and in particular, the Company assumes full responsibility and shall indemnify Atlas and save it harmless from all liability and against any and all actions and suits in connection with any record differences existing at the time of appointment as transfer agent or that are due to any co-transfer agent failing to act in accordance with applicable procedures as to such record differences. Eighth: Without limiting any foregoing indemnity, the Company shall pay to Atlas in a prompt manner Atlas' usual and customary charges and fees for services it renders in connection with the within appointment as Transfer Agent including but not limited to changes for services set forth in the attached fee schedule marked as Exhibit A hereto. This fee schedule is subject to change by Atlas from time to time and the amount to be charged and the items which will give rise to the assessment of charges. Any changes to the fee schedule will become effective upon Atlas providing notice of such changes to the Company. This Company hereby grants to Atlas a security interest in all transfer and other records delivered to, created by and maintained by Atlas in connection with its appointment and activities as transfer agent of this Company. Atlas may retain possession of and refuse to deliver such records to this Company or third parties until all such charges and fees have been paid to Atlas, and Atlas shall also have any and all other rights provided by law to a secured party. WITNESS my hand and the seal of the Company, this 28th day of March, 2006. Ridgefield Acquisition Corp. /s/ Steven N. Bronson ---------------------------- Steven N. Bronson, President EX-10.17 5 ex10-17.txt Exhibit 10.17 EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of March 28, 2006, is entered into between Ridgefield Acquisition Corp. (the "Company"), located at 100 Mill Plain Road, Danbury, Connecticut 06811, and Steven N. Bronson with a business address of 100 Mill Plain Road, Danbury, Connecticut 06811 ("Employee"). W I T N E S S E T H : WHEREAS, the Company desires to employ the Employee and to be assured of his services on the terms and conditions hereinafter set forth; and WHEREAS, the Employee is willing to accept such employment on such terms and conditions. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, the Company and the Employee hereby agree as follows: 1. Employment. The Company hereby employs the Employee as the President and Chief Executive Officer of the Company, and the Employee accepts such employment, upon the terms and subject to the conditions set forth in this Agreement. 2. Term. The term of this Agreement shall be for a period of one (1) year commencing on April 1, 2006, and terminating on March 31, 2007 (the "Term"), subject to earlier termination pursuant to the provisions of Section 7 hereof. The Term of this Agreement shall automatically renew for additional one year periods unless the Company or Employee provides written notice to the other party that the Agreement shall not be renewed at least thirty (30) days prior to the renewal date. 3. Duties. During the term of this Agreement, the Employee shall serve as the President and Chief Executive Officer of the Company and shall perform all duties commensurate with his position (including, but not limited to, those heretofore performed by the Employee) and as may be assigned to him by the Board of Directors of the Company and subject to the control of the Board of Directors of the Company. It is understood that Employee will not devote his full business time and energies to the business and affairs of the Company, however Employee shall use his best efforts, skills and abilities to promote the interests of the Company and to diligently and competently perform the duties of his position. 4. Compensation, Benefits, Options and Incentive Bonus. 4.1 Base Salary. Employee shall not be paid a base salary during the Term of this Agreement as compensation for the services rendered and the duties to be performed by Employee hereunder. However, the Company may, by order of the Board of Directors, determine to compensate the Employee. 4.2 Bonus Compensation. Employee shall be entitled to earn and receive bonus compensation as determined by the Board of Directors, in the form of cash or securities of the Company. 4.3 Employee Benefit Plans. At all times during the term of this Agreement the Employee shall be provided the opportunity to participate in all health, pension and welfare plans, programs and benefits (the "Plans") offered generally to all employees of the Company. 5. Reimbursement of Business Expenses. During the term of this Agreement, upon submission of proper invoices, receipts or other supporting documentation satisfactory to the Company and in specific accordance with such guidelines as may be established from time to time by the Company's Board of Directors, the Employee shall be reimbursed by the Company for all reasonable business expenses actually and necessarily incurred by the Employee on behalf of the Company in connection with the performance of services under this Agreement. 6. Representations. 6.1 Employability. The Employee represents and warrants that he is not party to, or bound by, any agreement or commitment, or subject to any restriction, including, but not limited to agreements related to previous employment containing confidentiality or non-compete covenants, which in the future may have a possibility of adversely affecting the business of the Company or the performance by the Employee of his duties under this Agreement. 6.2 Awareness of Certain Employment Regulations. The Employee represents and warrants that he is aware that there are laws and regulations that prohibit discrimination in the workplace based upon, among other things, race, religion, gender, and national origin such as Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e et. seq., and similar laws adopted by the states (the "Discrimination Laws"). Employee represents and warrants that he will abide by the Discrimination Laws in the performance of his duties under this Agreement. The Employee, further, represents and warrants that if he becomes aware of any violation or potential violation of the Discrimination Laws that he will immediately notify the Company, in writing, of any such violation or potential violation of the Discrimination Laws. 7. Termination. This Agreement may be terminated prior to the expiration of the Term set forth in Section 2 upon the occurrence of any of the events set forth in, and subject to the terms of, this Section 7. 7.1 Death. This Agreement will terminate immediately and automatically upon the death of the Employee. 7.2 Disability. This Agreement may be terminated at the Company's option, immediately upon notice to the Employee, if the Employee shall suffer a permanent disability. For the purposes of this Agreement, the term "permanent disability" shall mean the Employee's inability to perform his duties under this Agreement for a period of ninety (90) consecutive days due to illness, accident or any other physical or mental incapacity, as determined by the Board of Directors of the Company. In the event that a dispute arises with respect to the disability of the Employee, the parties shall each select a duly licensed medical doctor to make such a determination. If the two doctors so selected cannot agree on a determination, they will mutually select a third duly licensed medical doctor and the decision of the majority of the three doctors will be binding. 7.3 Cause. This Agreement may be terminated at the Company's option, immediately upon notice to the Employee, upon: (1) breach by the Employee of any material provision of this Agreement; (2) breach by the Employee of any fiduciary duty to the Company, or any of its affiliates or subsidiaries; (3) gross negligence or willful misconduct of the Employee in connection with the performance of his duties under this Agreement; (4) Employee's failure to perform (i) any of his duties or responsibilities required pursuant to this Agreement, or (ii) any reasonable directive of the Chief Executive Officer or Board of Directors of the Company; (5) fraud, criminal conduct, dishonesty or embezzlement by the Employee; or (6) Employee's misappropriation for personal use of any assets (having in excess of nominal value) or business opportunities of the Company; provided that in any such case with respect to any such breach that is capable of being cured, the Employee is afforded a ten (10)-day cure period for such monetary breaches and a thirty (30)-day cure period for such non-monetary breaches. 7.4 Termination by Employee. This Agreement may be terminated by Employee prior to the expiration of the Term set forth in Section 2 upon three (3) months written notice to the Company. 7.5 Effect of Termination. Upon the termination of this Agreement pursuant to this Section 7, the Employee shall be entitled to his Compensation to the date of termination as set forth in this Section 7, and after such date shall not be entitled to any Compensation, benefits or other rights granted herein to the Employee. 8. Miscellaneous. 8.1 No Third-Party Beneficiaries. Each of the provisions of this Agreement is for the sole and exclusive benefit of the parties hereto and shall not be deemed for the benefit of any other person or entity. 8.2 Modification. This Agreement may not be modified or terminated orally, and no modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by the party against whom the same is sought to be enforced. 8.3 Successors and Assigns. Neither party shall have the right to assign this Agreement, or any rights or obligations hereunder, without the consent of the other party; provided, however, that upon the sale of all or substantially all of the assets, business and goodwill of the Company to another company, or upon the merger or consolidation of the Company with another company, this Agreement shall inure to the benefit of, and be binding upon, both Employee and the company purchasing such assets, business and goodwill, or surviving such merger or consolidation, as the case may be, in the same manner and to the same extent as though such other company were the Company; and provided, further, that the Company shall have the right to assign this Agreement to any affiliate or subsidiary of the Company. Subject to the foregoing, this Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their legal representatives, heirs, successors and assigns. 8.4 Communications. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been given at the time personally delivered or when mailed in any United States post office enclosed in a registered or certified postage prepaid envelope and addressed to the addresses set forth below, or to such other address as any party may specify by notice to the other party; provided, however, that any notice of change of address shall be effective only upon receipt. To the Company: Ridgefield Acquisition Corp. 100 Mill Plain Road Danbury, Connecticut 06811 To the Employee: Mr. Steven N. Bronson 100 Mill Plain Road Danbury, Connecticut 06811 8.5 Waiver. Failure of a party to enforce one or more of the provisions of this Agreement or to require at any time performance of any of the obligations hereof shall not be construed to be a waiver of such provisions by such party nor to in any way affect the validity of this Agreement or such party's right thereafter to enforce any provision of this Agreement, nor to preclude such party from taking any other action at any time which it would legally be entitled to take. 8.6 Severability. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity and enforceability of the other provisions of this Agreement and the provision held to be invalid or unenforceable shall be enforced as nearly as possible according to its original terms and intent to eliminate such invalidity or unenforceability. 8.7 Governing Law. This Agreement is made and executed and shall be governed by the laws of the State of New York, without regard to the conflicts of law principles thereof. 8.8 Counterparts. This Agreement may be executed in any number of counterparts, including facsimile signatures, which shall be deemed as original signatures. All executed counterparts shall constitute one Agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart. 8.9 Entire Agreement. This Agreement sets forth the entire understanding of the parties and merges and supersedes any prior or contemporaneous agreements between the parties pertaining to the subject matter hereof. IN WITNESS WHEREOF, each of the parties hereto have duly executed this Agreement as of the date set forth above. RIDGEFIELD ACQUISITION CORP. By: /s/ Leonard Hagan ----------------------------- Leonard Hagan Title: Director EMPLOYEE /s/ Steven N. Bronson -------------------------------- Steven N. Bronson EX-10.18 6 ex10-18.txt Exhibit 10.18 ADDENDUM MERGERS AND ACQUISITIONS ADVISORY AGREEMENT THIS ADDENDUM (the "Addendum") to the MERGERS AND ACQUISTIONS ADVISORY AGREEMENT, dated as of April 1, 2005 (the "M&A Agreement"), by and between Ridgefield Acquisition Corp., a Colorado corporation, having an address at 100 Mill Plain Road, Danbury, Connecticut 06811 (hereinafter referred to as the "Company"), and Catalyst Financial LLC, a New York limited liability company, having an address at 100 Mill Plain Road, Danbury, Connecticut 06811 (hereinafter referred to as the "Consultant") is made as of the 1st day of February 2006. WHEREAS, the Company and the Consultant have agreed to amend the M&A Agreement in accordance with the terms and conditions set forth in this Addendum. NOW, THEREFORE, in consideration of the mutual promises set forth herein, the parties hereto agree as follows: 1. That paragraph 3. A. (Monthly Fee) of the M&A Agreement shall be amended to provided that monthly fee payable by the Company to the Consultant during the one year period from February 1, 2006 though January 31, 2007 shall be increased from $1,000 per month to $5,000 per month. Accordingly, during the one year period from February 1, 2006 though January 1, 2007, the Company shall pay a monthly fee in the amount of $5,000.00 to Consultant on the first day of each month commencing on February 1, 2006 and continuing through January 1, 2007. Thereafter, the Company shall pay a monthly fee in the amount of $1,000.00 to Consultant on the first day of each month commencing on February 1, 2007 and continuing through March 1, 2008. 2. All of the other remaining terms and conditions set forth in the M&A Agreement shall remain in full force and effect. 3. This Addendum may be executed in any number of counterparts, including facsimile signatures, which shall be deemed as original signatures. All executed counterparts shall constitute one Agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. RIDGEFIELD ACQUISITION CORP. CONSULTANT By: /s/ Leonard Hagan By: /s/ Steven N. Bronson ___________________________ ___________________________ Leonard Hagan, Director Steven N. Bronson, President Ridgefield Acquisition Corp. Catalyst Financial LLC EX-31 7 ex31.txt Exhibit 31 Statement Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 By Principal Executive Officer and Principal Financial Officer Regarding Facts and Circumstances Relating to Exchange Act Filings I, Steven N. Bronson, certify that: 1. I have reviewed this Annual Report on Form 10-KSB for the year ended December 31, 2005 of Ridgefield Acquisition Corp.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Dated: March 28, 2006 /s/ Steven N. Bronson ---------------------------------- Steven N. Bronson, President EX-32 8 ex32.txt Exhibit 32 CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned President and Sole Executive Officer of the Company, certifies, that to his knowledge: 1) Ridgefield Acquisition Corp.'s Form 10-KSB for the annual period ended December 31, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2) the information contained in Ridgefield Acquisition Corp.'s Form 10-KSB for the annual period ended December 31, 2005 fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 28, 2006 /s/ Steven N. Bronson ----------------------------------- Steven N. Bronson, President -----END PRIVACY-ENHANCED MESSAGE-----