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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
AMENDMENT 2
(Mark One)
[ X ] 15, ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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COMMISSION FILE NUMBER: 001-12063
ROCKY MOUNTAIN INTERNET, INC.
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Exact name of Registrant as specified in its charter
Delaware 84-1322326
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State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification
1099 18th Street, Suite 3000 DENVER COLORADO 80202
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Address of principal executive offices Zip Code
Registrant's telephone number, including area code: 303-672-0700
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $.001 per share
Warrants to purchase common stock
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 .
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Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ].
State issuer's revenue for its most recent fiscal year: $3,281,579
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The aggregate market value of the voting stock held by non-affiliates of the
registrant on March 15, 1997, based upon the closing price of the Common
Stock on the NASDAQ SmallCap Market for such date, was approximately
$5,445,000.
The number of outstanding shares of the registrant's Common Stock as of March
15, 1997, was approximately 4,648,565 shares.
Transitional Small Business Disclosure Format (Check one): Yes No X
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
<TABLE>
Name Age Position with the Company
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<S> <C> <C>
Gerald Van Eeckhout 56 Chairman of the Board
Roy J. Dimoff 38 Director, President and Chief Executive Officer
Christopher K. Phillips 31 Director
Kevin R. Loud 44 Vice President - Business Development
D. Kirk Roberts 45 Chief Financial Officer
Nancy P. Phillips 37 Vice President -- Operations
</TABLE>
GERALD VAN EECKHOUT is the current Chairman of the Board and has been a
director of the Company since May 1996. Mr. Eeckhout has been the Chief
Executive Officer and Chairman of the Board of ACT Teleconferencing, Inc.
since he formed that company in 1989. From 1982 to 1989, Mr. Eeckhout was
President, Chief Executive Officer and a director of ConferTech. He received
a Bachelor of Science degree from the University of North Dakota in 1962 and
completed the Stanford Executive Program in 1976. Mr. Van Eeckhout has been
a national director of the American Electronic Association and president of
the University of North Dakota Foundation.
ROY J. DIMOFF has served as President and Chief Executive Officer of the
Company since July 1995 and has been a director of the Company since July
1995. Prior to joining the Company, Mr. Dimoff was the founder and owner of R
J Alexander & Associates, Inc., a management consulting firm, from 1994 to
1995. From 1993 to 1994, Mr. Dimoff was Executive Vice President of ITC
Worldwide Telecommunications Company, LP, a provider of broadcast fax,
fax-on-demand, audio conferencing and multi-point video services. From 1988
to 1993, Mr. Dimoff was Vice President and General Manager of the Services
Division of ConferTech International, Inc. ("ConferTech"), and President of
its Canadian subsidiary. ConferTech is a provider of digital audio and video
conference bridging equipment and services. Mr. Dimoff was President and
founder of Teleconferencing Systems Canada, Inc. from 1985 to 1988, which he
later sold to ConferTech. He has an Honors Bachelor of Business
Administration degree from Wilfrid Laurier University, Waterloo, Ontario,
Canada.
CHRISTOPHER K. PHILLIPS has been a director of the Company since 1994. From
1996 to April 1997, Mr. Phillips served as Chief Technical Officer. From 1993
to 1995 he was Network Operations Manager for the Company. From 1991 to
1993, Mr. Phillips was a Terminal Area Security Officer in the United States
Army. He secured computer terminals linked to classified data and performed
technical installation duties. From 1990 to 1991 Mr. Phillips worked as an
Advanced Consumer Electronics Consultant for Circuit City. Prior to 1990,
Mr. Phillips worked as a Faculty Computing Project Programmer for Brigham
Young University. He has a Bachelor of Arts degree from Brigham Young
University.
MR. LOUD is Vice President - Business Development. Before joining Rocky
Mountain Internet in July 1995, he served as Vice President of Marketing for
SP Telecom, a national long distance company from 1994 to 1995. In 1992, he
formed Loud and Associates, where he consulted with regional and national
communication organizations on market development and operation efficiencies
until 1994. While operating Loud & Associates, Mr. Loud undertook a year-long
project for Automated Communications, Inc.,
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during which he was treated as a statutory employee. From 1984 until 1992,
he was employed by Houston Network, Inc. and held positions ranging from
Director of Finance, Vice President of Operations and Carrier Sales, Vice
President Sales, and President. The primary business of that organization
was switched long distance communication services. Mr. Loud holds a Masters
of Business Administration from William and Mary, and a Bachelors of Arts in
Economics from UCLA.
MR. ROBERTS has served as Chief Financial Officer and Controller of the
Company since January 1995. He was an accountant employed by Potter,
Littlewood, & Petty, PC, an accounting firm in Houston, Texas from 1991 to
1994. From 1989 to 1990, he worked for a national computer retailer as
National Product Manager --Accounting Solutions. He has a Bachelor of
Business Administration degree from the University of Houston and is a
certified public accountant.
MS. PHILLIPS has been Vice President - Operations since May 1996. Prior to
joining Rocky Mountain Internet, Inc., Ms. Phillips was the founder and owner
of Phillips Taylor Enterprises, L.L.C., a management consulting firm. From
1993 to 1994, Ms. Phillips was Senior Vice President of ITC Worldwide
Telecommunications Company, LP, a provider of broadcast fax, fax on demand,
audio conferencing and multi-point video services. From 1988 to 1993, Ms.
Phillips held positions as Director of Corporate Marketing and Vice President
Operations of ConferTech International, Inc. ConferTech is a provider of
digital audio and video conference bridging equipment and services. From
1986 to 1988, Ms. Phillips was Director of Marketing and Sales for
Teleconferencing Systems Canada, Inc. Ms. Phillips has an Honors Bachelor of
Economics degree from Queens University, Kingston, Ontario, Canada.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the outstanding Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of the Company's Common Stock. Officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based on a review of the copies of such reports furnished to the Company or
representations that no other reports were required, the Company believes
that, during 1996 calendar year, all filing requirements applicable to its
officers, directors and greater-than-10% beneficial owners were complied
with, except that Statements of Changes in Beneficial Ownership (Form 4) were
filed late for Roy J. Dimoff, Nancy Phillips, Kevin Loud, and D. Kirk Roberts.
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ITEM 10. EXECUTIVE COMPENSATION.
Following is information concerning compensation paid to the Company's Chief
Executive Officer and the other executive who was serving as an executive
officer during the 1996 Fiscal Year and whose annual compensation (salary and
bonus) was at least $100,000 (the "Named Executive Officers"). The Company's
fiscal year ends December 31.
<TABLE>
Summary Compensation Table
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and principal Year Salary Bonus Other Restricted Securities LTIP All Other
position ($) ($)/ Annual Stock Underlying Payouts Compensa-
options Compensa- Awards ($) Options/ tion ($)
tion ($) SARs (#)
(1) (2)
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<S> <C> <C> <C>
Roy J. Dimoff, CEO 1996 $101,407 $20,250
and President
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1995 $ 23,322
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Kevin Loud, Vice 1996 $ 83,967 $16,200
President
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1995 $ 17,822
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</TABLE>
(1) Mr. Dimoff and Mr. Loud joined the company in July, 1995, therefore
there is no compensation to report for 1994.
(2) This bonus was earned in 1996 and paid in 1997. The bonus is based on
achieving 81% of the revenue plan. Mr. Dimoff elected to receive
$3,000 of the bonus in the form of 3,000 stock options exercisable in
September, 1997. Mr. Loud elected to receive $8,100 of the bonus in
the form of 8,100 stock options exercisable in September, 1997. All
employees who received 1996 bonuses had the same choice of receiving
their bonus as cash or stock options.
The Company currently has employment agreements with Messrs. Dimoff and Loud.
The employment agreements provide for salaries of $102,000 and $84,000 per
year for Messrs. Dimoff and Loud, respectively, and are terminable for cause.
The Company may also terminate the agreements without cause subject to the
obligation to pay the terminated employee a severence equal to five to eight
months' salary based on length of service. The agreements terminate in
December 1999. The employment agreements do not significantly restrict the
employees' ability to compete with the Company following any termination.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of April 15, 1997 by
each of the directors and each of the Named Executive Officers
and all directors and executive officers as a group and each person
who is known to Rocky Mountain Internet to own beneficially more
than five percent of the Common Stock.
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<TABLE>
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(1) (2) (3) (4)
Title of Class Name and address of Beneficial Owner Amount and Nature of Percent of
Beneficial Owner Class
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<S> <C> <C> <C>
Common Shares Roy J. Dimoff 510,739 11%
President and Chief Executive Officer
1099 18th Street, Ste 3000
Denver, CO 80202
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Common Shares Kevin R. Loud 483,500 10%
Vice President - Business Development
1099 18th Street, Ste 3000
Denver, CO 80202
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Common Shares Christopher K. Phillips 423,000 9%
Director
1099 18th Street, Ste 3000
Denver, CO 80202
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Common Shares All Officers and Directors (six persons) 1,496,818 32%
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Common Stock Jim D. Welch 460,820 10%
Shares 1326 Sorrento
Colorado Springs, CO 80906
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Series A Preferred Gerald Van Eeckhout 35,000 14%
Chairman - Board of Directors
ACT Teleconferencing, Inc. (1)
1658 Cole Blvd., Suite 162
Golden, CO 80401
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Series A Preferred All Officers and Directors (six persons) 35,000 14%
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</TABLE>
(1) ACT Teleconferencing, Inc. holds 25,000 shares of Series A Preferred
Stock. Mr. Van Eeckhout, a director of the Company, is also an
officer, director and shareholder of ACT Teleconferencing, Inc., and
may be deemed the beneficial owner of the 25,000 shares of Series A
Preferred Stock held by it. Mr. Van Eeckhout disclaims beneficial
ownership of the shares. Mr. Van Eeckhout also holds 10,000 shares
of Series A Preferred Stock in his name.
Changes in Control.
There are no arrangements or agreements which may result in a change in
control of Rocky Mountain Internet, Inc.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions
In December, 1996, the Company acquired the assets of The Information
Exchange, LLC., a Denver based voice messaging service company, a related
party through common ownership. Roy J. Dimoff, President and CEO of Rocky
Mountain Internet, Inc. (RMI), held a 51% ownership share of The Information
Exchange and Nancy Phillips, Vice President of Operations of RMI held a 31%
share of The Information Exchange. RMI issued 52,723 shares of common stock
in exchange for 100% ownership of The Information Exchange.
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In late 1995 and early 1996, the Company effected an offering of
convertible Debentures in the aggregate principal amount of $490,000.
The Debentures bear interest at the rate of 12% per annum, payable
quarterly, and are convertible into Common Stock at the option of the
holder at a conversion price of $0.40 per share. All of the Debentures
were converted to Common Stock in October, 1996. Certain of the Debentures
were purchased by persons who are relatives of the Company's major
shareholders on terms the same as those offered to unrelated purchasers.
Relatives of Mr. Dimoff purchased $132,000 (subsequently converted to
330,000 common shares) and relatives of Mr. Loud purchased $68,000
(subsequently converted to 170,000 common shares), respectively, in
aggregate principal amounts of the Debentures.
In February 1997, the Company entered into a negotiated agreement with
Jim D. Welch, an officer and a shareholder of the Company, wherein the
Company agreed to purchase 90,000 shares of the Company's common stock
from him for $120,000. The stock will be purchased over an eighteen
month period. As part of the agreement, Mr. Welch separated from
employment with the Company.
Transactions with Promoters
Neidiger, Tucker, Bruner, Inc. (NTB) was the principal underwriter of the
initial public offering (IPO). The Company sold to NTB at the closing of
the IPO, for $100, warrants to purchase 136,500 Units (comprised of one
share of common stock and one warrant). Such Units are the same as the
Units offered in the IPO except that they (a) have an exercise price of
$4.20 per Unit (120% of the Unit offering price) and $6.5625 per
underlying Warrant (150% of the public Warrant exercise price); and (b)
will be exercisable for a 48-month period commencing one year from
September 5, 1996 (the date of the Prospectus). The NTB Warrants may be
exercised in a cashless transaction whereby the NTB Warrants, at the
holder's option, may be exchanged, in whole or in part, for the underlying
Common Stock and Warrants.
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Rocky Mountain Internet, Inc.
Registrant
April 30,1997 By: /s/ D. Kirk Roberts
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Chief Financial Officer
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