U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(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, 1997
Transition report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 (No fee required)
For the transition period from __________ to __________
Commission file number 0-22325
ALYDAAR SOFTWARE CORPORATION
(Name of Small Business Issuer in its Charter)
North Carolina 87-0399301
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2101 W. Rexford Road, Charlotte, North Carolina 28211
(Address of Principal Executive Offices) (Zip Code)
(704) 365-2324
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock
(Title of Class)
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 past 90 days.
Yes X No_____
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-K 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-K
or any amendment to this Form 10-K. X
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. $173,952,160 as of March 30, 1998.
Documents Incorporated by Reference: See Footnotes to Exhibits
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Class
<S> <C> <C>
Robert F. Gruder 7,030,325 38.8%
c/o Alydaar Software Corporation
2101 West Rexford Road
Charlotte, NC 28211
V. Hollis Scott 186,667 1 1.0%
c/o Alydaar Software Corporation
2101 West Rexford Road
Charlotte, NC 28211
Thomas J. Dudchik 226,166 2 1.3%
c/o Alydaar Software Corporation
2101 West Rexford Road
Charlotte, NC 28211
Frank G. Milligan 30,000 3 *
c/o Alydaar Software Corporation
2101 West Rexford Road
Charlotte, NC 28211
James F. Helm 20,250 4 *
c/o Alydaar Software Corporation
2101 West Rexford Road
Charlotte, NC 28211
J. Alex McMillan (Director) 23,340 5 *
3801 Barnwood Drive
Charlotte, NC 28211
John McCarthy (Director) -0- *
4 Glenwood Circle
East Windsor, NJ 08520-2304
All officers and directors
as a group (9 persons) 7,576,248 42.5%
<FN>
- --------
1 Includes 100,000 shares issuable upon exercise of options which vest
on April 24, 1998.
2 Includes 200,000 shares issuable upon exercise of options. Of these,
50,000 options vest on April 24, 1998.
3 Includes 10,000 shares issuable upon exercise of options and an
additional 20,000 shares issuable upon exercise of options, which options vest
on April 24, 1998.
4 Includes 10,000 shares issuable upon exercise of options and an
additional 10,000 shares issuable upon exercise of options, which options vest
on April 24, 1998.
5 Includes 15,000 shares issuable upon exercise of warrants and warrants to
purchase 7,840 shares owned by a company which Mr. McMillan controls.
* Represents less than 1% ownership.
</FN>
</TABLE>
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<PAGE>
Item 13. Certain Relationships and Related Transactions
In connection with the litigation referred to in Item 3, "Legal
Proceedings," Mr. Robert Gruder, President and Chief Executive Officer of the
Company, entered into agreements with the Company to indemnify the Company
against any liability resulting from a final unappealable judgment. The Colby
Lawsuit was settled by Mr. Gruder in 1997, and the Company was released from all
liability. Pursuant to the agreement with Mr. Gruder, the Company paid all his
legal expenses. Mr. Gruder has also entered into an agreement to indemnify the
Company from all liability in connection with the Kaplan Lawsuit, which trial
commenced April 14, 1998 but was adjourned after one day for three months. In
consideration of the agreement to indemnify the Company, the Company agreed to
pay Mr. Gruder's legal fees and expenses in defending the Kaplan Lawsuit. As of
December 31, 1997 the Company had paid $85,000 of Mr. Gruder's legal fees.
Between April 1, 1997 and December 31, 1997, The McMillan Group, owned
by Mr. Alex McMillan, who is a Director of the Company, was retained by the
Company to act as an independent consultant to assist the Company in developing
government contracts. (See "Directors and Executive Officers of the
Registrant.") The McMillan Group received total compensation of $90,000 plus
reimbursement of expenses for the services rendered to the Company. The amount
paid to The McMillan Group on a monthly basis was consistent with amounts that
the Company had previously paid another consulting firm performing the same
general services for the Company.
In July 1997, the Company acquired Alydaar International, Ltd.
("Alydaar International") as a wholly owned subsidiary. Prior to the
acquisition, Alydaar International was an independently owned company which
marketed Alydaar's services in Europe and had been granted a license to use the
name "Alydaar." Mr. Robert Gruder, Chairman and Chief Executive Officer of the
Company, along with fifteen other individuals, owned stock in Alydaar
International. When Alydaar International was acquired by the Company, the
shareholders of Alydaar International, including Mr. Gruder, received shares of
the Company's Common Stock in exchange for their interests in Alydaar
International. Mr. Gruder received 50,000 shares of the Company's Common Stock
which then had a value of $7.75 per share. (See "Consolidated Financial
Statements--notes to Consolidated Financial Statements.")
Robert F. Gruder, Chairman and Chief Executive Officer, has made
advances to the Company from time to time to assist the Company in its working
capital requirements. As of January 1, 1997, $500,000 of principal and $3,550 of
interest were owed by the Company to Mr. Gruder. During 1997, Mr. Gruder
advanced an additional $1,100,000 to the Company, and during the year the
Company repaid Mr. Gruder $800,000, leaving a balance due Mr. Gruder at year end
of $800,000 of principal and accrued interest at 10.5% per annum of $27,868. The
advances are evidenced by promissory notes payable on demand.
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<PAGE>
Just before December 31, 1997, V. Hollis Scott, Chief Financial Officer
of the Company, advanced the Company $166,700 with interest at 10.5% per annum.
The loan is evidenced by a promissory note payable on demand.
PART IV
Item 14. Exhibits, List and Reports on Form 8-K
(a) 1. Financial Statements and Schedules
The financial statements and schedules appearing after the
Index to Exhibits are filed as part of this Annual Report.
2. Exhibits
The exhibits listed on the Index to Exhibits following the
Signature Page are filed as part of this Annual Report by
incorporation by reference from the filings indicated in the
footnotes to the Index
(b) On September 14, 1997, the Company filed a report on Form 8-K reporting
the sale of 150,000 shares of the Company's Common Stock for an
aggregate consideration of $2,250,000 pursuant to Regulation S
promulgated under the Act. The report included Item 7 - Financial
Statements and Exhibits and Item 9 - Sale of Equity Securities Pursuant
to Regulation S.
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<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d), the
Registrant has duly caused this Amendment to Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALYDAAR SOFTWARE CORPORATION
By: /s/ Robert F. Gruder
Robert F. Gruder, Chief Executive Officer,
President and Chairman
Dated: April 22, 1998
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