SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------------
FORM 10-K/A
AMENDMENT NO. 1
(Mark one)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended March 31, 1997 or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ________________
to ___________________
COMMISSION FILE NUMBER: 0-21903
ORA ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4607830
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9410 OWENSMOUTH AVE.
CHATSWORTH, CALIFORNIA 91311
--------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(818) 772-2700
(Registrant's telephone number, including area code)
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; Class A Warrants; Class B Warrants; Class C Warrants;
Class D Warrants
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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.
Yes [ ] No [ X ]
Page 1 of 12
<PAGE>
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ X ] No [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant at July 21, 1997 was approximately $5,204,221.70.
The registrant had 6,601,299 shares of common stock, par value $.001 per
share outstanding at July 21, 1997.
The registrant had each of 467,108 Class A Warrants; 628,186 Class B
Warrants; 549,289 Class C Warrants; and 713,024 Class D Warrants, outstanding at
July 21, 1997.
Documents Incorporated by Reference (To the Extent Indicated Herein):
None. This Form 10-K/A-1 amends Items 10, 11, 12 and 13 of the registrant's
Annual Report on Form 10-K as filed on June 30, 1997.
ORA Electronics, Inc., a Delaware corporation ("ORA" or the "Company"),
originally filed its Annual Report on Form 10-K for the fiscal year ended
March 31, 1997 ("Fiscal 1997"), intending to incorporate by reference the
information required by Items 10, 11, 12 and 13 of Part III of Form 10-K from
the Company's Proxy Statement for its 1997 Annual Meeting of Stockholders.
Because such Proxy Statement will not be filed within the period permitted
for incorporation by reference into the Form 10-K, this Form 10-K/A-1 provides
the information required by Items 10, 11, 12 and 13 of Form 10-K and supersedes
such Items as included in the Form 10-K as originally filed.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The Company's Bylaws authorize a Board of Directors (the "Board" or "Board
of Directors") consisting of five people to be elected by the Company's
stockholders each year. Currently the Board consists of four members, with one
vacancy. The following table sets forth certain information concerning Board
members as of July 21, 1997:
Name Principal Occupation Age
- - ---- -------------------- ---
GERSHON N. COOPER Mr. Cooper founded the Company's business in 1974 48
and has been Chairman of the Board and President
of the Company since its incorporation in 1979.
He became Chief Executive Officer of ORA in
December 1996.
Page 2 of 12
<PAGE>
JOHN M. BURRIS Mr. Burris, a certified public accountant, 50
joined ORA in 1987 as its General Manager in
charge of accounting and finances. From 1990
through November 1996 he continued to work in such
capacity, but as an independent contractor. In
December 1996, Mr. Burris became ORA's Vice
President and Chief Financial Officer and an
employee and director of the Company.
MATTHEW F. JODZIEWICZ Mr. Jodziewicz, a registered patent attorney 48
joined ORA in March 1995 as in-house counsel. He
became Vice President of Technology and Legal
Affairs, Secretary and a director in December
1996. Prior to joining ORA, Mr. Jodziewicz was
in the private practice of law and provided
legal services, primarily in the intellectual
property area, to the Company and other clients.
RUTH COOPER Ms. Cooper joined ORA upon its formation in 1974 46
and has served in many capacities. Ms. Cooper
has served on the Board since the Company's
incorporation in 1979, and from the time of
such incorporation in 1979 to December 1996, she
was an Executive Vice President. She is the
wife of Mr. Cooper.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has not created any committees as of the date
hereof, although it may do so in the future. The Board of Directors did not hold
any regularly scheduled or special meetings during Fiscal 1997. The Board of
Directors and the board of directors of Alliance Research Corporation,
predecessor to the Company, acted by unanimous written consent on nineteen
occasions during Fiscal 1997.
MANAGEMENT
The following table sets forth certain information concerning the
executive officers of the Company:
Name Age Position
---- --- --------
Gershon N. Cooper 48 Chairman of the Board, Chief Executive Officer
and President
John M. Burris 50 Vice President, Chief Financial Officer and
Director
Matthew F. Jodziewicz 48 Vice President of Technology and Legal Affairs,
Secretary and Director
Page 3 of 12
<PAGE>
Background information on Messrs. Cooper, Burris and Jodziewicz is set
forth under "Directors" above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers, directors and persons who own more than ten
percent of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock of the Company. To the Company's knowledge, based solely on its
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, the Company believes that
all of its officers and directors and greater than ten percent beneficial owners
complied with all Section 16(a) filing requirements applicable to them with
respect to transactions during Fiscal 1997, with one exception. The Form 3
(Initial Statement of Beneficial Ownership of Securities) for John Moore III,
Controller (Principal Accounting Officer) of the Company was not filed in a
timely manner. Such Form 3 was not filed on or prior to the Company's common
stock and warrants being registered under Section 12(g) of the Exchange Act. As
of the date of this Proxy Statement, the applicable Form 3 has been filed by
Mr. Moore.
ITEM 11 - EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation for each of the last three
years of the Chief Executive Officer and each of the most highly compensated
executive officers (the "Named Executive Officers") who earned over $100,000
during Fiscal 1997.
Page 4 of 12
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Securities All
Annual Underlying Other
Name and Compen- Options/ Compen
Principal Fiscal Salary Bonus sation SARs sation
Positions Year ($) ($) ($) (#) ($)
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gershon Cooper 1997 $95,817<F1> -0- $20,629<F2> -0- -0-
President and Chief 1996 15,000<F1> 250,000 4,200<F3> -0- -0-
Executive Officer 1995 15,000<F1> 282,000 4,200<F3> -0- -0-
John M. Burris 1997 109,040 -0- 1,400<F3> 30,000 -0-
President and 1996 88,800 -0- -0- -0- -0-
Chief Financial 1995 24,000 -0- -0- -0- -0-
Officer
Matthew F. 1997 120,000 -0- -0- 15,000<F4> 250<F5>
Jodziewicz 1996 120,000 -0- -0- -0- 250<F5>
Vice President of 1995 8,308 -0- -0- -0- -0-
Technology and
Legal Affairs and
Secretary
</TABLE>
<F1> During the fiscal years ended March 31, 1995 and March 31, 1996, Mr.
Cooper was paid an annual salary of $15,000 plus an annual bonus for each
such fiscal year. In December, 1996, Mr. Cooper entered into an Employment
Agreement with the Company altering the terms of Mr. Cooper's
compensation.
<F2> Of this amount, $15,023 represents a below market interest differential on
loans by the Company to Mr. Cooper and $5,606 represents an automobile
allowance.
<F3> Such amount was paid by the Company to the indicated Named Executive
Officer as an automobile allowance.
<F4> These stock options were granted to Messrs. Burris and Jodziewicz pursuant
to the terms of the Company's 1996 Stock Plan, as discussed below.
<F5> Such amounts were paid by the Company to Mr. Jodziewicz pursuant to the
terms of the Company's Profit Sharing 401(k) Savings Plan, as discussed
below.
Page 5 of 12
<PAGE>
OPTION GRANTS FOR FISCAL 1997
The following table sets forth grants of stock options during Fiscal 1997
to the Named Executive Officers. No stock appreciation rights were granted to,
and no stock options were exercised by, any Named Executive Officers during
Fiscal 1997.
<TABLE>
<CAPTION>
Individual Grants
-----------------
% of Total Potential Realizable
Options/ Value at Assumed
Number of SARs Annual Rates of
Securities Granted to Stock Price
Underlying Employees Exercise or Appreciation for
Options/SARs in Fiscal Base Price Expiration Option Term<F2>
Name Granted 1997<F1> ($/Share) Date 5%($) 10%($)
---- ------- -------- ----------- ---------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Gershon N. Cooper..... -- -- -- -- -- --
John M. Burris ....... 30,000 22.6% 5.00 12/20/01 41,442 91,577
Matthew F.
Jodziewicz............ 15,000 11.3% 5.00 12/20/01 20,721 45,788
</TABLE>
<F1> During Fiscal 1997, the Company granted 20 employees options to purchase
an aggregate of 133,000 shares of its Common Stock. All grants were made
at exercise prices equal to the market price of the underlying Common
Stock on the grant date.
<F2> Potential realizable value is based on the assumption that the Common
Stock price appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the option term. The actual value,
if any, an executive may realize will depend on the excess of the stock
price over the exercise price on the date the option is exercised (if the
executive were to sell the shares on the date of exercise); there is no
assurance that the value realized will be at or near the potential
realizable value as calculated in this table.
Page 6 of 12
<PAGE>
EXECUTIVE EMPLOYMENT AND SEPARATION AGREEMENTS
Mr. Cooper entered into an employment agreement with the Company in
December 1996 pursuant to which Mr. Cooper will continue to serve as the
Company's Chief Executive Officer and President. The agreement has a term of
three years and contains a non-competition provision effective through the term
of employment and for an additional three years from the end of such term.
Pursuant to the agreement with Mr. Cooper, the Company will pay to Mr. Cooper a
base salary of $330,000 per year (subject to increase but not decrease by the
Board of Directors), an auto allowance of $1,000 per month and, at the
discretion of the Board of Directors, a bonus. In addition, Mr. Cooper will also
be entitled to certain fringe benefits. Commencing on the expiration of the term
of the employment agreement, or earlier should the employment agreement be
terminated prior to the end of the term, the Company and Mr. Cooper will enter
into a three-year consulting agreement under which he will render certain
consulting services for which the Company will pay an annual consulting fee of
$250,000 per year. If Mr. Cooper is terminated other than for cause, death or
disability, the Company will continue to pay Mr. Cooper an amount equal to his
base salary then in effect for the remaining term of the agreement.
DIRECTORS' COMPENSATION
Directors who are employees of the Company receive no compensation for
serving on the Board of Directors. Directors who are not employees of the
Company will receive a retainer fee of $1,000 per meeting attended. All
directors are reimbursed for reasonable expenses incurred in connection with
attendance at board or committee meetings. Eligible non-employee directors will
participate in the Company's 1996 Non-Employee Directors Stock Option Plan (the
"Directors Plan") which provides for certain automatic grants of options to
non-employee directors. Under the Directors Plan, each eligible non-employee
director who has been elected or who is continuing to serve on the Board of
Directors will receive an option to purchase an additional 500 shares of Common
Stock on each anniversary of joining the Board. As of July 18, 1997, no options
are outstanding under the Directors Plan.
STOCK PLANS
1996 STOCK PLAN. The 1996 Stock Plan was adopted by the Board of Directors
and ratified by the Company's then-existing sole shareholder in December 1996.
The total number of shares of Common Stock subject to issuance under the 1996
Stock Plan is 2,000,000, subject to adjustments as provided in the 1996 Stock
Plan. The 1996 Stock Plan provides for the grant of stock options (including
incentive stock options as defined in Section 422 of the Internal Revenue Code
of 1986, as amended, and non-qualified stock options), stock appreciation rights
("SARs") and other stock awards (including restricted stock awards and stock
bonuses) to employees of the Company or its affiliates or any consultant or
advisor engaged by the Company who renders bona fide services to the Company or
the Company's affiliates in connection with its business; provided, that such
services are not in connection with the offer or sale of securities in a capital
raising transaction. The 1996 Stock Plan will be administered by the Company's
Board of Directors or, when and if formed, the Compensation Committee of the
Page 7 of 12
<PAGE>
Board of Directors (the "Committee"). Stock options may be granted by the Board
of Directors or Committee on such terms, including vesting and payment forms, as
it deems appropriate in its discretion; provided, that no option may be
exercised later than ten years after its grant, and the purchase price for
incentive stock options and non-qualified stock options shall not be less than
100% and 85%, respectively, of the fair market value of the Common Stock at the
time of grant. SARs may be granted by the Board of Directors or Committee on
such terms, including payment forms, as the Board of Directors or Committee
deems appropriate; provided, that an SAR granted in connection with a stock
option shall become exercisable and lapse according to the same vesting schedule
and lapse rules established for the stock option (which shall not exceed ten
years from the date of grant). A SAR shall not be exercisable during the first
six months of its term and only when the fair market value of the underlying
Common Stock exceeds the SAR's exercise price and is exercisable subject to any
other conditions on exercise imposed by the Board of Directors or the Committee.
In the event of a change in control of the issuer, the Board of Directors or the
Committee retains the discretion to accelerate the vesting of stock options and
SARs and to remove restrictions on transfer of restricted stock awards. Unless
terminated by the Board of Directors, the 1996 Stock Plan continues until
December 2006.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN. The Company's 1996 Non-
Employee Directors Stock Option Plan (previously defined as the "Directors
Plan") was adopted by the Board of Directors and ratified by the Company's
then-existing sole shareholder in December 1996. A total of 100,000 shares are
available for grant under the Directors Plan. The Directors Plan provides for
the automatic grant to each of the Company's non-employee directors of (i) an
option to purchase 5,000 shares of Common Stock on the date of such director's
initial election or appointment to the Board of Directors (the "Initial Grant")
and (ii) an option to purchase 500 shares of Common Stock on each anniversary
thereof on which the director remains on the Board of Directors (the "Annual
Grant"). The options will have an exercise price of 100% of the fair market
value of the Common Stock on the date of grant and have a ten-year term.
Initial Grants become exercisable in two equal annual installments commencing
on the first anniversary of the date of grant thereof and Annual Grants become
fully exercisable beginning on the first anniversary of the date of grant.
Both Initial and Annual Grants are subject to acceleration in the event of
certain corporate transactions. Any options which are vested at the time the
optionee ceases to be a director shall be exercisable for one year thereafter;
provided, that options which are vested on the date the optionee ceased to be a
director due to death or disability generally remain exercisable for five years
thereafter. Options which are not vested automatically terminate in the event
the optionee ceases to be a director of the Company. If the Company is a
party to a transaction involving a sale of substantially all of its assets, a
merger or consolidation, all then outstanding options under the Directors
Plan may be canceled. However, during the 30 day period preceding the
effective date of such transaction, all partly or wholly unexercised options
will be exercisable, including those not yet exercisable pursuant to the
vesting schedule.
Page 8 of 12
<PAGE>
PROFIT SHARING PLAN
The Company has a defined contribution Profit Sharing 401(k) Savings Plan
(the "401(k) Plan") which covers substantially all of its employees. The 401(k)
Plan became effective on January 1, 1992. Under the terms of the 401(k) Plan,
employees can elect to defer up to 15% of their wages or $9,500, whichever is
less, subject to certain limitations set forth by the Internal Revenue Service
("IRS"), by making voluntary contributions to the 401(k) Plan. Additionally, the
Company can, at its discretion, match 100% of the voluntary employee
contributions not to exceed $250. The Company has received a determination
letter from the IRS indicating that the 401(k) Plan is qualified within the
terms of the applicable provisions of the Employee Retirement Income Security
Act, as amended.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
During Fiscal 1997, compensation decisions were made by the full Board of
Directors or by Mr. Cooper as Chief Executive Officer.
During Fiscal 1997, Mr. Cooper as Chief Executive Officer established base
salaries for the executive officers.
BASE SALARY. During Fiscal 1997, the annual base salaries of the Company's
named Executive Officers, including the Chief Executive Officer, were at the
levels set forth in the Executive Compensation Summary Compensation Table. The
annual base salary levels were established by the Board based upon a subjective
judgment with respect to appropriate levels of pay in relation to the executive
officers' respective levels of responsibility and, when applicable, as required
by contract.
ANNUAL BONUS. No bonuses were payable with respect to Fiscal 1997.
EQUITY COMPENSATION. The Company provides equity-based compensation to its
employees under its 1996 Stock Plan. In Fiscal 1997, the Company granted 20
employees options to purchase 133,000 shares (for option grants to the Named
Executive Officers, see "Option Grants for Fiscal Year 1997" table).
CHIEF EXECUTIVE OFFICER'S COMPENSATION. The Chief Executive Officer's
compensation for Fiscal 1997 consisted of a salary of $95,817, as determined by
the board of directors, in addition to $5,606 which was paid to him as an
automobile allowance. Prior to December, 1996, the Chief Executive Officer was
paid a salary of $15,000 per year with a bonus paid in March of each year. In
December, 1996, the Chief Executive Officer entered into an Employment Agreement
with the Company, and his salary was adjusted in accordance therewith.
POLICY WITH RESPECT TO INTERNAL REVENUE CODE SECTION 162(M). In 1993, the
Code was amended to add Section 162(m). Section 162(m), and the regulations
thereunder, place a limit of $1,000,000 on the amount of compensation that may
be deducted by the Company in any year with respect to certain of the Company's
most highly compensated officers. Section 162(m) does not, however, disallow a
deduction for qualified "performance-based compensation," the material terms of
which are disclosed to and approved by stockholders. At the present time, the
Company's executive officer compensation levels do not exceed $1,000,000. The
Board of Directors plans to take such actions in the future to minimize the
loss of tax deductions related to compensation as they deem necessary and
appropriate in light of specific compensation objectives.
Page 9 of 12
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of July 21, 1997, with
respect to Common Stock of the Company owned by (i) each person known by the
Company to be the beneficial owner of more than 5% of the outstanding Common
Stock, (ii) each director of the Company, (iii) each Named Executive Officer,
and (iv) all directors and executive officers of the Company as a group. Except
as noted below, and subject to applicable community property and similar laws,
each stockholder has sole voting and investment powers with respect to the
shares shown.
Number of Shares Percent of Shares
Name of Common Stock of Common Stock
---- ---------------- -----------------
The Cooper Family Trust<F1><F2> 5,000,000 75.7%
Gershon N. Cooper<F1><F3> 5,000,000 75.7%
John M. Burris<F1> 0 0
Matthew F. Jodziewicz<F1> 0 0
Ruth Cooper<F1><F3> 5,000,000 75.7%
Jack D.W. Song<F4> 1,173,626 17.8%
All directors and executive 5,000,000 75.7%
officers as a group (4 persons)
- - --------------------
<F1> The mailing address of such person is c/o ORA Electronics, Inc., 9410
Owensmouth Ave., Chatsworth, California 91311.
<F2> The shares held by the Cooper Family Trust are deemed beneficially owned
by Gershon N. Cooper and Ruth Cooper, who have shared voting and
investment power.
<F3> All shares held by this person are held of record by the Cooper Family
Trust.
<F4> The mailing address of such person is 6F #219 Chingshan South Section 2,
Taipei, Taiwan, ROC.
Page 10 of 12
<PAGE>
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN TRANSACTIONS
During Fiscal 1996, the Company paid personal expenses of Mr. Cooper and
Ms. Cooper totaling $243,982. Such amount is evidenced by a promissory note
which bears interest at 5.05% per annum. Such loan was originally repayable on
March 31, 1997. In December 1996, the Company extended such loan until March 31,
1999. All principal and accrued interest is due and payable by the Coopers on
such date.
From April 1, 1996 to December 4, 1996, the Company paid personal expenses
of the Coopers totaling $280,855. Such amount is evidenced by a promissory note
which bears interest at 5.05% per annum. All principal and accrued interest
under such note is due and payable by the Coopers to the Company on December 1,
1999.
In December 1996, certain shares of Common Stock were issued after
consummation of the merger of North American Energy of Delaware, Inc., with and
into the Company (which merger was consummated on December 20, 1996) in complete
satisfaction of approximately $4,368,130 of indebtedness, consisting of
$2,524,200 in principal and $1,843,930 in accrued interest (the "Indebtedness"),
and $1,500,000 in trade payables (the "Trade Payables") due Jack D.W. Song, who
as of March 31, 1997 beneficially owned over 10% of the outstanding Common
Stock. The Indebtedness, which was evidenced by three promissory notes, was
incurred by the Company in February 1987, April 1990 and May 1991 to provide
working capital, bore interest at a rate of 7% per annum, was payable upon
maturity and would have matured in June 2000 ($650,000 of original principal)
and February 2001 ($1,874,200 of original principal).
The Trade Payables were originally incurred by the Company to Data-Spec
Taiwan, of which Mr. Song is the controlling shareholder. Subsequently, such
Trade Payables were assigned by Data-Spec Taiwan to Mr. Song. During Fiscal
1997, the Company purchased approximately $10,200,000 of products from
Data-Spec Taiwan. As of June 30, 1997, the Company had total trade payables of
approximately $2,400,000 with Data-Spec Taiwan.
Page 11 of 12
<PAGE>
SIGNATURES
----------
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 on the 28th of July,
1997.
ORA ELECTRONICS, INC.
By: /s/ Gershon N. Cooper
----------------------------
Gershon N. Cooper, President
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 indicated on the 28th day of July, 1997.
Signature Title
--------- -----
/s/ Gershon N. Cooper Chairman of the Board, Chief
- - ---------------------------- Executive Officer and President
Gershon N. Cooper (Principal Executive Officer)
/s/ John M. Burris Vice President, Chief Financial Officer
- - ---------------------------- and Director (Principal Financial Officer)
John M. Burris
/s/ Matthew F. Jodziewicz Vice President of Technology and
- - ---------------------------- Legal Affairs, Secretary and Director
Matthew F. Jodziewicz
/s/ John Moore III Controller (Principal Accounting Officer)
- - ----------------------------
John Moore III
/s/ Ruth Cooper Director
- - ----------------------------
Ruth Cooper
Page 12 of 12
