U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. (FEE REQUIRED).
For the fiscal year ended September 30, 1997
_______________________________________
[ ] TRANSACTION 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 0-14210
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COMPUMED, INC.
________________________________________________
(Name of Small Business Issuer in Its Charter)
Delaware 95-2860434
_____________________________________________ ________________
(State of Incorporation or Organization) (I.R.S. Employer
Identification
No.)
1230 Rosecrans Avenue, Suite 1000, Manhattan Beach, California 90266
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
(310) 643-5106
______________
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 par value
Common Stock Purchase Warrants
_______________________________
Title of Class
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months), and (2) has been subject to such filing
requirements for the past 90 days. [X] YES [ ] 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 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.
As of December 12, 1997, 9,041,857 common shares were outstanding and
the aggregate market value of the common shares (based upon the
average bid and asked prices on such date) of the Registrant held by
non-affiliates was approximately $12,700,000.
Revenues for the fiscal year ended September 30, 1997 totaled
$1,939,000.
Documents incorporated by reference: None
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PART III
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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AN CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Executive Officers and Directors
The following table sets forth certain information
concerning the directors and executive officers of the Company as
of December 31, 1997:
Year
Became
Name Position with Company Director Age
---- --------------------- -------- ---
Robert Goldberg Chairman of the Board 1994 64
James Linesch President, CFO, Secretary n/a 43
Herbert S. Lightstone Director 1997 64
John Minnick Director 1985 49
Rod Raynovich Director 1995 54
John Romm, M.D. Director 1997 67
Robert Stuckelman Director 1973 65
The terms of the Board of Directors will expire at the next
annual meeting of stockholders. The Company's officers are
elected by the Board of Directors and hold office at the will of
the Board.
BACKGROUND EXPERIENCE OF DIRECTORS AND OFFICERS
Mr. Goldberg is a senior partner in the firm of Francis, Goldberg
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& Powers, a certified Public Accounting Firm and has been
associated with such firm since January 1995. Prior thereto, he
was a senior partner in the Los Angeles office of Bernstein, Fox,
Goldberg & Licker Certified Public Accountants for fifteen years.
He is certified in both California and New York and has been a
member of the New York State Bar. Mr. Goldberg attended Lehigh
University, Brooklyn Law School and New York University School of
Law and has lectured for the Practicing Law Institute and The
American College of Life Underwriters. He is a member of the
Estate Planning Council, Professional Planners Forum and various
accounting societies.
Mr. Linesch joined the Company in June 1996 as Vice President and
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Chief Financial Officer and became President and Secretary in
August 1997. From 1991 until 1996, he served as Chief Financial
Officer of Universal Self Care, Inc. ("Universal"), a durable
medical equipment supplier, publicly traded on the Nasdaq Small
Cap market and is currently a director of Universal. From 1987
to 1991, he served as the Chief Financial Officer of Science
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Dynamics Corp., specializing in sales, service and development of
medical billing software. He has practiced as a CPA in
California with Price Waterhouse from 1981 to 1984. Mr. Linesch
received his BS degree in Finance from California State
University, Northridge, and his MBA degree from the University of
Southern California.
Mr. Lightstone is Vice President, Corporate Development, with ICN
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Pharmaceuticals, (NYSE:ICN) where he is also responsible for
ICN's global public and investor relations activities, having
rejoined ICN in 1994, and also served with ICN from 1968 until
1981. From 1983 through 1988, Mr. Lightstone served as a
director and subsequently Chairman & CEO of Immunetech
Pharmaceuticals. He has been a consultant to numerous emerging
companies.
Mr. Minnick is President of Minnick Capital Management, an
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investment management firm that he founded in 1972. Mr. Minnick,
an attorney is a member of the Kansas Bar and has had a long-
standing relationship with the Company in his capacity as
investment counsel for a large number of investors in franchise
programs that the Company originated. He has served as a
director on other corporate and non-profit boards and is a member
of the Association for Investment Management and Research (AIMR).
Mr. Minnick is a graduate of Washburn University (BA) and the
Washburn University School of Law (JD).
Mr. Raynovich is a principal of Raygent Associates, a healthcare
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consulting firm providing investment banking and business
development services. He was President and Chief Executive
Officer of the Company from October 1994 until August 1997. Mr.
Raynovich has 25 years of experience in the medical diagnostics
and biotechnology industry. Mr. Raynovich served as President of
Raygent Associates, from April 1993 to October 1994. He was
President and CEO of Leeco Diagnostics, Inc., which merged into
Endogen, Inc., from August 1990 to April 1993. Mr. Raynovich was
Vice President of Business Development of Cambridge Bioscience
Corp. He has also held management positions with Abbott
Laboratories and Johnson & Johnson. Mr. Raynovich received his
M.B.A. from Rutgers University and his B.S. from Penn State
University.
Dr. Romm has practiced internal medicine and gastroenterology in
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private practice since 1962. He earned his MD at Wayne State
College of Medicine and also holds a BS in biology. He is an
associate professor of medicine at the University of California,
Los Angeles and is an attending physician at CedarsSinai Medical
Center.
Mr. Stuckelman founded the Company in 1973 and served as its
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President to 1982. From 1982 through 1989, Mr. Stuckelman was a
business consultant for small and medium size companies. In
1989, he rejoined the Company as President and Chief Executive
Officer in which capacities he served until October 1994. Mr.
Stuckelman has been a director of the Company since its
incorporation. Since 1994, he has been President of Technical
Management Consultants, which provides business consulting
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services. He is also a director of Medical Resources Management,
Inc., a public company that rents laser surgery equipment to
doctors and hospitals. He holds an MSEE from the University of
Southern California and a BEE from Cornell University.
There is no family relationship among the directors or
executive officers of the Company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four
meetings during the fiscal year ended September 30, 1997, No
director attended fewer than 75% of the aggregate of all meetings
of the Board of Directors.
The Board of Directors has established three Committees:
Executive, Audit and Compensation.
The Executive Committee current consists of Mr. Goldberg, Mr.
Minnick and Mr. Lightstone. It meets monthly.
The Audit Committee is primarily responsible for approving the
services performed by the Company's independent auditors and
reviewing reports of the Company's internal and external auditors
regarding the Company's accounting practices and systems of
internal accounting controls. This Committee currently consists
of Mr. Stuckelman and Mr. Goldberg. The Audit Committee met two
times during the fiscal year ended September 30, 1997,
The Compensation Committee reviews and approves the Company's
compensation policy and has assumed responsibility for
administration of the Company's 1992 Stock Option Plan. This
Committee currently consists of Mr. Minnick and Mr. Romm, The
Compensation Committee met two times during the fiscal year
ending September 30, 1997.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than
ten percent of its Common Stock, to file reports of ownership and
changes of ownership with the Securities and Exchange Commission
("SEC") and each exchange [or market quotation system] on which
the Company's securities are registered. Officers, directors and
greater than ten-percent stockholders are required by SEC
regulation to furnish the Company with copies of all ownership
forms they file.
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Based solely on its review of the copies of such forms received
by it, or written representations that no Form 5 was required,
the Company believes that, during the year ended September 30,
1997, its officers, directors, and greater than ten-percent
beneficial owners compiled with all applicable filing
requirements.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the compensation for the fiscal
year ended September 30, 1997 for the Company's chief executive
officer and all executive officers whose compensation exceeded
$100,000 for such fiscal year.
Name and Fiscal Annual Compensation
Principal Position Year Salary Bonus
------------------ ------ ------ ------------
J. Linesch 1997 $ 98,077 $ 5,000
President and CEO 1996 $ 32,308* 0
R. Raynovich 1997 $111,660 0
Former President 1996 $ 90,000 0
1995 $140,000*** $25,000
Long-Term
Name and Fiscal Compensation All Other
Principal Position Year Stock Options Compensation
------------------ ------ ------------- ------------
J. Linesch 1997 25,000
President and CEO 1996 25,000
R. Raynovich 1997 25,000
Former President 1996 --
1995 158,150 $35,000
* Reflects actual salary from May 1996 to fiscal year end 1996
** Reflects actual salary from October 1996 to August 1997
*** Reflects actual salary from October 1994 to fiscal year end
1995
EMPLOYMENT AGREEMENTS
Mr. Raynovich has an employment agreement with the Company
through May 31, 1998, which was terminated in August 1997.
Pursuant to the terms of the Agreement, dated June 1, 1996, he
received an annual salary of $120,000, subject to annual
increases based on the Consumer Price Index and was also entitled
to receive periodic discretionary bonuses with an annual
cumulative amount not to exceed $40,000. In connection with his
relocation, the Company agreed to loan him up to $42,000, the
liability of which would be forgiven over approximately two
years. The Company and Mr. Raynovich are currently in
negotiations in connection with the termination of the employment
agreement.
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EMPLOYEE STOCK OPTION PLANS
The Company established its 1992 Stock Option Plan (the "1992
Plan") to enable the Company to recruit and retain selected
officers and other employees by providing equity participation in
the Company to such individuals. Under the 1992 Plan, regular
salaried employees, including directors who are full time
employees, may be granted options exercisable at not less than
100% of the fair market value of the Common Stock on the date of
grant. The exercise price of any option granted to an optionee
who owns stock possessing more than 10% of the voting power of
all classes of stock of the Company must be 110% of the fair
market value of the Common Stock on the date of grant and the
duration of the options granted may not exceed five years. Prior
to the existence of any public market for the Company's shares,
the fair market value had been determined from time to time by
the Board of Directors. Options generally become exercisable at
a rate of 33% of the shares subject to an option one year after
its grant. The remaining shares generally become exercisable
over an additional 24 months. The duration of options may not
exceed ten years. Options under the Plan are nonassignable,
except in the case of death and may be exercised only while the
optionee is employed by the Company, or in certain cases, within
a specified period after termination of employment (within three
months) or death (within twelve months). The purchase price and
number of shares of Common Stock that may be purchased upon
exercise of options are subject to adjustment in certain cases,
including stock splits, recapitalizations and reorganizations.
Under the 1992 Plan, the Company may grant qualified or non-
qualified options for the purchase of 880,000 shares of Common
Stock. At the year ended September 30, 1997, there were 594,975
shares reserved for exercise of options granted, of which 431,937
were exercisable subject to vesting, and 285,025 were available
for grant under such plan. Officers and members of the Board of
Directors hold an aggregate of 778,881 options, subject to
vesting, having exercise prices ranging from $1.00 to $1.25.
The amount of options granted and to whom they are granted, is
determined by the Board of Directors with the recommendation of
the Compensation Committee, at their discretion. There are no
specific criteria, performance formulas or measures applicable to
the determination of the amount of options to be granted and to
whom such options are to be granted.
The Company's 1982 Stock Option Plan (the "1982 Plan") terminated
on January 29, 1992, The terms and conditions of such Plan were
in all material respects identical with the 1992 Plan. As of
December 31, 1997, 9,805 options remain outstanding under the
1982 Plan expiring in 2001 at an exercise price of $1.00, and no
further options may be granted under such Plan.
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SAVINGS AND RETIREMENT PLANS
In July 1987 the Company instituted a Savings and Retirement Plan
(the "S&R Plan"). Under the S&R Plan, every full-time salaried
employee who is 18 years of age or older may contribute up to 15%
of his or her annual salary to the S&R Plan. The Company will
make a matching contribution of $.25 for every $1.00 of the
employee's contribution for an employee contribution of up to but
not exceeding 6 percent of the employee's annual salary. Company
contributions are 100% vested after 60 months of contributions to
the S&R Plan. Benefits are payable under the S&R Plan upon
termination of a participant's employment with the Company or at
retirement, The S&R Plan meets the requirements of Section 401(k)
of the Internal Revenue Code. Internal Revenue Service
regulations limit the percentage of tax-deferred contributions
that can be made by higher-compensated participants. There are
restrictions upon withdrawal of tax deferred contributions, but
participants are permitted to borrow against the value of their
tax deferred accounts.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
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Number of
Securities
(shares of
Common Stock) % of Total
Underlying Options Granted Exercise
Options to Employees Price Expiration
Name Granted(1) in Fiscal Year ($/share) Date
---- ---------- -------------- --------- ----------
J. Linesch 25,000 11% $.75 2006
R. Raynovich 25,000 11% $.75 2006
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(1) Options vested over a three-year period.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain information regarding the
exercise of stock options during the fiscal year ended September
30, 1997 and the fiscal year-end value of unexercised options for
the Company's named executive officers.
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Number of
Securities
(shares of Value of
Common Stock) Unexercised
Underlying In-the-money
Shares Unexercised Options Options at
Acquired at Fiscal Year End Fiscal Year End(1)
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
---- -------- -------- ------------------ ----------------
J. Linesch -- -- 21,250/67,500 $19,975/$75,950
R. Raynovich -- -- 158,150/25,000 $188,199/$3,000
(1) Based upon the closing market price of the Company's
Common Stock as reported on the Nasdaq Small Cap market
on September 30, 1997 minus the respective option
exercise prices.
NON PLAN STOCK OPTIONS
Between February 1992 and March 1997, a total of 944,918 stock
options were granted to directors, officers and consultants
outside either the 1982 Plan or 1992 Plan. The exercise prices
of these non-plan stock options were between $1.00 and $4.00 per
share which were equal to the fair market value of the Common
Stock on the respective dates of grant, and they expire between
1996 and 2001. As of December 31, 1997, 166,037 of these non-
qualified stock options were exercised and 778,881 were still
outstanding.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) MANAGEMENT
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The following table sets forth information concerning
beneficial ownership of the Company's Common Stock as of
December 31, 1997 by: (a) each director of the Company; and
(b) all executive officers and directors of the Company as a
group.
Amount and Nature of
Beneficial Ownership
--------------------------------
Name and Address* of Number of Percent of
Beneficial Owner Shares(1) Class
-------------------- --------- ----------
Robert Stuckelman 280,325(2) 3%
John Minnick 198,614(3) 2%
Rod Raynovich 191,483(4) 2%
Robert Goldberg 167,937(5) 2%
Herbert S. Lightstone 50,000(6) .5%
John Romm, M.D. 8,333(7) .1%
All Officers and
Directors as a group
(8 in number) 926,275(8) 9%
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(1) Includes options exercisable within sixty days of January
28, 1998.
(2) Includes 125,810 shares subject to non-qualified and
qualified
stock options.
(3) Includes 198,614 shares subject to non-qualified stock
options.
(4) Includes 166,483 shares subject to non-qualified stock
options.
(5) Includes 167,937 shares subject to non-qualified stock
options
(6) Includes 50,000 shares subject to non-qualified stock
options.
(7) Includes 8,333 shares underlying non-qualified stock
options.
(8) Includes 746,760 shares in addition to shares listed in
above footnotes subject to non-qualified and qualified stock
options.
(*) c/o CompuMed, Inc, 1230 Rosecrans Avenue, Manhattan Beach,
California 90206.
(b) FIVE PERCENT STOCKHOLDERS
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The following table sets forth information concerning
beneficial ownership of the Company's Common Stock as of December
31, 1997 by persons known to the Company as the beneficial owners
of more than 5% of the outstanding Common Stock as of such date.
Name and Address of Number of Percent of
Beneficial Owner Shares Class
------------------- --------- ----------
The Shaar Fund, Ltd. 884,956 (1) 8.9%
Kaya Flamboyan 9
Curacao, Netherlands Antilles
(1) Includes 884,956 shares underlying 10,000 shares of Class C
Series 1 7% Convertible Preferred Stock. Each share of
Class C Series 1 Preferred Stock is convertible into a
number of shares of Common Stock determined by dividing $100
by the lesser of (a) $1.51 or (b) the product of (i) .75 and
(ii) the average closing bid price of the Common Stock for
the 10 consecutive trading days immediately preceding the
receipt of the notice of conversion, subject to limitations
on the number of shares then convertible if the market price
of the preceding notice of conversion is less than $1.00 on
the trading date preceding the notice of conversion. Does
not include warrants to purchase Common Stock issuable upon
conversion of the Class C Preferred Stock at the rate of one
three-year warrant exercisable at a price equal to the
conversion price for each share of Common Stock received
upon conversion.
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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There were no related-party transactions or relationships
during the fiscal year ended September 30, 1997.
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SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPUMED, INC.
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Registrant
By: /s/ James Linesch
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James Linesch, President
Date: January 28, 1998
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