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, 1998
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[ ] 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.
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(Name of Small Business Issuer in Its Charter)
Delaware 95-2860434
- ------------------------------ -----------------------
(State of Incorporation (I.R.S. Employer
or Organization) Identification No.)
1230 Rosecrans Avenue, Suite 1000,
Manhattan Beach, California 90266
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(Address of principal executive offices) (Zip Code)
(310) 643-5106
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(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 11, 1998, 12,986,162 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 $13,000,000.
Revenues for the fiscal year ended September 30, 1998 totaled $1,857,000.
Documents incorporated by reference: None. The purpose of this
Amendment is to provide the information contained in Part III
herein.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
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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 January 22, 1999:
Year
Became
Name Position with Company Director Age
---- --------------------- -------- ---
Robert Goldberg Chairman of the Board 1994 65
James Linesch President and Chief -- 43
Financial Officer
Herbert S. Lightstone Director 1997 65
John Minnick Director 1985 50
John Romm, M.D. Director 1997 68
Robert Stuckelman Director 1973 67
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 OFFICER
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. 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 Chief
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Financial Officer and became President in August 1997. From 1991 until
1996, he served as Chief Financial Officer of Universal Self Care, Inc.
a durable medical equipment supplier publicly traded on the NASDAQ Small
Cap market, and is currently a director of that company. From 1987 to
1991, he served as the Chief Financial Officer of Science Dynamics Corp.,
specializing in sales, service and development of medical billing
software. He was a practicing CPA with Price Waterhouse in California
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. He rejoined ICN in 1994 and
also served with ICN from 1968 until 1981. Prior to ICN, Mr. Lightstone
served as a Director, and subsequently as Chairman & CEO of Immunetech
Pharmaceuticals from 1983 through 1986. In 1981 and 1982 he served as
President of Revlon Ophthalmic International. He has been a consultant
to numerous emerging companies.
<PAGE>
Mr. Minnick is President of Minnick Capital Management, an investment
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management firm that he founded in 1972. Mr. Minnick is a member of the
Kansas and Federal Bar. 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).
Dr. Romm has practiced internal medicine and gastroenterology in private
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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 Cedars-Sinai Medical Center.
Mr. Stuckelman founded the Company in 1973 and served as its President
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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 services to
many companies. He is also on the Board of Directors 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, 1998. No director attended
fewer than 75% of the aggregate of all meetings of the Board of
Directors.
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 once during the fiscal year ended September 30,
1998.
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 Dr. Romm. The Compensation Committee met
once during the fiscal year ended September 30, 1998.
The Executive Committee is comprised of Mr. Goldberg, Mr. Minnick and
Mr. Lightstone. The Executive Committee meets monthly.
<PAGE>
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.
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, 1998, its officers,
directors, and greater than ten-percent beneficial owners complied
with all applicable filing requirements.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the compensation for the fiscal year
ended September 30, 1998 for the Company's chief executive officer
and all executive officers whose compensation exceeded $100,000 for
such fiscal year.
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Name and Fiscal Annual Compensation Long-Term
Principal Year Salary Bonus Compensation
Position Stock Options
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James Linesch 1998 $117,000 0 0
President 1997 $98,077 $5,000 25,000
1996 $32,308* 0 63,750
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* Reflects actual salary from June 1996 to fiscal year end 1996
EMPLOYMENT AGREEMENTS
NONE
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
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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 up to 1,200,000 shares of Common Stock.
At the year ended September 30, 1998, there were 490,399 shares reserved
for exercise of options granted, of which 277,996 were exercisable,
and 554,924 were available for grant under such Plan. The average
price of options issued under the Plan is $1.15 per share. On January 8,
1999 the Board of Directors granted 435,000 options to employees,
officer and directors under the plan.
Both the amount of options granted and to whom they are granted are
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. For a fuller description of the 1992
Plan, see ITEM 2, below.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
None
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, 1998 and the
fiscal year-end value of unexercised options for the Company's named
executive officers.
Value of
Unexercised
Number of Securities In-the-money
(shares of Common Stock) Options at
Underlying Unexercised Fiscal Year
Shares Options at Fiscal Year End End(1)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
---- ----------- -------- --------------------- -------------
J. Linesch - - 50,834/37,916 $ 0/$ 0
R. Raynovich - - 158,150/25,000 $ 0/$ 0
(1) Based upon the closing market price of the Company's Common Stock
as reported on the Nasdaq Small Cap market on September 30, 1998
minus the respective option exercise prices.
<PAGE>
NON PLAN STOCK OPTIONS
Between February 1992 and July 1999, a total of 1,152,890 stock options
were granted to directors, officers and consultants outside either the
1982 or the 1992 Plans. The exercise prices of these non-plan stock
options are at an average price of $1.50 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 September 30,
1998, 258,393 of these non-qualified stock options were exercised and
799,026 were still outstanding.
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.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) MANAGEMENT
The following table sets forth information concerning beneficial
ownership of the Company's Common Stock as of January 22, 1999 by:
(a) each director of the Company; and (b) all executive officers and
directors of the Company as a group.
Name and Address*
of Beneficial Owner Amount and Nature of Beneficial Ownership
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Robert Stuckelman 284,414(2) 2%
John Minnick 264,707(3) 2%
Robert Goldberg 181,476(4) 1%
Herbert S. Lightstone 58,334(5) **
John Romm, M.D. 16,667(6) **
James Linesch 59,167(7) **
All officers and
Directors as a group
(6 persons) 864,765(8) 6%
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<PAGE>
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(1) Includes options exercisable within sixty days of January 31,
1999.
(2) Includes 129,899 shares subject to non-qualified and qualified
stock options.
(3) Includes 195,422 shares subject to non-qualified stock options.
(4) Includes 171,476 shares subject to non-qualified stock options.
(5) Includes 58,334 shares subject to non-qualified stock options.
(6) Includes 16,667 shares subject to non-qualified stock options.
(7) Includes 59,167 shares subject to qualified stock options.
(8) See notes (2) through (7)
(*) c/o CompuMed, Inc, 1230 Rosecrans Avenue, Manhattan Beach,
California 90206.
(**) Less than 1%.
(b) FIVE PERCENT STOCKHOLDERS
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None
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, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment to be signed on behalf
by the undersigned hereunto duly authorized.
Date: January 26, 1999
CompuMed, Inc.
/s/ James Linesch
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James Linesch
President
