UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
[xx] ANNUAL REPORT UNDER SECTION 13 OR 5(d) OF THE SECURITIES ACT OF 1934
[Fee Required]
For the fiscal year ended - June 30, 1996
OR
[ ] TRANSITION REPORT UNDER 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 0-12440
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GENERAL GENETICS CORPORATION
--------------------------------------------
(Name of small business issuer in its charter)
DELAWARE 84-0882076
- ------------------------------- ----------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
770 South Post Oak Lane, Suite 690, Houston, TX 77056
- -------------------------------------------------------------- --------
(Address of principal executive offices) (as of date of filing) (Zip Code)
Issuer's Telephone Number: (713) 840-0230
-----------------------------------------
Securities registered under Section 12(b)of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 Par Value
----------------------------------------
(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 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 [xx]
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. [ ]
The aggregate market value of the voting stock held by non-affiliates on
August 30, 1996, based upon average bid and asked price of the Common Stock as
reported by the National Quotation Bureau, Inc. for such date, was approximately
$664,054. The number of outstanding shares of the Registrant's Common Stock on
August 30, 1996 was 250,000.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
General Genetics Corporation
FORM 10-K
For the Fiscal Year Ended June 30, 1996
Page
----
Part I.
Item 1. Business........................................................ 1
Item 2. Properties...................................................... 2
Item 3. Legal Proceedings............................................... 2
Item 4. Submission of Matters to a Vote of Security Holders............. 2
Part II.
Item 5. Market for Common Equity and Related Stockholder Matters........ 3
Item 6. Selected Financial Data......................................... 3
Item 7. Management's Discussions and Analysis or Plan of Operation...... 4
Item 8. Financial Statements and Supplemental Data...................... 4
Part III.
Item 9. Disagreements with Accountants on Accounting
and Financial Disclosure....................................... 12
Item 10. Directors and Officers of Registrant........................... 13
Item 11. Executive Compensation......................................... 14
Item 12. Security Ownership of Certain Beneficial Owners and Management. 15
Item 13. Certain Relationships and Related Transactions................. 17
Part IV.
Item 14. Exhibits, Financial Statements, Schedules and Reports
on Form 8-K .................................................. 17
SIGNATURES................................................................. 20
<PAGE>
PART I
ITEM 1. BUSINESS
History
Registrant was incorporated on June 3, 1982 as the successor to
BioTechnical Resources Group,Inc. which had been incorporated on November 3,
1981. It commenced its business opera tions following completion of a public
offering of its securities on December 19, 1982 and from that date until the end
of 1986, when it ceased all activities, Registrant was engaged solely in
research and development activities. From 1982 until March 1984, Registrant was
engaged in the research and development of products in the immunology field for
human application and of a number of veterinary vaccines. Thereafter, until the
end of 1986, its activities were conducted solely through its wholly-owned
subsidiary Tround Geothermal Corporation ("Geothermal"), and consisted of
limited research and development in connection with its licensed high-speed,
projectile rock drill for geo thermal applications. Registrant has never had any
revenues from its operations. Unless context requires otherwise, all references
to "Registrant" throughout this report are to General Genetics Corporation and
its wholly-owned subsidiary, Tround Geothermal Corporation, collectively.
Until October 16, 1990 Registrant's common stock, which is traded in the
over-the-counter market, was quoted in the National Association of Securities
Dealers Automated Quotation ("NASDAQ") system under the NASDAQ symbol "GENG". On
that date, Registrant's common stock was deleted from that system by reason of
Registrant's failure to maintain an asset position of at least $750,000 in
accordance with NASDAQ requirements. Since October 17, 1990 Registrant's common
stock has been quoted by the National Quotation Bureau in its "pink sheets," but
without prices until September, 1995, at which time it was moved to the
Electronic Bulletin Board trading symbol GENG.
Acquisition of Majority Interest
On August 19, 1994 Tround International, Inc. ("Tround"), the owner of
125,000 shares of Registrant's common stock, constituting approximately 55% of
the 227,000 issued and outstanding shares of common stock of Registrant, entered
into an agreement with Zapit Technology, Inc. ("Zapit") and the Registrant
whereby Tround agreed to sell and Zapit agreed to purchase 115,000 of such
shares (the "Sale Shares"). The Sale Shares represented approximately 50.7% of
the issued and outstanding shares of common stock of the Registrant. The
purchase price for the Sale Shares was $60,000, of which a deposit of $15,000
was paid to Tround on or about September 16, 1994. The balance of the purchase
price was paid to Tround on or about January 23, 1995.
In December 1995, Zapit, the owner of 115,000 shares, constituting
approximately 50.7% of the 227,000 issued and outstanding shares of common stock
of Registrant, entered into an agreement with Havon Funding, L.P., a limited
partnership controlled by Hans and Yvonne Morkner ("Havon"), pursuant to which
Zapit transferred to Havon all of the 115,000 shares of Registrant then owned by
it.
Change in Control of Management
The Company accepted Peter Zachery's resignation effective May 31, 1996,
at which time this position was filled by Hans Morkner. In June 1996, Mello
Cottone resigned as director and Ty Poirier filled this vacancy. Hans Morkner
now controls the management of the Registrant.
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Form 10-K Page 1
<PAGE>
Other Matters
Registrant has no employees and pays no salaries, wages, fees or similar
compensation. Registrant's administrative requirements, such as they are, were
handled without charge by Tround until the January 1995 transfer by Tround to
Zapit, who then transferred controlling interest in Registrant to Havon Funding,
L.P., who is currently handling these requirements without charge.
Subsequent Events
The Registrant acquired Private Mortgage Bankers, Inc. on August 30, 1996
in exchange for 20,313,000 shares of its common stock. To consummate the
acquisition, the Company increased the number of shares of common stock it is
authorized to issue from 5,000,000 to 500,000,000 shares. The Company also
approved a 1 (new) for 20 (old) reverse stock split upon the closing of this
transaction. Unless otherwise indicated, all information in this Annual Report
gives effect to the 1 for 20 reverse stock split.
The Registrant's acquisition of Private Mortgage Bankers, Inc. represents
a reverse acquisition, whereby for accounting purposes, Private Mortgage
Bankers, Inc. was the acquiror. For financial statement purposes, the historical
financial statements of the Registrant will be those of Private Mortgage
Bankers, Inc. beginning on the closing date of the acquisition.
Resignation of Officers and Directors
On July 19, 1996 the Registrant accepted the resignations of James N.
Juliana and Chor-Weng Tan. Allen E Myers, E. Donald DeYoung and Louis J.
Blenderman were elected to the Board of Directors at the shareholders meeting
held on August 30, 1996.
ITEM 2. PROPERTIES.
During the fiscal year ended June 30, 1995 and 1996, Registrant made its
headquarters at the Zapit offices in Santa Clara, California, for which it paid
no rent or other office charges or overhead.
ITEM 3. LEGAL PROCEEDINGS.
No legal proceedings are pending to which the Registrant or any of its
property is subject, nor to the knowledge of Registrant are there any
proceedings threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Registrant submitted no matters to a vote of its security holders during
the fiscal year ended June 30, 1996.
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Form 10-K Page 2
<PAGE>
PART III
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Until October 16, 1990 Registrant's common stock was quoted in the
National Association of Securities Dealer's Automated Quotation ("NASDAQ")
system under the NASDAQ symbol "GENG". On that date, Registrant's common stock
was deleted from that system by reason of Registrant's failure to maintain an
asset position of at least $750,000 in accordance with NASDAQ requirements. The
Registrant's common stock has been listed by the National Quotation Bureau in
its "pink sheets," but without prices until September, 1995 at which time it was
moved to the Electronic Bulletin Board trading symbol GENG. The following table
sets forth representative high and low closing bid prices (as adjusted for the 1
for 20 reverse split) by calendar quarters as reported by the National Quotation
Bureau, Inc. from July 1, 1994 to June 30, 1996. Bid quotations represent prices
between dealers, do not include mark-ups, mark-downs or other fees or
commissions, and do not necessarily represent actual transactions.
Bid Prices
Calendar Quarter -----------------------------
Ended Low High
--------------------- --- ----
September 30, 1994 Unpriced
December 31. 1994 Unpriced
March 31, 1995 Unpriced
June 30, 1995 Unpriced
September 30, 1995 $.40 $.40
December 31, 1995 $.40 $.40
March 31, 1996 $.60 $.60
June 30, 1996 $.40 $.60
As of July 26, 1996, the number of holders of record of the common stock,
$.001 par value, of Registrant was approximately 367.
ITEM 6. SELECTED FINANCIAL DATA.
The selected statements of operations and balance sheet data set forth
below are derived from the financial statements of the Company for each of the
years in the five-year period ended June 30, 1996. The information set forth
below should be read in conjunction with the audited financial statements of
Registrant and related notes appearing elsewhere in this Report. (See, ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.)
<TABLE>
<CAPTION>
Year Ended June 30, 1996
--------------------------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Statement of Operations:
Revenue -- -- -- -- --
(Loss) (226,779) (339,040) -- (5,901) (35,100)
(Loss) per share ( 1.00) ( 1.49) -- ( .03) ( .15)
Weighted average number
of shares outstanding 227,000 227,000 227,000 227,000 227,000
Balance Sheet Data:
Total assets 1 1 1 -- --
Long-term obligations -- -- -- -- --
Cash dividends declared
per common share -- -- -- -- --
</TABLE>
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Form 10-K Page 3
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
The following is management's discussion and analysis of significant
factors which have affected Registrant's financial position and operations
during the fiscal years in the five-year period ended June 30,1996.
Liquidity and Capital Resources
The activities of Registrant since its inception in 1982 have been
financed entirely by sources other than operations. Such financing was
principally provided by: (i) the net proceeds, amounting to approximately
$2,468,834, from a public offering of Registrant's securities in 1982; (ii)
interest income earned on invested funds; and (iii) the sale of Registrant's
biological research and related assets and equipment.
Results of Operations
Registrant is not presently operational and has not been engaged in any
active business operations since the latter part of 1986.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.
The financial statements are filed pursuant to Item 14(a)1.
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Form 10-K Page 4
<PAGE>
Independent Auditor's Report
Board of Directors and Stockholders
General Genetics Corporation
We have audited the accompanying consolidated balance sheet of General
Genetics Corporation and Subsidiaries as of June 30, 1996 and the related
consolidated statement of operations, changes in stockholders' deficit and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of General
Genetics Corporation and Subsidiaries as of June 30, 1996, and the results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.
/s/ Hein + Associates LLP
- -------------------------------
Hein + Associates LLP
Certified Public Accountants
Houston, Texas
October 3, 1996
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Form 10-K Page 5
<PAGE>
GENERAL GENETICS CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30,
-------------------------
1995 1996
---- ----
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES: 1996 1995
---- ----
Accrued expenses $ 23,000 $ 5,900
---------- ----------
Total current liabilities: $ 23,000 $ 5,900
---------- ----------
COMMITMENTS (Note 7)
STOCKHOLDERS' DEFICIT:
Preferred stock, no par value; 150,000,000
shares authorized; none issued $ -- $ --
Common stock, $.001 par value; 500,000,000
shares authorized, 227,000 shares
issued and outstanding $ 227 $ 227
Additional paid-in capital 4,472,279 4,454,279
Accumulated deficit (4,495,506) (4,460,406)
--------- ----------
Total stockholders' deficit $ (23,000) $ (5,900)
--------- ----------
Total liabilities and stockholders' deficit $ -- $ --
========= ===========
</TABLE>
See Notes to Consolidated Financial Statements.
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Form 10-K Page 6
<PAGE>
GENERAL GENETICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30,
1994 1995 1996
---- ---- ----
EXPENSES
Professional Fees $ -- $ (5,901) $ (35,100)
--------- --------- ---------
Net Loss $ -- $ (5,901) $ (35,100)
========= ========= =========
Weighted Average Number of
Common Shares Outstanding 227,000 227,000 227,000
Loss per share -- $ (.03) $ (.15)
See Notes to Consolidated Financial Statements.
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Form 10-K Page 7
<PAGE>
<TABLE>
<CAPTION>
GENERAL GENETICS CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
Common Additional
Stock Paid-In Accumulated
Shares Amount Capital Deficit
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Balances, July 1, 1993 227,000 $227 $4,449,279 $(4,454,505)
Net Loss -- -- -- --
-------- -------- ---------- ----------
Balances, June 30, 1994 227,000 $227 $4,449,279 $(4,454,505)
Net Loss -- -- -- (5,901)
Convert accounts payable
to capital contribution -- -- 5,000 --
-------- -------- ---------- ----------
Balances, June 30, 1995 -- $227 $4,454,279 $(4,460,406)
Expenses paid by a shareholder
on behalf of the Company -- -- 18,000 --
-------- -------- ---------- ----------
Net Loss -- -- -- (85,100)
-------- -------- ---------- ----------
Balances, June 30, 1996 227,000 $ 227 $4,472,279 $(4,495,506)
======= ======== ========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
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Form 10-K Page 8
<PAGE>
GENERAL GENETICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended June 30,
----------------------------
1994 1995 1996
---- ---- ----
OPERATING ACTIVITIES
Net Loss $ -- $(5,901) $(35,100)
Expenses Paid by Shareholder
on Behalf of Company -- -- $ 18,000
------- ------- --------
Changes in Operating Assets
and Liabilities:
Decrease in Prepaid Expenses
and Other Current Assets -- 1 --
Increase in Accrued Expenses $ -- $ 5,900 $ 17,100
------- ------- --------
Net Cash Used in Operating Activities $ -- $ -- --
------- ------- --------
Cash - Beginning of Year -- -- --
------- ------- --------
Cash - End of Year $ -- $ -- $ --
======= ======= ========
SUPPLEMENTAL CASH FLOW
INFORMATION:
Accounts Payable Converted To
Capital Contribution $ -- $ 5,000 $ --
See Notes to Consolidated Financial Statements.
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Form 10-K Page 9
<PAGE>
GENERAL GENETICS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
------------------------------------------
A. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of
General Genetics Corporation and its 100% owned subsidiaries (the
"Company"). All intercompany transactions are eliminated in
consolidation.
B. NATURE OF BUSINESS
The Company was formed in 1982. In June 1982, the Company acquired
100% of the outstanding shares of BioTechnical Resources Group,
Inc., a company engaged in the development and research of
pharmaceutical products in the immunology field. The acquisition was
accounted for under the pooling of interests method of accounting.
In 1984, the Company acquired 100% of the outstanding shares of
Tround GeoThermal Corporation ("Tround Geothermal") in exchange for
the issuance of 125,000 shares of the Company's stock to Tround
International, Inc. ("Tround"). The acquisition was accounted for
under the purchase method of accounting. Tround Geothermal's charter
was revoked in March 1994 due to nonpayment of Delaware franchise
taxes.
The business activity of the Company has been substantially
discontinued since 1986.
C. ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
D. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's only financial instruments are accounts payable and
accrued expenses. Management believes the carrying amount of these
financial instruments approximate their fair values.
E. LOSS PER COMMON SHARE
The loss per share data was computed based on the weighted average
number of common shares outstanding. The Company authorized a 1
share of new for 20 old share reverse stock split on August 30,
1996. All share and per share amounts have been adjusted to give
effect to the stock split.
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Form 10-K Page 10
<PAGE>
F. INCOME TAXES
The Company accounts for income taxes on the liability method as
prescribed by Statement of Financial Accounting Standards No. 109.
2. Marketable Equity Securities
----------------------------
The Company has certain marketable equity securities, at June 30, 1996
deemed by management to have no fair value.
3. Notes Receivable - Other
------------------------
The Company had certain notes receivable, dated in 1984, for approximately
$150,000 of which management has deemed uncollectable and has fully
reserved for all years presented in the accompanying financial statements.
4. Leases
------
The Company rents no property and occupied office space at the facilities
of its parent on a rent-free basis, for all years encompassed by the
accompanying financial statements.
5. Income Taxes
------------
At June 30, 1996, the Company had net operating loss carry forwards
(NOL's) of approxi mately $4,500,000 available to offset future taxable
income. The carry forwards expire beginning in 1997. These NOL's will be
severely limited as to usage because of the change of control of the
Company which occurred after year end.
6. Related Parties Transactions
----------------------------
During the year ended June 30, 1996, a majority shareholder, whose owner
is also the President of the Company, paid legal fees of about $18,000 on
behalf of the Company. The Company incurred no liability due the
shareholder. These fees were accounted for as contributed capital and
charged to expenses in the accompanying financial statements.
7. Commitments
-----------
On July 19, 1996, the Company agreed to issue up to 250,000 shares of
common stock to a third party in exchange for consulting services to
assist in the acquisition of Private Mortgage Bankers, Inc.
8. Stockholders' Deficit
---------------------
On August 19, 1994 Tround International, Inc. ("Tround"), the owner of
125,000 shares of Registrant's common stock, constituting approximately
55% of the 227,000 issued and outstanding shares of common stock of
Registrant, entered into an agreement with Zapit Technology, Inc.
("Zapit") and the Registrant whereby Tround agreed to sell and Zapit
agreed to purchase 115,000 of such shares (the "Sale Shares"). The Sale
Shares represented approximately 50.7% of the issued and outstanding
shares of common stock of the Registrant. The purchase price for the Sale
Shares was $60,000, of which a deposit of $15,000 was paid to Tround on or
about September 16,1994. The balance of the purchase price was paid to
Tround on or about January 23, 1995.
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Form 10-K Page 11
<PAGE>
In December 1995, Zapit Technology, Inc., the owner of 115,000 shares,
constituting approximately 50.7% of the 227,000 issued and outstanding
shares of common stock of Registrant, entered into an agreement with Havon
Funding, L.P., a limited partnership controlled by Hans and Yvonne
Morkner, ("Havon") pursuant to which Zapit transferred to Havon all of the
115,000 shares of Registrant then owned by it.
The Registrant acquired Private Mortgage Bankers, Inc. on August 30, 1996
in exchange for 20,313,000 shares of its common stock. To consummate the
acquisition, the Company increased the number of shares of common stock it
is authorized to issue from 5,000,000 to 500,000,000 shares. The Company
also approved a 1 (new) for 20 (old) reverse stock split upon the closing
of this transaction. Unless otherwise indicated, all information in this
Annual Report gives effect to the 1 for 20 reverse stock split.
The Registrant's acquisition of Private Mortgage Bankers, Inc. represents
a reverse acquisi tion, whereby for accounting purposes, Private Mortgage
Bankers, Inc. was the acquiror. For financial statement purposes, the
historical financial statements of the Registrant will be those of Private
Mortgage Bankers, Inc. beginning on the closing date of the acquisition.
The Board of Directors has the authority to issue up to 150,000,000 shares
of "blank check" preferred stock with such designations, rights and
preferences as it may determine.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Changes in Registrant's Certified Public Accountant:
(a) Effective September 11, 1996, the Board of Directors of General
Genetics Corporation engaged the accounting firm of Hein +
Associates LLP as independent accountants to the Registrant. The
services of Paul Rosenberg, Certified Public Accountant, were
terminated for the convenience of the Company at that same meeting.
(b) During the most recent fiscal year ended June 30, 1995, and in the
subsequent interim periods up through the date of his replacement,
there were no disagreements with Paul Rosenberg, Certified Public
Accountant, on any matter of accounting principles or practices,
financial statement disclosure, auditing scope, or procedure or any
reportable event which, if not so resolved to the satisfaction of
Paul Rosenberg, Certified Public Accountant, would have caused said
firm to make reference to the matter in their report.
(c) Paul Rosenberg, Certified Public Accountant's, report on the
financial statements for the year ended June 30,1995 and 1994
contained no adverse opinion or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or accounting
principles.
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Form 10-K Page 12
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
DIRECTORS
The following sets forth, as at June 30, 1996, the directors of
Registrant, their respective ages, the year in which each was first elected or
appointed a director, and any other office in Registrant held by each director.
Other Offices Director
Name Held Age Since
---------------- ------------ --- --------
James N. Juliana None 76 1994
Chor-Weng Tan None 61 1984
Ty Poirier None 26 1996
On July 19, 1996 Chor-Weng Tan and James N. Juliana resigned as directors
for the Registrant. Such resignations did not result from any disagreement with
Registrant on any matter relating to Registrant's operations, policies or
practices.
Allen E. Myers, E. Donald DeYoung and Louis J. Blenderman were elected to
the Board of Directors at the annual shareholder's meeting on August 30, 1996.
EXECUTIVE OFFICERS
The following sets forth the executive officers of Registrant, their
respective ages, the year in which each was first appointed an executive officer
of Registrant and all positions and offices in Registrant held by each such
person as at June 30, 1996.
Office Held
Name Office Held Age Since
---------------- ------------ --- -----------
Hans Morkner President 52 1996
On May 31, 1996 Peter Zachery resigned as the president of Registrant.
Such resignations did not result from any disagreement with Registrant on any
matter relating to Registrant's operations, policies or practices. In June 1996,
Hans Morkner was appointed as the president of Registrant to fill the vacancy
thus created.
BUSINESS EXPERIENCE
The following summarizes the occupation and business experience during at
least five years preceding June 30, 1996 of each person who served as a director
and/or executive officer of Registrant at June 30, 1996.
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Form 10-K Page 13
<PAGE>
JAMES N. JULIANA holds a B.A. degree from Washington College, Chestertown,
MD. He has been an officer and director of Tround International, Inc. since 1992
and 1984, respectively. He is and has since January 1984 been self-employed as a
business consultant. From May 1981 to January 1984, Mr. Juliana served as
Principal Deputy Assistant Secretary of Defense inthe United States Department
of Defense. From 1977 to 1981 he was employed by Braniff International Inc.
(scheduled airline) as Vice-President, Federal Affairs. Prior to 1977 he held
various positions with the United States government, including Executive
Director - Civil Aeronautics Board, Counsel Senate Permanent Subcommittee on
Investigations and Special Agent - Federal Bureau of Investigation.
CHOR-WENG TAN holds the degrees of B.S. from the University of Evansville,
Indiana and M.S. and PhD. from the University of Illinois. Dr. Tan has served as
a director of Registrant since 1984. Since January 1991, he has been the
Managing Director for Education for the American Society of Mechanical Engineers
in New York City. Dr. Tan was employed by the National Science Foundation in
Washinton, DC from July 1987 until December 1990 as Program Director of its
Research Career Development Division, Science and Engineering Education Branch.
From 1963 to July 1987 he served at The Cooper Union for the Advancement of
Science and Art ("Cooper Union") in New York City in various teaching capacities
and has served as Dean of its School of Engineering from 1975 and as Executive
Vice President of The Cooper Union Research Foundation since 1976. He is a
member of the Board of Trustees of The Cooper Union Research Foundation.
He has served as a director of Tround Internatonal, Inc. since 1981.
HANS MORKNER has been the Registrant's secretary since January 1995 and
its president since June 1996. Mr. Morkner holds a B.A. degree in Mechanical
Engineering and an MBA in Finance from the University of Copenhagen, and a MA
degree in International Marketing from the University of Campinas in Brazil.
From 1966 to 1986, Mr. Morkner served as President of Cobb and Date Consulting,
Inc. a consulting Company. From 1988 to 1990, Mr. Morkner served as President of
Digital Consulting Group, Inc., a consulting Company. Mr. Morkner has been,
since 1990, President of 4M Development Corporation and a principal of Havon
Funding, L.P., a limited partnership which manages portfolios in real estate,
oil, cattle and start-up companies. Mr. Morkner has served as the Chief
Executive Officer and Chairman of the Board of Directors of Zapit Technology
International, Inc., a wholly-owned subsidiary of Zapit Technology
International, Inc., a wholly-owned subsidiary of Zapit, since its formation on
July 5, 1994.
TY POIRIER has been a director for the Registrant since June 1996. Mr.
Poirier has attended University of Oregon and Arizona State University pursuing
his B.S. degree in Business Adminstration. Since 1993 he has served as President
of a real estate development company.
ITEM 11. EXECUTIVE COMPENSATION
CASH COMPENSATION
No executive officer of Registrant received from it renumeration of any
kind during Registrant's fiscal year ended June 30, 1996.
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Form 10-K Page 14
<PAGE>
COMPENSATION PLANS
Registrant is not, and was not during the fiscal year ended June 30, 1996,
a party to any employment agreements or other plans for the compensation of any
executive officers or other persons.
STOCK OPTIONS
There are, and as at June 30, 1996, there were, no options of any kind
outstanding for the purchase of common stock of Registrant nor has Registrant
ever adopted or entered into any plan or agreement for the issuance of stock
options of any kind.
DIRECTOR'S COMPENSATION
The directors of Registrant are not and have never been compensated for
their services as such.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Any person who is an officer, director, or the beneficial owner, directly
or indirectly, of more than 10% of the outstanding common stock of the Company
is required under Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") to file certain reports with the Securities and
Exchange Commission (the "Commission") disclosing his or her holdings or
transactions in any securities of the Company. For purposes of this discussion,
all such persons required to file such reports will be referred to as "Reporting
Persons". Every Reporting Person must file an initial statement of his or her
beneficial ownership of the Company's securities on the Commission's Form 3
within ten days after he or she becomes a Reporting Person. Thereafter (with
certain limited exceptions), all changes in his or her beneficial ownership of
the Company's securities must be reported on the Commission's Form 4 on or
before the 10th day after the end of the month in which such change occurred.
Certain changes in beneficial ownership are exempt from the Form 4 requirements,
but are required to be reported on a Form 5 within 45 days of the end of the
fiscal year in which such changes occurred, The Company knows of no person who
was a Reporting Person during the fiscal year ended June 30, 1996, who has
failed to file any reports required to be filed during such period of Forms 3 or
4 with respect to his holdings or transactions in the Company's securities.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the share
ownership, as of June 30, 1996 of those persons known to Registrant to be the
beneficial owners of more than 5% of Registrant's common stock, $.001 par value:
- --------------------------------------------------------------------------------
Form 10-K Page 15
<PAGE>
- --------------------------------------------------------------------------------
Name and Address | Amount and Nature of | Percent of Class
of Beneficial Owner | Beneficial Ownership |
- --------------------------------------------------------------------------------
Havon Funding, L.P. | 215,000 (1) | 50.7
15720 Simoni Drive | |
San Jose, CA 95127 |
- --------------------------------------------------------------------------------
Allen & Company Inc. | 13,825 (2) | 6.1
711 Fifth Ave. | |
New York, NY 10022 | |
- --------------------------------------------------------------------------------
Sherwood Securities Corp. | 45,196 | 19.9
55 Broadway | |
New York, NY 10004 | |
- --------------------------------------------------------------------------------
(1) In December 1995 Zapit transferred all of the 115,000 shares of
Registrant's common stock then owned by it, to Havon Funding L.P., a
limited partnership controlled by Hans and Yvonne Morkner. Hans Morkner is
an officer of Registrant.
(2) Includes shares owned beneficially by members of the Allen family in which
Allen & Company Incorporated disclaims any beneficial interest.
SECURITY OWNERSHIP OF MANAGEMENT
Ownership of Registrant's Common Stock
The following table sets forth information concerning the beneficial ownership
of Registrant's Common Stock, as at June 30, 1996, by (I) each person who was a
director, (ii) Registrant's executive officers, and (iii) all persons who were
directors and officers of Registrant, as a group, and the percentage of
Registrant's issued and outstanding stock represented by such beneficial
ownership.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------- -------------------- ----------------
James N. Juliana 0 0
1899 L Street, NW
Washington, DC 20036
Ty Poirier 0 0
11375 East Sahuaro #2029
Scottsdale, AZ 85259
Chor-Weng Tan 0 0
76 Echo Bay Drive
New Rochelle, NY 10805
Havon Funding, L.P. 115,000 (1) 50.7
15720 Simoni Drive
San Jose, CA 95127
- --------------------------------------------------------------------------------
Form 10-K Page 16
<PAGE>
(Continuation):
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------- -------------------- ----------------
Hans and Yvonne Morkner 115,000 (1) 50.7(1)
3170 De La Cruz Blvd, Suite 108
Santa Clara, CA 95054
All directors and officers 115,000 (1) 50.7
as a group (5 persons)
(1) In December 1995, Havon Funding, L.P., a limited partnership controlled by
Mr. Morkner and his wife Yvonne acquired 115,000 shares of Registrant's
common stock from Zapit.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions With Management and Others
In connection with Zapit's purchase of 115,000 Shares of Registrant's
common stock, as discussed in Item 1 of this Report, Registrant and Tround
terminated the License and Development Agreement between Tround and Geothermal
and modified the terms under which Tround can acquire Geothermal. These matters
are discussed in greater detail in Item 5. "Other Matters" of Registrant's
Current Report of Form 8-K, dated August 12, 1994, under the respective
subcaptions, "Termination of License and Development Agreement" and "Sale of
Tround Geothermal," which discussions are hereby incorporated herein by
reference. In March 1994, the corporate charter of Geothermal was forfeited for
non-payment of corporate franchise taxes and remains forfeited at the present
time.
Indebtedness of Management
Registrant has no policy or plans with respect to the making of loans to
its officers and directors.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following documents are filed as a part of this Annual Report:
(a) FINANCIAL STATEMENTS Page
Report of independent accountant.................................... 5
Balance sheets - June 30, 1996 and 1995..............................6
- --------------------------------------------------------------------------------
Form 10-K Page 17
<PAGE>
Page
Statements of operations - Years ended June 30, 1994, 1995,
and 1996.......................................................... 7
Statements of changes in stockholders' deficit - Years ended
June 30, 1994, 1995 and 1996...................................... 8
Statements of cash flows - Years ended June 30, 1994, 1995
and 1996.......................................................... 9
Notes to financial statements...................................... 10
(b) FINANCIAL STATEMENT SCHEDULES
Financial statement schedules have been omitted for the reason that they
are not required or are not applicable, or the required information is shown in
the financial statement notes thereto.
(c) EXHIBITS
<TABLE>
<CAPTION>
The exhibits filed as a part of this report are as follows:
Exhibit No. as filed with
Registration statement or
Report specified below
----------------------
<S> <C>
2 (a) Agreement and plan of reorganization, date April 19, 1984 (3) 2
(b) Agreement and plan of merger, dated October 22, 1984 (1) 2
(c) Agreement and plan of reorganization, dated September 9, 1987 (5)
(d) Acquisition Agreement among Registrant, Zapit Technology, Inc.
and Tround International, Inc., dated August 19, 1994 (6) 2
3 (a) Certificate of incorporation (2) 3(a)
(b) Amendment to Certificate of Incorporation filed June 17, 1996 3(b)
(c) By-laws (2) 3(b)
4 Specimen common stock certificate (2) 4(a)
10 (a) License agreement between Tround International, Inc. and
Tround Geothermal Corp., dated April 10, 1984 (3) 10
(b) Agreement and development plan, dated May 14, 1984 (4) 10.1
(c) Recision and Option Agreement between Registrant, Tround
Geothermal Corporation, and Tround International, Inc.,
dated October 7, 1994 (6) 10
21 Notice to stockholders of Registrant under Rule 14f-1,
dated May 7, 1984 (4) 21.1
27 Financial Data Schedule (Electronic filing only) 27.1
</TABLE>
- --------------------------------------------------------------------------------
Form 10-K Page 18
<PAGE>
Notes:
(1) Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the annual report of Registrant on Form 10-K for
the year ended June 30, 1984, which exhibit is incorporated herein by
reference.
(2) Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the registration statement of Registrant on Form
S-18, File No. 2-79475-D, which exhibit is incorporated herein by
reference.
(3) Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the current report of Registrant on Form 8-K, dated
April 25, 1984, which exhibit is incorporated herein by reference.
(4) Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the current report of Registrant on Form 8-K, dated
May 10, 1984, which exhibit is incorporated herein by reference.
(5) Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the annual report of Registrant on Form 10-K for
the year ended June 30, 1987, which exhibit is incorporated herein by
reference.
(6) Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the current report of Registrant on Form 8-K, dated
August 12, 1994, which exhibit is incorporated herein by reference.
REPORTS ON FORM 8-K
On May 15, 1996 the Registrant filed a Form 8-K.
- --------------------------------------------------------------------------------
Form 10-K Page 19
<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 authorized.
GENERAL GENETICS CORPORATION
By: /s/ E. Donald DeYoung
-------------------------------
E. DONALD DeYOUNG, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities on the date(s) indicated.
SIGNATURES TITLE DATE
Principal Executive Officer:
/s/ E. Donald DeYoung President October 3, 1996
- ----------------------------
E. DONALD DeYOUNG
A Majority of the board of directors:
/s/ E. Donald DeYoung Director October 3, 1996
- ----------------------------
E. DONALD DeYOUNG
/s/ Allen E.Myers Director October 3, 1996
- ----------------------------
ALLEN E. MYERS
/s/ Louis J. Blenderman Director October 3, 1996
- ----------------------------
LOUIS J. BLENDERMAN
- --------------------------------------------------------------------------------
Form 10-K Page 20
<PAGE>
EXHIBITS
---------------------------------
GENERAL GENETICS CORPORATION
FORM 10-K
---------------------------------
Exhibit Index
The exhibits indicated below as having heretofore been filed with another
document with the Securities and Exchange Commission are incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit No. as filed
with registration
statement or report
specified below Page No.
--------------- --------
<S> <C> <C>
2 (a) Agreement and plan of reorganization, dated
April 19, 1984 (3) 2
(b) Agreement and plan of merger, dated
October 22, 1984 (1) 2
(c) Agreement and plan of reorganization, dated
September 9, 1987 (5)
(d) Acquisition Agreement among Registrant, Zapit
Technology, Inc. and Tround International, Inc.
Dated August 19, 1994 (6) 2
3 (a) Certificate of incorporation (2) 3(a)
(b) Amendment to Certificate of Incorporation filed
June 17, 1996 23
(c) By-laws (2) 3(b)
4 Specimen common stock certificates (2) 4(a)
10 (a) License agreement between Tround International,
Inc. and Tround Geothermal Corp., dated
April 10, 1984 (3) 10
(b) Agreement and development plan, dated
May 14, 1984 (4) 10.1
(c) Rescission and Option Agreement between
Registrant, Tround Geothermal Corporation,
and Tround International, Inc., dated
October 7, 1994 (6) 10
21 Notice to stockholders of Registrant under
Rule 14f-1, dated May 7, 1984 (4) 21.1
27 Financial Data Schedule (Electronic filing only) 27.1
</TABLE>
- ------------------------------------------------------------------------------
Form 10-K Page 21
<PAGE>
Notes:
(1)Filed with the Securities and Exchange Commission as an exhibit, numbered as
indicated above, to the annual report of Registrant of Form 10-K for the year
ended June 30, 1984, which exhibit is incorporated herein by reference.
(2)Filed with the Securities and Exchange Commission as an exhibit, numbered as
indicated above, to the registration statement of Registrant of Form S-18,
File No. 2-79475-D, which exhibit is incorporated herein by reference.
(3)Filed with the Securities and Exchange Commission as an exhibit, numbered as
indicated above, to the current report of Registrant on Form 8-K, dated April
25, 1984, which exhibit is incorporated herein by reference.
(4)Filed with the Securities and Exchange Commission as an exhibit, numbered as
indicated above, to the current report of Registrant on Form 8-K, dated May
10, 1984, which exhibit is incorporated herein by reference.
(5)Filed with the Securities and Exchange Commission as an exhibit, numbered as
indicated above, to the annual report of Registrant on Form 10-K for the year
ended June 30, 1987, which exhibit is incorporated herein by reference.
(6)Filed with the Securities and Exchange Commission as an exhibit, numbered as
indicated above, to the current report of Registrant on Form 8-K, dated
August 12, 1994, which exhibit is incorporated herein by reference.
- --------------------------------------------------------------------------------
Form 10-K Page 22
CERTIFICATE OF AMENDMENT
GENERAL GENETICS CORORATION
- --------------------------------------------------------------------------------
a corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That a meeting of the Board of Directors of
GENERAL GENETICS CORPORATION
- --------------------------------------------------------------------------------
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this
corporation be amended by changing the Articles thereof numbered
" IV " so that, as amended, said Article shall be and read
------ as follows:
"The total number of shares of stock which the corporation is
------------------------------------------------------------------
authorized to issue is
----------------------
Five Hundred Million (500,000,000) shares all with a par value of
------------------------------------------------------------------
one mil (.001).
---------------
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said GENERAL GENETICS CORPORATION
-------------------------------------------------------
has caused this certificate to be signed by its authorized officer this
14th day of June , 1996.
- ---------------- ---------------- --
BY: /s/ Hans Morkner
----------------------------------------------
Authorized Officer
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/17/1996
960175736 - 938627
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GENERAL GENETICS CORPORATION FOR THE FISCAL YEAR ENDED
JUNE 30, 1996 , AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 23,000
<BONDS> 0
0
0
<COMMON> 227,000
<OTHER-SE> (250,000)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 35,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (35,100)
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,100)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.15)
</TABLE>
