<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-K/A
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended October 26, 1997
Commission file number 0-14365
-----------------------
ALPHA TECHNOLOGIES GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 76-0079338
(State or other jurisdiction of (I.R.S. Employer Identification NO.)
incorporation or organization)
9465 Wilshire Blvd., Suite 980
Beverly Hills, CA 90212
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 385-1494
-----------------------
Securities registered under Section 12 (b) of the Exchange Act:
None
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock, $.03 par value
----------------------------
(Title of each class)
Indicate by check mark whether the registrant (1) has filed all reports
required 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) had 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.
State the aggregate market value of the voting stock held by non-affiliates of
the registrant.
$20,804,108 at January 20, 1998
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Common Stock, 6,693,680 shares outstanding at January 20, 1998
----------------------------
DOCUMENTS INCORPORATED BY REFERENCE
The Company's definitive proxy statement to be filed on or about February
23, 1998 is incorporated by reference into Part III of this report.
- ------------------------------------------------------------------------
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
fiscal year ended October 26, 1997 as set forth in the pages attached hereto:
Item 14(a)(3) Exhibits.
Exhibit 28.1 Annual Report on Form 11-K for the
fiscal year ended October 31, 1997 for the ATGI 401(k)
Plan
Exhibit 28.2 Transition Report on Form 11-K for the short year ended
December 31, 1997 for the ATGI 401(k) Plan
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, hereunto duly authorized.
ALPHA TECHNOLLGIES GROUP, INC.
By: /s/ JOHNNY J. BLANCHARD
-------------------------------
Johnny J. Blanchard
Principal Accounting Officer
Dated: April 28, 1998
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
28.1 Annual Report on Form 11-K for the year ended
October 31, 1997 for the ATGI 401K PLAN
28.2 Transition Report on Form 11-K for the short year ended
December 31, 1997 for the ATGI 401K PLAN
<PAGE>
Exhibit 28.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1997
OR
[-] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________________to____________________
Commission file number 0-14365
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
ATGI 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ALPHA TECHNOLOGIES GROUP, INC.
9465 Wilshire Boulevard
Suite 980
Beverly Hills, CA 90212
<PAGE>
REQUIRED INFORMATION
Item 1. The audited statements of financial condition (Statements of Net
Assets Available for Benefits) as of October 31, 1997 and 1996 are set
forth on page F-2.
Item 2. The audited statements of income and changes in plan equity
(Statements of Changes in Net Assets Available for Benefits) for the
years ended October 31, 1997 and 1996 are set forth on page F-3.
Item 3. The statements required by Items 1 and 2 were prepared in accordance
with the applicable provisions of Article 6A of Regulation S-X (17 CFR
210.6A-01-.6A-05).
Item 4. Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATGI 401(K) PLAN
By: /s/ STEVE E. CHUPIK
--------------------------
Steve E. Chupik
Trustee of the Plan
Date: April 28, 1998
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Trustees of
ATGI 401(K) PLAN
We have audited the accompanying statement of net assets available for
benefits of ATGI 401(k) Plan as of October 31, 1997 and 1996, and the related
statement of changes in net assets available for benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of October 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplemental
schedule of assets held for investment purposes at October 31, 1997, and the
schedule of reportable transactions for the year then ended are presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 and are not a required part of the basic financial statements. The
supplemental schedules have been subjected to the auditing procedures applied in
our audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ MELTON & MELTON, L.L.P.
Houston, Texas
March 20, 1998
<PAGE>
ATGI 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
OCTOBER 31, 1997 AND 1996
ASSETS
------
1997 1996
---- ----
Investments:
Alpha Technologies Group, Inc.,
Common Stock (at market), 191,618
and 148,487 shares in 1997 and 1996,
respectively $ 862,279 $ 686,750
Connecticut General Life Insurance
Company (a CIGNA company) accounts
at contract value:
Guaranteed Short-Term Account 368,615 171,176
Guaranteed Long-Term Account 2,646,323 1,130,846
Connecticut General Life Insurance
Company (a CIGNA company) accounts
at market value:
Stock Market Index Account 990,681 465,008
Growth Opportunities Account 1,524,994 1,045,197
Janus Fund 208,404 -
PBHG Growth Fund 282,213 -
American Century Fund 31,514 -
Participant loans 248,148 144,272
---------- ----------
Total investments 7,163,171 3,643,249
---------- ----------
Receivables:
Employer contributions 43,756 41,592
Participant contributions 116,853 107,640
Administrative fee reimbursement - 16,684
---------- ----------
Total receivables 160,609 165,916
---------- ----------
Cash 77 3,768
---------- ----------
Total assets 7,323,857 3,812,933
---------- ----------
LIABILITIES
-----------
Due to participants 22,830 15,296
Administrative fees payable 3,997 14,316
---------- ----------
Total liabilities 26,827 29,612
---------- ----------
Net assets available for
benefits $7,297,030 $3,783,321
========== ==========
(See Notes to Financial Statements)
<PAGE>
ATGI 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED OCTOBER 31, 1997 AND 1996
1997 1996
ADDITIONS TO NET ASSETS:
Participant contributions $1,301,146 $1,356,760
Employer contributions 440,510 433,365
Transfer to plan 2,148,655 -
3,890,311 1,790,125
---------- ----------
Interest and dividend income 143,361 71,208
---------- ----------
Total additions 4,033,672 1,861,333
---------- ----------
DEDUCTIONS FROM NET ASSETS:
Benefit payments 981,292 530,635
Nondiscriminatory refunds 22,830 15,296
Commissions and fees paid by
participants 23,524 18,329
Administrative expenses 26,507 8,270
---------- ----------
Total deductions 1,054,153 572,530
---------- ----------
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 534,190 (441,604)
---------- ----------
Increase in net assets 3,513,709 847,199
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 3,783,321 2,936,122
---------- ----------
End of year $7,297,030 $3,783,321
========== ==========
(See Notes to Financial Statements)
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN
GENERAL
The ATGI 401(k) Plan (the "Plan"), for employees of Alpha Technologies
Group, Inc. and its subsidiaries (the "Company"), is a defined contribution
profit sharing plan, established November 1, 1977.
ELIGIBILITY
All employees are eligible to participate in the Plan without regard
to minimum age or service requirements. The employee must be employed on the
following entry dates in order to participate: February 1, May 1, August 1, or
November 1. (See Note 10 - Subsequent Event.)
DISTRIBUTIONS
A participant or his beneficiary shall be immediately vested upon
death, retirement or termination of employment due to total and permanent
disability. Normal retirement age under the Plan is age 59. Upon an employee's
termination or retirement, the funds in his account are distributed in the form
of an annuity, cash or stock.
The statement of net assets available for benefits as of October 31,
1997 and 1996, includes amounts pending distribution to participants of $31,211
and $29,636, respectively. (See Note 6 -Reconciliation of Financial Statements
to Form 5500.)
If a participant terminates employment prior to normal retirement age
for any reason other than death or disability, his interest in Company
contributions to the Plan for his benefit vests as follows:
Percent Of
Nonforfeitable
Years Of Service Interest
---------------- --------------
Less than one year 0%
One year 20
Two years 40
Three years 60
Four years 80
Five years 100
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
After a participant's employment is terminated, any nonvested portion
of a participant's account can be used to offset administrative fees, thus
reducing future employer contributions. Forfeitures included in net assets
available for benefits at October 31, 1997 and 1996, are $127,155 and $86,088,
respectively.
CONTRIBUTIONS
The Company's matching contribution is a discretionary amount to be
determined in advance each month by the Company. For 1997 and 1996, the matching
contribution was equal to 50 percent of the participant's contribution not to
exceed 6 percent of the participant's compensation. The Company may also make a
discretionary contribution as determined by the Board of Directors. No
discretionary contribution was made for the fiscal years ended October 31, 1997
and 1996. Each participant's contribution is based upon a percentage of annual
compensation which is determined by the individual and is limited to the lesser
of 15 percent of the participant's compensation for the year or $9,500 in 1997
and 1996, as adjusted by the Internal Revenue Service for changes in the
cost-of-living pursuant to Section 402(g)(5) of the Internal Revenue Service
Code. Each participant may also contribute up to 10 percent of total
compensation on an after tax basis. The combined pretax and after tax
contributions cannot exceed the Plan's limitations. Participants are at all
times fully vested in their contributions and the appreciation or depreciation
thereon.
PARTICIPANT LOANS
Plan participants may borrow Plan assets up to a maximum of the lesser
of $50,000 or 50 percent of their vested account balance in the Plan. Loans are
repaid in level installments for periods ranging up to five years and are
secured by the participant's account to the extent of the principal amount of
the loan plus accrued interest .
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
INVESTMENT OF FUNDS
There are eight funds in which participants can invest contributions
and where other amounts are credited to their accounts as of October 31, 1997:
ATGI Stock Fund - A fund that maintains a brokerage account with
Merrill Lynch and invests solely in the common stock of Alpha Technologies
Group, Inc.
Guaranteed Short-Term Account - A CIGNA fixed-income investment
account that invests primarily in Treasury securities, U.S. Government
securities, certificates of deposit, time deposits, repurchase agreements and
commercial paper issued by major domestic and foreign corporations.
Guaranteed Long-Term Account - A CIGNA fixed-income investment account
that invests primarily in commercial mortgages and private and public bonds with
an average life of 5.8 to 7.3 years.
Stock Market Index Account - A CIGNA pooled stock market index account
that is constructed to reflect the composition of the Standard and Poor's 500
index.
Growth Opportunities Account - A CIGNA Separate Account that invests
in the Fidelity Advisor Growth Opportunities Fund. The fund seeks to provide
capital growth by investing primarily in common stocks and securities
convertible into common stock.
Janus Fund - A CIGNA separate account that seeks long-term growth of
capital by investing primarily in a diversified portfolio of common stock.
PBHG Growth Fund - A CIGNA separate account which seeks capital
appreciation by investing primarily in common stock and securities convertible
into common stock of small capitalization companies.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
American Century Fund - A CIGNA separate account that seeks capital
growth over time by investing in common stock.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of ATGI 401(k) Plan are maintained on the cash
basis; however, the financial statements have been prepared on the accrual basis
of accounting.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Plan. Forfeitures
of any nonvested portion of a participant's account can be used to offset
administrative fees.
INVESTMENTS
Pursuant to the Department of Labor Rules and Regulations for
Reporting and Disclosure under ERISA, the Plan reports investments in the
financial statements at current market value in accordance with generally
accepted accounting principles. As of October 31, 1997, the ATGI Stock Fund is
stated at aggregate current value based on quoted market prices for the last
trading day of the Plan year. All other funds as of October 31, 1997 are stated
at aggregate current value as determined by CIGNA.
INCOME TAXES
The Plan obtained its latest determination letter on February 27, 1995
in which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue Code.
The Plan has been amended since receiving the determination letter. However, the
Plan administrator and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 3 - INVESTMENTS
During 1997 and 1996, the Plan's investments (including investments bought,
sold, and held during the year) appreciated (depreciated) in value by $534,190
and $(441,604), respectively, as follows:
1997 1996
---- ----
Alpha Technologies Group, Inc.
Common Stock $ 2,314 $(646,427)
CIGNA Stock Market Index Account 212,908 60,513
Growth Opportunities Account 300,615 144,310
Janus Fund 13,293 -
PBHG Growth Fund 4,942 -
American Century Fund 118 -
-------- ---------
$534,190 $(441,604)
======== =========
Investments that represent 5 percent or more of the Plan's net assets at
October 31, 1997 and 1996, are separately identified below:
Identity Of Market Value
----------- ----------------
Party Involved Description 1997 1996
-------------- ----------- ---- ----
ATGI Stock Fund Equity securities $ 862,279 $ 686,750
CIGNA Guaranteed Short- Fixed-income
Term Account investment account 368,615 -
CIGNA Guaranteed Long- Fixed-income
Term Account investment account 2,646,323 1,130,846
CIGNA Stock Market Pooled stock market
Index Account index account 990,681 465,008
Growth Opportunities Capital appreciation
Account investment account 1,524,994 1,045,197
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 4 - NET ASSETS AVAILABLE FOR BENEFITS
The net assets available for benefits as of October 31, 1997 and 1996,
consist of the following:
<TABLE>
<CAPTION>
October 31, 1997
----------------------------------------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth PBHG American
ATGI Short-Term Long-Term Index Opportunities Janus Growth Century Total
Stock Fund Account Account Account Account Fund Fund Fund Loans For Plan
---------- ---------- ---------- ------- ------------- ----- ------ -------- ----- --------
ASSETS
------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments:
Investments, at market $862,279 $ 990,681 $1,524,994 $208,404 $282,213 $31,514 $3,900,085
Investments, at contract
value $368,615 $2,646,323 3,014,938
Participant loans $248,148 248,148
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total investments 862,279 368,615 2,646,323 990,681 1,524,994 208,404 282,213 31,514 248,148 7,163,171
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Receivables:
Employer contributions 8,370 2,635 7,842 5,313 10,217 5,321 3,322 736 43,756
Participant contributions 18,084 6,842 25,063 14,215 28,642 15,158 7,614 1,235 116,853
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total receivables 26,454 9,477 32,905 19,528 38,859 20,479 10,936 1,971 160,609
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Cash 77 77
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total assets 888,810 378,092 2,679,228 1,010,209 1,563,853 228,883 293,149 33,485 248,148 7,323,857
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
LIABILITIES
-----------
Due to participants 22,830 22,830
Administrative fees payable 3,997 3,997
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total liabilities 26,827 26,827
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Net assets available
for benefits $888,810 $378,092 $2,652,401 $1,010,209 $1,563,853 $228,883 $293,149 $33,485 $248,148 $7,297,030
======== ======== ========== ========== ========== ======== ======== ======= ======== ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 4 - NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
<TABLE>
<CAPTION>
October 31, 1996
----------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth
ATGI Short-Term Long-Term Index Opportunities Total
Stock Fund Account Account Account Account Loans For Plan
---------- ---------- --------- ------- ------------- ----- --------
ASSETS
------
Investments:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at market $686,750 $465,008 $1,045,197 $2,196,955
Investments, at contract value $171,176 $1,130,846 1,302,022
Participant loans $144,272 144,272
-------- -------- ---------- -------- ---------- -------- ----------
Total investments 686,750 171,176 1,130,846 465,008 1,045,197 144,272 3,643,249
-------- -------- ---------- -------- ---------- -------- ----------
Receivables:
Employer contributions 12,852 3,157 9,132 5,837 10,614 41,592
Participant contributions 23,804 9,487 27,826 16,148 30,375 107,640
Administrative fee reimbursement 16,684 16,684
-------- -------- ---------- -------- ---------- ----------
Total receivables 36,656 12,644 53,642 21,985 40,989 165,916
-------- -------- ---------- -------- ---------- ----------
Cash 547 3,221 3,768
-------- -------- ---------- -------- ---------- -------- ----------
Total assets 723,953 183,820 1,187,709 486,993 1,086,186 144,272 3,812,933
-------- -------- ---------- -------- ---------- -------- ----------
LIABILITIES
-----------
Due to participants 15,296 15,296
Administrative fees payable 14,316 14,316
-------- -------- ---------- -------- ---------- -------- ----------
Total liabilities 29,612 29,612
-------- -------- ---------- -------- ---------- -------- ----------
Net assets available
for benefits $723,953 $183,820 $1,158,097 $486,993 $1,086,186 $144,272 $3,783,321
======== ======== ========== ======== ========== ======== ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 5 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Changes in net assets available for benefits for the years ended October
31, 1997 and 1996, consist of the following:
<TABLE>
<CAPTION>
October 31, 1997
----------------------------------------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth PBHG American
ATGI Short-Term Long-Term Index Opportunities Janus Growth Century Total
Stock Fund Account Account Account Account Fund Fund Fund Loans For Plan
---------- ---------- ---------- ------- ------------- ----- ------ -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Employee and employer
contributions $309,837 $113,404 $ 360,386 $ 218,153 $ 422,420 $183,572 $111,661 $22,223 $1,741,656
Transfers to plan 169,958 1,705,955 272,742 2,148,655
Interest and dividend
income 2,581 12,882 120,666 2,684 2,326 1,579 637 6 143,361
Transfers among funds (26,804) (9,336) (205,912) (12,032) 25,115 33,593 183,629 11,747
-------- -------- ---------- ---------- ---------- -------- -------- ------- ----------
Total additions 285,614 286,908 1,981,095 481,547 449,861 218,744 295,927 33,976 4,033,672
-------- -------- ---------- ---------- ---------- -------- -------- ------- ----------
Deductions from net
assets attributed to:
Benefit payments 121,287 75,435 322,207 169,567 257,334 3,108 7,125 623 $ 24,606 981,292
Nondiscriminatory refunds 22,830 22,830
Commissions and fees paid
by participants 14,862 938 3,562 2,445 1,259 201 232 25 23,524
Administrative expenses 26,507 26,507
Loans issued (13,078) 16,263 111,685 (773) 14,216 (155) 363 (39) (128,482)
-------- -------- ---------- ---------- ---------- -------- -------- ------- --------- ----------
Total deductions 123,071 92,636 486,791 171,239 272,809 3,154 7,720 609 (103,876) 1,054,153
-------- -------- ---------- ---------- ---------- -------- -------- ------- --------- ----------
Net realized and unrealized
appreciation (depreciation)
in fair value of
investments 2,314 212,908 300,615 13,293 4,942 118 534,190
-------- -------- ---------- ---------- ---------- -------- -------- ------- --------- ----------
Increase (decrease)
in net assets 164,857 194,272 1,494,304 523,216 477,667 228,883 293,149 33,485 103,876 3,513,709
Net assets available
for benefits:
Beginning of year 723,953 183,820 1,158,097 486,993 1,086,186 144,272 3,783,321
-------- -------- ---------- ---------- ---------- -------- -------- ------- --------- ----------
End of year $888,810 $378,092 $2,652,401 $1,010,209 $1,563,853 $228,883 $293,149 $33,485 $ 248,148 $7,297,030
======== ======== ========== ========== ========== ======== ======== ======= ========= ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 5 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
<TABLE>
<CAPTION>
October 31, 1996
----------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth
ATGI Short-Term Long-Term Index Opportunities Total
Stock Fund Account Account Account Account Loans For Plan
---------- ---------- --------- ------- ------------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Employee and employer
contributions $ 457,188 $132,642 $ 478,332 $213,483 $ 508,480 $1,790,125
Interest and dividend income 1,931 6,638 59,563 915 2,161 71,208
Transfers among funds (10,214) (11,956) (21,741) 48,747 (4,836)
---------- -------- ---------- -------- ---------- ----------
Total additions 448,905 127,324 516,154 263,145 505,805 1,861,333
---------- -------- ---------- -------- ---------- ----------
Deductions from net assets
attributed to:
Benefit payments 62,884 33,759 171,900 43,630 211,779 $ 6,683 530,635
Nondiscriminatory refunds 15,296 15,296
Commissions and fees paid by
participants 14,652 139 1,604 960 974 18,329
Administrative expenses 8,270 8,270
Loans issued 36,687 2,790 36,388 17,995 8,685 (102,545)
---------- -------- ---------- -------- ---------- -------- ----------
Total deductions 114,223 36,688 233,458 62,585 221,438 (95,862) 572,530
---------- -------- ---------- -------- ---------- -------- ----------
Net realized and unrealized
appreciation (depreciation) in
fair value of investments (646,427) 60,513 144,310 (441,604)
---------- -------- ---------- -------- ---------- -------- ----------
Increase (decrease) in net
assets (311,745) 90,636 282,696 261,073 428,677 95,862 847,199
Net assets available for benefits:
Beginning of year 1,035,698 93,184 875,401 225,920 657,509 48,410 2,936,122
---------- -------- ---------- -------- ---------- -------- ----------
End of year $ 723,953 $183,820 $1,158,097 $486,993 $1,086,186 $144,272 $3,783,321
========== ======== ========== ======== ========== ======== ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 for the years ended October 31, 1997
and 1996:
1997 1996
---- ----
Net assets available for benefits
per the financial statements $7,297,030 $3,783,321
Amounts allocated to withdrawing
participants (31,211) (29,636)
---------- ----------
Net assets available for benefits
per the Form 5500 $7,265,819 $3,753,685
========== ==========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended October 31, 1997:
Benefits paid to participants
per the financial statements $981,292
Add: Amounts allocated to withdrawing
participants at October 31, 1997 31,211
Less: Amounts allocated to withdrawing
participants at October 31, 1996 (29,636)
--------
Benefits paid to participants
per the Form 5500 $982,867
========
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
October 31, but not yet paid as of that date.
NOTE 7 - EXCESS DEFERRALS DUE TO PARTICIPANTS
The Tax Reform Act of 1986 provides that plans such as the ATGI 401(k) Plan
cannot discriminate in favor of highly compensated individuals. As a result, for
the Plan years ended October 31, 1997 and 1996, certain highly compensated
individuals received refunds of contributions in excess of Internal Revenue Code
401(k) limits and all earnings attributable to such contributions. Excess
deferrals of $22,830 and $15,296 for the years ended October 31, 1997 and 1996,
respectively, are reflected as "due to participants" on the statement of net
assets available for benefits.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1997
NOTE 8 - CONTRACT WITH INSURANCE COMPANY
The Plan holds a deposit administration contract with CIGNA. The Guaranteed
Long-Term (GLT) Fund and the Guaranteed Short-Term (GST) Fund are unallocated
funds. The GLT account maintains a variable annualized rate which was 5.65 and
5.70 percent at October 31, 1997 and 1996, respectively. The GST maintains a
variable monthly rate which was 4.15 and 4.40 percent annualized at October 31,
1997 and 1996, respectively.
NOTE 9 - TRANSFERS TO PLAN
The Plan was amended effective January 1, 1997 to merge the ATGI 401(k)
Plan and the Employees' 401(k) Plan and Health/Disability Plan of Lockhart
Industries, Inc. ("Prior Plan"), and to include Lockhart Industries, Inc. as an
adopting employer. In April 1997, assets totaling $2,148,655 were transferred
into the Plan which were attributable to participants in the Prior Plan. In
connection with this event, the Plan was amended in accordance with the law to
maintain certain withdrawal rights for participants in the Prior Plan. The Plan
was further amended to allow all participants the right to defer benefit payment
to age 70 1/2.
NOTE 10 - SUBSEQUENT EVENT
The Plan was amended effective January 1, 1998 to change the Plan year end
from October 31 to December 31. In addition, the Plan was amended effective
February 4, 1998 to change the entry date on which an employee must be employed
in order to participate as stated in Note 1 to January 1, April 1, July 1 or
October 1. Furthermore, in accordance with the Plan document, the short plan
year ended December 31, 1997 was considered a full year for vesting purposes.
Any employee that was employed on December 31, 1997, and was not fully vested on
that date, automatically experienced a 20% increase in vesting for the short
plan year period.
NOTE 11 - RECLASSIFICATIONS
Certain amounts relating to the prior year have been reclassified to
conform to the current year presentation. The reclassifications have no effect
on previously reported changes in net assets available for benefits.
<PAGE>
SCHEDULE I
ATGI 401(K) PLAN
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
OCTOBER 31, 1997
MARKET OR
COST CONTRACT VALUE
---- --------------
Alpha Technologies Group, Inc.,
Common Stock Fund $1,026,070 $ 862,279
Connecticut General Life Insurance
Company (A CIGNA company) accounts:
Guaranteed Short-Term Account 368,615 368,615
Guaranteed Long-Term Account 2,646,323 2,646,323
Stock Market Index Account 760,963 990,681
Growth Opportunities Account 1,162,549 1,524,994
Janus Fund 193,741 208,404
PBHG Growth Fund 267,211 282,213
American Century Fund 31,454 31,514
Prime plus 1% participant loans - 0 - 248,148
<PAGE>
SCHEDULE II
ATGI 401(K) PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED OCTOBER 31, 1997
<TABLE>
<CAPTION>
CURRENT
VALUE OF
COST ASSETS ON
DESCRIPTION PURCHASE SELLING OF TRANSACTION NET GAIN
OF ASSETS PRICE PRICE ASSET DATE OR (LOSS)
----------- -------- ------- ----- ----------- ---------
<S> <C> <C> <C> <C> <C>
Alpha Technologies Group, Inc.:
Common Stock Fund $ 356,271 $ 356,271 $ 356,271
Common Stock Fund $ 173,293 310,030 173,293 $(136,737)
Connecticut General Life
Insurance Company (A CIGNA
company) accounts:
Guaranteed Short-Term Account 287,903 287,903 287,903
Guaranteed Short-Term Account 102,922 102,922 102,922
Guaranteed Long-Term Account 2,233,084 2,233,084 2,233,084
Guaranteed Long-Term Account 836,326 836,326 836,326
Stock Market Index Account 546,005 546,005 546,005
Stock Market Index Account 234,772 183,495 234,772 51,277
Growth Opportunities Account 515,901 515,901 515,901
Growth Opportunities Account 333,783 266,698 333,783 67,085
Janus Fund 207,466 207,466 207,466
Janus Fund 14,991 13,725 14,991 1,266
PBHG Growth Fund 295,109 295,109 295,109
PBHG Growth Fund 26,949 27,898 26,949 (949)
</TABLE>
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
1 Consent of Melton & Melton, L.L.P.
<PAGE>
Exhibit 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report included in this Form 11-K, into the Company's Form
S-8 Registration Statements filed on January 29, 1987 (Reg. No. 33-11627);
September 28, 1987 (Reg. No. 33-17359); March 17, 1988 (Reg. No. 33-20706); June
30, 1989 (Reg. No. 33-29636); June 23, 1992 (Reg. No. 33-48663); and April 30,
1996 (Reg. No. 333-03001); and S-3 Registration Statement filed on August 16,
1996 (Reg. No. 333-10311).
Houston, Texas
March 20, 1998 /s/ Melton & Melton, L.L.P.
<PAGE>
Exhibit 28.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[_] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1997
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
November 1, 1997 to December 31, 1997
Commission file number 0-14365
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
ATGI 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ALPHA TECHNOLOGIES GROUP, INC.
9465 Wilshire Boulevard
Suite 980
Beverly Hills, CA 90212
<PAGE>
REQUIRED INFORMATION
Item 1. The audited statements of financial condition (Statements of Net
Assets Available for Benefits) as of December 31, 1997 and October 31,
1997 are set forth on page F-2.
Item 2. The audited statements of income and changes in plan equity
(Statements of Changes in Net Assets Available for Benefits) for the
short year ended December 31, 1997 and year ended October 31, 1997 are
set forth on page F-3.
Item 3. The statements required by Items 1 and 2 were prepared in accordance
with the applicable provisions of Article 6A of Regulation S-X (17 CFR
210.6A-01-.6A-05).
Item 4. Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATGI 401(K) PLAN
By: /s/ STEVE E. CHUPIK
----------------------------
Steve E. Chupik
Trustee of the Plan
Date: April 28, 1998
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Trustees of
ATGI 401(K) PLAN
We have audited the accompanying statement of net assets available for
benefits of ATGI 401(k) Plan as of December 31, 1997 and October 31, 1997, and
the related statement of changes in net assets available for benefits for the
two months ended December 31, 1997. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 1997 and October 31, 1997, and the changes in its net assets
available for benefits for the two months ended December 31, 1997 in conformity
with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplemental
schedule of assets held for investment purposes at December 31, 1997 is
presented for purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 and are not a required part of the basic financial
statements. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Melton & Melton, L.L.P.
Houston, Texas
March 20, 1998
<PAGE>
ATGI 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, OCTOBER 31,
1997 1997
---- ----
ASSETS
------
Investments:
Alpha Technologies Group, Inc.,
Common Stock (at market), 200,236 and
191,618 shares at December 31, 1997
and October 31, 1997, respectively $ 775,916 $ 862,279
Connecticut General Life Insurance
Company (a CIGNA company) accounts
at contract value:
Guaranteed Short-Term Account 376,592 368,615
Guaranteed Long-Term Account 2,702,471 2,646,323
Connecticut General Life Insurance
Company (a CIGNA company) accounts
at market value:
Stock Market Index Account 1,089,992 990,681
Growth Opportunities Account 1,636,295 1,524,994
Janus Fund 271,825 208,404
PBHG Growth Fund 304,800 282,213
American Century Fund 32,432 31,514
Participant loans 258,762 248,148
---------- ----------
Total investments 7,449,085 7,163,171
---------- ----------
Receivables:
Employer contributions 41,054 43,756
Participant contributions 114,528 116,853
---------- ----------
Total receivables 155,582 160,609
---------- ----------
Cash 3,789 77
---------- ----------
Total assets 7,608,456 7,323,857
---------- ----------
LIABILITIES
-----------
Due to participants 22,830 22,830
Administrative fees payable 2,960 3,997
---------- ----------
Total liabilities 25,790 26,827
---------- ----------
Net assets available for
benefits $7,582,666 $7,297,030
========== ==========
(See Notes to Financial Statements)
<PAGE>
ATGI 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
FOR THE TWO MONTHS ENDED DECEMBER 31, 1997
ADDITIONS TO NET ASSETS:
Participant contributions $ 249,751
Employer contributions 77,040
----------
326,791
Interest and dividend income 31,015
----------
Total additions 357,806
----------
DEDUCTIONS FROM NET ASSETS:
Benefit payments 93,677
Commissions and fees paid by
participants 4,062
Administrative expenses 3,268
----------
Total deductions 101,007
----------
Net realized and unrealized
appreciation in fair value
of investments 28,837
----------
Increase in net assets 285,636
----------
NET ASSETS AVAILABLE FOR BENEFITS:
Balance, October 31, 1997 7,297,030
----------
Balance, December 31, 1997 $7,582,666
==========
(See Notes to Financial Statements)
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN
GENERAL
The ATGI 401(k) Plan (the "Plan"), for employees of Alpha Technologies
Group, Inc. and its subsidiaries (the "Company"), is a defined contribution
profit sharing plan, established November 1, 1977.
ELIGIBILITY
All employees are eligible to participate in the Plan without regard
to minimum age or service requirements. The employee must be employed on the
following entry dates in order to participate: February 1, May 1, August 1, or
November 1. (See Note 9 - Plan Amendment.)
DISTRIBUTIONS
A participant or his beneficiary shall be immediately vested upon
death, retirement or termination of employment due to total and permanent
disability. Normal retirement age under the Plan is age 59. Upon an employee's
termination or retirement, the funds in his account are distributed in the form
of an annuity, cash or stock.
The statement of net assets available for benefits as of December 31,
1997 and October 31, 1997, includes amounts pending distribution to participants
of $34,431 and $31,211, respectively. (See Note 6 - Reconciliation of Financial
Statements to Form 5500.)
If a participant terminates employment prior to normal retirement age
for any reason other than death or disability, his interest in Company
contributions to the Plan for his benefit vests as follows:
Percent Of
Nonforfeitable
Years Of Service Interest
---------------- --------------
Less than one year 0%
One year 20
Two years 40
Three years 60
Four years 80
Five years 100
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
After a participant's employment is terminated, any nonvested portion
of a participant's account can be used to offset administrative fees, thus
reducing future employer contributions. Forfeitures included in net assets
available for benefits at December 31, 1997 and October 31, 1997, are $138,721
and $127,155, respectively.
CONTRIBUTIONS
The Company's matching contribution is a discretionary amount to be
determined in advance each month by the Company. For 1997, the matching
contribution was equal to 50 percent of the participant's contribution not to
exceed 6 percent of the participant's compensation. The Company may also make a
discretionary contribution as determined by the Board of Directors. No
discretionary contribution was made for the two months ended December 31, 1997.
Each participant's contribution is based upon a percentage of annual
compensation which is determined by the individual and is limited to the lesser
of 15 percent of the participant's compensation for the year or $9,500 in 1997,
as adjusted by the Internal Revenue Service for changes in the cost-of-living
pursuant to Section 402(g)(5) of the Internal Revenue Service Code. Each
participant may also contribute up to 10 percent of total compensation on an
after tax basis. The combined pretax and after tax contributions cannot exceed
the Plan's limitations. Participants are at all times fully vested in their
contributions and the appreciation or depreciation thereon.
PARTICIPANT LOANS
Plan participants may borrow Plan assets up to a maximum of the lesser
of $50,000 or 50 percent of their vested account balance in the Plan. Loans are
repaid in level installments for periods ranging up to five years and are
secured by the participant's account to the extent of the principal amount of
the loan plus accrued interest.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
INVESTMENT OF FUNDS
There are eight funds in which participants can invest contributions
and where other amounts are credited to their accounts as of December 31, 1997:
ATGI Stock Fund - A fund that maintains a brokerage account with
Merrill Lynch and invests solely in the common stock of Alpha Technologies
Group, Inc.
Guaranteed Short-Term Account - A CIGNA fixed-income investment
account that invests primarily in Treasury securities, U.S. Government
securities, certificates of deposit, time deposits, repurchase agreements and
commercial paper issued by major domestic and foreign corporations.
Guaranteed Long-Term Account - A CIGNA fixed-income investment account
that invests primarily in commercial mortgages and private and public bonds with
an average life of 5.8 to 7.3 years.
Stock Market Index Account - A CIGNA pooled stock market index account
that is constructed to reflect the composition of the Standard and Poor's 500
index.
Growth Opportunities Account - A CIGNA Separate Account that invests
in the Fidelity Advisor Growth Opportunities Fund. The fund seeks to provide
capital growth by investing primarily in common stocks and securities
convertible into common stock.
Janus Fund - A CIGNA separate account that seeks long-term growth of
capital by investing primarily in a diversified portfolio of common stock.
PBHG Growth Fund - A CIGNA separate account which seeks capital
appreciation by investing primarily in common stock and securities convertible
into common stock of small capitalization companies.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
American Century Fund - A CIGNA separate account that seeks capital
growth over time by investing in common stock.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of ATGI 401(k) Plan are maintained on the cash
basis; however, the financial statements have been prepared on the accrual basis
of accounting.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Plan. Forfeitures
of any nonvested portion of a participant's account can be used to offset
administrative fees.
INVESTMENTS
Pursuant to the Department of Labor Rules and Regulations for
Reporting and Disclosure under ERISA, the Plan reports investments in the
financial statements at current market value in accordance with generally
accepted accounting principles. As of December 31, 1997, the ATGI Stock Fund is
stated at aggregate current value based on quoted market prices for the last
trading day of the Plan year. All other funds as of December 31, 1997 are
stated at aggregate current value as determined by CIGNA.
INCOME TAXES
The Plan obtained its latest determination letter on February 27, 1995
in which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue Code.
The Plan has been amended since receiving the determination letter. However,
the Plan administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 3 - INVESTMENTS
During December 31, 1997 and October 31, 1997, the Plan's investments
(including investments bought, sold, and held during the year) appreciated
(depreciated) in value by $28,837 and $534,190, respectively, as follows:
December 31, October 31,
1997 1997
------------ -----------
Alpha Technologies Group, Inc.
Common Stock $(121,184) $ 2,314
CIGNA Stock Market Index Account 62,540 212,908
Growth Opportunities Account 93,420 300,615
Janus Fund 5,747 13,293
PBHG Growth Fund (8,846) 4,942
American Century Fund (2,840) 118
--------- --------
$ 28,837 $534,190
========= ========
Investments that represent 5 percent or more of the Plan's net assets
at December 31, 1997 and October 31 1997, are separately identified below:
Market Value
------------------------
Identity Of December 31, October 31,
Party Involved Description 1997 1997
-------------- ----------- ----------- ----------
ATGI Stock Fund Equity securities $ 775,916 $ 862,279
CIGNA Guaranteed Short- Fixed-income
Term Account investment account 376,592 368,615
CIGNA Guaranteed Long- Fixed-income
Term Account investment account 2,702,471 2,646,323
CIGNA Stock Market Pooled stock market
Index Account index account 1,089,992 990,681
Growth Opportunities Capital appreciation
Account investment account 1,636,295 1,524,994
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 4 - NET ASSETS AVAILABLE FOR BENEFITS
The net assets available for benefits as of December 31, 1997 and October
31, 1997 consist of the following:
<TABLE>
<CAPTION>
December 31, 1997
----------------------------------------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth PBHG American
ATGI Short-Term Long-Term Index Opportunities Janus Growth Century Total
Stock Fund Account Account Account Account Fund Fund Fund Loans For Plan
---------- ---------- ---------- ------- ------------- ----- ------ -------- ----- --------
ASSETS
------
Investments:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at market $775,916 $1,089,992 $1,636,295 $271,825 $304,800 $32,432 $4,111,260
Investments, at contract
value $376,592 $2,702,471 3,079,063
Participant loans $258,762 258,762
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total investments 775,916 376,592 2,702,471 1,089,992 1,636,295 271,825 304,800 32,432 258,762 7,449,085
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Receivables:
Employer contributions 15,363 6,970 22,869 14,578 25,985 17,855 8,378 2,530 114,528
Participant contributions 7,478 2,384 7,426 5,472 8,712 5,339 3,481 762 41,054
-------- -------- ---------- ---------- ---------- -------- -------- ------- ----------
Total receivables 22,841 9,354 30,295 20,050 34,697 23,194 11,859 3,292 155,582
-------- -------- ---------- ---------- ---------- -------- -------- ------- ----------
Cash 3,789 3,789
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total assets 798,757 389,735 2,732,766 1,110,042 1,670,992 295,019 316,659 35,724 258,762 7,608,456
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
LIABILITIES
-----------
Due to participants 22,830 22,830
Administrative fees payable 2,960 2,960
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total liabilities 25,790 25,790
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Net assets
available
for benefits $798,757 $389,735 $2,706,976 $1,110,042 $1,670,992 $295,019 $316,659 $35,724 $258,762 $7,582,666
======== ======== ========== ========== ========== ======== ======== ======= ======== ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 4 - NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
<TABLE>
<CAPTION>
October 31, 1997
----------------------------------------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth PBHG American
ATGI Short-Term Long-Term Index Opportunities Janus Growth Century Total
Stock Fund Account Account Account Account Fund Fund Fund Loans For Plan
---------- ---------- ---------- ------- ------------- ----- ------ -------- ----- --------
ASSETS
------
Investments:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at market $862,279 $ 990,681 $1,524,994 $208,404 $282,213 $31,514 $3,900,085
Investments, at contract
value $368,615 $2,646,323 3,014,938
Participant loans $248,148 248,148
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total investments 862,279 368,615 2,646,323 990,681 1,524,994 208,404 282,213 31,514 248,148 7,163,171
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Receivables:
Employer contributions 8,370 2,635 7,842 5,313 10,217 5,321 3,322 736 43,756
Participant contributions 18,084 6,842 25,063 14,215 28,642 15,158 7,614 1,235 116,853
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total receivables 26,454 9,477 32,905 19,528 38,859 20,479 10,936 1,971 160,609
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Cash 77 77
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total assets 888,810 378,092 2,679,228 1,010,209 1,563,853 228,883 293,149 33,485 248,148 7,323,857
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
LIABILITIES
-----------
Due to participants 22,830 22,830
Administrative fees payable 3,997 3,997
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total liabilities 26,827 26,827
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Net assets
available
for benefits $888,810 $378,092 $2,652,401 $1,010,209 $1,563,853 $228,883 $293,149 $33,485 $248,148 $7,297,030
======== ======== ========== ========== ========== ======== ======== ======= ======== ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 5 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Changes in net assets available for benefits for the two months ended
December 31, 1997 consist of the following:
<TABLE>
<CAPTION>
December 31, 1997
----------------------------------------------------------------------------------------------------------
CIGNA
CIGNA CIGNA Stock
Guaranteed Guaranteed Market Growth PBHG American
ATGI Short-Term Long-Term Index Opportunities Janus Growth Century Total
Stock Fund Account Account Account Account Fund Fund Fund Loans For Plan
---------- ---------- ---------- ------- ------------- ----- ------ -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Employee and employer
contributions $ 43,344 $ 20,524 $ 84,379 $ 41,115 $ 68,241 $ 42,416 $ 21,363 $ 5,409 $ 326,791
Interest and dividend
income 497 2,575 25,160 508 666 1,291 313 5 31,015
Transfers among funds (366) (8,875) (49) (23,788) 17,104 15,974
-------- -------- ---------- ---------- ---------- -------- -------- ------- ----------
Total additions 43,475 23,099 100,664 41,574 45,119 60,811 37,650 5,414 357,806
-------- -------- ---------- ---------- ---------- -------- -------- ------- ----------
Deductions from net
assets attributed to:
Benefit payments 10,531 11,131 7,106 6,231 33,109 3,998 6,178 227 $ 15,166 93,677
Commissions and fees paid
by participants 2,082 100 868 352 505 155 4,062
Administrative expenses 3,268 3,268
Loans issued (269) 225 34,847 (2,302) (2,214) (3,731) (884) 108 (25,780)
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Total deductions 12,344 11,456 46,089 4,281 31,400 422 5,294 335 (10,614) 101,007
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments (121,184) 62,540 93,420 5,747 (8,846) (2,840) 28,837
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
Increase (decrease)
in net assets (90,053) 11,643 54,575 99,833 107,139 66,136 23,510 2,239 10,614 285,636
Net assets available
for benefits:
Beginning of year 888,810 378,092 2,652,401 1,010,209 1,563,853 228,883 293,149 33,485 248,148 7,297,030
-------- -------- ---------- ---------- ---------- -------- -------- ------- -------- ----------
End of year $798,757 $389,735 $2,706,976 $1,110,042 $1,670,992 $295,019 $316,659 $35,724 $258,762 $7,582,666
======== ======== ========== ========== ========== ======== ======== ======= ======== ==========
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 for the two months ended December 31,
1997 and for the year ended October 31, 1997:
December 31, October 31,
1997 1997
----------- ----------
Net assets available for benefits
per the financial statements $7,582,666 $7,297,030
Amounts allocated to withdrawing
participants (34,431) (31,211)
---------- ----------
Net assets available for benefits
per the Form 5500 $7,548,235 $7,265,819
========== ==========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for December 31, 1997:
Benefits paid to participants
per the financial statements $ 93,677
Add: Amounts allocated to withdrawing
participants at December 31, 1997 34,431
Less: Amounts allocated to withdrawing
participants at October 31, 1997 (31,211)
--------
Benefits paid to participants
per the Form 5500 $ 96,897
========
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31, 1997 and October 31, 1997, but not yet paid as of that date.
NOTE 7 - EXCESS DEFERRALS DUE TO PARTICIPANTS
The Tax Reform Act of 1986 provides that plans such as the ATGI 401(k) Plan
cannot discriminate in favor of highly compensated individuals. As a result, for
the Plan year ended October 31, 1997, certain highly compensated individuals
received refunds of contributions in excess of Internal Revenue Code 401(k)
limits and all earnings attributable to such contributions. Excess deferrals of
$22,830 for the year ended October 31, 1997, are reflected as "due to
participants" on the statement of net assets available for benefits. There were
no excess deferrals for the two-month period ending December 31, 1997.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 8 - CONTRACT WITH INSURANCE COMPANY
The Plan holds a deposit administration contract with CIGNA. The Guaranteed
Long-Term (GLT) Fund and the Guaranteed Short-Term (GST) Fund are unallocated
funds. The GLT account maintains a variable annualized rate which was 5.65
percent at December 31, 1997. The GST maintains a variable monthly rate which
was 4.05 percent annualized at December 31, 1997.
NOTE 9 - PLAN AMENDMENT
The Plan was amended effective January 1, 1998 to change the Plan year end
from October 31 to December 31. In addition, the Plan was amended effective
February 4, 1998 to change the entry date on which an employee must be employed
in order to participate as stated in Note 1 to January 1, April 1, July 1 or
October 1. In accordance with the Plan document, the short plan year ended
December 31, 1997 was considered a full year for vesting purposes. Any employee
that was employed on December 31, 1997, and was not fully vested on that date,
automatically experienced a 20% increase in vesting for the short plan year
period.
<PAGE>
SCHEDULE I
ATGI 401(K) PLAN
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
MARKET OR
COST CONTRACT VALUE
---- --------------
Alpha Technologies Group, Inc.,
Common Stock Fund $1,058,422 $ 775,916
Connecticut General Life Insurance
Company (A CIGNA company) accounts:
Guaranteed Short-Term Account 376,592 376,592
Guaranteed Long-Term Account 2,702,471 2,702,471
Stock Market Index Account 801,836 1,089,992
Growth Opportunities Account 1,195,984 1,636,295
Janus Fund 254,127 271,825
PBHG Growth Fund 307,461 304,800
American Century Fund 35,212 32,432
Prime plus 1% participant loans - 0 - 258,762
<PAGE>
SCHEDULE II
ATGI 401(K) PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
CURRENT
VALUE OF
COST ASSETS ON
DESCRIPTION PURCHASE SELLING OF TRANSACTION NET GAIN
OF ASSETS PRICE PRICE ASSET DATE OR (LOSS)
----------- -------- ------- ----- ----------- ---------
<S> <C> <C> <C> <C> <C>
Alpha Technologies Group, Inc.:
Common Stock Fund $ 356,271 $ 356,271 $ 356,271
Common Stock Fund $ 173,293 310,030 $ (136,737)
Connecticut General Life
Insurance Company (A CIGNA
company) accounts:
Guaranteed Short-Term Account 287,903 287,903 287,903
Guaranteed Short-Term Account 102,922 102,922 102,922
Guaranteed Long-Term Account 2,233,084 2,233,084 2,233,084
Guaranteed Long-Term Account 836,326 836,326 836,326
Stock Market Index Account 546,005 546,005 546,005
Stock Market Index Account 234,772 183,495 234,772 51,277
Growth Opportunities Account 515,901 515,901 515,901
Growth Opportunities Account 333,783 266,698 67,085
Janus Fund 207,466 207,466 207,466
Janus Fund 14,991 13,725 14,991 1,266
PBHG Growth Fund 295,109 295,109 295,109
PBHG Growth Fund 26,949 27,898 26,949 (949)
</TABLE>
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
1 Consent of Melton & Melton, L.L.P.
<PAGE>
Exhibit 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report included in this Form 11-K, into the Company's
Form S-8 Registration Statements filed on January 29, 1987 (Reg. No. 33-11627);
September 28, 1987 (Reg. No. 33-17359); March 17, 1988 (Reg. No. 33-20706); June
30, 1989 (Reg. No. 33-29636); June 23, 1992 (Reg. No. 33-48663); and April 30,
1996 (Reg. No. 333-03001); and S-3 Registration Statement filed on August 16,
1996 (Reg. No. 333-10311).
Houston, Texas
March 20, 1998 /s/ Melton & Melton, L.L.P.
