SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO.1 TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to _______
Commission file number 0-12829
GRADCO SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Nevada 95-3342977
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3753 Howard Hughes Pkwy, Ste 200,
Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 892-3714
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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None None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No par value
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(Title of 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 proceeding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Cover page (cont'd)
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. X
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The aggregate market value of voting stock held by non-affiliates of the
Registrant (based on the closing sales price of Gradco common stock on the
NASDAQ National Market System on June 7, 1996) was $27,749,546.
The number of outstanding shares of each class of the Registrant's common stock
outstanding at June 7, 1996 was: common stock, no par value--7,798,909 shares.
PART I
Item 1. Business
Gradco Systems, Inc. ("Gradco", "Company" or the "Registrant") was
originally incorporated in California on November 9, 1978. As previously
reported in the Registrant's Report on Form 10-K for the fiscal year ended
March 31, 1992, the Registrant changed its state of incorporation to Nevada
through a merger which became effective April 3, 1992. The Registrant's
principal executive offices are located at 3753 Howard Hughes Parkway, Suite
200, Las Vegas, Nevada 89109 and its telephone number is (702) 892-3714.
(a) Financial Information About Industry Segments.
Gradco and its subsidiaries operate primarily in one industry segment, the
design, development, production and marketing of intelligent paper handling
devices for the office automation market. Information relating to net sales,
net earnings (loss) and identifiable assets attributable thereto for the fiscal
years ended March 31, 1996, 1995 and 1994 is set forth in response to Item 8
below.
(b) Narrative Description of Business.
Gradco is a holding company which conducts business as follows:
(1) The various activities comprising the copier and printer product
businesses, as described below, are conducted through Gradco's majority-owned
Japanese subsidiary Gradco (Japan) Ltd. ("GJ"), and GJ's wholly-owned domestic
subsidiary Gradco (USA) Inc. ("GUSA"). GJ has a domestic branch office, which
performs research and development activities. GUSA concentrates on marketing
and sales activities.
(2) High technology engineering and manufacturing services are performed
by Gradco's wholly-owned Venture Engineering, Inc. subsidiary based in
Carrollton, Texas.
Unless otherwise indicated or unless the context otherwise requires, (1)
references to Gradco in the remainder of this Item 1(b) are to the parent
company, (2) references to GJ, in the descriptive material in the remainder of
this Item 1(b) pertaining to the copier and printer products businesses,
include the activities of GJ and GUSA, (3) references to the Registrant, in
connection with the presentation of financial data in the remainder of this
Item 1(b), and in Item 1(c), include the consolidated financial results of
Gradco and its subsidiaries.
Sales by GJ of sorter products to the convenience copier market currently
account for most of the Registrant's consolidated revenues. Such revenues also
include sales of printer products by GJ, revenues of GJ from selected
technology licenses and agreements with original equipment manufacturers and
marketers ("OEMs"), and from research and development activities conducted by
GJ on behalf of its OEM customers, and revenues of Venture Engineering from
contract engineering and manufacturing services on behalf of OEMs and other
customers.
Due to the overall maturity of the copier market, high growth cannot be
expected in this portion of GJ's business, so additional emphasis is being put
on printer products.
1
Business of GJ
General
GJ designs, develops, produces (primarily by contract) and markets on a
worldwide basis, intelligent paper handling devices for office copiers,
computer controlled printers and facsimile machines. GJ is a leading
independent supplier of sorters (devices which collate paper sheets) to the
convenience copier market, and supplies feeders and mailboxing sorters and
stackers for the computer controlled printer market. GJ customizes its sorters
and stackers for inclusion in the convenience copiers and printers of OEMs.
Sorter products presently constitute GJ's principal source of revenues. GJ's
revenues also include revenues from feeders, stackers and mailboxing sorters
for computer controlled printers, engineering and development activities for
certain OEMs and selected technology, licenses and agreements with OEMs. GJ
has developed and markets to OEMs automatic stackers, high capacity sheet
feeders and random access mailboxes for nonimpact electronic printers and paper
handling devices for facsimile machines. GJ also licenses certain proprietary
technology to OEMs.
GJ's products are marketed domestically and internationally primarily
directly to OEMs for incorporation into their product lines. Principal OEM
customers include Mita, Xerox, Rank Xerox, Fuji Xerox, Ricoh, Konica, Toshiba,
Lanier, Panasonic, Sharp, Fujitsu, Olympus and Kyocera. Marketing in Asia is
conducted by GJ, and marketing in North America is conducted by GUSA.
Marketing in Europe is conducted by GJ and GUSA, and by Gradco Belgium, S.C., a
wholly-owned subsidiary of GJ.
GJ produces its products at manufacturing facilities of contract
manufacturers in Japan and Korea. GJ has also entered into a contract for
production at a facility in Canada, at which manufacturing is expected to
commence by the end of calendar 1996.
In addition to marketing intelligent paper handling devices, GJ licenses
certain OEMs to produce products using GJ technology in exchange for license
fees and/or royalties, and receives fees from OEMs for research and development
and customization contracts for its products. GJ's development engineering
activities on behalf of OEMs include engineering, development and prototype
production of various paper handling devices.
Gradco and GJ do not have any common directors or officers. However, as
the majority shareholder Gradco has the controlling vote on major corporate
transactions by GJ. Furthermore, members of Gradco's management consult with
and advise GJ's management on an ongoing basis with regard to current
operational matters and future plans.
GJ Products
Currently, GJ's products are primarily paper input and output devices for
copiers and computer controlled printers, including sorter products for copiers
and printers and sheet feeding products for printers. GJ has development and
customization contracts with a number of OEMs for several new products for
copiers and intelligent non-impact electronic page printers.
Sorter Products. Prior to the introduction by Gradco (during the period
when it was directly engaged in the copier products business) of the sorters
currently sold by GJ, sorters available to the convenience copier market were
large and complicated, with many moving parts and long, complicated paper
2
paths. The sorters sold by GJ are primarily designed to provide a shorter,
straight-through or nearly straight-through, single paper path.
The sorters sold by GJ are designed for use with a variety of convenience
copiers and are available with either 10, 20, or 25 receiving bins. These
products may be attached quickly and easily to a copier or may be designed to
be an integral part of the copier. Some of GJ's sorters are controlled by
intelligence contained within the copier, which communicates with the sorter
through a customized interface, while others contain the necessary intelligence
to stand alone and receive output from the copier or mechanically and
electronically interface with a copier.
New Copier Products. The new products for the copier market include a
variety of 10, 15 and 20 bin sorters with a sheet capacity per bin and a copy
per minute operating speed to satisfy the need in the low through mid-range of
copiers. Some products include means for offsetting copy sets to enhance set
removal and set capacity for mid-range copier use, and some include set-
aligning sheet joggers and in-bin stapling capabilities.
GJ has acquired the exclusive rights to manufacture and market a computer
forms feeder which improves the feeding of continuous forms in medium to high
speed copiers.
New copier products which also are applicable to the printer market
include sorters which are also operable in a random access mode to function
with electronic page printers as a mailbox.
Printer Products. GJ's products include certain additional automatic
paper and envelope feeders and specialized output print stations. These
include a paper feeder, stacker and mailboxes specially designed for laser
printers.
New Printer Products. New products developed for the printer product
market include a sheet and envelope feeder, a variety of its high capacity
sheet feeders applicable to a variety of laser printers, a specialized high
capacity stacker for a high speed laser printer, a stacker for many low speed
laser printers, a sheet invertor and a sheet decurler for laser printers and
facsimile machines.
GJ Marketing and Customers
General. GJ sells its products domestically and internationally primarily
directly to OEMs. GJ (under licenses which were assigned to it by Gradco) has
licensed certain OEMs to manufacture and sell certain products for use in
conjunction with the OEMs' copiers marketed to other companies.
GJ frequently develops a new product or a variation of an existing product
in consultation with an OEM who has agreed to pay for the development work,
then submits a prototype for evaluation to the OEM customer who may agree to
purchase such product in commercial quantities. In other cases, an OEM will
present GJ with a copier, printer or other product in the research and
development stage and engage GJ (at the OEM's expense) to design a paper
handling device to fit the OEM's specifications. Any unique interface designed
to work only with an OEM's particular equipment may be exclusive to the OEM; GJ
retains ownership of the basic technology and any other technology developed by
GJ for use in its business. GJ also does product development work at its own
expense, based on its evaluation of future market requirements.
3
In fiscal 1996, Xerox, Rank Xerox, Mita and Lanier accounted for 29%, 16%,
13% and 11%, respectively, of the Registrant's consolidated revenues. In
fiscal 1995, Mita, Xerox and Sharp accounted for 19%, 16% and 11%,
respectively, of the Registrant's consolidated revenues. In fiscal 1994,
Ricoh, Mita and Sharp accounted for 23%, 17% and 15%, respectively, of the
Registrant's consolidated revenues. A loss of any of the current principal
customers could have a negative impact on the Registrant's consolidated
operations taken as a whole (see GJ Competition).
Based on Xerox's system for evaluation of vendors in view of business/
quality management, GJ is officially recognized by Xerox as one of its
certified suppliers.
Licensees. During the period that it was directly involved in the copier
business, Gradco entered into certain agreements and granted certain licenses
to others, described below, to manufacture products using Gradco technology.
These agreements and licenses were assigned by Gradco to GJ as part of the sale
to GJ of substantially all of the assets used in Gradco's copier business (the
"Copier Assets") in fiscal 1991. Thus, the pertinent rights, obligations and
technology of Gradco, described below, have devolved upon GJ. In certain
instances, GJ and the licensee have entered directly into an amended and
restated agreement superseding the original license as assigned to GJ, but
these restatements do not modify the basic features of the arrangement, as
described below. In one instance (the license described in the next to last
paragraph of this section), the license was granted by GJ itself in fiscal
1993.
In exchange for a lump sum payment, Gradco and a major OEM customer
entered into a paid up, royalty-free, worldwide release and agreement not to
assert against the OEM most of Gradco's then-existing patents relating to
sorters existing at the time of the agreement. This agreement is limited to
sorters made, used or sold by the OEM or its affiliates for use only with
certain products made by or for the OEM or its affiliates. In addition, this
OEM has been granted a non-exclusive worldwide license on a royalty basis
limited to certain sorter technology and patent rights for use with certain
products of the OEM or its affiliates. Gradco and the OEM amended this license
to include additional defined sorters in exchange for an additional royalty
payable to Gradco, in conjunction with the grant of royalty-free cross licenses
between Gradco and the OEM with respect to certain conflicting patent rights of
Gradco in the United States and the OEM in Japan.
Another major OEM was granted a limited non-exclusive world-wide license
for a lump sum payment and future royalties restricted to certain sorter
technology and patent rights for use with certain products of the OEM or its
affiliates. Such sorters are limited by definition of size, capacity and
copier speed.
Another OEM was granted a nonexclusive license in exchange for a lump sum
payment and future royalties on certain limited sorter technology for use on
copiers manufactured by the OEM. Certain sorters, as defined in the agreement,
are territorially limited.
GJ granted a license to a laser printer OEM to incorporate GJ's patented
de-curler structure in the OEM's printer for a royalty of one amount if
incorporated in an attachment to the printer, but a lesser amount if
incorporated directly in the printer.
4
These agreements generated recurring royalty revenues of approximately
$2,528,000 during the fiscal year ended March 31, 1996, $2,725,000 during the
fiscal year ended March 31, 1995, and $2,402,000 during the fiscal year ended
March 31, 1994. These agreements allow GJ to receive additional revenues from
certain OEMs while also selling products to the OEMs, and, overall, are
expected to result in better market penetration of GJ technology. However, the
licensees are able to compete with GJ in some of GJ's customary markets to the
limited extent set forth in such agreements. Except as described above, no
licensee has the right to sublicense the technology to nonaffiliates.
GJ Competition
GJ's principal competition for its sorters for convenience copiers is from
its OEM licensees. Certain licensees, because of their much larger resources,
have been able to develop new sorter products more rapidly than GJ. GJ also
experiences competition, to a more limited extent, from other OEMs, and from
other manufacturers of sorters using different technology. Copier
manufacturers or other companies, many of whom are much larger than GJ with
resources far in excess of those of GJ, could seek to enter the convenience
copier sorter market in direct competition with GJ. Certain OEMs make sorters
for use with certain of their convenience copier models using other sorter
technology such as fixed bin technology.
In its marketing of printer products, GJ competes with manufacturers of
mechanical sheet feeding devices, continuous form paper feeding devices and
automatic paper feeding devices, as well as OEMs that build such devices for
sale with their information or word processing systems.
GJ Patents and Proprietary Technology
GJ has an ongoing program of seeking patent protection for its technology.
GJ holds numerous patents and patent applications (including those acquired by
assignment from Gradco as part of the sale of Copier Assets in fiscal 1991)
relating principally to its sorters in the United States, United Kingdom,
Japan, Germany, France, Switzerland and Canada. The unexpired terms of the
major U.S. sorter patents already issued range from 3 to 17 years. Patent
applications are pending on most of GJ's recently introduced new products.
Patents have been obtained or patent applications are pending in the United
States and Japan, relating to GJ's paper decurling technology for laser
printers and facsimile machines.
GJ also has United States and foreign patents and has several additional
patent applications pending in the United States and abroad relating to paper
feeding devices for use with printer products.
Gradco believes that the issued patents of GJ are material to the
consolidated operations of Gradco and subsidiaries taken as a whole. However,
there can be no assurance that GJ's sorter patents will not be challenged or
infringed. In addition, there can be no assurance that other parties will not
develop new technology which does not violate such patents but which is
competitive with certain GJ products and patentable by such other parties.
GJ has a confidential information and invention assignment agreement to
protect GJ's technology with each of its key technical employees.
5
GJ Production and Assembly
GJ produces its products at manufacturing facilities of contract
manufacturers in Japan and Korea. Effective August 17, 1995, GJ entered into a
three year nonexclusive, extendible contract for production of a new copier
product at a contract manufacturing facility in Canada. Manufacturing is
expected to commence at this facility at the end of calendar 1996. Under this
contract GJ will purchase product at competitive arms-length, negotiated prices
subject to annual adjustment. The manufacturer will also provide certain
production design and engineering services in connection with the product as
well as certain warranties.
Agreements with the manufacturers for finished products provide for
quality controls and inspection by GJ and its customers. GJ seeks to control
product quality in a variety of ways. It emphasizes initial inspection and
testing of components. Each of GJ's product lines has a high commonality of
parts, enabling GJ to effect certain economies of scale. Raw materials for
GJ's products are available from a number of sources to permit timely shipment
of orders. Microprocessor programming and electronic assemblies are generally
proprietary but certain OEMs may specify electronics. Tooling for most common
parts is owned by GJ or its contract manufacturers, while a number of OEMs own
tooling for parts unique to models customized for their products.
GUSA, and GJ's domestic branch office, have obtained quality systems
certification under ISO 9001 (an International Standard promulgated under the
European Economic Community Mandate).
Business of Venture Engineering, Inc.
The Venture Engineering, Inc. ("Venture") subsidiary performs contract
engineering and manufacturing services, relating to the customer's own
products, for OEMs and other customers. Venture offers professional turnkey
services ranging from design concepts through manufacturing production. It
markets its services independently of the engineering services performed by GJ
for its OEM customers, referred to above.
Engineering services performed by Venture are principally related to
paper-handling products and semiconductor processing equipment, including
electronic motion control devices and devices used for putting marks on
paper/media. These devices and applications include printer-plotters,
peripheral media handling, and specialized printing and support. Services are
also performed for other applications such as automated medical diagnostic
equipment, manufacturing robotics, and test and process control equipment.
Services are typically billed on a time and material or fixed price basis.
However, Venture completed a development project in February 1992 which will
provide a royalty stream through 1998. This project generated royalty revenues
of approximately $32,000 in fiscal 1996, $52,000 in fiscal 1995, and $133,000
in fiscal 1994.
Manufacturing services principally include fabrication, assembly and
testing of complex electro-mechanical assemblies for customers in such diverse
fields as computer equipment, medical equipment and telecommunications.
Due to the broad and diverse number of markets and customers served by
Venture, there is not one specific group of competitors. In most cases, the
principal competition is from within the prospective customers' own functional
engineering and manufacturing organizations, or from a product company offering
standard products which may be adapted to a specific unique application
requirement.
6
Costs and Revenues of Development Engineering Services
In 1996, 1995 and 1994 the Registrant, on a consolidated basis, spent
approximately $3,641,000, $2,164,000 and $1,793,000, respectively, on research
and development and development engineering activities. Costs incurred under
research and development and development engineering contracts are included in
research and development expense. Included in research and development expense
are costs related to development engineering service contracts of approximately
$1,603,000, $676,000 and $260,000, in fiscal 1996, 1995 and 1994, respectively.
The Registrant, on a consolidated basis, also received revenues from customers
under development engineering service contracts of approximately $1,877,000,
$923,000 and $356,000, in fiscal 1996, 1995 and 1994, respectively.
Backlog
Registrant's order backlog at March 31, 1996 from consolidated operations
was estimated at approximately $39.3 million, and was estimated at
approximately $25.9 million at March 31, 1995. Backlog includes orders
accepted for delivery to customers during the ensuing fiscal year, including
purchases committed by certain customers in the form of purchase agreements,
although such orders are subject to cancellation by the customer (in most cases
upon the payment of a cancellation charge). Substantially all orders shown as
backlog were scheduled for delivery within approximately 6 months. Because
Gradco's operating subsidiaries generally ship products upon specific releases
from customers of previously received orders, the Registrant's backlog as of
any particular date may not be a meaningful measure of the Registrant's actual
sales for the succeeding fiscal period.
Employees
As of June 7, 1996, Gradco and its subsidiaries employed 116 persons. To
date, Gradco and its subsidiaries have encountered no difficulty in attracting
and retaining qualified employees. Gradco believes employee relations to be
satisfactory.
(c) Domestic Operations and Export Sales.
Approximately 64% of the Registrant's consolidated revenues for the fiscal
year ended March 31, 1996 were attributed to domestic sales and approximately
36% were attributed to foreign sales. Approximately 43% of the Registrant's
consolidated revenues for the fiscal year ended March 31, 1995 were attributed
to domestic sales and approximately 57% were attributed to foreign sales.
Approximately 20% of the Registrant's consolidated revenues were attributed to
domestic sales and approximately 80% were attributed to foreign sales for the
fiscal year ended March 31, 1994. In its export sales, Registrant is subject
to the usual risks of international trade, including political instability,
restrictive trade policies, controls on fund transfers and foreign currency
fluctuations.
The Registrant's sales are primarily denominated in Japanese yen and
United States dollars. In order to limit the risk of foreign currency exchange
fluctuations, the Registrant attempts to buy and sell products and services in
the same currency. However, there are foreign currency exchange gains and
losses associated with some sales transactions. In fiscal 1996, the Registrant
had a currency exchange gain of approximately $1,000,000 caused by the
strengthening of the dollar versus the yen during the year. In fiscal 1995,
the Registrant had a currency exchange loss of $400,000 caused by the surge in
the value of the yen versus the dollar in March 1995.
7
Financial information regarding foreign and domestic operations and export
sales is set forth in Note 8 of Notes to the Registrant's Consolidated
Financial Statements filed in response to Item 8 below.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) The following table sets forth information regarding persons known to
the Registrant to be the beneficial owners of more than 5% of the Registrant's
voting securities as of June 7, 1996 based on 7,798,909 shares of Common Stock,
no par value, outstanding as of such date.
Amount and Nature
Name and Address of of Beneficial Percentage
Title of Class Beneficial Owner Ownership of Class
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Common Stock, Plenum-Tash Group 1,213,672(1) 15.5%
no par value 233 Spring Street
New York, NY 10013
Ryback Management 969,000(2) 12.4%
Corporation
7711 Carondelet Avenue
Box 16900
St. Louis, MO 63105
Dimensional Fund 564,249(3) 7.2%
Advisors, Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
_______________
(1) As set forth in their joint statement on Schedule 13D dated December 1,
1989, and amendments thereto through January 3, 1991, Plenum Publishing
Corporation, Martin E. Tash and his wife Arlene Tash constitute a "group" as
defined in Rule 13d-5(b)(1) under the Securities and Exchange Act of 1934,
since Plenum, on the one hand, and Mr. and Mrs. Tash, on the other hand, have
agreed to act together for the purpose of voting the securities of the
Registrant held by them, and in general to act together for the purpose of
acquiring and disposing of such securities (although it is understood that, at
any given time, a purchase or sale may be effected by one such party without
the effectuation of a purchase or sale by the other party). Pursuant to said
Rule, the Group is therefore deemed the beneficial owner of the shares held by
each of its members.
The Group beneficially holds 1,213,672 shares of Common Stock of the Registrant
(including for this purpose currently exercisable options held by Mr. Tash to
purchase 50,000 shares). Plenum Publishing Corporation has sole voting and
dispositive power as to 913,000 shares owned solely by it, representing 11.7%
of the outstanding stock, and Martin E. Tash has sole voting and dispositive
power as to 80,672 shares owned solely by him (41,183 shares of which are held
by a private profit sharing plan of which Mr. Tash is sole beneficiary) which,
together with his currently exercisable options, represent 1.7% of the
outstanding stock. Mr. Tash and his wife, Arlene S. Tash, have shared voting
and dispositive power as to 170,000 shares owned jointly by them, representing
2.2% of the outstanding stock. The shares which may be acquired upon exercise
of the options held by Mr. Tash have been deemed outstanding for the purpose of
8
computing his individual percentage ownership of outstanding shares and the
percentage owned by the Group as set forth in the table, but not for the
purpose of computing the percentage owned by any other party. Plenum has
disclaimed beneficial ownership of the shares owned by Mr. and Mrs. Tash, they
have disclaimed beneficial ownership of the shares owned by Plenum, and Mrs.
Tash has disclaimed beneficial ownership of the shares owned solely by Mr.
Tash. The Group may be deemed to have obtained control of Gradco in October
1990 when its nominees were elected as a majority of Gradco's Board of
Directors. The Group may be deemed to continue to have control due to the fact
that the entire Board now consists of five persons designated as nominees at
the request of the Group.
(2) As set forth in Amendment No.1 to Statement on Schedule 13G, dated January
25, 1996, Ryback Management Corporation ("Ryback"), a registered investment
advisor, has sole voting and dispositive power as to 969,000 shares as of
December 31, 1995. 699,000 of such shares are held by Lindner Growth Fund, a
registered investment company, and 270,000 are managed by Ryback.
(3) As set forth in Amendment No. 4 to Statement on Schedule 13G, dated
February 7, 1996, Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 564,249 shares as
of December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company, or
in series of the DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors Inc.
serves as investment manager. Dimensional disclaims beneficial ownership of
all such shares.
(b) The following table sets forth information regarding the voting
securities of the Registrant beneficially owned by each director of the
Registrant, each of the executive officers named in the Summary Compensation
Table in Item 11(a), and all officers and directors as a group (7 persons), as
of June 7, 1996.
Amount and Nature
Name and Address of of Beneficial Percentage
Title of Class Beneficial Owner Ownership of Class
- -------------- ------------------- ----------------- ----------
Common Stock, Martin E. Tash 1,213,672 (2) 15.5%
no par value 233 Spring Street
New York, NY 10013
Harland L. Mischler 131,932 (3) 1.7%
7900 Glades Road
Boca Raton, FL 33434
Bernard Bressler 15,000 (4) *
17 State Street
New York, NY 10004
Robert J. Stillwell 16,500 (5) *
1009 N. Bethlehem Pike
Springhouse, PA 19477
Thomas J. Burger 7,500 (6) *
1555 West Walnut Lane
Irving, TX 75038
9
Masakazu (Mark) Takeuchi 18,000 (7) *
Shibuya-ku, Tokyo 150 Japan
Akira (Tony) Shinomiya 6,000 (8) *
Shibuya-ku, Tokyo 150 Japan
All Executive Officers 1,408,604 (9) 17.7%
and Directors as a Group
(comprising the 7
persons shown above)
* Less than 1%
_______________
(1) In each instance where a named individual is listed as the holder of a
currently exercisable option, the shares which may be acquired upon exercise
thereof have been deemed outstanding for the purpose of computing the
percentage of outstanding shares owned by such person, but not for the purpose
of computing the percentage owned by any other person, except the group
referred to in note (9).
(2) Mr. Tash, his wife Arlene S. Tash, and Plenum Publishing Corporation, are
members of the Plenum-Tash Group. The shares shown above include all shares
beneficially owned by the Group, including currently exercisable options to
purchase 50,000 shares of Gradco stock held by Mr. Tash. See note (1) to the
table in Item 12(a) for a breakdown of such ownership among the Group's
members. Mr. Tash disclaims beneficial ownership of the 913,000 shares owned
by Plenum.
(3) Includes 51,932 shares owned directly by HLM Capital Resources, Inc., a
private investment and holding corporation, of which Mr. Mischler is President,
Chairman and major shareholder, and 30,000 shares owned directly by Mr.
Mischler. Also includes currently exercisable options granted to Mr. Mischler
to purchase 50,000 shares of the Registrant's stock.
(4) Includes 12,000 shares owned directly by Mr. Bressler and 3,000 shares held
for Mr. Bressler in an individual retirement account.
(5) Includes 9,000 shares held for Mr. Stillwell in an individual retirement
account, and 7,500 shares which may be acquired upon the exercise of currently
exercisable options.
(6) Represents shares which may be acquired upon the exercise of currently
exercisable options.
(7) See note (1) to table in Item 10(a). The number of shares shown above
represents those which are subject to currently exercisable options held by Mr.
Takeuchi.
(8) See note (1) to table in Item 10(a). The number of shares shown above
represents those which are subject to currently exercisable options held by Mr.
Shinomiya.
(9) Number of shares and percentage owned includes 139,000 shares which may be
acquired through exercise of currently exercisable options held by certain of
such persons individually named. Number of outstanding shares for purpose of
computation of percentage of ownership by the group includes such shares.
10
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: July 30, 1996
GRADCO SYSTEMS, INC.
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Registrant
By: /s/ Bernard Bressler
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Bernard Bressler
Secretary and Treasurer
