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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
(Mark One)
/x/ Annual Report under Section 13 or 15 (d) of the Securities Exchange
Act of 1934 (Fee required)
For the fiscal year ended August 31, 1995
/ / Transition report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 (No fee required)
For the transition period from __________ to __________
Commission file number 0-13049
WATER-JEL TECHNOLOGIES, INC.
___________________________________________________________________________
(Name of Small Business Issuer in its Charter)
New York 13-3006788
_______________________________________ __________________________
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
243 Veterans Boulevard, Carlstadt, New Jersey 07072
________________________________________________ _____________
(Address of Principal Executive Offices) (Zip Code)
(201) 507-8300
________________________________________________
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock
_______________________
(Title of Class)
A Warrant
_______________________
(Title of Class)
B Warrant
_______________________
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days.
Yes X No_______
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. / /
State issuer's revenues for its most recent fiscal year. $5,195,276
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days. $3,685,456 as of December 11, 1995.
Documents Incorporated by Reference: See Footnotes to Exhibits
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Item 11. Executive Compensation
The following table sets forth information with respect to compensation
paid by the Company for the services to the Company during the three years ended
August 31, 1995 to the Company's Chief Executive Officer and two other officers
with compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
----------------------------------- ---------- -------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Other Re- under- All
Annual stricted lying Other
Compen- Stock Options/ LTIP compen-
Name and sation Awarded SARs(#) Payouts sation
Principal Position Year Salary ($) Bonuses($) ($)(1) ($) (2) (4) ($) ($)(3)
- ------------------ ---- ---------- ---------- ------- -------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
YITZ GROSSMAN 1995 $139,000 $45,000 $15,000 0 100,000 0 0
Chairman of the Board 1994 $135,000 $25,000 $20,000 0 0 0 46,500
and Secretary 1993 $135,000 $15,000 $20,000 0 100,000 0 0
PETER D. COHEN 1995 $100,000 $45,000 0 0 100,000 0 0
President, CEO, 1994 $100,000 $60,000 0 0 0 0 0
Treasurer and Director 1993 $100,000 $40,000 0 0 112,500 0 0
BOB DANIELS 1995 $ 77,000 $20,000 0 0 100,000 0 0
Executive Vice President 1994 $100,000 $60,000 0 0 0 0 0
1993 $100,000 $40,000 0 0 28,125 0 0
</TABLE>
_________
(1) In each year consists of the annual amortization of a bonus to be earned
over a five year period ending June 1, 1995 by Mr. Grossman. Mr. Grossman
earned the remaining balance $15,000 of his bonus in fiscal 1995.
(2) All options granted in fiscal 1992 were cancelled in fiscal 1993 and
equivalent number replacement options were then issued. There were no
stock options or stock appreciation rights granted to any named officer
in the fiscal year ended August 31, 1994.
(3) During fiscal 1994, the Company transferred 75,000 warrants, which it had
received from an investment, to Mr. Grossman for services rendered.
(4) During fiscal 1995 each officer was granted options to acquire 100,000
shares of common stock each.
(5) In June 1995, the Company terminated its employment agreement with Mr.
Daniels.
The aggregate amount of personal benefits, including personal use of three
automobiles provided to officers and used primarily for business purposes,
cannot be specifically or precisely ascertained and do not, in any event, exceed
$50,000 or 10% of compensation as to any person.
The Company offers health insurance to its employees. At the present time
the Company does not have any retirement, pension, profit sharing, or other
similar programs or benefits.
The Company has not paid remuneration of any nature for or on account of
services rendered by a director in such capacity.
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OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
Percent of
Number of Total Options/
Securities SARs Granted Exercise
Underlying to Employees or Base
Options/SARs in Fiscal Price Expiration
Name Granted (#) Year ($/Sh) Date
(a) (b) (c) (d) (e)
YITZ GROSSMAN, Chairman
of the Board and Secretary 100,000 33% $1.52 10/12/04
PETER D. COHEN, President
CEO, Treasurer, and Director 100,000 33% $1.52 10/12/04
BOB DANIELS, Executive
Vice President 100,000 33% $1.52 10/12/04
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the Money
Options/SARs Options/SARs
at FY-End at FY-End
(#) ($)
Exercisable/ Exercisable/
Name Unexerciseable Unexerciseable
---- -------------- --------------
YITZ GROSSMAN, Chairman, 200,000 $ 0
of the Board and Secretary
PETER D. COHEN, President 212,500 $ 0
CEO, Treasurer, and Director
BOB DANIELS, Executive 128,125 $ 0
Vice President
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Employment Agreements
In March 1990, the Company entered into a five-year employment agreement
with Peter Cohen, effective as of January 1, 1990. In April 1994, the
Company extended the agreement until December 31, 1997. The agreement
provides for annual compensation of $100,000 per year. Bonuses to Mr. Cohen
shall be paid quarterly at the rate of .5% of total revenues as reported in
the Company's quarterly Form 10-QSB and annual Form 10-KSB reports. In the
event of a change of control of the Company, Mr. Cohen is entitled to receive
a one-time payment equal to three times his then current annual compensation.
A change of control includes the acquisition of over 30% of the Company's
stock, the sale or transfer of over 50% of the Company's assets or certain
changes to the Board of Directors.
In March 1990, the Company entered into a five-year employment agreement
with Yitz Grossman, effective as of January 1, 1990. The agreement provided
for annual compensation of $135,000 per year. Bonuses to Mr. Grossman shall
be paid quarterly at the rate of .5% of total revenues as reported in the
Company's quarterly Form 10-QSB and annual Form 10-KSB reports. In May 1990,
the Company awarded Mr. Grossman a one-time bonus of $100,000 to be earned
over a five year period ending June 1, 1995. Mr. Grossman is not required to
devote his full time to the Company. In the event of a change of control of
the Company, Mr. Grossman is entitled to receive a one-time payment equal to
three times his then current annual compensation. A change of control
includes the acquisition of over 30% of the Company's stock, the sale or
transfer of over 50% of the Company's assets or certain changes to the Board
of Directors. In May 1995, the Company extended the employment agreement
until May 2000 with a new annual compensation of $150,000. All other
conditions remain unchanged.
Stock Option Plans
The Company has adopted three stock option plans. The Non-Qualified
Stock Option Plan (the "NQSO Plan") which expired on April 6, 1994 covering
187,500 shares of the Company's Common Stock, $.08 par value, pursuant to
which officers and employees of the Company were eligible to receive
non-qualified stock options. As of December 11, 1995, options to acquire
140,625 shares have been granted under the NQSO Plan at exercise prices
ranging from $1.52 to $2.32 per share. All options granted under the NQSO
Plan have been at exercise prices at least equal to the fair market value of
the Common Stock on the date of grant.
Under the 1990 Stock Option Plan (the "1990 Plan") the Company may grant
to its officers, key employees and others who render services to the Company,
options to purchase up to 187,500 shares of the Company's Common Stock at a
price which may not be less than the fair market value per share in the case
of incentive stock options or 85% of fair market value in the case of non-
qualified options for such stock on the date of the granting of the Option.
As of December 11, 1995, options to acquire a total of 187,500 shares have
been granted under the 1990 Plan at exercise prices of $1.52 per share.
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During fiscal 1995, the Company adopted an incentive stock option plan
(the "1995 Plan") which provides for the granting of options to employees,
officers, directors, and others who render services to the Company. Under
the terms of the plan, options to purchase not more than 500,000 shares of
common stock may be granted, at a price which may not be less than the fair
market per share in the case of incentive stock options or 85% of fair market
value for non-qualified options. Any options granted under the plan expires
ten years from the date of grant. The plan expires March 1, 2005. As of
December 11, 1995 no options have been granted under the plan.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 12, 1995
by: (i) each person who is known by the Company to own beneficially more than
5% of the Company's outstanding Common Stock; (ii) each of the Company's
officers and directors; and (iii) all officers and directors of the Company
as a group:
Amount and Nature
of Beneficial
Name and Address Ownership Percentage
- ---------------------- --------------- --------------
Yitz Grossman (1)..... 500,250 13.5%
243 Veterans Boulevard
Carlstadt, New Jersey
Peter D. Cohen (2).... 231,287 6.2%
243 Veterans Boulevard
Carlstadt, New Jersey
Werner Haase (3)...... 200,625 5.5%
555 Madison Avenue
New York, NY
J. Morton Davis (4)... 888,988 21.0%
44 Wall Street
New York, NY
All officers and
directors as a group
(3 persons) (6)....... 932,162 25.2%
- -----------------------
* Less than 1%
(1) Includes shares issuable on exercise of options to purchase 200,000
shares of Common Stock.
(2) Includes shares issuable on exercise of options to purchase 212,500
shares of Common Stock.
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(3) Includes shares issuable on exercise of options to purchase 143,750
shares of Common Stock.
(4) Includes 157,846 shares of Common Stock and 161,454 redeemable
Class A Common Stock Purchase Warrants ("Class Warrants") owned by
D. H. Blair Investment Banking Corporation ("Blair"), of which Mr.
Davis is Chairman and sole shareholder, and 81.68 units underlying
Unit Purchase option owned by Blair exercisable as of October 31,
1989 and expiring October 30, 1996. Each Unit is exercisable to
acquire 1,666 shares of Common Stock and 1,666 Class A Common Stock
Purchase Warrants. Each Class A Warrant entitles the holder to
purchase one share of Common Stock and to receive one redeemable
Class B Common Stock Purchase Warrant ("Class B Warrants") at an
exercise price of $3.00 per share exercisable prior to October 30,
1996. Each Class B Warrant entitles the holder to purchase one share
of Common Stock at $6.00 per share prior to October 30, 1996. Does
not include 19,999 shares of Common Stock and 19,999 Class A
Warrants owned by The Morton Foundation, Inc., a charitable
corporation controlled by Mr. Davis' wife, in which Mr. Davis
disclaims beneficial ownership.
(6) Includes shares issuable on exercise of options to purchase an aggregate
of 556,250 shares of Common Stock.
Item 13. Certain Relationships and Related Transactions
In April 1993, the Company exercised its conversion right and converted
a note receivable of $300,000 to 300,000 shares of Mark Solutions, Inc.,
formerly known as Mark Correctional Systems Inc. Also as part of the
conversion, the Company received warrants to purchase an additional 75,000
shares at $1 per share. This note was originally guaranteed by Mr. Grossman
and Mr. Haase, who are directors/shareholders of the Company. Mr. Grossman
is also a director of Mark Solutions, Inc. Additionally in a separate
transaction during 1993, the Company invested $150,000 in Mark Solutions,
Inc. and received 100,000 unregistered shares of common stock. In August
1994, the Company sold its investment of 300,000 shares of common stock and
received net proceeds of $937,500. In addition to the sale of the security,
the Company transferred during fiscal 1994 its 75,000 purchase warrants to
Mr. Grossman for services rendered. In October 1994, the Company invested an
additional $394,000 in Mark Solutions, Inc. and received 195,000 shares of
common stock. During fiscal 1995, the Company sold 10,000 shares of common
stock and received net proceeds of $50,000. Subsequent to year end, the
Company sold an additional 5,000 shares of common stock and received net
proceeds of $36,750. As of December 27, 1995, the Company owns 280,000
shares of Mark Solutions, Inc. common stock. The market price of the shares
of Mark Solutions, Inc. as of December 27, 1995 was $5.875.
In March 1995, the Company made a bridge loan of $150,000 to Pen
Interconnect, Inc. This loan was evidenced by a note bearing interest at 8%
per annum, payable by March 27, 1996 or the completion of an initial public
offering. In November 1995, Pen Interconnect, Inc. fully repaid the note
with interest. In consideration for the bridge loan the Company received
140,000 warrants. In November 1995, Pen Interconnect, Inc. completed an
initial public offering of securities. Concurrently with that offering Pen
Interconnect, Inc. registered the Company's warrants for public resale. The
Company has agreed not to sell its warrants until February 1996. Mr.
Grossman is a consultant to Pen Interconnect, Inc.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
WATER-JEL TECHNOLOGIES, INC.
By /s/ Peter D. Cohen
--------------------------
Peter D. Cohen,
President and
Chief Executive Officer
Dated: December 28, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on December 28, 1995 by the following persons on
behalf of Registrant and in the capacities indicated.
/s/ Peter D. Cohen
--------------------------
Peter D. Cohen,
President, Chief Executive Officer,
Chief Financial Officer, Principal
Accounting Officer and Director
/s/ Yitz Grossman
--------------------------
Yitz Grossman,
Secretary and Chairman
/s/ Werner Haase
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Werner Haase, Director
