SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-13803
GATEWAY INDUSTRIES, INC.
(Name of small business issuer in its charter)
Delaware 33-0637631
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 East 52nd Street
New York, New York 10022
(Address of principal executive offices including zip code)
Issuer's telephone number, including area code: 877-431-2942
Securities registered under Section 12(b) of the Act: NONE.
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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 the past 90 days.
Yes [X] No [ ]
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB. [X]
Issuer has had no revenues in its most recent fiscal year.
The aggregate market value of voting stock held by non-affiliates of the Issuer
at March 31, 2000 was approximately $8,749,420 based on the average high/low
ask/bid price of $3.6875 for such stock on that date.
As of March 31, 2000, the Registrant had 4,192,024 shares of common stock, $.001
par value per share, outstanding.
Transitional small business disclosure format: Yes [ ] No [X]
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's definitive Proxy Statement to be used in connection
with its Annual Meeting of Stockholders to be held on June 30, 2000, are
incorporated by reference into Part III of this report.
<PAGE>
PART III
ITEM 9. Directors and Executive Officers
The directors and executive officers of the Company are as follows;
NAME AGE POSITION
---- --- --------
Warren G. Lichtenstein 34 Chairman of the Board of
150 East 52nd Street Directors, and Chief Executive Officer
New York, NY 10022
Jack Howard 38 Acting President
2927 Montecito Avenue Director
Santa Rosa, CA 95404
Ronald W. Hayes 62 Director
810 Saturn Street
Suite 16-432
Jupiter, FL 33477-4398
Warren G. Lichtenstein was appointed a director of the Company in May 1994
and became Chairman of the Board in October 1995. Mr. Lichtenstein has been the
Chairman of the Board, Secretary and the Managing Member of Steel Partners,
L.L.C. ("Steel LLC"), the general partner of Steel Partners II, L.P. since
January 1, 1996. Prior to such time, Mr. Lichtenstein was the Chairman and a
director of Steel Partners, Ltd., the general partner of Steel Partners
Associates, L.P., which was the general partner of Steel Partners II, L.P. since
1993 and prior to January 1, 1996. Mr. Lichtenstein has also been President and
Chief Executive Officer of WebFinancial Corporation since December 1997. Mr.
Lichtenstein served as President and director of Marsel Mirror and Glass
Products, Inc. ("Marsel"), a subsidiary of the Company, from its inception in
July 1995 until shortly after the acquisition of its business by the Company in
November 1995, and continued as a director until its disposition in December
1996. Marsel filed for protection under Chapter 11 of the United States
Bankruptcy Code shortly following the Company's disposition of its interest in
Marsel. Mr. Lichtenstein is a director of the following publicly held companies:
WebFinancial Corporation, PLM International, Inc., Tech-Sym Corporation, CPX
Corp., ECC International Corp. and Saratoga Beverage Group, Inc.
Ronald W. Hayes was appointed a director of the company in May 1993. Mr.
Hayes is the owner of Lincoln Consultors & Investors, Inc., an investing and
consulting firm, for over five years.
Jack L. Howard was appointed Acting President and Chief Financial Officer
of the Company in September 1994, and was elected director of the Company in May
1994. Mr. Howard has been a registered principal of Mutual Securities, Inc., a
stock brokerage firm since prior to 1993. Mr. Howard has also been the Vice
President, Secretary, and Treasurer of WebFinancial Corporation since December
1997. Mr. Howard is a director of the following publicly held companies:
WebFinancial Corporation and Pubco Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater-than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. The
Company believes that all such reports required to be filed during the fiscal
year ended December 31, 1999 ("Fiscal 1999"), were filed on a timely basis. The
Company 's belief is based solely on its review of Forms 3, 4, and 5 and
amendments thereto furnished to the Company during, and with respect to, Fiscal
1999 by persons known to be subject to Section 16 of the Exchange Act. To the
Company's knowledge, based solely on its review of the copies of such reports
furnished to the Company, during its fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater-than 10% beneficial owners were satisfied.
<PAGE>
ITEM 10. Executive Compensation
The following table sets forth all compensation paid to the Company's
Acting President during its fiscal years ended December 31, 1999, 1998 and 1997
(the "Named Executive Officers"). No other executive officer received annual
compensation at the rate of $100,000 or more during the fiscal year.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Annual Long-term
Compensation Compensation
------------ ------------
Securities Underlying
Name and Principal Position Fiscal Year Bonus($) Options
- --------------------------- ----------- ------- -------
<S> <C> <C> <C>
Warren G. Lichtenstein 1999 0 50,000
Chairman of the Board 1998 0
and Chief Executive Officer 1997 0
Jack Howard 1999 0 10,000
Acting President 1998 $50,000
and Chief Financial Officer 1997 $50,000
</TABLE>
DIRECTOR COMPENSATION
The director who is not an officer receives, as his total annual
compensation, 2000 options to purchase Company common stock. The options are
granted each year at the time of the annual meeting. The exercise price of the
options is the fair market value of the common stock at the time of the grant.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to options
granted to the named executives during 1999. No stock appreciation rights were
granted to the named executives during 1999.
Individual Grants
-----------------
Percent of
Number Total
of Options
Securities Granted to
Underlying Employees in Exercise or
Options Fiscal Base Price Expiration
Name Granted(1) Year(2) ($/Sh) Date
---- ------- ---- ---- ----
Warren G. Lichtenstein 50,000 31.85% $2.00 7-20-04
Jack L. Howard 10,000 6.37% $2.00 7-20-04
- -----------
(1) All of the options were granted in respect of Mr. Lichtenstein's and Mr.
Howard's service as executive officers of the Company.
(2) Based on an aggregate of 173,500 options granted to all employees,
non-employees, and consultants during 1999. Options vest in 3 equal annual
installments.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table sets forth information concerning options exercised
during the fiscal year ended December 31, 1999, and the number of unexercised
options held by the Company's executive officers at the end of such fiscal year:
<TABLE>
<CAPTION>
Number of
Shares Shares Value of Unexercised
Acquired Value Number of Unexercised Options in-the-Money Options
Name On Exercise Realized($) at FY-End(#) at FY-End($)
- ---- ----------- ---------- ----------- -----------
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------- -------------------------
<S> <C> <C> <C> <C>
Warren G. Lichtenstein 0 0 116,667/33,333 33,334/66,666
Jack Howard 0 0 84,300/23,200 67,000/43,500
- -----------
<FN>
(1) Based on $2.00, the average high/low bid prices for the Common Stock on the
last date of 1999 for which trading was reported.
</FN>
</TABLE>
<PAGE>
ITEM 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of March 31, 2000 regarding
the beneficial ownership of the Common Stock by each person known by the Company
to own beneficially more than 5% of the Common Stock, by each director and
executive officer, individually, and by all directors and executive officers as
a group.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
Warren G. Lichtenstein 1,865,760 (1)(2) 44.51%
150 East 52nd Street
New York, NY 10022
Ronald W. Hayes 98,840 (3) 2.36%
810 Saturn Street Suite 16-432
Jupiter, FL 33477-4398
Jack Howard 162,700 (4) 3.88%
2927 Montecito Avenue
Santa Rosa, CA 95404
Steel Partners II, L.P. 1,674,208 39.94%
150 East 52nd Street
New York, NY 10022
George Soros 827,716 (5) 19.75%
888 Seventh Avenue
New York, NY 10022
All directors and executive officers 2,127,300 (1) 50.75%
as a group (three persons)
- -------------------------
(1) Includes: (i) 1,674,208 shares owned by Steel Partners II, L.P., an
entity controlled by Mr. Lichtenstein, (ii) 41,552 shares owned
directly by Mr. Lichtenstein, and (iii) 150,000 shares underlying stock
options held by Mr. Lichtenstein, all of which are exercisable within
sixty days of March 31, 2000.
(2) More than one beneficial owner is listed above for the same securities,
since the shares owned beneficially by Steel Partners II, L.P. are
included in the shares beneficially owned by Mr. Lichtenstein.
See note (1) above.
(3) Includes 50,500 options, all of which are exercisable within sixty
days of March 31, 2000 (4) Includes 107,500 stock options, all of which
are exercisable within sixty days of March 31, 2000 (5) As reported in
the shareholder's most recent Schedule 13D.
(4) Includes 107,500 stock options, all of which are exercisable within
sixty days of March 31, 2000
(5) As reported in the shareholder's most recent Schedule 13D.
<PAGE>
ITEM 12. Certain Relationships and Related Transactions
The Company occupies offices at 150 East 52nd Street, New York, New York
10022, under a lease agreement extending through March 30, 2001. It subleased
office space, at one-third of its cost for the space, to each of (a) Steel
Partners Services, Ltd. ("SPS"), an entity controlled by the Company's Chairman,
and (b) WebFinancial Corporation ("WEFN"), a public company in which Steel
Partners II, L.P. , an entity controlled by the Company's Chairman, and the
Company's Chairman have an approximately 30 % beneficial interest. Mr. Howard is
also a director of WEFN. As of January 1, 1999, the rent on the office space is
paid by SPS and the Company pays a management fee to SPS.
During the year ended December 31, 1999, the Company paid a management fee
of approximately $275,000 to Steel Partners Services, Ltd., for certain
management, consulting and advisory services. The fee also included the
Company's one-third share of rent expense which was paid entirely by SPS during
1999. The Company believes that the cost of obtaining the type and quality of
services rendered by SPS is no less favorable than the cost at which the Company
could obtain from unaffiliated entities.
As of February 15, 2000, Oaktree entered into a Reciprocal Agency Agreement
with MDM Technologies, L.L.C. ("MDM"). The agreement provides that Oaktree and
MDM will each pay one another, as appropriate, a market rate based fee for sales
leads generated that result in new revenues for each other. MDM is majority
owned by Warren G. Lichtenstein, the Company's Chairman.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GATEWAY INDUSTRIES, INC.
Date: April 25, 2000
By: /s/ Jack L. Howard
Jack L. Howard,
Acting President
Principal Executive Officer
