FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended April 24, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________.
Commission file number: 0-14922
ABC DISPENSING TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2001203
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
451 Kennedy Road Akron, Ohio 44305
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 733-2841
Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $.01
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(Title of class)
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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) has been subject to such
filing requirements for the past 90 days: [ X ] Yes [ ] 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: [ X ]
The aggregate market value of the voting stock held by non-affiliates
as of July 15, 1999 was $5,367,000.
The number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date is: Common Stock outstanding at
July 15, 1999 was 19,168,049 shares.
Documents Incorporated by Reference
Total number of pages of this report: 5
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ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Board of Directors of the Company is comprised of the following individuals.
At the 1998 Annual Meeting of Shareholders these Directors were elected to serve
as directors until the next annual meeting and until their successors are
elected and qualified. The date of the next annual meeting, as of yet, is
undetermined.
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Name Age Principal Occupation
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Charles M. Stimac, Jr. 47 President and Chief Executive Officer
Herbert L. Luxenburg(1) 63 President and Chief Executive Officer Days Inn of Kent, Ohio
Director
Frank E. Vaughn(3)(4) 70 Adjunct Professor and visiting lecturer at Kent State University
Director
William L. Shanklin(4) 58 Professor of Marketing and Entrepreneurship at Kent State University
Director
Norbert J. Lewandowski(2) 62 Consultant
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(1) Chairman of Compensation Committee
(2) Chairman of Audit Committee
(3) Member of Compensation Committee
(4) Member of Audit Committee
Effective June 23, 1999, Mr. C. Rand Michaels, a Director since September 1986,
resigned his position as Director of the Company.
IDENTIFICATION OF EXECUTIVE OFFICERS
Charles M. Stimac, Jr. is the Company's only executive officer. Mr. Stimac has
served as the Company's President and Chief Executive Officer since July 15,
1996.
BUSINESS EXPERIENCE OF DIRECTORS AND OFFICERS
Charles M. Stimac, Jr. has been President and Chief Executive Officer and a
Director of the Company since July 15, 1996. Mr. Stimac has more than 20 years
experience in the investment banking industry. Prior to joining the Company, Mr.
Stimac served as a Vice President of Roney and Company, a member firm of the New
York Stock Exchange, from 1991 through 1996. During his five-year tenure at
Roney and Company, Mr. Stimac served as a portfolio manager and small-cap stock
specialist.
Herbert L. Luxenburg has been a Director of the Company since September 1988.
Mr. Luxenburg has been a proprietor in the hospitality industry since 1965 and
has served as President and Chief Executive Officer of the University Inn and
Days Inn of Kent, Ohio from 1989 until the present.
Frank E. Vaughn has been a Director of the Company since October 1997. Mr.
Vaughn was formerly President of the Hoover Companies and Executive Vice
President of the Maytag Corporation. Mr. Vaughn is currently an Adjunct
Professor and visiting lecturer at Kent State University.
William L. Shanklin has been a Director of the Company since December 1997. Mr.
Shanklin has been a Professor of Marketing and Entrepreneurship at Kent State
University since 1977. Mr. Shanklin has served as consultant and advisor to the
Company for the past 28 months. Mr. Shanklin is an author and has served as a
marketing consultant to companies ranging from Fortune 500 firms to small
businesses.
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Norbert J. Lewandowski has been a Director of the Company since December 1997.
Mr. Lewandowski is a CPA and until 1992 headed a regional accounting firm that
he founded. Mr. Lewandowski currently serves on the Board of Trustees at Kent
State University and as a general business consultant to many local companies.
BOARD MEETINGS AND COMPENSATION
The Board of Directors of the Company met a total of eleven times during the
fiscal year ended April 24, 1999. All of the Directors were present at over 75%
of the meetings.
Except as set forth in the next paragraph, Directors were not compensated for
services as Directors to attend any meetings. All Directors were reimbursed for
their expenses in connection with the meetings.
On October 9, 1998 the Company granted 20,000 warrants to each Member of the
Board of Directors exercisable at $0.30 per share.
Item 11 EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth a summary of the compensation of the Chief
Executive Officer for the fiscal years ended April 24, 1999, April 25, 1998 and
April 26, 1997.
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Long Term All other
Fiscal Comp. Compensation
Name Year Salary Options $'s(1)
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Charles M. Stimac, Jr. 1999 $150,000 600,000(2) $1,500
President/ 1998 $150,000 - $1,342
CEO 1997 $108,333 100,000(3) $ 670
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(1) These amounts represent the Company's matching contributions for Mr.
Stimac's account in the Company's 401(k) retirement plan.
(2) These warrants are priced at $0.20 per share and vest equally on January 1
for the years 2000, 2001, and 2002.
(3) These warrants are priced at $1.25 per share, are fully vested and have a 10
year term.
Warrant Grants in FY 1999
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Number of % of Total
Warrants Warrants to Exercise Expiration Potential Value at the
Name Granted Employees Price Date given appreciation rates
---- ------- --------- ----- ---- ------------------------
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Charles M. Stimac, Jr. 600,000 83% $0.20 01/01/2004 $33,153 $72,261
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CHIEF EXECUTIVE OFFICER - EMPLOYMENT AGREEMENT
The Company entered into an employment agreement with Charles M. Stimac, Jr.,
President and Chief Executive Officer of the Company, as of March 1, 1997 and
amended effective December 16, 1998 (the "Stimac Agreement"). The Stimac
Agreement provides for Mr. Stimac to serve as the Company's President and Chief
Executive Officer for an initial three year term beginning March 1, 1997,
subject to automatic renewal for one-year renewal terms unless either party
gives one year's notice of termination. The Stimac Agreement provides for an
annual salary of $150,000 subject to annual cost of living increases and annual
bonuses equal to 4% of the Company's pretax income. The Stimac Agreement was
amended to include a capital bonus equal to 2% of gross proceeds of the sale by
the Company of its capital stock or warrants to purchase same between August 1,
1998 and June 30, 1999 if the aggregate of such proceeds exceeded $1,000,000 and
3% if the aggregate of such proceeds exceeds $3,000,000. No capital bonus was
earned or paid. The Stimac Agreement was also amended by modifying the vesting
provisions of two classes of warrants to purchase 100,000 shares of common stock
such that instead of vesting on the earlier to occur of July 15, 2006 and the
public market stock price of $5.00, or greater, and $10.00, or greater, the
warrants now vest on the earlier of July 15, 2006 and attaining a public market
stock price (as defined) of $3.00 and $4.00, respectively, (for 90 consecutive
days). The Stimac Agreement was amended to provide for a lump sum payment equal
to two (2) times the annual salary plus incentive bonus if a change of control
of the Company is followed by termination of employment without cause (as
defined).
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ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND
MANAGEMENT
As of July 30, 1999, there were no persons known by the Company to beneficially
own more than five percent (5%) of any class of the Company's voting securities.
The following table sets forth certain information as of July 30, 1999, except
as noted, regarding the Common Stock held by each director and the Chief
Executive Officer of the Company and all directors and executive officers as a
group:
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Number of Shares of Common Percent of
Name and Position(s) Stock Beneficially Owned Class
-------------------- ------------------------ -----
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Charles M. Stimac, Jr....................... 411,896(1) 2.0%
President, Chief Executive Officer
and Director
Herbert L. Luxenburg........................ 233,326(1) 1.1%
Director
Frank E. Vaughn............................. 211,843(2) 1.0%
Director
William L. Shanklin......................... 397,707(2) 1.9%
Director
Norbert J. Lewandowski...................... 160,000(1)(2) 0.8%
Director
Directors and Executive Officers
as a Group (Six persons)............... 1,414,772(1)(2) 6.9%
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(1) Includes shares the directors have a right to acquire within 60 days
through the exercise of warrants and options: Mr. Stimac - 220,000; Mr.
Luxenburg - 233,326, Mr. Vaughn - 135,000; Dr. Shanklin - 295,000; Mr.
Lewandowski - 110,000; and all directors and executive officers - 933,326.
(2) Includes shares the directors have a right to acquire within 60 days
through the conversion of Preferred Stock: Mr. Vaughn - 75,000; Dr.
Shanklin - 100,000; Mr. Lewandowski - 50,000; and all directors and
executive officers - 225,000.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William L. Shanklin is serving as a marketing and management consultant to the
Company. For his services as a consultant from October 1997 through September
1998, Dr. Shanklin has been awarded five shares of the Company's Series A
Preferred Stock valued at $12,500 per share. Dr. Shanklin has been awarded
100,000 warrants priced at $.20 per share for services rendered from January 1,
1999 through June 30, 1999. Dr. Shanklin has extended his contract for
consulting services through December 31, 1999 for an additional 100,000 warrants
to be priced at $.20 per share.
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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.
ABC DISPENSING TECHNOLOGIES, INC.
By: /S/ Charles M. Stimac, Jr.
- --- --------------------------
Charles M. Stimac, Jr.
President
Principal Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
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Name Title Date
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/S/Charles M. Stimac, Jr. President & Director August 23, 1999
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Charles M. Stimac, Jr.
/S/Herbert L. Luxenburg Director August 23, 1999
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Herbert L. Luxenburg
/S/Frank E. Vaughn Director August 23, 1999
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Frank E. Vaughn
/S/Norbert J. Lewandowski Director August 23, 1999
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Norbert J. Lewandowski
/S/William L. Shanklin Director August 23, 1999
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William L. Shanklin
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