SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
FORM 10-K/A
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1996
OR
_______ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 08354
nStor Technologies, Inc.
(Formerly IMGE, Inc.)
(exact name of registrant as specified in its charter)
Delaware 95-2094565
(State of Incorporation) (I.R.S. Employer ID No.)
100 Century Blvd., West Palm Beach, Florida 33417
(Address of principal executive offices)
Registrant's telephone number, including area code: 561-640-3131
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.05 per share
(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 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. Yes X No
PART I AND II
Registrant incorporates by reference, Parts I and II of
Registrants Form 10-K for the year ended October 31,
1996, filed with the Securities and Exchange Commission
on January 29, 1997.
PART III
Item 10. Directors and Executive Officers of the Registrant
MANAGEMENT
Directors and Executive Officers of the Company - Set forth
below is the name, age, position with the Company, the year in
which each was first appointed or elected an officer or director,
and certain other information with respect to each director and
executive officer:
Director Officer
Name Age Position Since Since
Michael L. Wise 53 Chairman of the Board 1989 - (1)
H. Irwin Levy 70 Director 1995 (2) -
Joseph D. Weingard 51 Director, Vice President 1995 (3) 1995 (3)
and Secretary
Mark F. Levy 41 Director and President 1992 (4) 1995 (4)
R. Daniel Smith 44 Director, President of January June 1996
nStor Corporation, Inc., 1997
the Company's operating
subsidiary
Jack Jaiven 50 Vice President and Chief - January
Financial Officer 1997 (5)
________
(1) Mr. Wise previously served as President of the Company from
March 1989 until December 1990 and from October 1992 until
July 1996.
(2) Mr. H. Irwin Levy previously served as Chairman of the Board
of Directors of the Company from 1987 until July 1991.
(3) Mr. Weingard previously served as a director and in various
executive capacities of the Company, including Chief Executive
Officer and Vice Chairman, from 1981 until January 1992.
(4) Mr. Mark Levy previously served as Vice President, Secretary,
and a director of the Company from 1985 to 1990.
(5) Mr. Jaiven previously served as Vice President and Chief
Financial Officer of the Company from July 1989 until June
1991.
Michael L. Wise has been associated with the Company in
various positions since 1986. Mr. Wise was the founder of IMNET
Corporation of Delaware and served as its President and Chairman of
the Board from July 1986 to June 1990. IMNET Corporation of
Delaware became a subsidiary of the Company in 1988. Mr. Wise has
a PhD in physics.
H. Irwin Levy is presently Chairman of the Board and Chief
Executive Officer of Hilcoast Development Corp. ("Hilcoast"), a
real estate developer, which position he has held since August
1992. Mr. Levy was Chairman of the Board and Chief Executive
Officer of CV Reit, Inc. ("CV Reit") from 1985 to July 1992. He is
currently of counsel to the West Palm Beach law firm of Levy Kneen
Mariani Curtin Wiener Kornfeld and del Russo.
Joseph D. Weingard has been a financial consultant in an
individual capacity since 1987 and is currently president of
Century Financial Advisors, Inc. Mr. Weingard was a director of
Hilcoast from August 1992 to February 1997, and a director of CV
Reit from May 1992 to July 1992. Mr. Weingard is a Certified
Public Accountant and holds real estate broker and mortgage broker
licenses.
Mark F. Levy is presently President of Cenvill Recreation,
Inc. and certain affiliated companies, all of which are privately
held businesses. Mr. Levy is licensed to practice law in the State
of Florida.
R. Daniel Smith was President and Chief Executive Officer of
Intelligent Manufacturing Systems, Inc. ("IMS"), a company engaged
in the development and sales of software technologies, from
September 1991 through October 1996. Effective November 1, 1996,
the Company acquired certain assets of IMS (see Certain
Transactions - Intelligent Manufacturing Systems, Inc.).
Jack Jaiven, a Certified Public Accountant, has been a
director, Executive Vice President and Chief Financial Officer of
Hilcoast and/or its subsidiaries since August 1992. Mr. Jaiven was
Vice President and Treasurer of CV Reit from December 1988 to July
1992.
Meetings and Committees of the Board of Directors
During the fiscal year ended October 31, 1996, the Board of
Directors held five meetings. No director attended fewer than 75
percent of the aggregate number of meetings of the Board of
Directors held during the period he served on the Board.
There were no committees of the Board of Directors during the
fiscal year ended October 31, 1996.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires the Company's directors and
executive officers, and persons who own more than ten percent of
the Company's outstanding Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock. Such persons
are required by SEC regulation to furnish the Company with copies
of all such reports they file.
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, the officers,
directors and greater than ten percent beneficial owners of the
Company have complied with all applicable Section 16(a) filing
requirements.
Item 11. Executive Compensation
The following table sets forth, for the fiscal years ended
October 31, 1996, 1995 and 1994, the compensation awarded to,
earned by or paid to those persons who were, during fiscal 1996,
(i) the Chief Executive Officer of the Company and (ii) the other
executive officers of the Company whose compensation is required to
be disclosed pursuant to the rules of the Securities and Exchange
Commission (collectively, the "Named Officers"). Michael Wise
served as Chief Executive Officer during the fiscal years ended
October 31, 1994 and 1995 and from November 1995 until July 1996,
at which time Mark Levy was appointed as the Company's Chief
Executive Officer.
Summary Compensation Table
Name and All Other Annual
Principal Position Year Salary Bonus Compensation (1)
Mark F. Levy, 1996 - - $36,000
President and Chief 1995 - - -
Executive Officer 1994 - - -
Michael Wise, 1996 - - $51,000
Chairman of the 1995 - - $48,000
Board 1994 - - $36,000
R. Daniel Smith, 1996 $65,400(2) - -
President, nStor 1995 - - -
Corporation, Inc. 1994 - - -
("nStor") the Company's
operating subsidiary
__________
(1) Generally consists of monthly management/consulting fees for services
rendered in the Named Officer's respective capacities as directors or
officers of the Company, including evaluating potential acquisitions
and/or investments and services provided to the Company for previous
years, primarily monitoring the Company's investment in IMNET Systems,
Inc. and providing necessary corporate and public company functions.
(2) Represents salary received by Mr. Smith commencing June 3, 1996, the
date nStor acquired certain net assets from Seagate Peripherals, Inc.
Mr. Smith's compensation package initially was to consist of an annual
salary of $150,000 plus a bonus equal to 20% of nStor's cumulative net
operating profit. Effective October 14, 1996, Mr. Smith's compensation
package was amended to eliminate the bonus and increase his annual
salary to $250,000.
Option/SAR Grants
The following table sets forth information regarding options to
purchase the Company's Common Stock granted pursuant to the 1996
Stock Option Plan during the fiscal year ended October 31, 1996 to
the Named Officers. No SARs were granted.
Individual Grants Potential
------------------- Realizable
Percent Value
Number of of Total at Assumed
Securities Options/ Annual Rates
Underlying SARs of Stock Price
Options/ Granted to Exercise Appreciation
SARs Employees or Base Expira- for Option Term
Granted in Fiscal Price tion --------------------
(#) (1) Year ($/sh) Date 5%($) 10%($)
---------- ---------- -------- ------- ---------- ----------
R. Daniel
Smith 1,000,000 100% $2.10 10/05/06 $3,420,679 $5,446,859
__________
(1) Option awards reported for fiscal 1996 were granted October 5, 1996.
Options become exercisable in equal annual installments of 200,000 shares
commencing October 5, 1997.
Aggregated Fiscal Year-End Option Value Table
The following table sets forth certain information concerning
unexercised stock options held by the Named Officers as of the end
of the 1996 fiscal year. No stock options were exercised by any of
the Named Officers during the 1996 fiscal year. No stock
appreciation rights have been granted or are outstanding.
OPTION EXERCISES DURING 1996 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Value of Unexercised
Shares Unexercised Options at In-the-Money Options at
Acquired 1996 Fiscal Year End (#) 1996 Fiscal Year End($)(1)
on Value ------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
R. Daniel
Smith -0- -0- -0- 1,000,000 -0- $210,000
__________
(1) The closing price for the Company's Common Stock, as reported by the
National Association of Securities Dealers Automated Quotation System on
October 31, 1996, was $2.31. Value is calculated by multiplying (a) the
difference between $2.31 and the option exercise price by (b) the number
of shares of Common Stock underlying the option.
Compensation Committee Interlocks and Insider Participation
Since the Board does not have a Compensation Committee, the
entire Board of Directors participated in deliberations concerning
compensation paid to the Company's executive officers.
Accordingly, the following executive officers or former executive
officers participated in the Board of Directors deliberations
concerning executive officer compensation: Michael Wise, Joseph
Weingard and Mark Levy.
Item 12. Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth, as of January 31, 1997,
information with respect to the beneficial ownership of the
Company's Common Stock by (i) each person known by the Company to
beneficially own more than 5% of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each of the five
most highly compensated executive officers of the Company, and (iv)
all directors and executive officers of the Company as a group.
Amount and
Nature of Percent of
Name and Address of Beneficial Outstanding
Beneficial Owner Ownership (1) Shares
H. Irwin Levy 3,243,767 17.3%
100 Century Blvd.
West Palm Beach, FL 33417
Michael L. Wise 1,041,312 (2) 5.5%
285 Tanglewood Crossing
Lawrence, NY 11559
R. Daniel Smith 1,000,000 5.4%
450 Technology Park
Lake Mary, FL 32746
Joseph D. Weingard 921,780 (3) 4.9%
185 NW Spanish River Blvd.
Boca Raton, FL 33431
Mark F. Levy 687,500 (4) 3.7%
100 Century Blvd.
West Palm Beach, FL 33417
Jack Jaiven 53,000 (5) (6)
19146 Lyons Road
Boca Raton, FL 33434
All executive officers and 6,947,359 36.4%
directors as a group
__________
(1) Unless otherwise indicated, each stockholder listed has the
sole power to vote and direct disposition of the shares of
Common Stock shown as beneficially owned by such stockholder.
For purposes of this table, a person or group of persons is
deemed to have "beneficial ownership" of the following shares
which such person or group has the right to acquire pursuant
to options exercisable within 60 days: Mr. H. Irwin Levy -
80,000 shares; Mr. Wise - 160,000 shares; Mr. Weingard -
80,000 shares; Mr. Mark F. Levy - 80,000 shares; Mr. Jaiven
- 25,000 shares; and all executive officers and directors as
a group - 425,000 shares. See "Executive Compensation".
(2) Includes 84,000 shares owned directly by Mr. Wise and 227,410
shares owned by a retirement trust controlled by Mr. Wise.
The balance, as to which Mr. Wise disclaims beneficial
ownership, consists of 389,502 shares owned by Mr. Wise's
wife, 130,000 shares owned by Mr. Wise's children and 50,400
owned jointly by Mr. Wise's wife and his mother.
(3) Includes 645,002 shares owned jointly with Mr. Weingard's
wife. Also includes 3,000 shares as to which Mr. Weingard
disclaims beneficial ownership, owned individually by Mr.
Weingard's wife.
(4) Includes 7,500 shares as to which Mr. Levy disclaims
beneficial ownership, owned by Mr. Levy as guardian for his
children.
(5) Includes 24,500 shares owned by Mr. Jaiven's wife. Also
includes 3,500 shares as to which Mr. Jaiven disclaims
beneficial ownership, owned by Mr. Jaiven's adult children.
(6) Less than 1%.
Item 13. Certain Relationships and Related Transactions
Consulting and Advisory Agreement with Hilcoast Advisory Services,
Inc. ("Advisor")
Since July 1, 1996, Advisor has provided certain financial
consulting and administrative services to the Company under a one-year
agreement which provides for the payment of $6,000 per month,
plus reimbursement for all out-of-pocket expenses, and which may be
terminated by the Company upon 60 days notice and by Advisor upon
180 days notice. H. Irwin Levy is the Chairman of the Board, Chief
Executive Officer and a principal shareholder of Hilcoast, the
parent of Advisor. Mr. Jaiven is a vice president and director of
Advisor. Management believes that the terms of this agreement are
no less favorable to the Company than those that would be received
from other sources.
Intelligent Manufacturing Systems, Inc. ("IMS")
R. Daniel Smith is the Chief Executive Officer and sole
shareholder of IMS, which, until November 1, 1996, specialized in
providing software solutions. In July 1996, nStor purchased an
integrated software package from IMS, including installation,
consulting and training support, at a cost of approximately
$172,000. The software package was purchased to facilitate the
internal operations of nStor and includes finance, planning and
production, sales and marketing, service and engineering modules.
Management believes that the terms of this transaction were no less
favorable to nStor than those that would be paid to other vendors.
Effective November 1, 1996, nStor purchased substantially all
of the assets of IMS, consisting of computer hardware and software,
furniture and other equipment. The purchase price amounted to
approximately $135,000, which amount has been agreed to be paid to
IMS during 1997. Management believes that the terms of this
transaction were no less favorable to the Company than those that
would be received from other sources.
PART IV
Registrant incorporates by reference, Part IV of
Registrant's Form 10-K for the year ended October 31,
1996, filed with the Securities and Exchange Commission
on January 29, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 and 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.
nSTOR TECHNOLOGIES, INC.
By:_____________________________________
Jack Jaiven, Vice President
Dated: February 28, 1997
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.
February 28, 1997 ______________________________________
Mark F. Levy, President and Director
February 28, 1997 ______________________________________
Joseph D. Weingard, Vice President,
Secretary and Director
February 28, 1997 ______________________________________
Jack Jaiven, Vice President,
Principal Financial Officer and
Principal Accounting Officer
February 28, 1997 ______________________________________
H. Irwin Levy, Director
February 28, 1997 _____________________________________
R. Daniel Smith, Director
February 28, 1997 ____________________________________
Michael L. Wise, Director
