U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB-A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended: November 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ________________ to ______________.
Commission file Number: 0-18686
PAK MAIL CENTERS OF AMERICA, INC.
(Name of small business issuer in its charter)
Colorado 89-0934575
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3033 South Parker Road, Suite 1200, Aurora, Colorado 80014
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 303-752-3500
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001 per share
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, and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
----- -----
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Issuer'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. [X]
The Issuer's revenues for its most recent fiscal year were $4,164,330.
The aggregate market value of the Issuer's voting stock held as of a recent date
by nonaffiliates of the Issuer cannot be ascertained due to the absence of
reliable information as to quoted prices with respect to the Issuer's common
stock.
As of April 30, 1998, the Issuer had 2,989,483 shares of its $0.001 par value
common stock issued and outstanding.
Transitional small business disclosure format: YES NO X
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PAK MAIL CENTERS OF AMERICA, INC.
1997 FORM 10-KSB-A ANNUAL REPORT
AMENDMENT NO. 1
TABLE OF CONTENTS
Part III
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Page No.
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Item 10. Executive Compensation 1
Item 11. Security Ownership of Certain Beneficial Owners and Management 2
Item 12. Certain Relationships and Related Transactions 4
Signatures 7
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ITEM 10. EXECUTIVE COMPENSATION
Cash Compensation.
------------------
The following table shows all cash compensation paid by the Company for
services rendered during the fiscal years ended November 30, 1997, November 30,
1996 and November 30, 1995 to John E. Kelly and P. Evan Lasky (there were no
other executive officers of the Company whose annual salary and bonus exceeded
$100,000).
SUMMARY COMPENSATION TABLE
Name and
Principal Position Fiscal Year Salary Bonus
- ------------------ ----------- ------ -----
John E. Kelly 1997 $131,040 $44,554 (1)
President and Chief 1996 $126,000 $16,630 (1)
Executive Officer 1995 $120,000 $33,600 (1)
P. Evan Lasky 1997 $ 91,000 $21,840 (1)
Executive Vice 1996 $ 86,000 $11,000 (1)
President and Chief 1995 $ 80,500 $16,583 (1)
Operating Officer
(1) The bonus was earned in the fiscal year indicated, although it may have
been paid in the following fiscal year.
Option/SAR Grants and Long-Term Incentive Plans.
------------------------------------------------
Not Applicable.
Compensation of Directors--Standard Arrangement.
------------------------------------------------
Members of the Board of Directors, other than members who are also officers
of the Company, are entitled to receive a fee of $2,000 per year and $250 for
each attended meeting of the Board of Directors. During the fiscal year ended
November 30, 1997, the Company paid $2,000 to Mr. Grant and $2,000 to Mr. White
for service as a director. Other that the payments to Mr. Grant and Mr. White,
the Company has not paid any directors' fees.
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Compensation of Directors--Other Arrangements.
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Not Applicable.
Employment Contracts and Termination of Employment and Change of Control
- --------------------------------------------------------------------------------
Arrangements.
- -------------
Not Applicable.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners.
The following persons are the only persons known to the Company who as of
February 16, 1998, and as of April 30, 1998, owned beneficially more than 5% of
the Company's $0.001 par value common stock, its only class of outstanding
voting securities:
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class
- ------------------------------------ ----------------------- --------
D.P. Kelly and Associates, L.P. 298,400 (2) 9.1%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Pak Mail Investment Partnership L.P. 2,404,264 (3) 66.9%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Janie M. D'Addio 188,833 (4) 6.3%
c/o Security Manufacturing Corporation
815 South Main Street
Grapevine, Texas 76051
(1) The beneficial owners listed have sole voting and investment power with
respect to the shares shown unless otherwise indicated.
(2) Includes 280,000 shares of common stock underlying presently
exercisable warrants.
(3) Includes 604,264 shares of common stock underlying presently
exercisable warrants.
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(4) Information with respect to Ms. D'Addio's common stock is given to the
best of the Company's knowledge based upon the records of the Company's
transfer agent.
(b) Security Ownership of Management.
The following table shows as of February 16, 1998, and as of April 30,
1998, the shares of the Company's $0.001 par value common stock beneficially
owned by each director, each executive officer and by all the executive officers
and directors as a group:
Name and Address of Amount and Nature of
Beneficial Holder Beneficial Ownership Percent of Class
------------------ -------------------- ----------------
J. S. Corcoran 1,000(1) (4)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Raymond S. Goshorn 1,000 (4)
3033 S Parker Rd Suite 1200
Aurora, Colorado 80014
John W. Grant 800(2) (4)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
F. Edward Gustafson 20,000(1)(3) (4)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
John E. Kelly 12,000 (4)
3033 S Parker Rd Suite 1200
Aurora, Colorado 80014
William F. White 2,000 (4)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
P. Evan Lasky -0- (4)
3033 S Parker Rd Suite 1200
Aurora, Colorado 80014
Tonya D. Sarina -0- (4)
3033 S Parker Rd Suite 1200
Aurora, Colorado 80014
Alex Zai 112 (4)
3033 S Parker Rd Suite 1200
Aurora, Colorado 80014
All directors and officers as 36,912(1) 1.2%
a group (9 persons)
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(1) Excludes 1,800,000 shares of common stock owned by Pak Mail Investment
Partners, L.P. ("PMIP") and 604,264 shares of common stock underlying presently
exercisable warrants owned by PMIP. Mr. Corcoran and Mr. Gustafson are officers,
directors and shareholders of Norcross Corporation, 701 Harger Road, Suite 190,
Oak Brook, Illinois 60523, which exercises control over PMIP, and therefore may
be deemed to have the ability to vote or dispose of securities owned by PMIP.
Messrs. Corcoran and Gustafson disclaim beneficial ownership of the shares of
common stock owned by PMIP.
(2) The shares are owned jointly by Mr. Grant and his wife.
(3) Includes 6,000 shares of common stock owned by Mr. Gustafson's
children, for whom he acts as custodian; excludes 280,000 shares of common stock
underlying presently exercisable warrants owned by D. P. Kelly and Associates,
L.P. ("D.P. Kelly"). Mr. Gustafson is an executive officer of D.P. Kelly but
disclaims beneficial ownership of the 280,000 shares.
(4) Less than 1%.
(c) Changes in Control. Not Applicable.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a)(b) Transactions With Management and Others and Certain Business
Relationships.
The Company purchases mailboxes from Security Manufacturing Corporation
("Security") for resale to the Company's franchisees. Security is controlled by
Janie M. D'Addio, who owns 6.3% of the Company's $0.001 par value common stock.
During fiscal 1997 and fiscal 1996, the Company made purchases in the total
amounts of $82,128 and $64,300, respectively, from Security.
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(c) Parent Companies. PMIP owns a controlling interest in the Company
through its ownership of 1,800,000 shares of common stock, representing
approximately 60.2% of the outstanding common stock. In addition, PMIP owns
presently exercisable warrants (described below) to purchase 604,264 shares of
common stock, which, if exercised, will increase PMIP's ownership to
approximately 66.9% of the outstanding common stock of the Company.
In December 1997, the Company paid in full two outstanding promissory notes
with an original principal balance of $50,000 each to D.P. Kelly, an affiliate
and limited partner of PMIP. The promissory notes were made on February 14,
1996. In February 1998, D.P. Kelly became the beneficial owner of more than 5%
of the Company's outstanding shares of common stock.
In February 1998, effective November 30, 1997, PMIP and D.P. Kelly
relinquished any rights to dividends in the respective amounts of $604,264 and
$280,000 on the shares of Series A Preferred Stock and Series B Preferred Stock
they owned in the Company in exchange for shares of Series C Preferred Stock
with the same aggregate liquidation preferences as the Series A Preferred Stock
and Series B Preferred Stock they previously owned. In addition, as a part of
the exchange, PMIP and D.P. Kelly received warrants to purchase 604,264 shares
of the Company's common stock and warrants to purchase 280,000 shares of the
Company's common stock, respectively, that are exercisable until November 30,
2007 at an exercise price of $0.10 per share. The Series A Preferred Stock and
Series B Preferred Stock had cumulative dividends of $80 per year on each share
of Series A Preferred Stock; provided that, no dividends were payable on the
Series A Preferred Stock or Series B Preferred Stock until the Company's net
income from and after December 1, 1993, exceeded the product of $200,000
multiplied by the number of years elapsed from December 1, 1993, through the
last day of the fiscal year next proceeding the dividend due date with respect
to such year. The Series C Preferred Stock has cumulative dividends at the rate
of $60 per twelve month period commencing December 1, 1997, on each share of
Series C Preferred Stock. Cash dividends on the outstanding shares of Series C
Preferred Stock are payable on each March 31, commencing March 31, 1999.
Due to the restrictions on paying dividends on the Series A Preferred Stock
and Series B Preferred Stock as described in the preceding paragraph, the
accumulated dividends on the Series A Preferred Stock and Series B Preferred
Stock would continue to increase from year to year. As a result, the Board of
Directors of the Company believed that the continual accumulation of unpaid
dividends would possibly diminish the value of the outstanding common stock of
the Company. Further, the Board of Directors believed that the holders of the
Series A Preferred Stock and Series B Preferred Stock were entitled to receive a
return on their investment. The exchange of the Series A Preferred Stock and
Series B Preferred Stock for Series C Preferred Stock eliminates the increase in
obligations created by the accumulation of dividends on the Series A Preferred
Stock and Series B Preferred Stock and provides a potential return for the
holders thereof.
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The Series C Preferred Stock has no voting rights except that, without the
affirmative vote or consent of the holders of at least a majority of all
outstanding shares of Series C Preferred Stock, the Company may not amend its
Articles of Incorporation or Bylaws so as to adversely affect the powers,
preferences or special rights of the Series C Preferred Stock, the company may
not authorize, or increase the authorized amount of, any class or series of
stock, or any equity security convertible into stock of such class or series,
ranking senior to the Series C Preferred Stock in respect of the payment of
dividends or upon liquidation, dilution or winding up, and the Company may not
consummate any reclassification of the Series C Preferred Stock. The Series C
Preferred Stock is also entitled to vote on any matter in which the holders
thereof are required by Colorado law to have a vote and on any other matter with
respect to which the Company's Board of Directors shall direct.
Further, the affirmative vote or consent of the holders of the majority of
the outstanding shares of Series C Preferred Stock, voting or consenting
separately as a series, is required to approve any merger or consolidation of
the Company with or into any other corporation or entity, any sale, lease,
exchange or other transfer of all or substantially all of the assets of the
Company and any issuance of shares of common stock of the Company that would
cause the ownership of the outstanding shares of common stock by the holders of
shares of Series C Preferred Stock to be less than 51% of the outstanding Common
stock of the Company.
The Series A Preferred Stock and Series B Preferred Stock had similar
voting rights to the Series C Preferred Stock except that the Series A Preferred
Stock and Series B Preferred Stock were only entitled to be voted on a merger or
consolidation if thc terms of the merger or consolidation did not provide that
the terms of the Series A Preferred Stock and Series B Preferred Stock remained
unchanged and on a parity with or senior to any other class or series of capital
stock authorized by the surviving corporation as to dividends and upon
liquidation, dissolution or winding up except as to any such class or series of
preferred stock of the Company ranking senior to the Series A Preferred Stock
and Series B Preferred Stock either as to dividends or upon liquidation,
dissolution or winding up that was created prior to the merger or consolidation.
(d) Transactions With Promoters. Not Applicable.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PAK MAIL CENTERS OF AMERICA, INC.,
a Colorado corporation
By: /s/ John E. Kelly
------------------------------------
John E. Kelly, President and
Chief Executive Officer
By: /s/ Raymond S. Goshorn
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Raymond S. Goshorn, Chief Financial
Officer, Treasurer and Secretary
Dated: April 30, 1998.
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name and Title Signature Date
- -------------- --------- ----
J.S. Corcoran /s/ J.S. Corcoran April 30, 1998
Director ------------------------
John W. Grant /s/ John W. Grant April 30, 1998
Director ------------------------
F. Edward Gustafson /s/ F. Edward Gustafson April 30, 1998
Director ------------------------
John E. Kelly /s/ John E. Kelly April 30, 1998
Director ------------------------
William F. White /s/ William F. White April 30, 1998
Director ------------------------
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