Registration No. 33-64091
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM SB-2
Registration Statement
Under the
Securities Act of 1933
(Amendment No. 1)
ZING TECHNOLOGIES, INC.
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(Name of Small Business Issuer in Its Charter)
New York 5065 13-265062
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(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Classification Identification No.)
Incorporation Code Number)
or Organization)
115 Stevens Avenue, Valhalla, New York 10595, (914) 747-7474
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(Address and Telephone Number of Principal Executive Offices)
115 Stevens Avenue, Valhalla, New York 10595
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(Address of Principal Place of Business or Intended Principal Place of Business)
Mr. Robert Schrader, c/o
Zing Technologies, Inc.,
115 Stevens Avenue, Valhalla, New York 10595, (914) 747-7474
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(Name, Address and Telephone Number of Agent For Service)
With copies to:
Henry A. Singer, Esq.
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
(212) 735-8677
Approximate Date of Proposed Sale to the Public: From time to
time after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. / /
----------------------------------------------------------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
-------------------------
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. / /-----------------------------
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CALCULATION OF REGISTRATION FEE
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Proposed
Title of Each Proposed Maximum
Class of Dollar Maximum Aggregate
Securities Amount to be Offering Price Offering Amount of
to be Registered Registered Per Unit Price Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $2,740,622.50 $13.75 * $2,740,622.50 $945.04
par value $.01 per
share
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</TABLE>
*Estimated solely for the purposes of determining the
registration fee. This amount, calculated pursuant to Rule
457(c), was based on the average of the high and low prices of
the Registrant's Common Stock on November 1, 1995, as reported on
the NASDAQ - National Market System.
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The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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CROSS REFERENCE SHEET
Pursuant to Rule 501(a)(4)
of Regulation S-B showing location
in Prospectus of Information Required
By Items in Part I of Form SB-2
Location/Caption
Item in Prospectus
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1. Front of Registration Statement
and Outside Front Cover of Prospectus . . . . . . Outside front
cover page
2. Inside Front and Outside
Back Cover Pages of Prospectus . . . . . Inside front and outside
back cover pages
3. Summary Information and Risk Factors . . . . . . . . Risk Factors
4. Use of Proceeds . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . . Not Applicable
6. Dilution . . . . . . . . . . . . . . . . . . . . . Not Applicable
7. Selling Security Holders . . . . . . . . . . Selling Shareholders
8. Plan of Distribution . . . . . . . . . . . Plan of Distribution/
Sale of Shares
9. Legal Proceedings . . . . . . . . . . . . . . . . Not Applicable
10. Directors, Executive Officers,
Promoters and Control Persons . . . . . . . . . . . . Management
11. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . Security Ownership
12. Description of Securities . . . . . . . . . . . . . Common Stock
13. Interest of Named Experts
and Counsel . . . . . . . . Management -- Certain Transactions;
Legal Matters; Selling Shareholders
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14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities . Indemnification
15. Organization Within Last Five Years
Management -- Certain Transactions
16. Description of Business . . . . . . . . . . . . . . The Company
17. Management's Discussion and Analysis
or Plan of Operation . . . . . . . . . . . . . . . Not Applicable
18. Description of Property . . . . . . . . . . . . . . The Company
19. Certain Relationships and Related
Transactions . . . . . . . . . Management -- Certain Transactions
20. Market for Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . Common Stock
21. Executive Compensation . . . . . . . . . . . . . . . . Management
22. Financial Statements . . . . . . . . . . . . Financial Statements
23. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure . . . . . . Not Applicable
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PROSPECTUS
ZING TECHNOLOGIES, INC.
199,318 Shares of Common Stock
(Par Value $.01 Per Share)
This Prospectus relates to 199,318 shares (the "Shares") of
common stock, par value $.01 per share (the "Common Stock"), of Zing
Technologies, Inc., a New York corporation (the "Company"), which may
be sold from time to time by the selling shareholders named herein
(the "Selling Shareholders"). See "Selling Shareholders" below. The
Shares have been issued or are issuable to the Selling Shareholders
upon the exercise of certain warrants (each a "Warrant") granted to
the Selling Shareholders in connection with their past compensation as
officers, directors or employees of the Company. The Company has
received or will receive approximately $1.34 for each Share issued
upon the exercise of a Warrant. The Company will not receive any of
the proceeds from the sale of the Shares by the Selling Shareholders.
The expenses of registration incurred in connection with this
offering, up to $.15 per share, together with all selling and other
expenses incurred by the Selling Shareholders in connection with the
sale of the Shares, will be borne by the Selling Shareholders.
Expenses of registration in excess of $.15 per share, if any, will be
borne by the Company. The Company is not aware of any underwriting
arrangements with respect to the sale of any of the Shares by the
Selling Shareholders.
The Shares may be offered by or for the account of the Selling
Shareholders, from time to time, on the NASDAQ National Market System
or on any stock exchange on which the Shares may be listed at the time
of sale, in negotiated transactions, or through a combination of such
methods of sale, at fixed prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to or
through broker-dealers who may receive compensation in the form of
discounts, concessions, or commissions from the Selling Shareholders
and/or the purchasers of the Shares (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
Any broker-dealer acquiring Shares from a Selling Shareholder may sell
such Shares in its normal market making activities, through other
brokers on a principal or agency basis, in negotiated transactions, or
through a combination of such methods. See "Selling Shareholders" and
"Plan of Distribution/Sale of Shares".
The Common Stock is traded in the NASDAQ National Market System
under the symbol "ZING". On November 1, 1995, the average of the high
and low prices for shares of the Common Stock was $13.75 per share, as
reported on the NASDAQ National Market System.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
<PAGE>
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<CAPTION>
Underwriting
Discounts and Proceeds to Issuer
Price to Public and Commissions or Other Persons(1)
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<S> <C> <C> <C>
Per Share Total 100% 0% 100%
</TABLE>
(1)The Selling Shareholders may effect transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions from the
Selling Shareholders. See "Plan of Distribution/Sale of Shares."
The date of this Prospectus is November 16, 1995.
[End of Outside Front Cover.]
[Inside Front or Outside Back Cover]
No person has been authorized to give any information or to make any
representation other than as contained or incorporated by reference in this
Prospectus, and any information or representation not contained or incorporated
by reference herein should not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer of any securities
other than those described on the cover page or an offer to sell or a
solicitation of an offer to buy the Shares in any State or other jurisdiction
where, or to any person to whom, it is unlawful to make such offer. Neither
the delivery of this Prospectus nor any sales made hereunder, under any
circumstances, shall create any implication that there has been no change
in the affairs of the Company between the date hereof and the date of any such
sale.
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TABLE OF CONTENTS
Section Page
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RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . 4
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECURITY OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . 20
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . 22
PLAN OF DISTRIBUTION/SALE OF SHARES . . . . . . . . . . . . . . . 24
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . 25
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 25
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . 26
INDEX TO FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . 27
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
in accordance therewith, files reports, proxy statements, and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements, and other information
can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices: the Northeast
Regional Office, Seven World Trade Center, Suite 1300, New York, New
York 10048, and the Midwest Regional Office, Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of such material can be obtained by written request from
the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Common Stock
is traded on the NASDAQ National Market System, and the Company's
reports and proxy statements may be inspected at the offices of the
National Association of Securities Dealers, Inc., located at 1735 K
Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a registration statement
(the "Registration Statement") on Form SB-2 filed by the Company with
the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Shares offered by this
Prospectus. This Prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby made
to the Registration Statement and related exhibits for further
information with respect to the Company and the Shares offered hereby.
Statements in this Prospectus as to the contents of exhibits are not
necessarily complete, and each statement is qualified in all respects
by reference to the copies of documents filed or incorporated by
reference as an exhibit to the Registration Statement or otherwise
filed with the Commission. See also "Incorporation of Certain
Documents by Reference".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (or parts thereof) filed by the Company
with the Commission are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1995;
2. The Company's Definitive Proxy Statement, dated
August 10, 1995; for the Annual Meeting of
Shareholders held on September 12, 1995;
3. The Company's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1995;
4. All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the Annual Report referred to in (1)
above; and
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5. The description of the Common Stock contained in the
registration statement filed under the Exchange Act
registering such Common Stock under Section 12 of the
Exchange Act, including any amendment or report filed for
the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the filing of a post-effective amendment indicating that all
of the Shares have been sold, or deregistering all of the Shares that,
at the time of such post-effective amendment, remain unsold, shall be
deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement
contained herein or in any document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
other subsequently filed document, which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company shall furnish without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of such person, a copy of
any or all of the documents which are incorporated by reference herein
(other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Written
or telephone requests for such documents should be directed to Deborah
J. Schrader, Secretary, Zing Technologies, Inc., 115 Stevens Avenue,
Valhalla, New York 10595. The Company's telephone number is (914)
747-7474.
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RISK FACTORS
The following factors should be carefully considered in
evaluating the Company, its two subsidiaries, Omnirel Corporation
("Omnirel") and Transition Analysis Component Technology, Inc.
("TACTech"), and their respective businesses before purchasing the
securities offered hereby.
Dependence Upon Major Customers/Projects for Omnirel Products
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Sales of various industrial products to a single customer
represented 19% of Omnirel's sales revenues for the Fiscal Year 1994
and 65% of Omnirel's sales revenues for fiscal year 1995. A single
project accounted for approximately 16% of Fiscal Year 1994 sales and
63% of fiscal year 1995 sales. Because of Omnirel's dependence on
sales to one major customer in Fiscal Years 1994 and 1995, and
anticipated dependence on sales to such customer in Fiscal Year 1996,
which, based on existing orders are expected to be less than in 1995,
there can be no assurance that fiscal 1996 sales will match 1995
sales, or that, in the event sales to such major customer decline over
the succeeding years, Omnirel will be able to compensate for the loss
of such sales in Fiscal Year 1996 and beyond.
Decline in Defense and/or Aerospace Spending
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Although Omnirel's military, defense and aerospace business
represents a decreasing percentage of its overall sales in recent
years (and, therefore, is decreasing in its significance), the
businesses of both Omnirel and TACTech continue to depend to a
substantial extent upon sales to military, defense and aerospace
contractors. In the event that military, defense and/or aerospace
spending were to decline significantly over the next several years,
sales by Omnirel and TACTech could suffer a corresponding or greater
decline. In such event, both companies would have to seek replacement
markets in other industries. There can be no assurance that such
markets would be available or that either company would be successful
in penetrating them.
Dependence on Key Personnel
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The businesses of Omnirel and TACTech are substantially dependent
upon the active participation and technical expertise of their
executive officers. Omnirel is dependent upon the services of John F.
Catrambone, its Chief Executive Officer, while TACTech is dependent
upon Malcolm Baca, its Executive Vice President and Chief Operating
Officer. The Company currently maintains key-man life insurance
policies on both such executive officers in the amounts of $1,500,000
and $1,700,000, respectively. Omnirel also maintains a key-man life
insurance policy on Mr. Catrambone in the amount of $2,500,000. Both
the Company's and Omnirel's Boards of Directors regularly re-evaluate
the need for and amount of such key-man life insurance. There can be
no assurance, however, that the Company or Omnirel can obtain
executives of comparable expertise and commitment in the event of
death, or that the business of the Company would not suffer material
adverse effects as the result of the death
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(notwithstanding coverage by key-man insurance), disability or
voluntary departure of any such executive officer.
Absence of Dividends
- --------------------
The Company does not currently intend to pay cash dividends on
its Common Stock. The Board of Directors present policy is to retain
earnings to provide funds for the operations and expansion of the
Company's business. The Company's dividend policy is reviewed from
time to time by its Board of Directors in light of its earnings and
financial condition, its research and development and other needs, and
such other business considerations as the Board of Directors considers
pertinent.
Competition
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Although the market for multi-chip power modules and packaged
semiconductor components is fragmented and no single company maintains
a dominant position, it is nevertheless highly competitive among the
five manufacturers (including Omnirel) who collectively account for
approximately 65% of sales to such market. Omnirel believes that its
products and technologies can compete favorably with the products of
its principal competitors. Nevertheless a few of these competitors
have greater financial, marketing, servicing and research and
development resources than those of Omnirel. There can be no
assurance that existing or potential competitors will not develop and
market products that are superior or perceived to be superior to
multi-chip power modules and other products supplied by Omnirel.
TACTech's license agreements are cancelable on thirty (30) days'
notice. Approximately 50% of TACTech's information for its data bases
comes from numerous companies in the private sector. Accordingly,
there can be no assurance that existing arrangements with private
suppliers of data will continue in effect or, if they are canceled,
that TACTech will be able to enter into arrangements with other
suppliers on terms as beneficial to TACTech as those presently in
effect. Moreover, there can be no assurance that other companies,
including existing customers of TACTech, will not avail themselves of
sources of data to develop their own software and data base services
either in competition with TACTech or to enable them to have their own
sources for such services. TACTech's software services and data bases
are protected by trade secret provisions of license agreements and by
copyright laws, but because such provisions and laws are frequently
difficult or costly to enforce, there can be no assurance that such
protection will prove effective.
Technological Change and New Product Development
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In the event of changes in the structure of the computer hardware
systems used by subscribers to operate TACTech's data base software,
TACTech would incur capital costs for new equipment and development
costs in connection with the reconfiguring of its software programs,
which costs could be substantial and could have an adverse effect on
TACTech's profitability. In addition, TACTech regularly incurs
capital costs in connection with its new
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product development in advance of their being ready for market, and
there can be no assurances that such new products will prove
profitable.
THE COMPANY
The Company is a holding company with one material 98% owned
operating subsidiary, Omnirel (approximately 84% owned by the Company
on a fully diluted basis), and one non-material 90% owned operating
subsidiary, TACTech. The Company was incorporated in New York on
October 17, 1969.
Background and Business
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Since June 26, 1991, when the Company acquired Omnirel, the
Company has engaged in the manufacture and sale of high reliability
power semiconductor multi-chip modules and packaged semiconductor
components in its niche market and has expanded its distribution into
the high-end commercial and industrial market.
High reliability power semiconductor multi-chip modules are
defined as electronic components and are single-package devices with a
power dissipation of five watts or more. They combine active power
semiconductor components and passive components (such as capacitors
and resistors) which form integrated smart power electronic circuits
which control, drive and regulate the input and output of power
(electricity) in motion control and power supply applications for use
in electronic systems and equipment. Omnirel manufacturing techniques
and design standards for the military and high-reliability industrial
markets are more exacting than is the case for commercial general
purpose hybrid circuit components. The products manufactured by
Omnirel include custom designed products as well as standard commodity
products.
Omnirel produces both standard and custom products in a clean
room environment and is certified to MIL-STD 1772, the highest level
of military certification for a hybrid circuit manufacturer, and is
registered to ISO 9001. Omnirel's products are used where circuit
density (including miniaturization), electrical performance and
reliability are critical design requirements, such as in the defense,
aerospace, commercial transportation and medical device industries.
Omnirel's products are also used in the production of industrial
controls and power supplies where these same criteria are needed.
TACTech licenses proprietary computer software databases to
military semiconductor manufacturers, the Department of Defense and
defense contractors. The databases provide the end users with
information useful in determining the projected life cycle
(obsolescence) of microcircuits and discrete semiconductor devices
used primarily in the manufacture of systems for military and
aerospace applications. TACTech software also contains a description
and the general specification of each microcircuit and discrete
semiconductor device, thereby allowing
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the user to identify functionally interchangeable devices from various
manufacturers and to upgrade and rank the devices according to life
cycle and availability based on sources of supply. The TACTech
database is believed to include virtually all standard microcircuits
and discrete devices with high reliability specifications used
primarily for military or aerospace application. The database is
constantly updated and delivered on a real-time or near real-time
basis. TACTech is not presently a material subsidiary to the Company.
Until May 19, 1993, the Company was principally engaged in the
business of distributing high reliability electronic semiconductor
components used in military and aerospace equipment and providing
value-added services under the name Zeus Components, Inc. It was one
of the largest distributors in this niche market, representing over
thirty semiconductor manufacturers, with a product line which
consisted of integrated circuits, discrete semiconductors, and passive
components. Integrated circuits generally are sold at higher unit
prices and at higher unit gross profit margin than discrete
semiconductors. Passive components generally consist of capacitors
and resistors.
On May 19, 1993, the Company sold the net assets of its high
reliability electronic component distribution and value added service
businesses to Arrow Electronics, Inc. (the "Arrow Sale"). Arrow is
the world's largest electronic components distributor. The purchase
price was $24,254,000, representing a premium of approximately
$3,000,000 over the net book value of the assets transferred. In May
1996 the Company is entitled to receive up to $2,000,000 from Arrow as
additional purchase price depending on the performance of Arrow's high
reliability electronic components and value-added business. Based
upon information received to date, the Company believes sales are
running at a rate which would make it more likely than not that some
or all of the $2,000,000 will be realized by the Company.
Competition
- -----------
The market for high reliability power semiconductor multi-chip
modules is fragmented. There is no single firm which maintains a
dominant position, either in technology or in market share. Based on
recent industry publications of Frost & Sullivan, Moody Associates and
the Semiconductor Industry Association, the total available market for
high reliability power semiconductor multi-chip modules within the
United States was approximately $300,000,000 in 1993 and $330,000,000
in 1994, and is expected to grow at a rate greater than 10% per annum
during the later 1990's. The market for power hybrid products which
Omnirel addresses is in excess of $125,000,000 a year and
approximately 65% of the sales to such market are made by five
manufacturers (including Omnirel) of power hybrid components. Omnirel
is the only such manufacturer whose primary focus is on high
reliability power semiconductor multi-chip modules. The principal
competitors of Omnirel are other hybrid manufacturers, original
equipment manufacturers with internal capability and power
semiconductor manufacturers who offer multi-chip modules as a
complementary product line. Omnirel distinguishes itself in the
marketplace principally on the strength of its focus on power
applications. It has complete design, manufacturing and high
reliability screening capabilities in-house, and has developed a
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reputation for innovative solutions for customer needs. The Company
also competes on the basis of pricing and delivery.
Marketing and Sales
- -------------------
Omnirel markets its products through four regional sales managers
in the United States and twenty-five sales representative
organizations world-wide. Omnirel sells both standard and custom
products to approximately two hundred customers world-wide. Standard
products are sold both through distributors and directly to customers.
Custom products are sold directly to customers.
Omnirel publishes and distributes to its existing customers and
potential new customers a catalogue of its standard products. Omnirel
management has focused its marketing effort in the United States where
nineteen independent sales representatives are coordinated by
Omnirel's sales management. Key accounts are also covered by area
managers in each sales region. Six representatives/distributors are
currently in place in Europe marketing Omnirel's products.
Omnirel's customers are primarily major electronic equipment and
systems manufacturers such as General Electric, Loral, Bendix,
Hamilton-Standard, Hughes Aircraft, Boeing, Texas Instruments,
Raytheon and Motorola. Sales of various products to General Electric
representing multiple industrial and military/aerospace programs at
four separate locations aggregated 65% of Omnirel's sales revenues for
fiscal year 1995 of which a single project accounted for approximately
63% of 1995 sales. Based upon orders already placed, sales to General
Electric are expected to represent a significant portion of Omnirel's
fiscal 1996 sales. The Company expects that the current General
Electric orders will be filled during the first three quarters of
fiscal 1996, and while additional sales to such customer are likely,
revenues from General Electric are expected to decline significantly
over the next several years. The amount of the decline is dependent
upon factors such as the level of General Electric's business, whether
Omnirel continues as General Electric's sole source supplier and
whether Omnirel can produce the products required by General Electric
based upon changing technology. Arrow is Omnirel's exclusive
distributor of its single and multi-chip semiconductor devices for a
period ending December 31, 1996.
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Omnirel's customers outside the United States and export sales
outside the United States are as follows:
1995 1994 1993
- --------------------------------------------------------------------------------
(000's omitted)
Canada $67 $89 $ --
Europe 172 183 249
Mid East
(Israel) 99 30 24
Far East (Japan) 12 5 4
South Pacific
(Australia) 12 151 44
--- ---- ---
Total $362 $458 $321
=== === ===
Omnirel's backlog on June 30, 1995 was $15,900,000; $9,100,000 of
which is represented by the General Electric order. Approximately 90%
of the backlog is deliverable over the next 12-month period.
For the fiscal years 1995, 1994, and 1993 Omnirel did not enter
into any contracts with either customers of the United States
Government or any agency of the United States Government. Omnirel
sells its products to subcontractors of certain government agencies
through customer purchase orders. Cancellation of purchase orders
from time to time is customary in the power hybrid component industry.
Under standard industry practices, in the event of cancellation,
Omnirel is entitled to reimbursement of costs incurred and a
reasonable profit for work performed prior to the cancellation.
The sale of Omnirel products is not seasonal. However, the
timing of sales to Omnirel's principal customer was concentrated
predominantly in the fourth quarter, and to a lesser extent the third
quarter, of fiscal 1995.
Product Warranty
----------------
Omnirel warrants that its products are free from defects in
workmanship and meet with the agreed upon specifications supplied by
the customer or Omnirel's current published specifications. Omnirel's
liability for defective products is limited solely to replacement
thereof upon receipt from the customer of notice of breach of warranty
within varying periods of between three (3) and twelve (12) months of
the date of shipment, depending upon the product. Omnirel disclaims
any liability for a customer's cost of replacement of defective
products, for lost profits, loss of use and consequential damages.
Omnirel also disclaims any warranty or merchantability and all other
warranties, express or implied.
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Suppliers and Materials Used
----------------------------
Unpackaged semiconductors, in chip form and other components such
as capacitors and resistor chips or surface mount devices, metal and
plastic packages and ceramic materials are used by Omnirel in the
manufacture of its products. These materials and components, none of
which is presently in short supply, are purchased from time to time on
the open market, and Omnirel has no long term commitments for their
purchase. Omnirel is not dependent on any one supplier for a primary
material. Omnirel has agreements with a number of premier
semiconductor manufacturers which allow Omnirel to buy products
directly from such manufacturers. These agreements also allow Omnirel
to be apprised of technological advances and developments.
Patents, Trademarks and Licenses
--------------------------------
Omnirel does not possess any patents for proprietary
manufacturing processes. Omnirel believes, however, that its
proprietary processes and product technologies are such that they give
it a unique position in the design and manufacture of power
semiconductor hybrids and multi-chip modules using semiconductor
assembly technology. The Omnirel name and logo are unique trademarks.
While Omnirel considers that in the aggregate its trademarks are
important in its operation, it does not consider that one or any group
of trademarks is of such importance that termination could materially
affect its business. TACTech maintains copyright protection for its
computer software, and claims proprietary trade secret protection
through customer licensing agreements.
Inventory
---------
Omnirel follows industry standards for procurement, sale and
return of its inventory. Materials are procured based upon purchase
orders which have standard terms and conditions including the right of
return for inferior quality or non-compliance with purchase order
terms. Omnirel inventory is maintained at its principal place of
business in storage facilities with temperature and humidity controls.
Omnirel stocks inventory for standard products, and for certain of its
custom products.
Environmental Compliance
------------------------
Omnirel does not use hazardous materials in its manufacturing
process nor does the manufacturing process result in the discharge of
potentially hazardous material. Omnirel does not expect to incur
significant expenditures relating to environmental compliance.
Research and Development
------------------------
Generally, Omnirel's research and development expenditures
involve engineering and design of custom products for specific
applications, development of new packaging techniques and development
of packaging for new semiconductor devices. Research and development
10
<PAGE>
expenditures for the fiscal years ended June 30, 1995, and June 30,
1994, and the nine months ended June 30, 1993 were $1,055,000,
$841,000, and $808,000, respectively or 4.7%, 7.3% and 1.5% of sales
in those respective periods.
Employees
---------
As of June 30, 1995, Zing had 157 employees, 102 of whom were
employed by Omnirel in a manufacturing capacity and 34 in clerical,
administrative, engineering or sales positions at Omnirel. The
Company employs four people in executive or administrative functions,
and TACTech employs five computer programmers and an additional 12
persons in clerical, sales, customer support and administrative roles.
None of Zing's employees are covered by a collective bargaining
agreement.
In March 1995, in exchange for the shares of Omnirel common stock
owned by Omnirel's president and his release of his rights to
participate in Omnirel's Management Incentive Rights Plan ("MIRP"),
Omnirel granted its president options to purchase up to an aggregate
of 100,000 shares of Omnirel's common stock pursuant to Omnirel's 1995
Non-Qualified Stock Option Exchange Plan. Also in March 1995 in
exchange for their release of rights to participate in the MIRP and
concurrently with the grant of options to Omnirel's president, Omnirel
granted to other executive employees options to purchase up to an
aggregate of 34,000 shares of Omnirel's common stock pursuant to
Omnirel's 1995 Non-Qualified Stock Option Plan. As a result of such
exchange of shares and the option grants described above, the
Company's direct ownership of Omnirel's outstanding shares increased
from approximately 96% to approximately 98%; and, on a fully diluted
basis, the Company's ownership of Omnirel could be reduced to
approximately 84%.
Properties
----------
The Company leases 750 square feet at a modern office building
located in Valhalla, New York, where it maintains its executive
offices. The Company pays an annual rent of $15,000 for the Valhalla
space. The lease term expires on October 31, 1996. The Company uses
all of the leased space.
Omnirel owns a 6.5 acre parcel of land with a 38,000 square foot,
one story, modern facility located in Leominster, Massachusetts, where
Omnirel manufactures its products in a clean-room environment.
Omnirel's processes are certified to MIL-STD 1772 and registered to
ISO 9001. Approximately 12,000 square feet of the Company's facility
is rated and certified as a class 10,000 clean-room environment. This
location houses all of the operations of Omnirel Corporation. This
clean room facility is equipped with design, manufacturing, electrical
test and environment screen equipment which are state-of-the-art.
Substantially all of Omnirel's facility is productively in use.
11
<PAGE>
TACTech is currently leasing a facility in Yorba Linda,
California from Arrow Electronics on a month-to-month basis at a cost
of $3,500 per month. Approximately 40% of TACTech's facility is in
productive use.
The Company does not currently have a formal policy in place
specifically addressing investments in real estate and real estate
related products. However, the Company's general investment
objectives are to invest a majority of its available funds in
relatively low risk liquid investments or publicly traded securities
and to achieve a maximum aggregate return comprised of both capital
appreciation and income distributions consistent with such
investments. Although such investments may include real estate and
real estate related products, other than the real property described
above, they currently do not. The Company can alter its investment
policies and investment portfolio at anytime without shareholder
consent.
12
<PAGE>
MANAGEMENT
Directors
---------
The names and ages of all Directors of the Company, their
positions with the Company, their term of office and their business
background are set forth below:
Director of
Name, Age, Principal Occupation, Other Directorships Zing Since
---------------------------------------------------- -----------
JOHN F. CATRAMBONE, 55, has been President and Chairman 1986
of the Board of Omnirel Corporation, a manufacturer of
power hybrid semiconductor devices since 1985. Omnirel has
been a subsidiary of the Company since June 1991.
MARTIN S. FAWER, 61, became Chief Financial Officer and 1984
Treasurer in February 1988. From October 1984 to January
1988 Mr. Fawer was Treasurer of the Company. He is also the
Chief Financial Officer and Treasurer of TACTech and Omnirel,
as well as a director of each such entity. For more than
five years, Mr. Fawer has been a principal of Fawer and Kupczyk,
P.C. and its predecessors, certified public accountants.
LAURENCE W. HIGGITT, 49, has been employed by Stephen Rose & 1985
Partners, Limited, investment bankers, in London, England
since 1984 and has been on its Board of Directors since 1985.
Prior to 1984, he was a fund manager for Lazard Brothers
& Co. Ltd., merchant bankers, London, England.
DEBORAH J. SCHRADER, 48, has been Secretary of the Company 1969
since its incorporation. She is also the Secretary and a
director of TACTech, a subsidiary of the Company. She is
the wife of Robert E. Schrader.
ROBERT E. SCHRADER, 51, is the founder of the Company and 1969
has been President and Chief Executive Officer since its
incorporation in 1969. Prior to organizing the Company,
Mr. Schrader was an account executive with a division of
Lafayette Radio Corporation, a district sales manager of
Arrow Electronics, Inc. and held purchasing manager positions
with two electronic equipment manufacturers. He is also a
director and the president of TACTech and Omnirel Corporation,
each a subsidiary of the Company. He is the husband of
Deborah J. Schrader.
HENRY A. SINGER, 58, has been a member of the law firm of 1988
Morrison Cohen Singer & Weinstein, LLP and its predecessor
for more than the past five years. Morrison Cohen Singer &
Weinstein, LLP serves as general counsel to the Company.
The Company's Certificate of Incorporation divides the Board of
Directors into two classes, with regular two-year staggered terms.
Messrs. Singer, Catrambone and Higgitt are currently up for re-
election for a two-year term.
13
<PAGE>
No director is a director of any company with a class of
securities registered pursuant to Section 12 of the Act or of any
company registered as an Investment Company under the Investment
Company Act of 1940. Other than Robert E. Schrader and Deborah J.
Schrader, who are married to each other, there is no family
relationship among any of the members of the Board of Directors or the
officers of the Company.
In June 1990, the Securities and Exchange Commission filed a
civil suit against Henry A. Singer alleging that in August and
November of 1987 he purchased shares of common stock of a company
listed on the New York Stock Exchange based upon material non-public
information. In July 1990, Mr. Singer denied these allegations except
that he admitted the fact of his purchase of the shares of such
company and the sale for a profit of approximately $34,000 in April
1988. In November 1992, Mr. Singer and the Commission settled the
civil action, and, without admitting or denying the allegations in the
complaint, Mr. Singer consented to the entry of a final judgment of
permanent injunction against his violating securities laws in future
trading of any securities. In connection therewith, Mr. Singer paid
$34,050, representing the profits from the transaction described in
the complaint, together with interest thereon, as well as a civil
money penalty in the same amount.
Executive Officers
------------------
Position with Company and Business
Name Age Experience During Past Five Years
---- --- ----------------------------------
Robert E. Schrader*
Deborah J. Schrader*
Martin S. Fawer*
John F. Catrambone*
Malcolm Baca 54 Executive Vice President and
Treasurer of the Company's
TACTech subsidiary since 1987.
-----------------------
* See "Directors" above.
Based upon an examination of Forms 3, 4 and 5 furnished to the
registrant in respect of the 1995 Fiscal Year, no persons have failed
timely to file any of the foregoing forms in respect of transactions
in such year or in respect of a prior year.
Compensation of Directors
-------------------------
The Company pays each director who is not an officer or employee
of the company (other than Henry A. Singer) $4,000 per year for his
services as a director plus $250 for each Board of Directors meeting
attended and for each Committee meeting attended if not held on the
same day as a Board meeting. Mr. Singer does not receive such fee,
since the firm of which he is a partner is paid its customary legal
fees for Mr. Singer's attendance and participation. Such firm was
paid $246,550 for legal services rendered to the Company for the 1995
Fiscal Year, of which $5,200 was paid in respect of Mr. Singer's
attendance at Board and Committee Meetings. See "Compensation
---
Committee Interlocks and Insider Participation", below.
Executive Compensation
----------------------
The following table shows, for the three most recently ended
fiscal years, the cash compensation paid or accrued for those years to
the Chief Executive Officer of the Company and to each of the four
most highly
14
<PAGE>
compensated executive officers of the Company other than the Chief
Executive Officer whose aggregate annual salary and bonus paid in
compensation for services rendered in all the capacities in which they
served exceeded $100,000 for the Company's Fiscal Year 1994 (the
"Named Executives"):
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
-------------------- ---------------------- -------
Securities
Name and Other Restricted Underlying All Other
Principal Annual Stock Options/ LTIP Compensation(2)
Position Year(1) Salary($) Bonus($) Compensation($) Awards($) SARs (#) Payouts($) ($)
- -------- ---- --------- -------- --------------- --------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert E. Schrader 1993 220,600 1,481
President, Chief Executive 1994 162,500 1,800
Officer and Chairman of the 1995 150,000 1,800
Board
John F. Catrambone(3) 1993 163,625 2,043
President of Omnirel 1994 207,504 50,000 3,054
Corporation 1995 207,500 100,000 3,714
Malcolm Baca 1993 111,754 783
Vice President and Treasurer 1994 161,479 1,044
of TACTech 1995 168,788 1,044
Martin S. Fawer 1993 75,126 --
Chief Financial Officer and 1994 99,450 --
Treasurer 1995 75,000 389,996(4)
</TABLE>
- -------------------------
(1)On May 19, 1993 the Company's Board of Directors voted to change the
Company's fiscal year end to June 30 from September 30. Information for the
1993 Fiscal Year is for the nine months ended June 30, 1993.
(2)The amounts reflect the following payments of annual life insurance
premiums in the 1994 Fiscal Year: $1,800 on behalf of Mr. Robert E. Schrader,
$3,054 on behalf of Mr. John Catrambone and $1,044 on behalf of Mr. Malcolm
Baca.
(3)The salary amounts for Mr. Catrambone in each of 1993, 1994 and 1995
include (i) $16,875, $22,500 and $22,500, respectively, representing interest
imputed at 9% per annum on the $250,000 interest free loan provided by the
Company to Mr. Catrambone for the purchase of the Company's common stock,
and (ii) a contractually required annual bonus of $60,000. See "Employment
Contracts and Termination of Employment and Change-of-Control Agreements"
below.
(4)This amount reflects the difference between the value of the shares
underlying the warrants on the date of exercise and the exercise price.
The above amounts do not include certain personal benefits, which do not
exceed, as to any executive officer identified above, 10% of his total Annual
Compensation.
15
<PAGE>
Grants of Warrants
- ------------------
During the 1995 Fiscal Year no warrants, options or Stock
Appreciation Rights were granted to any Named Executive of the
Company.
<TABLE><CAPTION>
Aggregated Warrant Exercises in Last Fiscal Year
and Fiscal Year-End Warrant Values
Value of Unexercised
Shares Number of Unexercised In-the-Money
Acquired Option/SARs at Option/SARs at
on Value FY-End (#) FY-End ($)
Name Exercise(#) Realized($) ---------------------- --------------------
- ---- ----------- ----------- Exercisable Unexercisable Exercisable(1) Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
John F. Catrambone 3,000 $33,292
Martin S. Fawer 41,857 $389,996
</TABLE>
- ------------------------------------
(1) Based on the fair market value per share of the
Common Stock of $12.4375, which was the closing
bid price of the Common Stock as reported by the
National Association of Securities Dealers, Inc.
on June 30, 1995.
Employment Contracts and Termination of Employment and Change-In-
----------------------------------------------------------------------
Control Arrangements
--------------------
John Catrambone has an employment agreement with the Company's
Omnirel subsidiary. The five year agreement, expiring in June of
1996, provides for a base salary of $125,000 per year, a guaranteed
bonus of $60,000 per year and an incentive bonus linked to a set of
performance criteria determined annually by Omnirel's Board of
Directors and subject to percentage limitations of Mr. Catrambone's
base salary (80% for 1995). Mr. Catrambone was loaned $300,000,
without interest, by the Company in connection with the purchase of
Omnirel by the Company. The Company has guaranteed to Mr. Catrambone
the base compensation payments under such employment agreement and
pays the $60,000 annual bonus, which is used by Mr. Catrambone to
repay such loan. The Company also loaned Mr. Catrambone $250,000,
without interest, to purchase shares of the Company's common stock.
Such loan, which is due in June, 2001, is secured by the stock so
purchased by Mr. Catrambone. Through September 30, 1995, Mr.
Catrambone sold 14,500 shares of the Company's Common Stock, and
pursuant to his agreement with the Company, he paid down his $250,000
loan with the Company by $80,000.
During the end of calendar year 1994 and the beginning of
calendar year 1995, the Company negotiated with Mr. Catrambone and key
employees of Omnirel with respect to terminating Omnirel's existing
Management Incentive Plan ("MIP") and revising the ownership structure
of Omnirel. In March, 1995, the MIP was canceled and the MIP
participants received in exchange for their MIP interests ( on a pro
rata basis to their participation in the MIP) options to purchase
61,818 shares of Omnirel common stock exercisable at $8.00 per share.
In addition Mr. Catrambone exchanged 2,000 existing options
exercisable at $6.50 per share and 18,872.4 shares of Omnirel common
stock owned by him for 72,182 new ten year options for Omnirel stock
exercisable at $8.00 per share. These options were issued pursuant to
a new non-qualified stock option exchange plan. The purpose of these
transactions was to exchange for management's existing rights and
securities, securities of equal value to that which management and Mr.
Catrambone gave up while at the same time creating longer term
incentives for Omnirel management to grow its business. In March,
1995, 45,000 options to purchase Omnirel stock exercisable at $10.00
per share were granted to new and old members of Omnirel management to
further incentivize management. Such 45,000 options were granted
pursuant to a new non-qualified stock option plan.
Malcolm Baca has an employment agreement with the Company's
TACTech subsidiary. The term of Mr. Baca's employment is to expire on
May 1, 1997. Mr. Baca's agreement entitles him to a salary of
$120,000 per annum, plus five percent (5%) of TACTech's collected
revenues in each year, except that on revenues attributable to another
commissioned member of TACTech's management Mr. Baca's commission is
two and one-half percent (2 1/2%). Effective as from the middle of the
1995 fiscal year, all commissions to Mr. Baca are subject to his
required contribution of one-half of one percent (1/2%) of TACTech's
collected revenues to a bonus pool fund for the benefit of non-
commissioned members of management, which contribution is matched by
TACTech. Mr. Baca does not participate in such bonus pool fund. In
addition to other customary terms, pursuant to the agreement, Mr.
Baca's compensation is subject to a $350,000 per annum maximum. The
annual maximum is subject to increase based upon the National Consumer
Price Index. In the event Mr. Baca is terminated without good cause,
TACTech is obligated to continue to pay compensation to Mr. Baca
through April 30, 1997.
16
<PAGE>
Mr. Schrader does not have an employment agreement with the
Company and his compensation is set by the Compensation Committee
subject to the approval of the Board of Directors. In connection with
the 1993 sale of the Company's high reliability electronic component
distribution and value-added businesses to Arrow Electronics, Inc.,
Mr. Robert E. Schrader entered into a Consulting and Non-Competition
Agreement with Arrow. As a consequence of such agreements, Mr.
Schrader does not devote his full time to the Company. Pursuant to
the terms of his agreement with Arrow, Mr. Schrader is required to
devote up to five business days per quarter to the business of Arrow.
Certain Transactions
--------------------
Mr. Singer, a director of the Company during the 1995 Fiscal
Year, is a partner at the law firm of Morrison Cohen Singer &
Weinstein, LLP, counsel to the Company. Such firm received $246,550
for legal services rendered on behalf of the Company during the 1995
Fiscal Year, of which $5,200 was paid in respect of Mr. Singer's
attendance at Board and Committee meetings. During Fiscal Year 1994,
the same firm received $179,548 for legal services rendered on behalf
of the Company, of which $5,491.50 was paid in respect of Mr. Singer's
attendance at Board and Committee meetings.
17
<PAGE>
COMMON STOCK
The authorized capital stock of the Company consists of
12,000,000 shares of Common Stock. At July 27, 1997, there were
2,597,497 shares of Common Stock outstanding, 81 holders of record and
at least 630 beneficial owners.
Holders of Common Stock are entitled to cast one vote for each
share held at all shareholder meetings for all purposes, including the
election of directors and to receive dividends as may be declared from
time to time by the Board of Directors out of funds legally available
therefor. In the event of liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to share ratably
in the assets remaining after payment of liabilities. Holders of
Common Stock have no preemptive or conversion rights and their stock
is not subject to further calls or assessments by the Company. There
are no redemption or sinking fund provisions applicable to the Common
Stock. The Common Stock currently outstanding is, and the Common
Stock to be issued upon exercise of a Warrant will be, upon payment of
the Warrant exercise price, validly issued, fully paid and
nonassessable.
The Company's Certificate of Incorporation and By-laws provide
for a Board of Directors consisting of not fewer than six nor more
than ten members, classified into three classes if there shall be nine
or more directors, or two classes if there shall be fewer than nine
directors in either case with each class being as nearly as possible
equal in size to the others, and with at least three directors in each
class. The terms of each class are staggered.
Except for transactions approved by the Board of Directors, the
Company's Certificate of Incorporation requires the affirmative vote
of at least 66 2/3% of the shares entitled to vote on certain mergers,
consolidations and sales, leases or exchanges of assets in cases where
the offeror controls more than 10% of the Common Stock of the Company.
The Common Stock of the Company is traded on NASDAQ-NMS, under
the symbol ZING. The following table sets forth the high and low
closing sales prices of the Company's Common Stock on the NMS for each
quarterly period during the last two fiscal years.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
High Low
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1st Quarter Fiscal Year '94 2 1/2 1 7/8
2nd Quarter Fiscal Year '94 2 1/4 1 5/8
3rd Quarter Fiscal Year '94 2 1/4 1 7/8
4th Quarter Fiscal Year '94 2 1/4 1 3/4
1st Quarter Fiscal Year '95 2 1/2 1 7/8
2nd Quarter Fiscal Year '95 6 3/4 2 1/16
3rd Quarter Fiscal Year '95 10 1/4 4 5/8
4th Quarter Fiscal Year '95 12 7/8 6 5/8
1st Quarter Fiscal Year '96 26 1/2 12 1/8
</TABLE>
18
<PAGE>
No cash dividends have been declared on the Company's Common
Stock for the fiscal years ended June 30, 1995 and 1994. The present
policy of the Company is to retain earnings to provide funds for the
operations and expansion of its business.
The Transfer Agent and Registrar for the Common Stock is Mellon
Securities Transfer Services.
19
<PAGE>
SECURITY OWNERSHIP
Principal Security Holders
- --------------------------
The following table sets forth, as at November 1, 1995,
information concerning the beneficial ownership of voting securities
of the Company by each person who is known by management to own
beneficially more than 5% of any class of such securities:
Amount
Title of Name and Address Beneficially Percent
Class of Beneficial Owner Owned of Class
- ----------- ----------------------------- ---------------- -------------
Common Robert E. Schrader 1,152,711 44.4%
72 Haight Cross Road
Chappaqua, NY 10514
Common Jesse Greenfield* 227,350 8.3%
3765 Wild Palm Court
Boulder, CO 80434
_____________________________
* Information with respect to beneficial interest of the holder is
based on the most recent Schedule 13D or Schedule 13G delivered
to the Company by such holder and not on the basis of any
independent information with respect to such holdings which the
Company may possess.
Management
- ----------
The following table sets forth, as at November 1, 1995,
information concerning the beneficial ownership of each class of
equity securities of the Company and its subsidiaries beneficially
owned by all directors and officers of the Company and its
subsidiaries:
20
<PAGE>
<TABLE>
<CAPTION>
Amount
Name and Address Beneficially Percent
Title of Class of Beneficial Owner Owned of Class(2)
------------------ ---------------------------------------- ----------------- ----------------
<S> <C> <C> <C>
Common John F. Catrambone 87,000(1) 3.3
167 South Street
Carlisle, MA 01741
Common Martin S. Fawer 89,736 3.5
860 Fifth Avenue
New York, NY 10021
Common Laurence W. Higgitt 3,000(1) *
Arossa Pilmer Road
Corwborough East Sussex
ENGLAND CN6 ZUG
Common Henry A. Singer 3,000(1) *
c/o Morrison Cohen Singer
& Weinstein, LLP
750 Lexington Avenue
New York, NY 10022
Common Robert E. Schrader 1,152,711 44.4
72 Haights Cross Road
Chappaqua, NY 10514
Common Deborah J. Schrader 0 0%
72 Haights Cross Road
Chappaqua, NY 10514
Common Malcolm Baca 0 0%
24611 Catalonia Circle
Mission Viejo, CA 92691
</TABLE>
____________________
(*) Represents less than 1% of the shares attending.
(1) Includes 3,000 shares which may be acquired upon exercise of
warrants. Mr. Singer's 3,000 warrants are held for the benefit of his
firm, Morrison Cohen Singer & Weinstein, LLP.
(2) Includes shares outstanding and shares which may be acquired upon
exercise of warrants.
21
<PAGE>
SELLING SHAREHOLDERS
Identity of Selling Shareholders; Number of Shares Offered
----------------------------------------------------------
The following table sets forth (i) the name of each Selling
Shareholder, (ii) the nature of any position, office, or other
material relationship which each such Selling Shareholder has had with
the Company or any of its affiliates within the last three years,
(iii) the number of shares of Common Stock owned by each such Selling
Shareholder prior to the offering, (iv) the number of shares of Common
Stock offered for each such Selling Shareholder's account, and (v) the
number of shares of Common Stock and the percentage owned by each such
Selling Shareholder after completion of the offering, assuming all
Shares offered pursuant to this Prospectus are sold.
<TABLE>
<CAPTION>
Number of Shares
Owned of Record
Relationship Total Shares Number of Shares After The Offering,
Selling To Owned Prior to Offered for Selling Assuming That All
Shareholder The Company* Offering Shareholder's Account Shares Are Sold Percent
----------- ----------- -------------- --------------------- ------------------- -------
<S> <C> <C> <C> <C> <C>
John Burrows 23,034(1) 23,034 0 **
Joseph Camarda 35,582 35,582 0 **
John F. Catrambone Director 87,000(2) 3,000 84,000 3.8%
Michael Decesare 4,666(3) 4,666 0 **
Martin S. Fawer Director 89,736 41,857 50,879 2%
Laurence W. Higgitt Director 3,000(2) 3,000 0 **
Gordon Leith 7,500 7,500 0 **
Thomas Ross 7,500(4) 7,500 0 **
Dorothy Schrader 1,762(5) 1,762 0 **
Wayne Schrader 44,012(6) 44,012 0 **
Eugene Sheinman 16,905 16,905 0 **
Henry A. Singer Director 3,000*(2) 3,000 0 **
William Toumey 7,500(4) 7,500 0 **
</TABLE>
- ------------------------------
1 Includes 23,034 shares which may be acquired upon exercise of
Warrants.
2 Includes 3,000 shares which may be acquired upon exercise of
Warrants.
3 Includes 4,666 shares which may be acquired upon exercise of
Warrants.
4 Includes 7,500 shares which may be acquired upon exercise of
Warrants.
5 Includes 1,762 shares which may be acquired upon exercise of
Warrants.
6 Includes 44,012 shares which may be acquired upon exercise of
Warrants.
* See narratives below further describing the relationships between
each selling shareholder and the Company and its affiliates.
** Represents less than 1% of the Shares Outstanding.
22
<PAGE>
John F. Catrambone is a director of the Company and has been
President, Chief Executive Officer of Omnirel Corporation since 1985.
Omnirel has been a subsidiary of the Company since June 1991.
Martin S. Fawer is a director of the Company. He became Chief
Financial Officer and Treasurer in February 1988. From October 1984
to January 1988 Mr. Fawer was Treasurer of the Company. He is also a
director of TACTech and Omnirel, and serves as Chief Financial Officer
and Treasurer of both.
Laurence W. Higgitt has been a director of the Company since
1985.
Henry A. Singer has been a director of the Company since 1988.
He has been a member of the law firm of Morrison Cohen Singer &
Weinstein, LLP and its predecessor for more than three years.
Morrison Cohen Singer & Weinstein, LLP serves as general counsel to
the Company.
Messrs. Burrows, Camarda, Leith, and Sheinman were all Vice
Presidents of the Company whose employments were terminated in May
1993 in connection with the Arrow Sale. Messrs. Camarda, Burrows, and
Wayne Schrader were also Directors of the Company prior to the Arrow
Sale.
Wayne Schrader was a Senior Vice President of the Company. His
employment was terminated in May 1993 in connection with the Arrow
Sale.
Thomas Ross was the Comptroller of the Company until December
1993 when he left the employment of the Company.
Dorothy Schrader was an employee of the Company until May 1993,
when she left the employment of the Company.
Michael Decesare was an employee of the Company until July 31,
1990, when he left the employment of the Company.
William Toumey was an employee with the Company until May 19,
1993, at which time the Arrow Sale was completed; he is currently
employed by Arrow.
23
<PAGE>
PLAN OF DISTRIBUTION/SALE OF SHARES
The sales of the Shares by the Selling Shareholders may be
effected, from time to time, on the NASDAQ National Market System or
on any stock exchange on which the Shares may be listed at the time of
sale, in negotiated transactions, or through a combination of such
methods of sale, at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling
Shareholders may effect such transactions by selling Shares to or
through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions
from the Selling Shareholders and/or the purchasers of Shares (which
compensation as to a particular broker-dealer might be in excess of
customary commissions).
The Selling Shareholders and any broker-dealers that act in
connection with the sale of the Shares hereunder might be deemed to be
"Underwriters" within the meaning of Section 2(11) of the Securities
Act; any commissions received by them and any profit on the resale of
Shares as principal might be deemed to be underwriting compensation
under the Securities Act.
Any broker-dealer acquiring Shares from a Selling Shareholder may
sell the Shares either directly, in its normal market-making
activities, through or to other brokers on a principal or agency
basis, or to its customers. Any such sales may be at prices then
prevailing on the NASDAQ National Market System, at prices related to
such prevailing market prices, at negotiated prices, or a combination
of such methods.
The Company has advised the Selling Shareholders that anti-
manipulative Rules 10b-2, 10b-6 and 10b-7 under the Exchange Act may
apply to their sales in the market, has furnished the Selling
Shareholders with a copy of these Rules and has informed the Selling
Shareholders of the possible need for them to deliver copies of this
Prospectus. The Selling Shareholders may indemnify any broker-dealer
that participates in transactions involving the sale of the Shares
against certain liabilities, including liabilities arising under the
Securities Act. Any commissions paid or any discounts or concessions
allowed to any such broker-dealers, and, if any such broker-dealers
purchase Shares as principal, any profits received on the resale of
such Shares, may be deemed to be underwriting discounts and
commissions under the Securities Act.
Upon the Company's being notified by any Selling Shareholder that
any material arrangement has been entered into with a broker-dealer
for the sale of Shares through a cross or block trade, a supplemental
prospectus will be filed under Rule 424(c) under the Securities Act,
setting forth the name of the participating broker-dealer(s), the
number of Shares involved, the price at which such Shares were sold by
the Selling Shareholder, the commissions paid or discounts or
concessions allowed by the Selling Shareholder to such broker-
dealer(s), and where applicable, that such broker-dealer(s) did not
conduct any investigation to verify the information set out in this
Prospectus.
24
<PAGE>
Any Shares which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under that Rule rather than pursuant to
this Prospectus.
There can be no assurances that the Selling Shareholders will
sell any or all of the Shares offered by them hereunder.
Expenses of the registration of the Shares, up to $.15 per share,
will be paid for by the Selling Shareholders. Expenses of
registration in excess of $.15 per Share, if any, shall be borne by
the Company.
USE OF PROCEEDS
The Company will not realize any proceeds from the sale of the
Shares which may be sold under this Prospectus for the respective
accounts of each of the Selling Shareholders. The Company, however,
will derive proceeds of approximately $130,981 if all of the currently
unexercised warrants are exercised. Such proceeds will be available
to the Company for working capital and general corporate purposes. No
assurance can be given, however, as to when or if any or all of the
Warrants will be exercised. See "Selling Shareholders" and "Plan of
Distribution/Sale of Shares".
LEGAL MATTERS
The legality of the Shares offered by this Prospectus has been
passed upon for the Company by Morrison Cohen Singer & Weinstein, LLP,
750 Lexington Avenue, New York, New York 10022.
EXPERTS
The consolidated financial statements and schedules of the
Company appearing in the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference . Such consolidated
financial statements are incorporated herein by reference in reliance
upon such report given upon the authority of such firm as experts in
accounting and auditing.
25
<PAGE>
INDEMNIFICATION
Sections 721 to 725 of the New York Business Corporation Law
("NYBCL") permit indemnification of directors, officers, and employees
of corporations under certain circumstances and subject to certain
limitations. Section 726 of the NYBCL permits the purchase of
insurance to indemnify the corporation and its officers and directors,
subject to certain limitations. Section 402(b) of the NYBCL permits
the inclusion of a provision in the certificate of incorporation of a
corporation eliminating or limiting the personal liability of
directors to the corporation or its shareholders for damages for any
breach of duty in such capacity, subject to certain limitations.
Article SEVEN, Section 7.1 of the Company's By-laws, as amended
through February 26, 1987, provides that the Company shall indemnify
each director and officer of the Company elected, appointed, or
continuing to serve after the adoption of Article SEVEN of the By-
laws, and may indemnify all other persons whom the Company is
authorized to indemnify under the provisions of the NYBCL, to the
fullest extent permitted by law, against all legal, accounting, and
other expenses and liabilities incurred in connection with any pending
or threatened action, suit, or proceeding, civil or criminal, or in
connection with any appeal therein, or otherwise, and no provision of
the By-laws is intended to be construed as limiting, prohibiting,
denying, or abrogating any of the general or specific powers or rights
conferred under the NYBCL upon the Company to furnish, or upon any
court to award, such indemnification, or indemnification as otherwise
authorized by the NYBCL or other law now or hereafter in effect.
Article NINTH of the Company's Certificate of Incorporation
provides that, except as otherwise specifically provided, no provision
of the Company's Certificate of Incorporation is intended to be
construed as limiting, prohibiting or denying any of the general or
specific powers or rights conferred under the NYBCL, including, in
particular, the power of the Company to furnish officers, directors
and other Company personnel with indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling
persons of the registrant pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
26
<PAGE>
INDEX TO FINANCIAL INFORMATION
ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
*Incorporated by reference to the Company's Annual Report
on Form 10-K for the year ended June 30, 1995.
Page
----
Report of Independent Accountants . . . . . . . . . . . . . . . . . *
Consolidated Balance Sheets at June 30, 1995 . . . . . . . . . . . *
Consolidated Statements of Income for the Years Ended
June 30, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . *
Consolidated Statements of Shareholders Equity for the Years
Ended June 30, 1994 and 1995 . . . . . . . . . . . . . . . . . . *
Consolidated Statements of Cash Flows for Years Ended
June 30, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . *
Notes to Consolidated Financial Statements . . . . . . . . . . . . *
27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 721 to 725 of the New York Business Corporation Law
("NYBCL") permit indemnification of directors, officers, and employees
of corporations under certain circumstances and subject to certain
limitations. Section 726 of the NYBCL permits the purchase of
insurance to indemnify the corporation and its officers and directors,
subject to certain limitations. Section 402(b) of the NYBCL permits
the inclusion of a provision in the certificate of incorporation of a
corporation eliminating or limiting the personal liability of
directors to the corporation or its shareholders for damages for any
breach of duty in such capacity, subject to certain limitations.
Article SEVEN, Section 7.1, of the Company's By-laws, as amended
through February 26, 1987, provides that the Company shall indemnify
each director and officer of the Company elected, appointed, or
continuing to serve after the adoption of Article SEVEN of the By-
laws, and may indemnify all other persons whom the Company is
authorized to indemnify under the provisions of the NYBCL, to the
fullest extent permitted by law, against all legal, accounting, and
other expenses and liabilities incurred in connection with any pending
or threatened action, suit, or proceeding, civil or criminal, or in
connection with any appeal therein, or otherwise, and no provision of
the By-laws is intended to be construed as limiting, prohibiting,
denying, or abrogating any of the general or specific powers or rights
conferred under the NYBCL upon the Company to furnish, or upon any
court to award, such indemnification, or indemnification as otherwise
authorized by the NYBCL or other law now or hereafter in effect.
Article NINTH of the Company's Certificate of Incorporation
provides that, except as otherwise specifically provided, no provision
of the Company's Certificate of Incorporation is intended to be
construed as limiting, prohibiting or denying any of the general or
specific powers or rights conferred under the NYBCL, including, in
particular, the power of the Company to furnish officers, directors
and other Company personnel with indemnification.
II-1
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated Legal Fees $30,000
Estimated Accounting Fees $10,000
Registration Fees $945.04
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
In June of 1995, Marty Fawer exercised his warrants to purchase
41,857 shares of Common Stock of the Company at $1.34 per share. The
warrants were offered to Mr. Fawer by the Company without registration
by relying on the exemption available under Section 4(2) of the
Securities Act of 1933, as amended.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
NOTE: Exhibits marked with one asterisk are incorporated by
reference to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No. 2-
93940) filed with the Securities Exchange Commission (the
"SEC") on February 26, 1985; exhibits marked with two
asterisks are incorporated by reference to Amendment No. 2
to the Registrant's Registration Statement on Form S-1
(Registration No. 2-93940) filed with the SEC on March 21,
1985; exhibits marked with three asterisks are incorporated
by reference to the Registrant's Form 8-K filed with the SEC
on February 13, 1993. Exhibits marked with four asterisks
have been previously filed by the Registrant with the SEC
in its Registration Statement filed on November 8, 1995
(Registration No. 33-64091).
3(i)(1) Restated Certificate of Incorporation, filed with the New
York Secretary of State on October 31, 1984.*
(2) Certificate of Amendment of the Certificate of
Incorporation, filed with the New York Secretary of State
on March 15, 1985.**
(3) Certificate of Amendment of the Certificate of
Incorporation, filed with the New York Secretary of State
on June 9, 1987.****
(4) Certificate of Amendment of the Certificate of Incorporation,
filed with the New York Secretary of State on
June 16, 1993.****
3(ii)(1) By-Laws****
5. Opinion of Morrison Cohen Singer & Weinstein, LLP, as to the
legality of the securities being registered.****
10 Asset Purchase Agreement, dated as of February 12, 1993, and
among the Registrant, certain of its subsidiaries, and Arrow
Electronics, Inc.***
21. Subsidiaries of Registrant****
II-2
<PAGE>
23.1 Consent of Ernst & Young LLP
23.2 Consent of Morrison Cohen Singer & Weinstein, LLP
(contained in its Opinion filed as part of Exhibit 5)
24. Powers of Attorney (included on the signature page of the
registration statement filed November 8, 1995)
ITEM 28. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended ("Securities Act");
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For purposes of determining liability under the
Securities Act, to treat each post-effective amendment as a new
registration statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of
the offering.
B. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the small business issuer of
II-3
<PAGE>
expenses incurred or paid by a director, officer or controlling person
of the small business issuer in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form SB-2
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Village
of Valhalla, State of New York, on this 16th day of November, 1995.
ZING TECHNOLOGIES, INC.
By: /s/ Robert E. Schrader
--------------------------------------
Robert E. Schrader,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
<TABLE><CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert E. Schrader President and Chief Executive November 16, 1995
- ------------------------
Robert E. Schrader Officer
* Director November 16, 1995
- ----------------------
John F. Catrambone
* Chief Financial Officer, November 16, 1995
- -------------------
Martin S. Fawer Treasurer and Director
* Director November 16, 1995
- -----------------------
Laurence W. Higgitt
* Secretary and Director November 16, 1995
- -----------------------
Deborah J. Schrader
* Director November 16, 1995
- -------------------
Henry A. Singer
* By /s/ Robert E. Schrader
-----------------------
Robert E. Schrader
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No. Description Page
- ---------- ----------- ----
<C> <S> <C>
3(i)(1) Restated Certificate of Incorporation, filed with the New York *
Secretary of State on October 31, 1984.
(2) Certificate of Amendment of the Certificate of Incorporation, filed **
with the New York Secretary of State on March 15, 1985.
- --(3) Certificate of Amendment of the Certificate of Incorporation, filed ****
with the New York Secretary of State on March 9, 1987.
- --(4) Certificate of Amendment of the Certificate of Incorporation, ****
filed with the New York Secretary of State on June 16, 1993.
- -- 3(ii)(1)By-Laws ****
- -- 5. Opinion of Morrison Cohen Singer & Weinstein, LLP, as to the legality ****
of the securities being registered.
10 Asset Purchase Agreement, dated as of February 12, 1993, and among the ***
Registrant, certain of its subsidiaries, and Arrow Electronics, Inc.
- -- 21. Subsidiaries of Registrant ****
- -- 23.1 Consent of Ernst & Young.
23.2 Consent of Morrison Cohen Singer & Weinstein, LLP
(contained in its Opinion filed as part of Exhibit 5)
24. Powers of Attorney (included on the signature page of the registration
statement filed November 8, 1995)
</TABLE>
NOTE: Exhibits marked with one asterisk are incorporated by reference to
Amendment No. 1 to the Registrant's Registration Statement Form S-1
(Registration No. 2-93940) filed with the Securities Exchange Commission
(the "SEC") in February 26, 1985; exhibits marked with two asterisks are
incorporated by reference to Amendment No. 2 to the Registrant's
Registration Statement on Form S-1 (Registration No. 2-93940) filed with
the SEC on March 21, 1985; exhibits marked with three asterisks are
incorporated by reference to the Registrant's Form 8-K filed with the SEC
on February 13, 1993.Exhibits marked with four asterisks have been
previously filed by the Registrant with the SEC in its Registration
Statement (Registration No. 33-64091) filed on November 8, 1995.
EXHIBIT 23.1
------------
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form SB-2 No. 33-64091) and related Prospectus of
Zing Technologies, Inc. for the registration of 199,318 shares of its common
stock and to the Incorporation by reference therein of our report dated
September 12, 1995, with respect to the financial statements and schedules of
Zing Technologies, Inc. included in its Annual Report on Form 10-K for the year
ended June 30, 1995, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
White Plains, New York
November 15, 1995
