SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
X Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange
Act of 1934 for the Fiscal Year Ended December 31, 1996.
Transition report pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934 for the transition period from _____ to
_____.
Commission File Number 0-21662
STRATEGIA CORPORATION
(Exact name of registrant as specified in its charter)
Kentucky
61-1064606
(State or other jurisdiction of (I.R.S.
Identification No.)
Employer incorporation or organization)
10301 Linn Station Road
P.O. Box 37144
Louisville, Kentucky
40233-7144
(Address of principal executive offices)
(zip code)
Registrant's telephone number, including area code: (502)426-3434
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
Indicate by check mark whether the registrant (1) has filed all
reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the
registrant was required to file such reports), and (2) has been
subject to
such filing requirements for the past 90 days. Yes __X__ No
_____.
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 registrant'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. ______
The aggregate market value of the voting stock held by
non-affiliates of the
registrant as of March 26, 1997: Common stock -- $23,515,672.
The number of shares of the registrant's common stock outstanding
as of March
26, 1997 -- 4,404,885 shares.
Strategia Corporation (the "Corporation") hereby amends its annual
report on
Form 10-KSB for the year ended December 31, 1996 to add the
information
required by Items 9 through 12 of Part III of Form 10-KSB.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons;
Compliance with Section 16(a) of the Exchange Act.
The following information is furnished as of March 26, 1997, with
respect
to each of the Corporation's directors and executive officers. The
Corporation's four directors hold office for a one-year term
expiring at the
Corporation's next annual meeting of shareholders or until their
successors
are elected and qualified.
<TABLE>
<CAPTION>
Name Age Position with the
Corporation
<S> <C> <C>
Richard W. Smith 43 President and Director
James P. Buren 58 Executive Vice President -
Technology and Director
John P. Snyder 58 Secretary and Director
John A. Brenzel 56 Director
Roland Esnis 30 Directeur Generale, Twinsys
Dataguard SA
</TABLE>
Richard W. Smith has been President and a director of the
Corporation
since its inception in September 1984. Mr. Smith previously served
as
General Manager of PDW Computer Systems, Inc., which markets
computer
systems.
James P. Buren has been Executive Vice President-Technology
and a
director of the Corporation since its inception in September 1984.
From
1980 to 1984, Mr. Buren was President and sole shareholder of Buren
&
Company, Inc., a data processing consulting firm.
John P. Snyder has been a director of the Corporation since
November
1984 and Secretary since 1985. During the past five years, Mr.
Snyder has
served as President and Chairman of EPI Corporation, which
currently operates
20 nursing homes.
John A. Brenzel, a director of the Corporation since November
1984, is a
business consultant. From January 1991 until June 1994, Mr.
Brenzel was
President and Chief Executive Officer of Commonwealth Bank & Trust
Company,
Middletown, Kentucky. From 1984 to 1990, he was Chairman and Chief
Executive
Officer of Shelby County Trust Bank, Shelbyville, Kentucky.
Roland Esnis has served as Directeur Generale of Twinsys
Dataguard SA
("Twinsys"), the Corporation's Paris, France subsidiary since
August 1995. Mr.
Esnis joined Twinsys in a marketing position when it was
established in
February 1995. From July 1993 to February 1995 he held a similar
position
with Twinsys SA, and unrelated computer services firm whose
operating assets
were acquired by Twinsys. Mr. Esnis held marketing positions with
Systar, a
software company, from November 1991 to June 1993 and with the
disaster recovery
division of Telesystemes, a computer services affiliate of France
Telecom, from
January 1990 to November 1992.
Richard W. Smith, James P. Buren, and Roland Esnis are the
Corporation's
executive officers.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Corporation's
executive
officers and directors and persons who beneficially own more than
10% of the
Corporation's Common Stock (collectively, "Reporting Persons") to
file
reports of ownership and changes in ownership of the Common Stock
with the
Securities and Exchange Commission. Reporting Persons are required
by SEC
regulations to furnish the Corporation with copies of all Section
16(a) forms
that they file. Based solely on its review of the copies of such
forms
received or written representations from certain Reporting Persons
that no
Form 5s were required, the Corporation believes that during fiscal
1996, all
the Reporting Persons complied with all applicable filing
requirements,
except that EPI Corporation, John P. Snyder, Max G. Baumgardner, J.
Ben
Cress, Robert H. Loeffler, Grace B. Wilkins, James E. Buchart and
Henry
Schumpf each filed Form 4 reports with respect to nine transactions
by EPI
Corporation in June, July, August, September and October 1996 after
the
reports were due.
Item 10. Executive Compensation.
The following table sets forth the cash compensation earned by
the
Corporation's executive officers for each of the last three fiscal
years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Name and Other Annual Compensation
Principal Position Year Salary Bonus Compensation Stock
Options#
<S> <C> <C> <C> <C> <C>
Richard W. Smith, 1996 $117,000 $ 0 $6,000
75,664
President (Chief 1995 103,500 28,437 6,000
25,000
Executive Officer) 1993 99,000 366 6,000
0
James P. Buren, 1996 $105,000 $ 0 $6,000
64,631
Executive Vice- 1995 93,000 14,788 6,000
17,500
President 1994 89,000 0 6,000
0
Roland Esnis 1996 $ 68,716 $ 40,647 $ -
15,000
Directeur Generale, 1995* 56,864 23,530 - -
Twinsys Dataguard SA
*(Mr. Esnis joined Twinsys on February 1, 1995.)
</TABLE>
The Corporation currently does not have a retirement plan for
its officers and employees.
Options Grants in Last Fiscal Year
The following table sets forth information relating to stock options
granted during 1996 to the Company's executive officers named in the summary
compensation table. The option exercise price is $7.00, which was the market
price of the Common Stock on October 14, 1996, the date of the grant.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/ Exercise
Underlying SARs or Base
Options/ Granted to Price Expiration
Name SARs Granted Employees ($/sh) Date
<S> <C> <C> <C> <C>
Richard W. Smith 75,664 44.4% $7.00 10/14/2006
James P. Buren 64,631 38.0% $7.00 10/14/2006
Roland Esnis 15,000 .9% $7.00 10/14/2006
</TABLE>
Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values
The following table sets forth as of December 31, 1996 the
value of
unexercised options granted to the Corporation's executive officers
pursuant
to the Corporation's 1988 Stock Option Plan (the "1988 Plan"). In
1996, no
options were exercised by the named executive officers under the
1988 Plan.
The average of the closing bid and asked price of the Common Stock
on
December 31, 1996 was $7.125 per share.
<TABLE>
<CAPTION>
Number of Shares Subject Value of
to Unexercised Options Unexercised
Name Exercisable Unexercisable In-the-Money
Options
<S> <C> <C> <C>
Richard W. Smith 110,000 0 $ 193,126
James P. Buren 90,000 0 $ 141,379
Roland Esnis 15,000 0 $ 26,335
</TABLE>
Director Compensation
Under the 1988 Plan, nonemployee directors first elected after
May 15,
1989 are awarded options for 2,500 shares of Common Stock on the
May 15th
following election to the Board by the Corporation's shareholders,
and each
nonemployee director in office on May 15, 1989 or May 15th of any
succeeding
year automatically receives an option for 500 shares of Common
Stock. The
exercise price for options granted to nonemployee directors is the
fair
market value of the Common Stock on the date of grant, and options
for
approximately one-third of the shares become exercisable on May
15th of each
of the first three years following grant. Options granted to
nonemployee
directors have a term of ten years.
In 1996, Mr. Brenzel and Mr. Snyder each received the annual
grant of
options for 500 shares of Common Stock. The option exercise price
was
$3.00 per share. No options were exercised in 1996.
Other than the issuance of stock options, the Corporation did
not pay its
directors for attendance at regularly scheduled board meetings in
1996. The
Corporation has not determined its director compensation policy for
1997.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth certain information as of April
16, 1997
with respect to the shares of Common Stock owned (i) by each person
known to
the Corporation to own beneficially more than 5% of the outstanding
shares of
Common Stock (ii) by each of the Corporation's directors and
executive officers,
and (iii) by all directors and officers as a group. As of April
16, 1997,
there were 4,404,885 outstanding shares of Common Stock, which is
the
Corporation's only class of voting shares.
<TABLE>
<CAPTION>
Directors and Number Percent
Executive Officers of Shares(1) of Class(2)
<S> <C> <C>
John P. Snyder
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,396,937(3) 29.8%
Richard W. Smith
10301 Linn Station Rd.
P. O. Box 37144
Louisville, KY 40233 216,425(4) 4.8%
James P. Buren
10301 Linn Station Rd.
P. O. Box 37144
Louisville, KY 40233 194,379(5) 4.3%
John A. Brenzel
3501 Graham Rd.
Louisville, KY 40207 83,044(6) 1.9%
Roland Esnis
Twinsys Dataguard
Tour Mirabeau
39/43, Quai Andre Citroen
75015 PARIS 15,000(7) *
All current directors
and officers as a
group (8 persons) 1,922,830(8) 38.7%
5% Beneficial Owners
H. Joseph Schutte
1410 Hadleigh Place
Louisville, KY 40222 279,780(9) 6.2%
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,363,903(10) 29.2%
* Indicates less than 1%.
</TABLE>
<TABLE>
<CAPTION>
Number Percent
5% Beneficial Owners of Shares(1) of Class(2)
<S> <C> <C>
EPI Corporation,
John P. Snyder,
Max G. Baumgardner,
James E. Buchart,
J. Ben Cress,
Robert H. Loeffler,
Henry A. Schumpf,
Grace W. Wilkins
9707 Shelbyville Rd.
Louisville, KY 40223 1,575,085(10)(11) 33.3%
</TABLE>
(1) Based on information furnished to the Corporation by the
named
person, and information contained in filings with the
Securities and
Exchange Commission (the "Commission"). Under the rules of
the
Commission, a person is deemed to beneficially own shares
over which
the person has or shares voting or investment power or has
the right
to acquire beneficial ownership within 60 days. Except as
otherwise
noted, each person or entity named in the table has sole
voting and
investment power with respect to all shares of Common Stock
shown as
beneficially owned.
(2) Shares of Common Stock subject to options or warrants that
are or
will become exercisable within 60 days or are subject to
issuance
upon the conversion of the Corporation's Series AA
Preferred Stock
have been deemed outstanding for computing the percentage
of class of
the listed person or the group, but are not deemed
outstanding for
computing the percentage of class for any other person.
(3) Includes 1,363,903 shares of Common Stock beneficially
owned by EPI
Corporation. (See footnote 10.) Mr. Snyder is President,
a director,
and largest single shareholder of EPI Corporation. Mr.
Snyder shares
voting and investment power with respect to, and disclaims
beneficial
ownership of, the shares owned by EPI Corporation, which
are included
once in the shares beneficially owned by all directors and
officers
as a group. Mr. Snyder's total also includes 3,000 shares
subject to
currently exercisable stock options, 11,152 shares issuable
upon the
conversion of 2,788 shares of Series AA Preferred, and
7,885 shares
issuable upon the exercise of warrants.
(4) Includes 110,000 shares subject to currently exercisable
stock options,
14,840 shares issuable upon the conversion of 3,710 shares
of Series AA
Preferred, 3,710 shares issuable upon the conversion of
warrants, and
500 shares owned individually by Mr. Smith's wife.
(5) Includes 90,000 shares subject to currently exercisable
stock options,
14,840 shares issuable upon the conversion of 3,710 Series
AA
Preferred and 3,710 shares issuable upon the exercise of
warrants.
(6) Includes 3,000 shares subject to currently exercisable
stock options,
7,420 shares issuable upon the conversion of 1,855 Series
AA Preferred
and 1,855 shares issuable upon the exercise of warrants.
(7) Includes 15,000 shares subject to currently exercisable
stock options.
(8) Includes 16,950 shares subject to currently exercisable
stock options
held by nonexecutive officers in addition to shares
beneficially owned
by the five directors and executive officers listed in the
table.
(9) Includes 29,744 shares issuable upon the conversion of
7,436 shares
of Series AA Preferred and 45,403 shares issuable upon the
exercise
of warrants.
(10) Includes 108,660 shares issuable upon the conversion of
27,165 shares
of Series AA Preferred and 153,271 shares issuable upon the
exercise
of warrants.
(11) Includes 1,363,903 shares of Common Stock beneficially
owned by EPI
Corporation, for which the named individuals, as directors
of EPI
Corporation, share voting and investment power. The
individual
members of this group together own the majority of shares
of EPI
Corporation. Also includes 33,456 shares issuable upon the
conversion of 8,364 shares of Series AA Preferred, 25,870
shares
issuable upon the exercise of warrants, and 3,000 shares
issuable upon
the exercise of options, respectively, held by group
members other
than EPI Corporation. Also includes 2,500 shares held by
members of
the immediate family of a group member for which beneficial
ownership
is disclaimed.
Item 12. Certain Relationships and Related Transactions.
In 1992, EPI Corporation loaned $300,000 to the Corporation to
finance the
Corporation's purchase of certain equipment to be installed in its
computer
center. On January 17, 1995, EPI extended an additional $500,000
in credit
under the loan to assist in financing the organization of, and
purchase of
certain assets by its French subsidiary. The annual interest rate
paid on the
loan was 1.5% above the "prime rate" as published in The Wall
Street Journal.
Each term of the loan was for 90 days, and the loan was renewed for
additional
90-day terms through April 5, 1997, until repaid in full with
proceeds from
the sale of Common Stock in March 1997. The loan was secured by a
second
mortgage on the Corporation's real estate. The Corporation also
issued 15,000
shares of Common Stock to EPI Corporation when the loan was
originally made in
1992, and an additional 1,000 shares of common stock per $100,000
outstanding
principal balance upon each renewal of the loan for an additional
90-day term.
John P. Snyder, a director of the Corporation, is President, a
director and the
largest shareholder of EPI Corporation.
On June 30, 1996, the Corporation issued a total of 64,546 shares
of newly
authorized Series AA Preferred and a warrant to purchase one share
of Common
Stock ("New Preferred Warrants") in connection with a plan to
restructure
certain of its current obligations to founding shareholders and
preferred
shareholders, including directors of the Corporation, EPI
Corporation and
certain of EPI's directors. The Corporation issued one share of
Series AA
Preferred and a New Preferred Warrant in payment of each $10.00 in
outstanding
principal and interest due on loans made in 1985 by founding
shareholders, or
a total of 23,427 shares in payment of $234,344 in principal and
interest on
the shareholder loans. The interest rate on the retired
shareholder loans was
10% per year. The Corporation also issued one share of Series AA
Preferred
and a New Preferred Warrant to holders of Series A Preferred Stock
("Series A
Preferred") in payment of each $10.00 of accrued, unpaid dividends
payable on
the Series A Preferred, or a total of 6,952 shares in payment of
dividend
obligations totaling $69,552 as of June 30, 1996. In addition, the
Corporation issued one share of Series AA Preferred and one new
Preferred
Warrant in exchange for each of the 34,167 shares of Series A
Preferred
outstanding as of June 30, 1996 and the warrant to purchase one
share of Common
Stock that was originally issued with each Series A Preferred share
(an "Old
Preferred Warrant").
By restructuring its preferred stock and shareholder loans, the
Corporation
eliminated its outstanding obligations for accrued, unpaid
dividends, reduced
the principal balance of loans from shareholders, and reduced the
rate of
dividends and interest payable to shareholders in the future. As
a result of
these transactions, the Corporation's preferred shareholders, who
have
provided capital necessary for the expansion of the Corporation's
business in
past years, effectively extended the period for converting their
preferred
stock and exercising their warrants, and reduced the current
exercise price
per share on their warrants. The Series AA Preferred provides for
an annual
dividend of 8%, compared to 11.5% on the Series A Preferred. The
Series AA
Preferred, like the Series A Preferred, is convertible into 4
shares of Common
Stock for 5 years after issuance. However, the conversion rights
of the
Series A Preferred would have expired during December 1996 and
January 1997,
while the conversion rights of the Series AA Preferred continue
until June 30,
2001. The limitations, preferences, and relative rights of the
Series AA
Preferred are otherwise identical to those of the Series A
Preferred. The New
Preferred Warrant issued with each share of Series AA Preferred,
like the Old
Preferred Warrant accompanying the Series A Preferred, has initial
exercise
price of $2.50 per share of Common Stock, which increases by $.50
per year to
$4.50 per share during the fifth year after issuance. However, the
Old
Preferred Warrants would have expired at December 31, 1996,
compared to the
June 30, 2001 expiration date of the New Preferred Warrant, and the
current
exercise price was reduced from $4.50 to $2.50 per share.
In September and October 1996, the Corporation issued a total of
500,000 units
comprised of one share of Common Stock and a warrant to purchase
one share of
Common Stock at a price of $3.75 per share (the "1996 Warrants") in
a private
placement. The offering price was $2.50 per unit, and placement
proceeds
totaled $1,250,000. Directors, five percent beneficial owners of
Common Stock
and their affiliates who purchased units in the placement included
John P.
Snyder (5,097 units), EPI Corporation (126,106 units), directors of
EPI
Corporation other than Mr. Snyder (12,409 units) and H. Joseph
Schutte (37,967
units).
Effective as of July 1996, Twinsys began offering disaster recovery
and other
services to users of Unix-based computer systems in France through
Twin-X SA,
a newly organized subsidiary. Twinsys holds a 59.9% interest in
Twin-X, and
Roland Esnis and Francois Domine, Directeur Generale and Sales
Manager of
Twinsys, respectively, each holds an approximate 20% interest in
Twin-X.
Twinsys and Messrs. Esnis and Domine made proportional cash
contributions to
Twin-X for their respective interests in Twin-X.
It is the Corporation's policy that all material affiliated
transactions and
loans will be made or entered into on terms that are no less
favorable to the
Corporation than those that can be obtained from unaffiliated third
parties.
All future material affiliated transactions and loans must be
approved by a
majority of the independent directors who do not have an interest
in the
transactions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the
registrant has duly caused this report to be signed on its behalf
by the
undersigned thereunto duly authorized.
STRATEGIA CORPORATION
Date: April 30, 1997
By /s/ Richard W. Smith
Richard W. Smith,
President
