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, 1998.
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)
6040 Dutchman's Lane, Suite 400
Louisville, Kentucky 40205-3271
(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: Common Stock
Securities registered pursuant to Section 12(g) of the Act: None
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 December 31, 1998: Common stock -- $3,500,758
The number of shares of the registrant's common stock outstanding as of
March 31, 1999 -- 4,667,677 shares.
Strategia Corporation (the "Corporation") hereby amends its annual report on
Form 10-KSB for the year ended December 31, 1998 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 31, 1999, with respect
to each of the Corporation's directors and executive officers. The
Corporation's three 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 45 President and Director
John P. Snyder 60 Secretary and Director
John A. Brenzel 58 Director
James A Huguenard 45 Vice President and Chief Operating
Officer
Roland Esnis 32 Vice President - European Operations
Directeur General, Twinsys Dataguard SA
Paul E. Phillips. Jr. 55 Vice President and Chief Financial
Officer
</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.
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
a chain of 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.
James A. Huguenard has served as Vice President and Chief Operating
Officer of the Corporation since October 1998. From August 1997 to October
1998 Mr. Huguenard served the Corporation as Vice President and General
Counsel. Prior to August 1997, Mr. Huguenard was a member of the law firm
Brown, Todd & Heyburn PLLC, where he had practiced since 1983.
Roland Esnis has served as Vice President - European Operations since
December 1997 and Directeur General of both Twinsys Dataguard SA ("Twinsys")
since August 1995 and Strategia Europe SAS (Strategia Europe) since it was
formed in 1997. Both companies are French subsidiaries of the Corporation.
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, an unrelated computer services firm whose operating assets
were acquired by Twinsys. Prior to July 1993, Mr. Esnis held marketing
positions with Systar, a software company, and with the disaster recovery
division of Telesystemes, a computer services affiliate of France Telecom.
Paul E. Phillips, Jr. has served as Vice President and Chief Financial
Officer since July 6, 1998. From February, 1996 to March, 1998 Mr. Phillips
served as Vice President - Finance of Royal Ten Cate (USA), Inc., the U.S.
holding company for Royal Ten Cate NV, a Dutch company with operations in
textiles, plastics and rubber roller products, and its wholly owned subsidiary,
Nicolon Corporation, a company that principally manufactures specialty
textiles. From March, 1995 to December, 1995 Mr. Phillips served as President
of National Fire Hose Corporation, a wholly owned subsidiary of Royal Ten Cate
(USA), Inc., and a manufacturer of fire hoses for municipal and industrial fire
suppression markets, and from September, 1993 to February, 1995 as Vice
President - Finance and Administration of National Fire Hose Corporation.
Prior to September, 1993 Mr. Phillips held senior financial and accounting
positions with other organizations.
Richard W. Smith, James A. Huguenard, Roland Esnis and Paul E. Phillips,
Jr. 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 1998, all
the Reporting Persons complied with all applicable filing requirements,
except that Paul E. Phillips, Jr. filed the initial Form 3 report thirteen days
after the report was 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 Awards
Principal Position Year Salary Bonus Compensation Stock Underlying
*** Options (#)
<S> <C> <C> <C> <C> <C>
Richard W. Smith, 1998 $199,046 $ 0 $6,000 0
President (Chief 1997 156,585 33,182 6,000 0
Executive Officer) 1996 117,000 0 6,000 75,664
James A. Huguenard 1998 $146,160 $ 0 $ 0 0
Vice President and 1997 50,500 0 0 35,000
Chief Operating Officer*
Paul E. Phillips, Jr. 1998 $ 59,111 $ 0 $ 0 15,000
Vice President and
Chief Financial Officer**
Roland Esnis 1998 $113,312 $ 18,720 $ 0 0
Directeur General, 1997 64,844 42,647 0 0
Twinsys Dataguard 1996 68,716 40,647 0 15,000
SA and Strategia Europe SAS
*(Mr.Huguenard joined the Corporation August, 1997.)
** (Mr. Phillips joined the Corporation July 6, 1998.)
***(Perquisites and other personal benefits paid to the named executive
officers did not exceed 10% of the total salary and bonus.)
</TABLE>
The Corporation currently does not have a retirement plan for its
officers and employees. The Corporation implemented a 401(k) and Profit
Sharing Plan ("Plan") effective December 1, 1998. There were no
contributions made to the Plan by the Company on behalf of its officers and
employees during 1998.
Options Grants in Last Fiscal Year
In 1998, no options were granted to the executive officers named in
the summary compensation table with the exception of options for 15,000 shares
granted to Mr. Phillips at the time he joined the Company in July, 1998.
Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values
The following table sets forth as of December 31, 1998 the value of
unexercised options granted to the Corporation's executive officers named
in the summary compensation table pursuant to the Corporation's 1988 Stock
Option Plan (the "1988 Plan"). In 1998, no options were exercised by
the named executive officers under the 1988 Plan. The closing price on the
American Stock Exchange of the Common Stock on December 31, 1998 was $.75 per
share.
<TABLE>
<CAPTION>
Value of
Number of Shares Subject Unexercised
to Unexercised Options In-the-Money Options
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Richard W. Smith 110,000 0 $ 0 $ 0
James A. Huguenard 11,667 23,333 $ 0 $ 0
Roland Esnis 15,000 0 $ 0 $ 0
Paul E. Phillips, Jr. 0 15,000 $ 0 $ 0
</TABLE>
Director Compensation
The Strategia 1988 Stock Option Plan (as amended by stockholders in
1989 and 1997) provides automatic grants of stock options to the Company's
directors who are not employees. Beginning in the second quarter of 1997,
options to purchase 1,000 shares of common stock have been granted quarterly
to each nonemployee director. In addition, each nonemployee director who was
not a director on May 15, 1989 will automatically be granted an option for
2,500 shares of common stock on May 15 following his subsequent election.
Options for nonemployee directors are granted at the fair market value of
the common stock on the grant date and vest on the first anniversary of the
grant date.
In 1998, Mr. Brenzel and Mr. Snyder each were granted options for 4,000
shares of Common Stock. The option exercise prices ranged from $1.0625 to
$8.25 per share. No options were exercised in 1998.
In addition to the issuance of stock options, the Corporation paid its
Directors $750.00 per meeting for attendance at board and committee meetings
in 1998.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of March 31, 1999
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 March 31, 1999,
there were 4,667,677 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 1,408,937(3) 29.1%
Richard W. Smith
6040 Dutchmans Lane
P. O. Box 37144
Louisville, KY 40233 206,688(4) 4.3%
John A. Brenzel
3501 Graham Rd.
Louisville, KY 40207 83,440(5) 1.8%
James A. Huguenard
6040 Dutchmans Lane
P. O. Box 37144
Louisville, KY 40233 12,167(6) *
Roland Esnis
Twinsys Dataguard SA
Tour Mirabeau
39/43, Quai Andre Citroen
75015 PARIS 15,000(7) *
Paul E. Phillips, Jr.
6040 Dutchmans Lane
P. O. Box 37144
Louisville, KY 40233 500(8) *
All current directors
and officers as a
group (6 persons) 1,726,832(9) 34.6%
5% Beneficial Owners
TSF Investment Group LLC
9707 Shelbyville Road
Louisville, KY 40223 279,780(10) 5.9%
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,364,903(11) 28.3%
* 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,
Robert H. Loeffler,
Henry A. Schumpf,
Grace W. Wilkins
9707 Shelbyville Rd.
Louisville, KY 40223 1,596,945(11)(12) 32.9%
</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 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 1,364,903 shares of Common Stock beneficially owned by EPI
Corporation. (See footnote 12.) 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 9,000 shares subject to
currently exercisable stock options, and 7,885 shares issuable upon the
exercise of warrants.
(4) Includes 110,000 shares subject to currently exercisable stock options,
3,710 shares issuable upon the conversion of warrants, and 500 shares
owned individually by Mr. Smith's wife.
(5) Includes 9,000 shares subject to currently exercisable stock options,
and 1,855 shares issuable upon the exercise of warrants.
(6) Includes 11,667 shares subject to currently exercisable stock options.
(7) Includes 15,000 shares subject to currently exercisable stock options.
(8) Does not include 15,000 shares subject to stock options that are not
currently exercisable.
(9) Includes 154,667 shares subject to currently exercisable stock options
and 166,721 shares issuable upon the exercise of warrants.
(10) Includes 45,403 shares issuable upon the exercise of warrants.
(11) Includes 153,271 shares issuable upon the exercise of warrants.
(12) Includes 1,364,903 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 20,294 shares issuable upon the exercise of
warrants, and 9,000 shares issuable upon the exercise of options,
respectively, held by group members other than EPI Corporation. Also
includes 14,000 shares held by members of the immediate family of two
of the group members for which beneficial ownership is disclaimed.
Item 12. Certain Relationships and Related Transactions.
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 60% 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 23, 1999
By /s/ Richard W. Smith
Richard W. Smith, President
