SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO.2
TO
FORM 10-KSB
[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 0-15873
LASERGATE SYSTEMS, INC.
----------------------------------------------------
(Exact name of small business issuer in its charter)
Florida 59-2543206
- - ------------------------------- ---------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
28050 U.S. 19 North, Suite 502, Clearwater, Florida 34621
- - --------------------------------------------------- -----
(Address of principal executive office) (Zip Code)
Issuer's telephone number: (813) 725-0882
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.03 par value
-----------------------------
(Title of Class)
Redeemable Warrants
-------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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 is not contained in this form, and no disclosure will be
contained, to the best of the 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 issuer's revenue for its most recent fiscal year was $4,204,626.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
At March 20, 1997, 7,362,061 shares of Common Stock were outstanding, and the
aggregate market value of the Common Stock of Lasergate Systems, Inc. held by
non-affiliates (7,235,234 shares) was $2,713,213.
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.
At March 20, 1997, 7,362,061 shares of Common Stock were outstanding.
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
YEAR
FIRST
BECAME PRESENT POSITION
NAME AGE DIRECTOR CLASS WITH THE COMPANY
- - ---- --- -------- ----- ----------------
<S> <C> <C>
Jacqueline E. Soechtig 47 1994 III President, Chief Executive Officer
and Director
Philip P. Signore 38 1996 I Vice President, Chief Financial Officer,
Treasurer, Secretary and Director
Bruce D. Barrington 54 1996 II Director
John J. Chluski 73 1996 II Director
Frank W. Swacker 74 1995 III Director
John J. Lettieri, Jr. 40 -- -- Vice President - Ticketing Services
James H. Moore, Jr. 54 -- -- Vice President - Operations and Assistant
Secretary
Glenn W. Phillips 55 -- -- Vice President - Sales and Marketing
William R. Stapleton 52 -- -- Vice President - Engineering and Product
Management
</TABLE>
The Company's Articles of Incorporation and By-Laws provide for a
classified Board of Directors. The Board is divided into three classes
designated Class I, Class II and Class III. The term of each Class II Director
is to expire at the 1997 Annual Meeting, the term of each Class III Director is
to expire at the 1998 Annual Meeting of Shareholders and the term of each Class
I Director is to expire at the 1999 Annual Meeting. Directors hold office until
their respective successors are elected and duly qualified, or until death,
resignation or removal. Officers hold office until the meeting of the Board of
Directors following each Annual Meeting of Shareholders and until their
successors have been chosen and qualified.
JACQUELINE E. SOECHTIG has been a director of the Company and the
Company's President and Chief Executive Officer since October 31, 1994. From
September 1994 until immediately prior to her employment by the Company, Ms.
Soechtig was a consultant to the Company. During the ten-month period prior
thereto, Ms. Soechtig purchased and operated a restaurant in Clearwater, Florida
together with her spouse. From February 1992 through December 1993, Ms. Soechtig
was the President and Chief Executive Officer of Precision Systems, Inc.
("PSI"), a company engaged in the production and sales of voice and call
processing systems. Prior to her employment with PSI, Ms. Soechtig served as
vice president of business development for Sprint Corp. (May 1990 through
February 1992). She also held the position of vice president of MCI
Telecommunications Corporation where she served in various sales, marketing and
technical capacities from May 1984 through May 1990. Both Sprint and MCI are
engaged in the telecommunications industry. Additionally, from 1970 to 1983, Ms.
Soechtig was employed by International Business Machines Corp. in various
technical and sales positions.
PHILIP P. SIGNORE has been the Company's Vice President - Finance,
Chief Financial Officer, Treasurer and Secretary since May 1996 and has been a
member of the Board of Directors since June 1996. Mr. Signore served as Chief
Financial Officer of Commercial Design Services, Inc., an office furniture
dealership, from March 1993 to May
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<PAGE>
1996. From July 1989 to March 1993, Mr. Signore was the Operations Controller
for Briggs Industries, Inc., a plumbing fixtures manufacturer. Previously, Mr.
Signore held various financial management positions in the areas of financial
planning and analysis while at Paradyne Corporation from 1983 to 1988 as well as
internal auditing at Moore McCormack Resources from 1981 to 1983. He began his
career working as a CPA at the international accounting firm of Peat Marwick
Mitchell & Co. from 1979 to 1981.
BRUCE D. BARRINGTON has been a member of the Board of Directors of
the Company since November 1, 1996. From 1973 to 1980 Mr. Barrington served as
Vice President of Research and Development for HBO & Company, a publicly-held
software solutions provider to the health care industry which he co-founded in
1973. From 1980 to 1983 Mr. Barrington served as a Director of HBO & Company. In
1982 Mr. Barrington formed Top Speed Corporation (formerly Clarion Software
Corporation and prior thereto Barrington Systems, Inc.), a software company
which develops and markets a sophisticated line of software development tools
aimed at the Windows(R) environment. Mr. Barrington served as a Systems Analyst
for Caterpillar Tractor Company from 1965 to 1967 and as a Manager of Hospital
Systems Development for McDonnel Douglas Automation Company from 1967 to 1973.
Mr. Barrington serves as the Company's Chief Technology Advisor and will
contribute to the direction of future products.
JOHN J. CHLUSKI has been a member of the Board of Directors of the
Company since November 1, 1996. Since 1988 Mr. Chluski has been an international
business consultant and advisor. He has served as an active Board Member of
several ITT subsidiaries and is presently a Director of ITT Composants (France).
Mr. Chluski is also a Director of Howmet S.A. (France), and serves as Advisor to
the Chairman of Marceau Investissements, a Paris-based investment fund, and
Advisor to Monitor Company, a global strategy consulting firm based in
Cambridge, Massachusetts. From 1972 to 1988, Mr. Chluski held several executive
management positions at ITT Corporation, including Group Executive-Engineered
Products-Europe, and Senior Vice President and Executive Representative of the
Chairman.
FRANK W. SWACKER has been a member of the Board of Directors of the
Company since May 3, 1995. Mr. Swacker has been engaged in the practice of law
for the past 46 years, more than the last five of such years in private
practice. Between 1968 and 1978, he was the International Counsel for
Allis-Chalmers Corporation in Milwaukee, Wisconsin. Mr. Swacker has published
articles focusing on international foreign trade and the financial, antitrust
and cross-cultural aspects of transnational business and is the lead author of
the 1996 two volume work entitled "World Trade Without Barriers," a
comprehensive treatise on the World Trade Organization and dispute resolution.
Additionally, he has advised the United States House of Representatives on
international trade treaties and has served as Special Assistant Deputy Attorney
General for the State of New York. Since 1960, Mr. Swacker has been a member of
the National Panel of Arbitrators of the American Arbitration Association.
JOHN J. LETTIERI, JR. has been the Company's Vice President of
Ticketing Services since March 1997. From August 1980 to February 1997, he
worked for the Carnegie Hall Corporation, serving as the first Director of
Ticket Operations from June 1989 until his departure. Mr. Lettieri's management
responsibilities included sales, customer service, and technological support.
Prior to August of 1980, Mr. Lettieri was employed by the Metropolitan Opera in
New York City.
JAMES H. MOORE, JR. has been the Company's Vice President of
Operations since January 1995. From April 1993 to December 1994, Mr. Moore was
the Vice President of Internal Operations of Precision Systems, Inc. From March
1962 to February 1993, he worked for General Motors Corporation serving from
March 1990 as Production Superintendent of its Arlington, Texas assembly plant.
While at General Motors, Mr. Moore had production management responsibility and
also served as a quality expert and consultant to various General Motors plants
throughout North America.
GLENN W. PHILLIPS has been the Company's Vice President of Worldwide
Sales and Marketing since January 1996. From May 1995 to December 1995 Mr.
Phillips was Vice President of Sales and Marketing for Syntrex Technologies,
Inc., a network systems integrator. From June 1994 to April 1995, Mr. Phillips
acted as a sales and marketing consultant to various companies. Prior thereto,
from October 1990, Mr. Phillips was employed by Software AG, a systems software
provider, as an Area Vice President of Sales until February 1993 and as Vice
President of Sales and Operations until May 1994.
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<PAGE>
WILLIAM R. STAPLETON has been the Company's Vice President of
Development and Product Management since February 1997. From October 1995 to
January 1997, Mr. Stapleton served as President (and Principal) of The Redington
Group, a business management and marketing consulting firm. From June 1961 to
September 1995 he worked for AT&T Corporation, holding various executive
management positions, most recently Corporate Director of Strategic Marketing
and Business Planning.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
- - ------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and any persons who own
more than 10% of any class of the Company's equity securities which are
registered under the Securities and Exchange Act of 1934, as amended (the
"1934") to file certain reports relating to their ownership of such securities
and changes in such ownership with the Securities and Exchange Commission and
NASDAQ, and to furnish the Company with copies of such reports. To the Company's
knowledge, based solely on a review of the copies of such reports furnished to
the Company, all Section 16 (a) filing requirements applicable to such officers,
directors and owners of over 10% of the Company's equity securities registered
under the 1934 Act, during the year ended December 31, 1996, have been complied
with except as follows: Bruce D. Barrington (a current Director of the Company)
and John J. Chluski (a current Director of the Company) were each inadvertently
late in filing a report upon becoming a Director and in filing a report of
transactions; Philip P. Signore (a current Officer and Director of the Company)
was inadvertently late in filing a report upon becoming an Officer and a
Director of the
Company; and Frank W. Swacker (a current Director of the Company) and Jacqueline
E. Soechtig (a current Officer and Director of the Company) were each
inadvertently late in filing reports of transactions. Fred R. Maglione (a former
officer of the Company) was inadvertently late in filing a report upon the
termination of his employment with the Company. To the Company's knowledge, John
P. Warnick (a former officer of the Company) did not file a report upon the
termination of his employment with the Company. To the Company's knowledge
Timothy E. Mahoney, Lawrence W. Umstadter and Stewart L. Krug (former Directors
of the Company) did not file reports upon resigning as Directors of the Company.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
- - --------------------------------------------------------------
The Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee recommends to the Board of Directors the
appointment of independent auditors to audit the Company's consolidated
financial statements, reviews the Company's internal control procedures and
advises the Company on tax and other matters connected with the growth of the
Company. The Audit Committee also reviews with management the annual audit and
other work performed by the independent auditors. The Compensation Committee
administers the Company's 1994 Stock Option Plan and recommends to the Board of
Directors the nature and amount of compensation to be paid to the Company's
Executive Officers.
On June 28, 1996, three members of the Board of Directors resigned
as Directors of the Company (in connection with the redemption of the Company's
Series A Convertible Preferred Stock.) On the same day, Philip P. Signore, the
Company's Vice President and Chief Financial Officer was appointed to the Board
of Directors. As a result, there was only one non-employee director on the Board
of Directors from June 28, 1996 until October 21, 1996. During this period, the
duties normally performed by the audit committee and compensation committee were
assumed by the sole remaining non-employee director, Frank W. Swacker. On
December 16, 1996, the Company established new audit and compensation
committees. The Audit Committee consists of Messrs. Barrington, Chluski and
Swacker. The Compensation Committee consists of Messrs. Barrington, Chluski and
Swacker.
During the fiscal year ended December 31, 1996, the Board of
Directors of the Company held 18 meetings, the Audit Committee held one meeting
and the Compensation Committee held four meetings. Each director attended at
least 75% of the aggregate number of meetings of the Board of Directors and the
committees, which were held during the period the director served as director
during the fiscal year ended December 31, 1996.
REMUNERATION OF NON-EMPLOYEE DIRECTORS
- - --------------------------------------
Effective January 1, 1996, the Company commenced paying non-employee
Directors fees equal to $1,000 per meeting attended in person, and $500 per
meeting attended by telephone.
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<PAGE>
In addition, upon the initial election and upon each re-election of
an outside Director to serve a term as a Director of the Company, such Director
is entitled under the Company's 1994 Stock Option Plan, to be granted an option
to purchase 5,000 shares of Common Stock for each year of such term, with 5,000
of such options to vest at the beginning of each year of such term provided that
the Director continues to serve in such capacity at the time of the scheduled
vesting. The exercise price of such options is set at 85% of market value at
time of grant. During the fiscal year ended December 31, 1996, each of Messrs.
Barrington and Chluski were granted options to purchase 5,000 shares under the
Company's 1994 Stock Option Plan at an exercise price of $.425 per share (85% of
the market value at time of grant). As a further inducement to their agreeing to
serve on the Board, they were each granted additional options to purchase 37,500
shares outside of the 1994 Stock Option Plan at an exercise price of $.656 per
share (the market value at time of grant). All such options are exercisable for
10 years.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth certain summary information
concerning compensation with respect to each person who served as the Company's
Chief Executive Officer during the fiscal year ended December 31, 1996 and each
of the Company's executive officers whose total cash compensation for the year
ended December 31, 1996 exceeded $100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
------ -------
NAME AND SECURITIES
PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY $ BONUS $ OPTIONS(#) COMPENSATION
--------- ---- -------- -------- ---------- ------------
<S> <C> <C> <C> <C>
Jacqueline E. Soechtig (1) 1996 220,000 100,000 -- --
President and Chief 1995 220,000 20,170 -- --
Executive Officer 1994 54,347 -- 375,000 --
Glenn W. Phillips(2) 1996 130,950 50,000 -- --
Vice President - Sales 1995 -- -- -- --
& Marketing 1994 -- -- -- --
James H. Moore, Jr. (3) 1996 100,000 50,000 -- --
Vice President - 1995 100,000 -- -- --
Operations, Assistant 1994 -- -- -- --
Secretary
</TABLE>
- - --------------
(1) Ms. Soechtig has been employed by the Company since October 31, 1994. Ms.
Soechtig's annual salary is currently $220,000. During the year ended
December 31, 1994, Ms. Soechtig was awarded stock options to purchase
375,000 shares of Common Stock, all of which are presently exercisable. In
addition, a $20,170 bonus payable in 1994 upon Ms. Soechtig's employment
with the Company was paid during 1995.
(2) Mr. Phillips has been employed by the Company since January, 1996. Mr.
Phillips' annual salary is currently $150,000. During the year ended
December 31, 1996, Mr. Phillips was awarded a bonus of $50,000.
(3) Mr. Moore has been employed by the Company since January, 1995. Mr.
Moore's annual salary is currently $100,000. During the year ended
December 31, 1996, Mr. Moore was awarded a bonus of $50,000.
No options were granted during the Company's 1996 fiscal year to the
current and former executive officers named in the Summary Compensation Table
above.
The following table sets forth certain information concerning the
number of shares of Common Stock acquired upon the exercise of stock options
during the year ended December 31, 1996 by, and the number and value at December
31, 1996 of shares of Common Stock subject to unexercised options held by, the
individuals listed in the Summary Compensation Table.
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<PAGE>
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
VALUE OPTIONS/SARS OPTIONS/SARS
REALIZED AT FY-END (#) AT FY-END ($)
NAME ON EXERCISE (#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ---- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C>
Jacqueline E. Soechtig -- -- 375,000/0 0/0
</TABLE>
- - ---------------------
(1) Represents the closing bid price on the National Association of Securities
Dealers Automated Quotation System of the underlying shares of Common
Stock on the date of exercise less the option exercise price.
EMPLOYMENT AGREEMENT
- - --------------------
Jacqueline E. Soechtig, President and Chief Executive Officer of the
Company, is a party to an employment agreement with the Company, which commenced
on October 31, 1994 for a term of three years and is automatically renewed for
two years (unless terminated by either party). Ms. Soechtig's base salary of
$220,000 per annum. Pursuant to the Agreement and as a signing bonus, Ms.
Soechtig was paid $20,170 and was granted ten-year stock options to purchase
375,000 shares of Common Stock, which are all presently exercisable at an
exercise price of $2.00 per share. Ms. Soechtig was granted certain registration
rights with respect to the shares of Common Stock underlying all of such
options.
No options were granted during the Company's 1996 fiscal year to the
current and former executive officers named in the Summary Compensation Table
above.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 28,
1997 regarding the beneficial ownership of shares of Common Stock by (I) each
person (including any "group" as that term is used in Section 13 (d)(3) of the
Securities Exchange Act of 1934, as amended) who is known by the Company to be
the beneficial owner of more than 5% of the Common Stock, its only class of
voting securities (ii) each director and nominee, (iii) each current and former
executive officer named in the Summary Compensation table herein titled
"Executive Compensation" and (iv) all directors and executive Officers of the
Company as a group.
NAME AND ADDRESS OF AMOUNT AND NATURE
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) Percent of Class
- - ------------------------ -------------------------- ----------------
Jacqueline E. Soechtig 398,500(2) 5.4%
c/o Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34621
Bruce D. Barrington 92,500(3)(4) 1.3%
c/o Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34621
John J. Chluski 95,827(3) 1.3%
C/O Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34621
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<PAGE>
NAME AND ADDRESS OF AMOUNT AND NATURE
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) Percent of Class
- - ------------------------ -------------------------- ----------------
Frank W. Swacker 15,000(5) *
c/o Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34616
James H. Moore 16 *
c/o Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34616
Glenn W. Phillips 0 *
c/o Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34616
Philip P. Signore 0 *
c/o Lasergate Systems, Inc.
28050 U.S. 19 Highway North
Suite 502
Clearwater, FL 34621
All directors and executive officers 601,843(6) 8.2%
of the Company as a group
(9 PERSONS)
- - -------------------
* LESS THAN 1%.
(1) Unless otherwise noted, the Company believes that all persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
(2) Includes 375,000 shares of Common Stock which Ms. Soechtig has the right
to acquire pursuant to presently exercisable stock options.
(3) Includes 42,500 shares of Common Stock which each of Messrs. Barrington
and Chluski has the right to acquire pursuant to presently exercisable
stock options.
(4) Includes 50,000 shares of Common Stock which Mr. Barrington holds as
trustee of a trust.
(5) Includes 10,000 shares of Common Stock which Mr. Swacker has the right to
acquire pursuant to presently exercisable stock options.
(6) Includes shares of Common Stock which such directors and executive
officers have the right to acquire pursuant to presently exercisable stock
options.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
LASERGATE SYSTEMS, INC.
By: /s/ Philip P. Signore
--------------------------
Philip P. Signore
Vice President, Chief Financial Officer
April 30, 1997
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