SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB/A
[X] Annual Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended October 31, 1999
OR
[ ] Transition Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File No.: 0-19000
JLM COUTURE, INC.
(Name of Small Business Issuer in its charter)
Delaware 13-3337553
(State or other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)
225 West 37th Street, 5th Floor, New York, New York 10018
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (212) 921-7058
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $.0002 per share
(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 contained herein, 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 [X].
The issuer's revenues for its most recent fiscal year were
$18,097,989.
The aggregate market value of the shares of Common Stock held by
non-affiliates as reported by NASDAQ on February 24, 2000 was
approximately $3,236,299.
As of February 22, 2000, the registrant had outstanding 2,070,530
shares of Common Stock, par value $.0002 per share.
Transitional Small Business Disclosure Format: Yes No X
The Annual Report on Form 10-KSB for the fiscal year ended
October 31, 1999 as filed on February 1, 2000 (the "Form 10-KSB")
of JLM Couture, Inc. ("JLM" or the "Company"), is hereby amended,
due to the fact the Company has not filed its proxy statement for
its annual meeting, to include the following items:
PART III.
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT.
The following table sets forth certain information as to the
directors of the Company:
Position with Director
Name Age the Company Since
Joseph L. Murphy 46 Chief Executive April 1986
and Financial Officer,
Director
Daniel M. Sullivan 74 Chairman of the September 1986
Board of Directors
Joseph E. O'Grady 77 Secretary and Director February 1991
Joseph L. Murphy, a founder of the Company, has been a
director of the Company since its inception. During Fiscal 1992,
Mr. Murphy was appointed President. In February 1993, Mr. Murphy
was appointed Chief Executive Officer. Mr. Murphy is the brother
of Mark Murphy, the Company's Vice President - Operations.
Daniel M. Sullivan became a director in September 1986 and was
elected Chairman of the Board in 1989. In 1989, Mr. Sullivan
retired as President and Chief Executive Officer of Frost &
Sullivan, Inc., a publicly-traded publisher of market research
studies, a position he had held for more than five years prior to
his retirement.
Joseph E. O'Grady was appointed to the Board of Directors in
February 1991. In December 1992, Mr. O'Grady was appointed
Secretary of the Company. For more than the past five years, Mr.
O'Grady has been the President of JOG Associates, Inc., a
privately-held financial consulting firm based in Hicksville, New
York. JOG Associates, Inc. arranges business financing and
provides financial consulting services for closely-held companies.
Directors serve until the next annual meeting of stockholders
and until their respective successors are elected and qualify.
During Fiscal 1999, the Board of Directors met informally. It
acted three times by unanimous written consent.
OTHER EXECUTIVE OFFICERS
Position with Position
Name Age the Company Held Since
Mark Murphy 35 Vice President- May 1993
Operations
Mark Murphy, 35, was appointed Vice President - Operations in
May 1993. Mr. Mark Murphy joined the Company in January 1993.
Prior to his joining the Company, Mr. Mark Murphy was employed as
a manager by Accurate Testing Co., a metals testing company based
in California, a position he had held since 1988. Mr. Mark Murphy
is the brother of Joseph L. Murphy, the Company's President.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF
1934.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Based solely on its
review of the copies of such forms received by it, the Company
believes that during Fiscal 1999 all executive officers and
directors of the Company complied with all applicable filing
requirements.
AUDIT AND COMPENSATION COMMITTEE
During Fiscal 1999, the Audit and Compensation Committee (the
"Audit Committee") consisting of Messrs. O'Grady and Sullivan did
not meet or act by unanimous written consent.
Item 10. EXECUTIVE COMPENSATION.
The following table sets forth information relating to the
cash compensation received during the Company's last three fiscal
years by the Company's President. None of the Company's other
officers had cash compensation in Fiscal 1998 of more than $100,000
per year:
SUMMARY COMPENSATION TABLE
Name and Annual Com- Other Long Term Other
Principal Fiscal pensation Annual Com- Compensation Compen-
Position Year Salary($) pensation($) Options sation($)
Joseph L. 1999 237,964 77,437 - 8,654
Murphy, 1998 178,833 45,703 200,000 10,132
President 1997 150,000 76,102 100,000 10,639
EMPLOYMENT AGREEMENT
On May 19, 1998, Mr. Joseph L. Murphy entered into an amended
employment agreement (the "Agreement") with the Company. The
Agreement terminates May 19, 2003, unless terminated earlier. The
base salary commences at $200,000 per annum. As additional
compensation, Mr. Murphy receives five percent (5%) of the
Company's annual pre-tax profits. As additional compensation, Mr.
Murphy was granted a five year option to purchase 200,000 shares of
Common Stock of the Company exercisable at a rate of 50,000 shares
immediately and 50,000 shares on each yearly anniversary date
thereof at an exercise price of $2.5625 per share, that being the
fair market value of a share of Common Stock on the date of grant.
STOCK OPTION PLANS
On November 17, 1986, the Company adopted an Incentive Stock
Option Plan (the "Plan") pursuant to which options to purchase up
to an aggregate of 100,000 shares of Common Stock could be granted.
Such options are intended to qualify as "incentive stock options"
within the meaning of Section 422A of the Code ("Incentive
Options").
In November 1994, the Board adopted and a majority of the
Company's shareholders approved a 1 for 3 reverse stock split,
which automatically decreased the authorized shares of Common Stock
under the Plan to 33,333. The Plan was amended in February 1996 to
increase the number of shares for which options could be granted to
100,000. A majority of the Company's stockholders approved the
Plan, as amended, in March 1996. During Fiscal 1996, options to
purchase an aggregate of 100,000 shares of Common Stock were
granted to ten employees of the Company. These options expire four
and three years from the date of issuance and are exercisable at
prices ranging from $.87 and $2.125 per share.
The Plan is administered by the Board of Directors which has
the authority to determine the persons to whom Incentive Options
may be granted, the number of shares of Common Stock to be covered
by each Incentive Option, the time or times at which the Incentive
Options may be granted or exercised and, for the most part, the
terms and provisions of the Incentive Options. The exercise price
of Incentive Options granted under the Plan may not be less than
the fair market value of the shares of Common Stock on the date of
grant.
On August 26, 1996, the Company adopted a second stock option
plan (the "1996 Plan"). The 1996 Plan provides for the issuance of
incentive and non statutory stock options to employees, consultants
advisors and/or directors for a total of up to 100,000 shares of
Common Stock. The 1996 Plan was amended by the Board of Directors
(subject to stockholder approval) in September 1998 to increase the
authorized number of shares thereunder from 100,000 to 250,000
shares. A majority of the Company's stockholders approved the
amendment to the 1996 Plan in October 1998, at the Company's Annual
Meeting of Shareholders. The exercise price of options granted may
not be less than the fair market of the shares on the date of grant
(110% of such fair market value for a holder of more than 10% of
the Company's Common Stock). The 1996 Plan will terminate on
August 26, 2006.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END (FYE) OPTION VALUES
Value of
Unexercised
Number In-the-Money
Of Unexercised Options
Options At FYE End
Shares At FYE Acquired ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized(1) Unexercisable Unexercisable(1)
Joseph L.
Murphy - - 200,000/100,000 0/0
Mark
Murphy - - 0/0 0/0
Joseph E.
O'Grady - - 6,667/3,333 0/0
Daniel M.
Sullivan - - 10,667/3,333 0/0
________________
(1) Represents fair market value of Common Stock at October 31,
1999 of $1.875 as reported by NASDAQ, less the exercise price.
COMPENSATION OF DIRECTORS
Directors not employed by the Company are compensated as
consultants for the time spent on Company matters, including
attendance at directors' and other meetings. During Fiscal 1999,
Mr. Sullivan received $30,000 and Mr. O'Grady received $50,956 as
consultant fees. Mr. O'Grady's remuneration is also reported in
the Summary Compensation Table above. See "Stock Option Plans"
above.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth as of February 22, 2000, the
number of shares of Common Stock held of record or beneficially (i)
by each person who held of record, or was known by the Company to
own beneficially, more than five percent of the outstanding shares
of Common Stock, (ii) by each director and (iii) by all officers
and directors as a group:
Number of Percent of
Names and Address Shares Owned (1) Outstanding Shares
Joseph L. Murphy 730,704(2)(3)(4) 32.18%
225 West 37th Street
New York, NY 10123
Daniel M. Sullivan 177,916(2)(3) 8.54%
225 West 37th Street
New York, NY 10123
Harvest Capital 78,740 3.8%
Corporation
225 West 37th Street
New York, NY 10123
Joseph E. O'Grady 11,333(2) (7)
FMR Corp. 181,500(5) 8.76%
82 Devonshire Street
Boston, MA 02109
Carl Seaman 281,666(6) 13.6%
12 The Poplars
Roslyn, NY 11576
All Directors and
officers as a
group (4 persons) 944,060(2)(3) 41.15%
_________________
(1) Unless otherwise indicated, all shares of Common Stock are
owned directly.
(2) Includes 200,000, 16,667, 6,667 and 223,344 shares for Messrs.
J. L. Murphy, Sullivan, O'Grady and all officers and directors
as a group, respectively, that are issuable upon exercise of
presently exercisable options at an average exercise price of
approximately $3.39 per share.
(3) Pursuant to the Securities Exchange Act of 1934, in addition
to the ownership of Common Stock set forth above, Mr. Joseph
L. Murphy, by virtue of his position with (President and a
director) and ownership of 22.1% of the outstanding Common
Stock of Harvest Capital Corporation ("Harvest") and Mr.
Sullivan, by virtue of his position with Harvest (Secretary
and a director), are considered to be the beneficial owners of
an additional 78,740 shares of Common Stock owned by Harvest.
Messrs. Murphy and Sullivan disclaim beneficial ownership of
these shares.
(4) On December 6, 1999, Mr. Joseph L. Murphy privately purchased
118,331 shares of Common Stock at a price of $2.125 per share.
To finance this purchase, Mr. Murphy borrowed funds from a New
York Bank and pledged all of these shares of Common Stock as
security for this loan. In addition, Mr. Murphy purchased
200,000 shares of Common Stock from the Company on December
22, 1998, as referred to below in Item 12. Certain
Relationships and Related Transactions.
(5) Based on information furnished to the Company by FMR Corp. on
Schedule 13G/A, dated February 11, 2000.
(6) Based on information furnished to the Company by Mr. Seaman on
Schedule 13D dated June 1, 1995 filed with the Company.
(7) Less than one percent.
The Company is unaware of any arrangement, the operation of
which, at a subsequent date, may result in a change of control of
the Company.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On December 22, 1998, Mr. Joseph L. Murphy purchased from the
Company 200,000 shares of Common Stock at a price of $2.25 per
share, the market value of such shares on such date. The purchase
was financed by Mr. Murphy executing a ten year promissory note due
to the Company in the principal amount of $450,000. The promissory
note bears interest at 5% per annum and requires annual principal
payments of $45,000 with accrued interest. The purchase was
approved by the unanimous consent of the Board of Directors of the
Company. The Company sold these shares to Mr. Murphy because it
was deemed to be in the best interests of the Company for him to
increase his equity ownership in the Company to better align his
interest with that of the other shareholders of the Company.
SIGNATURE
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.
JLM COUTURE, INC.,
Registrant
Dated: February 28, 2000 By:s/Joseph L. Murphy
Joseph L. Murphy
President (Authorized officer
and Principal Financial
Officer)
