SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K/A1
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to___________
Commission File No. 0-17118
Mark Solutions, Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-2864481
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(State or other jurisdiction (I.R.S. employer
of incorporation or organization) employer identification no.)
Parkway Technical Center
1515 Broad Street, Bloomfield, New Jersey 07003
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (973) 893-0500
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $ .01 par value
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(Title of class)
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
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or other information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ].
The aggregate market value of the 16,449,318 shares of Common Stock
held by non-affiliates of the Registrant on September 11, 1998 was $10,280,823
based on the closing sales price of $ .625 on September 11, 1998.
The number of shares of Common Stock outstanding as of September 11, 1998 was
19,296,674.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
This amendment No. 1 to the Annual Report on Form 10-K for the Year Ended
June 30, 1998 (the "1998 Form 10-K") of Mark Solutions, Inc. ("Mark") amends
Part III- Items 10 through 13 of the 1998 Form 10-K to include the following
information:
Item 10. Directors and Executive Officers of the Registrant.
The following table sets forth the names and ages if the members of
Mark's Board of Directors and its executive officers.
Name Age Position
Carl C. Coppola(1) 58 Chairman of the Board,
President, Chief Executive
Officer
Michael Nafash 37 Chief Financial Officer, Director
Michael J. Rosenberg 53 Vice President- Sales and Marketing
Richard Branca(2) 50 Director
Yitz Grossman 43 Director
Ronald E. Olszowy 51 Director
William Westerhoff(1,2) 60 Director
- ---------------------------------------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
All directors hold office until the next annual meeting of shareholders of
Mark (currently expected to be held during December 1998) and until their
successors are elected and qualified. Officers hold offices until the first
meeting of directors following the annual meeting of shareholders and until
their successors are elected and qualified, subject to earlier removal by the
Board of Directors.
Carl C. Coppola has been a Director, President and Chief Executive Officer of
Mark since 1984. For more than 30 years, Mr. Coppola has been President and
Chief Executive Officer of Mark Lighting Fixture Co., Inc., an unaffiliated
entity.
Michael Nafash has been the Chief Financial Officer of Mark since January 1998
and has been a Director since December 18, 1995. From February 1994 to January
1998, Mr. Nafash was employed by Evolutions, Inc. (OTC), an environmental
oriented apparel company as Chairman of the Board, President and Chief Executive
Officer. On January 5, 1998, Evolutions, Inc. filed a Chapter 7 bankruptcy
petition (Case No. 98-20010) in the U.S. Bankruptcy Court in Newark, New Jersey.
From June 1992 to June 1996, Mr. Nafash was employed by Pure Tech International,
Inc., a plastics and metal recycling company, including as Chief Financial
Officer from October 1993 to March 1995.
Michael J. Rosenberg has been Vice President- Sales and Marketing of Mark since
1990.
Richard Branca has been a Director of Mark since November 18, 1992. Since 1970
Mr. Branca has been President and Chief Executive Officer of Bergen Engineering
Co., a construction company.
Yitz Grossman has been a Director of Mark since December 4, 1997. Since 1983 Mr.
Grossman has been President and Chairman of Target Capital Corporation, a
consulting company.
Ronald E. Olszowy has been a Director of Mark since November 18, 1992. Since
1966, Mr. Olszowy has been President and Chief Executive Officer if Nationwide
Bail Bonds, which provides bail, performance and fidelity bonds. Mr. Olszowy has
also been President of Interstate Insurance Agency since 1980.
William Westerhoff has been a Director of Mark since November 18, 1992. Mr.
Westerhoff has been retired since June 1992. Prior thereto and for more than
five years Mr. Westerhoff was, a partner of Sax, Macy, Fromm & Co., certified
public accountants.
Directors' Compensation
Each outside director receives a $1,000 fee and is reimbursed for travel
expenses for each meeting attended. The fees will be accrued but remain unpaid
until Mark's financial condition sufficiently improves as determined by Mr.
Coppola. The Mark has established a policy of granting stock options to
directors exercisable at the closing sales price of the Common Stock on the date
of grant. On December 4, 1997, each of the outside directors received five-year
options to purchase 100,000 shares of Common Stock at between $2.875 and $3.375
per share. On June 25, 1998, the foregoing options were cancelled and each
outside director received five-year options to purchase 100,000 shares of Common
Stock at $1.125 per share, the closing sales price on the date of grant. Future
compensation policies will be reviewed annually based upon the Mark's financial
condition and results of operations.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) if the Securities Exchange Act of 1934, as amended, requires
the Mark's directors, executive officers and 10% shareholders to file with the
Securities and Exchange Commission reports of ownership and changes in ownership
of the Mark's equity securities including its Common Stock. Such persons are
also required to furnish the Mark with such reports.
To the Mark's knowledge during the fiscal year ended June 30, 1998, all
Section 16(a) filing requirements were satisfied.
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<PAGE>
Item 11. Executive Compensation.
The following table sets forth the amount of all compensation paid to each
of the Mark's executive officers whose compensation exceeded $100,000, including
its Chief Executive Officer, for the Mark's last three fiscal years ended June
30, 1998.
<TABLE>
<CAPTION>
================================================================================================================================
| | | Annual Compensation | Long Term Compensation | |
| | | | Awards/Payouts | |
================================================================================================================================
|Name and | Year | Salary ($) | Bonus | Other Annual | Restricted | Options/ | LTIP | All other|
|Principal | | | ($) | Compensation | Stock | SARs# | Payouts| Compen- |
|Position | | | | | Awards $ | | $ | sation |
- -------------------------------------------------------------------------------------------------------------------------------|
|<S> <C> <C> <C> <C> <C> <C> <C> <C>
||Carl Coppola, | | | | | | | |
|President & CEO | 1998 | 200,000 | -0- | -0- | -0- | 200,000 | -0- | -0- |
| | 1997 | 300,000 | -0- | -0- | -0- | 750,000 | -0- | -0- |
| | 1996 | 275,000 | -0- | -0- | -0- | -0- | -0- | -0- |
|----------------------------------------------------------------------------------------------------------------------------- |
|Michael Nafash, | 1998 | 50,000 | -0- | -0- | -0- | 150,000 | -0- | -0- |
|VP- Finance & | | | | | | | | |
|CFO(1) | | | | | | | | |
===============================================================================================================================
<FN>
(1) Mr. Nafash became an employee of Mark on January 1, 1998 and receives an annual salary of
$100,000.
</FN>
</TABLE>
- -
Options/SAR Grants in Fiscal Year 1998
The following table sets forth individual grants of stock options to the
named executive officers in the Summary Compensation Table for the fiscal year
ended June 30, 1998.
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term (1)
-------------------
% of Total
Options
Options Granted to Exercise
Granted Employees in Price Expiration
Name (#)(2) Fiscal Year ($/Sh) Date 5%($) 10% ($)
- -------------- -------- ----------- --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Carl Coppola 250,000 52.1% $ 1.125 06/24/03 43,750 93,750
Michael Nafash 150,000 31.1% $ 1.125 06/24/03 26,250 56,250
<FN>
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior to
the expiration of their term, assuming the specified compounded rates of
appreciation on the Common Stock over the term of the options. These numbers do
not take into account provisions of certain options providing for termination of
the option following termination of employment, nontransferability or
differences in vesting periods.
(2) The closing sales price on date of option grants was $ 1.125 per share.
</FN>
</TABLE>
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<PAGE>
1998 Fiscal Year End Option Values
The following table sets forth the value of options granted to the named
executive officers in the Summary Compensation Table for the fiscal year ended
June 30, 1998.
Number of Securities Value of Unexercised
Underlying Unexercised in-the Money Options
Options at Fiscal Year(#) at Fiscal Year End($)
Name Exercisable/Unexercisable Exercisable
- ----------------- ------------------------- --------------------
Carl Coppola 1,000,000/0 0 (1)
Michael Nafash 210,000/0 0 (1)
- --------------------------------------
(1) Based upon a closing sales price of $0.8125 per share of Common Stock on
October 27, 1998.
1998 Fiscal Year End Repricing of Options
The following table sets forth all repricing of stock options held by the
named executive officers in the Summary Compensation Table in the last ten
years. See "Report of the Board of Director on Executive Compensation- Stock
Option Repricing".
<TABLE>
<CAPTION>
========================================================================================================================
| | | | | | | Length of |
| | | Number of | Market Price | Exercise | | Original Term |
| | | Securities | of Stock at | Price at Time | | Remaining at |
| | | Underlying | Time of | of Repricing | New | Date of |
| | | Options/SARs | Repricing or | or Exercise | Exercise | Repricing or |
|Name and | | Repriced or | Amendment | Amendment | Price | Amendment |
|Title | Date | Amended(#) | ($) | ($) | | (Years/Days) |
|----------------|---------------|---------------|-------------------|------------------|-------------|-----------------|
|<S> <C> <C> <C> <C> <C> <C>
| | | | | | | |
|Carl Coppola, | 06/25/98 | 250,000 | 1.125 | 2.875 | 1.125 | 2/156 |
|CEO | | | | | | |
|----------------|---------------|---------------|-------------------|------------------|-------------|-----------------|
| | | | | | | |
|Michael Nafash, | 06/25/98 | 150,000 | 1.125 | 2.875 | 1.125 | 2/156 |
|CFO | | | | | | |
=========================================================================================================================
</TABLE>
Employment Agreements
Pursuant to a three-year employment agreement expiring on June 30, 2000,
Mr. Coppola receives an annual base salary of $200,00 and was granted three-year
options to purchase 250,000 shares of Common Stock at an exercise price of
$1.125, 250,000 shares of Common Stock at an exercise price of $2.00 and 250,000
shares of Common Stock at an exercise price of $2.75. In addition, Mr. Coppola
is entitled to reimbursement of expenses not to exceed $15,000 annually and is
provided with an automobile and maintenance and use reimbursement by Mark. Mr.
Coppola's employment is terminable by Mark upon 90 days written notice and
provides for a two-year non-compete period to take effect upon the termination
of Mr. Coppola's employment.
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<PAGE>
Stock Option Plan
Under Mark's 1993 Stock Option Plan (the "Option Plan"), options to
purchase up to 1,000,000 shares of Common Stock may be granted to key employees
and officers of Mark or any of its subsidiaries. The Option Plan is designed to
qualify under Section 422 of the Internal Revenue Code as an "incentive stock
option" plan.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information with respect to each
beneficial owner of 5% or more of the Common Stock, each Director of Mark, each
Executive Officer of Mark who is named in the Summary Compensation Table and all
Executive Officers and Directors as a group as of October 28, 1998. The persons
named in the table have sole voting and investment power with respect to all
shares of Common Stock owned by them, unless otherwise noted.
Number of Shares % of Shares
Beneficial Owner Owned Outstanding
- ---------------- ---------------- -----------
Carl C. Coppola
c/o Mark Solutions, Inc.
1515 Broad Street
Bloomfield, NJ 07003 2,797,100 (1) 13.8%
Joseph Salvani
1 Duran Avenue
Ridgewood, NJ 07450 1,159,956 (2) 6.0%
William Westerhoff 160,000 (3) (4)
Richard Branca 225,000 (3) (4)
Ronald E. Olszowy 210,000 (3) (4)
Michael Nafash 213,500 (5) (4)
Yitz Grossman 119,333 (6) (4)
All executive officers
and Directors as
a group (7 persons) 3,923,833 (7) 18.5%
-5-
<PAGE>
(1) Includes 63,200 shares held in trust for the benefit of three children of
Mr. Coppola. Mr. Coppola disclaims beneficial ownership of these shares.
Also includes 1,000,000 shares of Common Stock issuable pursuant to options
which are presently exercisable.
(2) Includes 100,000 shares of Common Stock issuable pursuant to warrants which
are presently exercisable.
(3) Represents or includes 160,000 shares of Common Stock issuable pursuant to
options which are presently exercisable.
(4) Less than 1%
(5) Includes 210,000 shares of Common Stock issuable pursuant to options which
are presently exercisable.
(6) Includes 19,333 shares held in a charitable trust of which Mr. Grossman
serves as one of the trustees. Mr. Grossman disclaims beneficial ownership
of these shares. Also includes 100,000 shares of Common Stock issuable
pursuant to options which are presently exercisable.
(7) Includes 1,940,000 shares of Common Stock issuable pursuant to warrants or
options which are presently exercisable.
Item 13. Certain Relationships and Related Transactions.
Mark purchases lighting fixtures, fabricating services and other related
services from Mark Lighting Fixture Co., Inc. ("Mark Lighting"), a company
wholly owned by Carl Coppola, President and Chief Executive Officer of Mark. For
the fiscal year ended June 30, 1998, Mark paid Mark Lighting $416,497 for such
goods and services.
On December 4, 1997, Mr. Coppola was granted three-year options to purchase
250,000 shares of Common Stock at $2.875 per share. On June 25, 1998, the
foregoing options were cancelled and Mr. Coppola was granted three-year options
to purchase 250,000 shares of Common Stock at $1.125 per share the closing sales
price on the date of grant.
In May 1997, Mr. Coppola made loans aggregating $160,000 to Mark for
working capital purposes. The loans are represented by demand notes with an
annual interest rate of 10% payable semiannually. These notes were repaid on
April 16, 1998.
In May 1998, Mark loaned Mr. Coppola $100,000 at 10% interest per annum.
The loan was payable on demand and was repaid in full in September 1998.
On December 4, 1997, Mr. Nafash was granted three-year options to
purchase 150,000 shares of Common Stock at $2.875 per share. On June 25, 1998,
the foregoing options were cancelled and Mr. Nafash granted three-year options
to purchase 150,000 shares of Common Stock at $1.125 per share the closing sales
price on the date of grant.
In order to induce their exercise, on September 9, 1997, Mark reduced the
exercise price of warrants to purchase 100,000 shares of Common Stock issued to
Joseph Salvani from $5.00 to $2.50 per share.
Mark grants each nonemployee director options as compensation for serving
on the Board of Directors. On December 4, 1997, each of the outside directors
received five-year options to purchase 100,000 shares of Common Stock at between
$2.875 and $3.375 per share. On June 25, 1998, the foregoing options were
cancelled and each outside director received five-year options to purchase
100,000 shares of Common Stock at $1.125 per share the closing sale price on the
date of grant.
Management believes that each of the foregoing transactions are on terms no
less favorable to Mark than could be obtained from unaffiliated third parties.
<PAGE>
POWER OF ATTORNEY
Mark Solutions, Inc., and each of the undersigned do hereby appoint Carl
Coppola, its or his true and lawful attorney to execute on behalf of Mark
Solutions, Inc. and the undersigned any and all amendments to this Report and to
file the same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MARK SOLUTIONS, INC.
October 28, 1998 By: /s/ Carl Coppola
--------------------------
(Carl Coppola, Chief Executive
Officer and President)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the persons on behalf of the Registrant and in
the capacities and on the date indicated:
Signature Title Date
/s/ Carl Coppola Chief Executive Officer October 28, 1998
- ---------------- President and Director
(Carl Coppola) (Principal Executive
Officer)
/s/Michael Nafash Chief Financial Officer, October 28, 1998
- ----------------- Vice President and
(Michael Nafash) Director
/s/ Richard Branca* Director October 28, 1998
- ------------------
(Richard Branca)
/s/ Ronald Olszowy* Director October 28, 1998
- --------------------
(Ronald E. Olszowy)
/s/William Westerhoff* Director October 28, 1998
- --------------------
(William Westerhoff)
/s/Yitz Grossman* Director October 28, 1998
- --------------------
(Yitz Grossman)
* By Carl Coppola as attorney-in-fact
<PAGE>
