U.S. Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 1 to Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission File Number: 0-20999
CHADMOORE WIRELESS GROUP, INC.
Name of small business issuer in its charter
COLORADO 84-1058165
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2875 E. PATRICK LANE, SUITE G, LAS VEGAS, NV 89120
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (702) 740-5633
Securities registered under Section 12(b) of the Exchange Act: NONE
Title of each class and name of each exchange on which registered: NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $.001 PAR VALUE
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the 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 in this form, and no disclosure will be contained,
to the best of the registrants 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]
State issuer's revenues for its most recent fiscal year. $6,074,076
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. As of April 27, 2000, the aggregate market value of the registrant's
common stock held by non-affiliates was $39,443,900.
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date. As of April 27, 2000, 45,695,172
shares of the registrant's common stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement to be filed not later than 120 days
after December 31, 1999, in connection with the Registrant's 2000 Anual Meeting
of Stockholders, referredto to herein as the "Proxy Statement," are incorporated
by reference into Part III of this Form 10-KSB. Certain exhibits filed with the
Registrant's prioor registration statements and period reports under the
Securities Exchange Act of 1934 are incorporated herein by reference by
reference into Part IV of this Report.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes [ ] No [X]
<PAGE>
Chadmoore Wireless Group, Inc. (the "Company") hereby amends Items 9,
10, 11 and 12 of its Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1999 to read in their entirety as follows:
<PAGE>
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS. The following table sets
forth the names and ages of all directors and executive officers of the company,
indicating all positions and offices with the registrant held by each such
person and the period during which he or she has served as a director or
executive officer as of April 15, 2000:
<TABLE>
<CAPTION>
PERIOD OF SERVICE AS
NAME AGE POSITION DIRECTOR OR EXECUTIVE OFFICER
- -------------------------- ---------------- ---------------------------- -----------------------------
<S> <C> <C> <C>
Robert W. Moore 42 President, CEO and Director 02/95 to Present
Stephen K. Radusch 47 Chief Financial Officer 01/00 to Present
Treasurer 03/00 to Present
Rick D. Rhodes 45 Chief Regulatory Officer 06/98 to Present
Secretary 06/98 to Present
Senior Vice President 06/98 to Present
Janice H. Pellar 48 Director 05/98 to Present
Mark F. Sullivan 42 Director 05/98 to Present
Joseph J. Finn-Egan 66 Director 05/98 to Present
Gary L. Stanford 61 Director 05/98 to Present
Jeffrey A. Lipkin 54 Director 05/98 to Present
</TABLE>
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<PAGE>
ROBERT W. MOORE has been President, Chief Executive Officer and Director of the
Company since inception and founded the Company in 1994. From 1989 to 1993, Mr.
Moore served as a Regional Manager and General Manager for Cellular One.
STEPHEN K. RADUSCH has been Chief Financial Officer since January 2000 and
Treasurer since March 2000. From 1997 to 1999, Mr. Radusch served as Vice
President and Chief Financial Officer of Surface Protection, Inc., in Houston
Texas, where he was in charge of all corporate finance and administrative
functions. From 1996 to 1997, he was a sole practitioner, in Houston Texas,
providing general accounting, tax and consulting services to individuals and
privately owned companies. From 1993 to 1996, Mr. Radusch was the Corporate
Controller and Chief Accounting Officer for Players International, Inc, a
multi-property developer and operator of gaming and entertainment facilities.
Mr. Radusch has a bachelors degree in accounting from the University of Texas
and is a Certified Public Accountant in the state of Texas.
RICK D. RHODES has been Senior Vice President and Chief Regulatory Officer and
Secretary since June of 1998. From 1995 until joining Chadmoore he worked for
the law firm of Irwin Campbell and Tannenwald. There he provided client
counseling for telecommunications clients and provided advocacy regarding
federal law, federal administrative agency matters and legislative activity on
Capitol Hill. From 1990 to 1995, Mr. Rhodes practiced law at the Law Firm of
Keller & Heckman in Washington, DC. In 1978 he earned his Master of Arts in Mass
Communications from the University of Arkansas. He earned his Juris Doctorate
from Catholic University of America in 1990.
JANICE H. PELLAR has been a Director since May 1998. Ms. Pellar is President of
Electronic Maintenance Co., Inc. ("EMCO"). She has held this position since
1988. Before this she held various titles including Service Manager, Vice
President and Manager at EMCO where she has been employed full time since 1973.
MARK F. SULLIVAN has been a Director since May 1998. Mr. Sullivan serves as
Managing Partner of Private Equity Partners, an investment banking firm
specializing in institutional private equity and debt financings for growth
companies based in the western United States, which he founded in 1996. From
1993 to 1996 he served as co-head of corporate finance for D.A. Davidson &
Company.
JOSEPH J. FINN-EGAN has been a Director since May 1998. Mr. Finn-Egan is
Managing General Partner of Recovery Equity Investors, L.P. and Recovery Equity
Investors II, L.P., which were founded in 1989 and 1994, respectively. Mr.
Finn-Egan has also been a Director of CMI Corporation since 1991.
GARY L. STANFORD has been a Director since May 1998. Mr. Stanford is currently
retired from the FCC after a 37-year career. He held various positions including
Associate Bureau Chief for Operations of the FCC's Wireless Telecommunications
Bureau.
JEFFREY A. LIPKIN has been a Director since May 1998. Mr. Lipkin is Managing
General Partner of Recovery Equity Investors, L.P. and Recovery Equity Investors
II, L.P., which were founded in 1989. Mr. Lipkin has also been a Director of CMI
Corporation since 1991 and of QAD Inc. since February 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") 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 registered
under the Exchange Act, to file initial reports of ownership and reports
indicating changes in ownership with the Securities and Exchange Commission (the
"SEC") and each exchange in which its securities are traded. Executive officers
and directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based on representations by each Officer, Director and greater than 10%
shareholder, during 1999 all required forms under Section 16A were filed in a
timely manner.
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<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation received
for services rendered to the Company during the years ended December 31, 1997,
1998, and 1999 by the Chief Executive Officer of the Company and all other
executive officers of the Company whose total salary and bonus for such fiscal
year exceeded $100,000 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLES
LONG TERM
ANNUAL COMPENSATION COMPENSATION
(a) (b) (c) (d) (1) (e)
Name Year Salary Bonus
And Ended SECURITIES
Principal December UNDERLYING
Position 31 ($) ($) OPTIONS
- ---------------------------------------------- ------------ ------------- -----------------
<S> <C> <C> <C> <C>
Robert W. Moore 1999 165,308 30,000 -
President, Chief Executive 1998 133,000 60,000 850,000
Officer and Director 1997 128,000 100,000
-
Rick D. Rhodes 1999 110,000 30,000 -
Chief Regulatory Officer and 1998 60,000 (2) 24,000 250,000
Secretary 1997
- - -
</TABLE>
(1) In 1997, Robert Moore was paid a cash bonus of $20,000 and an additional
$80,000 was accrued at December 31, 1997 and paid in May of 1998. In 1998,
the Company accrued bonuses in the amounts of $60,000 and $24,000 for
Robert Moore and Rick Rhodes, respectively. These bonuses were paid in
March of 1999. During 1999, the Company accrued bonuses of $30,000 each for
Robert Moore and Rick Rhodes. These bonuses were paid in February of 2000.
(2) Amounts shown for 1998 for Mr. Rhodes represent base salaries paid after he
commenced employment with the Company on June 1, 1998.
COMPENSATION OF DIRECTORS
No directors of the Company received compensation for their services as
directors during the Company's 1999 fiscal year.
EMPLOYMENT AGREEMENTS. Effective June 16, 1997, the Company and Robert Moore
entered into an employment agreement (the "Moore Agreement"). Under the terms of
the Moore Agreement, Mr. Moore is entitled to: (i) base compensation of $125,000
per year (subject to a minimum 5% annual increase); (ii) bonus compensation
based upon the growth and success of the Company's business as may be determined
by the Compensation Committee; and (iii) other benefits equivalent to those
provided the Company's other officers. The Moore Agreement's initial term ended
on January 1, 1999 and was automatically renewed until January 1, 2001. The
Moore Agreement is terminable by the Company or Mr.
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<PAGE>
Moore for cause, as defined therein, at any time or in the event of death or
disability. In the event of death or disability, Mr. Moore or his personal
estate is entitled to additional compensation as specified. If the Moore
Agreement is terminated for cause by Mr. Moore or without cause by the Company,
Mr. Moore is entitled to health insurance benefits for a two-year term and a
lump sum payment equal to twice the then- base compensation. In addition, in the
event of a termination following a change of control, as defined therein, Mr.
Moore is entitled to 2.99 times the average annual compensation. In addition,
Mr. Moore has agreed, for a period of 12 months following termination of the
Moore Agreement, not to render services for a company that is a competitor to
the Company and to keep all information received by Mr. Moore during the course
of his employment as confidential. Finally, in the event that the Moore
Agreement terminates upon expiration of a term or Mr. Moore terminates the
contract without cause, Mr. Moore is entitled to a lump sum payment equal to the
then-applicable annual base compensation.
Effective December 10, 1998, the Company and Rick D. Rhodes entered into an
employment agreement under substantially the same terms as the Moore Agreement,
with the exception of a base salary of $110,000, the issuance of options to
purchase 250,000 shares of Common Stock at an exercise price of $.51 per share
(the "Options"), a lump sum payment upon termination by the Company without
cause of one year's salary and automatic vesting of the Options and no lump sum
payment upon termination of the agreement by Mr. Rhodes.
OPTION GRANTS IN LAST FISCAL YEAR
No options were issued to the Named Executive Officers during the year ended
December 31, 1999.
None of the Named Executive Officers exercised any options during 1999.
As of December 31, 1999 the fair market value of all outstanding options issued
to the Named Executive Officers is $0.
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<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 15, 2000 ("the Ownership
Date"), regarding the beneficial ownership of shares of common stock held by (i)
the Named Executive Officers; (ii) each shareholder known by the Company to be
the beneficial owner of more than 5% of the Common Stock; (iii) each Director of
the Company, and (iv) all Directors and executive officers of the Company as a
group. The Company's Common Stock is the Company's only class of outstanding
voting securities. Unless otherwise indicated in a footnote thereto, the persons
named in the table below have sole voting and investment power with respect to
the shares of Common Stock shown as beneficially owned by them. Except as
otherwise indicated below, the address for each person is: c/o Chadmoore
Wireless Group, Inc., 2875 E. Patrick Lane, Suite G, Las Vegas, NV 89120.
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) BENEFICIALLY OWNED
- ------------------------------------- ------------------------ ------------------
<S> <C> <C> <C>
Robert W. Moore 2,399,266 (2) 5.7%
Rick D. Rhodes 125,000 (3) *
Janice H. Pellar 37,500 (4) *
Mark F. Sullivan 751,298 (5) 1.8%
Joseph J. Finn-Egan 29,771,814 (6) 47.1%
Gary L. Stanford 37,500 (7) *
Jeffrey A. Lipkin 29,771,814 (8) 47.1%
Recovery Equity Investors II, L.P.
555 Twin Dolphin Drive #185
Redwood City, CA 94065 29,771,814 (9) 47.1%
All directors and executive
Officers as a group (7 persons) 33,122,378 (10) 52.4%
</TABLE>
* Less than 1%
(1) According to the rules of the Commission, a person is deemed to be the
beneficial owner of a security if such person, directly or indirectly, has
or shares the power to vote or direct the voting of such security or the
power to dispose or direct the disposition of such security. A person or
entity is also deemed to be a beneficial owner of any securities if that
person has the right to acquire beneficial ownership within 60 days of the
Ownership Date. Accordingly, more than one person may be deemed to be a
beneficial owner of the same securities. Unless otherwise indicated by
footnotes the named person has sole voting and investing power with respect
to shares beneficially owned.
(2) Includes 725,000 shares of the Company's Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Moore upon the exercise
of nonqualified stock options.
(3) Comprised of 125,000 shares of the Company's Common Stock obtainable as of
the Ownership Date or within 60 days thereafter by Mr. Rhodes upon the
exercise of nonqualified stock options.
(4) Comprised of 37,500 shares of the Company's Common Stock obtainable as of
the Ownership Date or within 60 days thereafter by Ms. Pellar upon the
exercise of nonqualified stock options.
(5) Includes 608,798 shares of the Company's Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Sullivan Family Trust, of
which Mr. and Mrs. Sullivan are trustees, upon the exercise of nonqualified
stock options.
(6) Comprised of (i) 8,854,662 shares of Common Stock owned by Recovery Equity
Investors II, L.P. ("REI"); and (ii) 20,917,152 shares of Common Stock
obtainable as of the Ownership Date or within 60 days thereafter by REI
upon exercise of warrants. Mr. Finn-Egan, who is a Managing General
7
<PAGE>
Partner of REI and a member of the Company's Board of Directors, disclaims
beneficial ownership of all securities of the Company held by REI.
(7) Comprised of 37,500 shares of the Company's Common Stock obtainable as of
the Ownership Date or within 60 days thereafter by Mr. Stanford upon the
exercise of nonqualified stock options.
(8) Comprised of (i) 8,854,662 shares of Common Stock owned by REI; and (ii)
20,917,152 shares of Common Stock obtainable as of the Ownership Date or
within 60 days thereafter by REI upon exercise of warrants. Mr. Lipkin, who
is a Managing General Partner of REI and a member of the Company's Board of
Directors, disclaims beneficial ownership of all securities of the Company
held by REI.
(9) Comprised of 29,771,814 shares of the Company's Common Stock beneficially
owned by REI, obtainable as of the Ownership Date or within 60 days
thereafter by exercise of certain warrants.
(10) Includes 22,488,444 shares of the Company's Common Stock obtainable as of
the Ownership Date or within 60 days thereafter by exercise of certain
options and warrants.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a description of the employment agreements entered into between the Company
and three of the Named Executive Officers, see Item 10. "EXECUTIVE
COMPENSATION".
During the years ended December 31, 1999 and 1998 the Company paid $1,749,315
and $680,351, respectively, to Private Equity Partners ("PEP"), for professional
services associated with equity and debt financings under a consulting agreement
between the Company and PEP. Mark F. Sullivan, a Director of the Company, is an
owner and managing partner of PEP.
On December 6, 1999 the Company re-priced 358,798 of warrants to purchase the
Company's Common Stock from exercise prices ranging from $0.50 to $2.50 to an
exercise price of $0.01. These warrants are held by the Sullivan Family Trust,
of which Mark F. Sullivan and his wife are the only trustees.
On January 21, 2000 the Company issued a warrant to purchase 250,000 shares of
the Company's Common Stock at an exercise price of $0.21. This warrant is held
by the Sullivan Family Trust, of which Mark F. Sullivan and his wife are the
only trustees.
On May 1, 1998, the Company and REI entered into a shareholders agreement which
stipulated that the Company and each of the shareholders shall take all action
necessary to cause the Board to consist of two Directors to be designated by the
REI shareholders, two Directors designated by the Chief Executive Officer of the
Company, and three independent Directors.
On May 1, 1998, the Company and REI entered into an advisory agreement
commencing on May 1, 1998 and ending on the fifth anniversary. The advisory
agreement stipulates the consultant shall devote such time and effort to the
performance of providing consulting and management advisory services for the
Company as deemed necessary by REI. The Company shall pay an annual consulting
fee of $312,500 beginning on May 1, 1999 which shall be paid in advance, in
equal monthly installments, reduced by the Series C Preferred dividends paid in
the preceding twelve months.
8
<PAGE>
FORM10-KSB/A
============================================================================
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized:
Chadmoore Wireless Group, Inc.
(formerly CapVest International, Ltd.)
By: /s/ Stephen K. Radusch
----------------------------------
Stephen K. Radusch
Chief Financial Officer
Date: April 29, 2000
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