SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-KSB/A-1 Annual or Transitional Report
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
Commission File Number 0-17580
FIRETECTOR INC.
(Exact name of Small Business Issuer in its charter)
Delaware 11-2941299
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
262 Duffy Avenue, Hicksville, New York 11801
(Address of principal executive offices) (zip code)
Issuer's telephone number, including area code: (516) 477-4300
Securities registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value per share
(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 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 the Registrant's knowledge, in definitive proxy or information
statements be reference in Part III of this Form 10-KSB ( )
State issuer's revenues for its most recent fiscal year: $13,614,000
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the average bid and ask prices for the Registrant's
Common Stock, $.001 par value per share, as of December 17, 1996 was
$2,204,371.94.
As of January 24, 1997, the Registrant had 3,548,400 shares of Common Stock
outstanding.
Documents Incorporated by Reference: None
<PAGE>
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:
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 37 Chairman, Chief October 1990
Executive Officer,
General Counsel and
Director
Joseph Vitale 48 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 56 Treasurer, Vice January 1997
President, Chief
Financial Officer,
and Director
Dennis P. McConnell 43 Secretary and January 1997
Director
Henry Schnurbach 44 Director October 1988
Richard Axelsen 62 Director October 1988
Marc Palker(1) 44 Treasurer, Chief October 1988
Financial Officer,
Secretary and
Director
(1) Mr. Palker resigned as Treasurer, Secretary, Chief Financial
Officer and Director of the Company and all its subsidiaries
effective January 1, 1997. Mr. Palker has taken a position working
with several companies affiliated with the Company's largest
stockholder.
Mr. Tamkin has a J.D. degree from New York University School of Law and an
A.B. degree from Columbia University. Mr. Tamkin has been Chief Executive
Officer since March 15, 1996, prior to which Mr. Tamkin was Vice President and
General Counsel of the Company from October 1990. Also since October 1990, Mr.
Tamkin has been a Vice President of Mirtronics and Executive Vice President of
Forum Financial Corporation, a Toronto based merchant banking organization
controlled by a Director of Mirtronics. Since November 1992, Mr. Tamkin has been
a director of Unicap Commercial Corporation, an Ontario corporation which is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"). Mr.
Tamkin was associated with Varet & Fink P.C. from 1986 to October 1990 and from
October 1990 to January, 1993 was Counsel to that firm. Mr. Tamkin is presently
Counsel to Dolgenos Newman & Cronin LLP, counsel to the Company.
Mr. Vitale has been active in the fire/communications industry with Casey
since 1982. Mr. Vitale has been President of the Company since March 15, 1996.
Mr. Vitale has been President of Casey since 1993 and has held the positions of
Director of Engineering, Vice President - Engineering and Executive Vice
President. Mr. Vitale holds a Bachelor of Science degree in Engineering from
C.W. Post College and a Master of Science degree in Electrical Engineering from
New York University.
<PAGE>
Mr. Poserina joined the Company as Treasurer, Vice President, Chief
Financial Officer and Director as of January 1, 1997. From December 1995 until
he joined the Company, Mr. Poserina was an independent financial consultant.
Also, from July 1996 to September 1996, Mr. Poserina was Chief Financial Officer
of Happiness Express Inc. Mr. Poserina was Chief Financial Officer of Dorne and
Margolin Inc. from November 1994 to December 1995. Prior to that, Mr. Poserina
spent 15 years as Vice President, Treasurer and Chief Financial Officer of
Chryon Corporation, a NYSE listed company registered under the Exchange Act. Mr.
Poserina holds a Bachelor of Science in accounting from the University of Rhode
Island and is a Certified Public Accountant.
Mr. McConnell is associated with Dolgenos Newman & Cronin LLP, counsel to
the Company. Prior to Dolgenos Newman & Cronin, he was associated with Varet &
Fink P.C. from 1989 to March 1993. Mr. McConnell has a J.D. degree from New York
Law School.
Mr. Schnurbach has a Bachelor of Commerce degree from Sir George Williams
University and is a Certified Management Accountant in Ontario. Since October
1991, Mr. Schnurbach has been Chief Executive Officer of Cantab./Polyair
Incorporated, a manufacturer of specialty covers and packaging materials.
Mr. Axelsen has a Bachelor of Science degree from Hofstra University. Mr.
Axelsen was President of Casey from 1982 to 1993 and Chairman of the Company
from 1986 to March 1996. Mr. Axelsen previously served as a Director of the
Automatic Fire Alarm Association of New York and as Co-Chairman of the
Association's advisory committee for new codes and existing codes.
Mr. Palker was employed by the Company, as Treasurer, Secretary, Vice
President and CFO since September 1988. From 1988 through 1992, Mr. Palker
served as a National Director of the Institute of Management Accountants, in
1994 as a National Vice President, and currently serves as a National Committee
Chair of this organization. Mr. Palker holds a Bachelor of Science degree from
Rider College and a Master of Business Administration degree from St. John's
University. Mr. Palker is a Certified Management Accountant.
There are no family relationships between any Director or Executive Officer
of Firetector and any other Director or Executive Officer of Firetector.
Directors hold office for a period of one year from the Annual Meeting of
Stockholders at which they are elected or until their successors are duly
elected and qualified. Officers are appointed by the Board of Directors and hold
office at the will of the Board. There is no nominating, auditing or
compensation committee of the Board of Directors nor is there any committee
performing similar functions.
During the fiscal year ended September 30, 1996, Marc Palker, an
Officer and Director of the Company during the fiscal year ended September 30,
1996, failed to file with the Securities and Exchange Commission on a timely
basis one required report relating to transactions involving Common Stock owned
by him. During the fiscal year ended September 30, 1996, Joseph Vitale, an
Officer and Director of the Company during the fiscal year ended September 30,
1996, failed to file with the Securities and Exchange Commission on a timely
basis one required report relating to transactions involving Common Stock owned
by him. During the fiscal year ended September 30, 1996, Henry Schnurbach, a
Director of the Company during the fiscal year ended September 30, 1996, failed
to file with the Securities and Exchange Commission on a timely basis one
required report relating to transactions involving Common Stock owned by him. In
making these statements, the Company has relied on the written representations
of its directors, officers and 10% holders and copies of the reports that they
have filed with the Commission.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation paid or accrued by the Company for services rendered to it for each
of the three fiscal years ended September 30, 1996, as to Daniel S. Tamkin, the
Company's present Chief Executive Officer and Richard H. Axelsen, the Company's
former Chief Executive Officer; none of the Company's other Executive Officers
had aggregate remuneration in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG
ANNUAL COMPENSATION TERM COMPENSATION
All Other
Year Salary ($) Bonus($) Other($) Option/SAR Compensation
- - -----------------------------------------------------------------------------
Daniel S. Tamkin
1996 $69,000 -- -- -- --
1995 $65,000 -- -- --
1994 $65,000 -- -- 8,750(1) --
Richard H. Axelsen
1996 $85,000 -- -- -- --
1995 $110,000 -- -- --
1994 $137,000 -- -- 3,750(2) --
- ------
(1) Options to purchase 8,750 shares of Common Stock, at a price of $1.00 per
share, were issued to Mr. Tamkin in May, 1994.
(2) Options to purchase 3,750 shares of Common Stock, at a price of $1.00 per
share, were issued to Mr. Axelsen in May, 1994.
- -----------
In December 1995, the Board of Directors voted to institute a 401(k) plan
for nonunion employees to be effective January 1, 1996. The plan includes a
profit sharing provision based on a determination of the Board of Directors.
Directors do not receive any compensation for their service. Out-of-pocket
expenses for travel, meals and miscellaneous expenses incurred in the course of
the Director's activities on behalf of the Company are reimbursed at cost.
The Company adopted its 1990 Non-Qualified Stock Option Plan (the "Plan")
and has reserved 175,000 Common Shares for issuance under the Plan to employees
and officers of the Company and its subsidiaries. The Plan is administered by
the Company's Board of Directors, which determines the officers and employees to
whom options ("Options") are to be granted, the number of shares that may be
purchased at the Option price, which may not be less than 100% of the fair
market value of a Common Share at the time the Option is granted. Each Option
granted under the Plan is evidenced by a written Option Agreement. All Options
granted under the Plan expire on May 24, 1999, or with respect to any optionee,
90 days after termination of employment (with certain exceptions in the case of
death or permanent disability of the optionee) or if an optionee is terminated
for cause, upon termination. Directors may grant options to eligible employees
at exercise prices not less than 100% of the fair market value of the common
shares at the time the option is granted. The Plan provides for anti-dilution
protection for optionees in the case of recapitalizations, stock splits or
combinations, and stock distributions. The standard form of Option Agreement
(which may be altered)
<PAGE>
provides for piggy-back registration of Common Shares issued upon exercise of
Options issued under the Plan. All Options issued under the Plan are
non-transferable (except to an executor or administrator of an optionee's estate
for a limited period) and all Common Shares issuable upon exercise of Options
are restricted securities and may only be sold pursuant to a registration
statement under the Act, or an available exemption from the registration
requirements of the Act.
The Company currently has issued and outstanding options to purchase
103,750 shares of its Common Stock, at an exercise price of $1.00 and 71,250 at
an exercise price of $1.25, to certain of its officers, Directors and employees.
See Item 12, "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's outstanding Common Stock at
January 8, 1996 of (i) each beneficial owner of more than five percent of the
Common Stock, (ii) each of the Company's Directors, and (iii) all Officers and
Directors of the Company as a group.
Common Stock Beneficially Owned At January 24, 1997
Number of Shares Percent of Shares
--------------------------------------
Mirtronics Inc.(1) 4,369,250 61.7%
First Corporate Capital Inc.(2) 500,000 12.4%
Daniel S. Tamkin (3) 363,200 9.4%
Joseph Vitale (4, 5) 23,875 nil
Richard H. Axelsen (4, 5) 12,500 nil
Henry Schnurbach (2) 8,250 nil
John A. Poserina (4, 5) 13,500 nil
Dennis P. McConnell (6) 0 nil
All Executive Officers and
Directors as a Group (6 Persons) 421,325 10.8%
- ----------
(1) Includes 3,528,000 shares of Common Stock issuable upon conversion of
preferred stock, exercise of presently exercisable options held by Mirtronics
and conversion of debt owed to Mirtronics and convertible into shares of Common
Stock. See ITEM 12, "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS". Address is
106 Avenue Road, Toronto, Ontario.
(2) All issuable upon exercise of presently exercisable options. Address is
106 Avenue Road, Toronto, Ontario.
(3) Includes 303,200 shares of Common Stock issuable upon exercise of
presently exercisable options. Of these options, 12,500 were granted by the
Company and 290,700 were acquired from Mirtronics. Address is 106 Avenue Road,
Toronto, Ontario.
(4) Address is 262 Duffy Avenue, Hicksville, NY.
(5) Issuable upon exercise of presently exercisable options.
(6) Address is 96 Spring Street, New York, NY.
- -------
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As at September 30, 1996 Firetector and its affiliates were indebted to
<PAGE>
Mirtronics and its subsidiaries for materials, loans and miscellaneous advances
in the amount of $149,000. In addition, the Company is indebted to First
Corporate Equity Ltd., an affiliate of a Director of Mirtronics, in the
aggregate amount of $204,500. Firetector and Casey also have granted Mirtronics
a pledge of all assets to secure any indebtedness which may, from time to time,
be owing by Firetector or Casey or any subsidiaries to Mirtronics or its
subsidiaries. The Company had a receivable from Mirtronics and its subsidiaries
in the amount of $413,000 and $297,000 at September 30, 1996 and 1995,
respectively.
In July 1994, in consideration of Mirtronics extending the term of a letter
of credit that supported a prior credit facility and making further advances,
Firetector restated the price, terms and conditions of the conversion rights and
options previously granted to Mirtronics and granted Mirtronics 500,000
additional options giving Mirtronics, as at September 30, 1996, the right to
acquire up to an aggregate of 1,840,000 shares of Common Stock at a price of
$.30 per share. Mirtronics has the right to designate a member of Firetector's
Board of Directors and has certain standard lender covenant protections against
material changes and transactions as long as the foregoing debt and options
remain outstanding.
In March 1995 the Company entered into a Debt/Equity Agreement with
Mirtronics, whereby Mirtronics will have the right until December 31, 1999, to
convert all or part of the Company's debt to Mirtronics into shares of Class A,
Series 1 Preferred Stock, at the conversion price of $1.00 per share, or one
share of Preferred Stock for each dollar of debt converted. The Preferred Stock
may be converted into Common Stock at the rate of two Common shares for one
share of Preferred.
In March 1995, Mirtronics converted $425,000 of debt into 425,000 shares
of Class A, Series 1 Preferred Stock and in May 1995, Mirtronics converted an
additional $250,000 of debt into 250,000 shares of Class A, Series 1 Preferred
Stock.
First Corporate Capital Inc., an Ontario corporation ("FCC") has provided
the bank under the Credit Facility with an income guaranty (see Item 6,
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION") in consideration of
which Firetector has granted to FCC options to purchase 500,000 shares of
Firetector Common Stock at $.30 per share through December 31, 1999. In July
1996, FCC exercised 100,000 of these options at $.30 per share. Mark Litwin, the
President and a Director of Mirtronics is also President and a Director of FCC.
In 1985, Casey entered into a royalty agreement with Joseph Vitale, prior
to his becoming the President and Chief Operating Officer of the Company. The
agreement pays Mr. Vitale a royalty on certain systems marketed and serviced by
Casey. In fiscal year ended September 30, 1996, Casey paid $61,000 pursuant to
the terms of the agreement.
As discussed in Notes to Consolidated Financial Statements, "Note 2.
Transactions With Related Parties", as of January 1, 1997, pursuant to the terms
of an employment agreement between the Company and Richard H. Axelsen, a
Director of the Company, Firectector repurchased 25,312 shares of its Common
Stock from Mr. Axelsen.
Management believes each of the foregoing transactions was entered into on
terms at least as favorable as could be obtained from unrelated parties
negotiating at arms-length.
Daniel S. Tamkin, Chairman, Chief Executive Officer and General Counsel of
Firetector, is also an officer of a company controlled by a Director of
Mirtronics, Firetector's largest stockholder. Mr. Schnurbach, a Director of the
Company, is a Director of Mirtronics.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIRETECTOR INC.
(Registrant)
By: /s/ DENNIS P. McCONNELL
-----------------------
Dennis P. McConnell,
Secretary and Director
Dated: January 28, 1997
