<PAGE> 1
1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Amendment No. 1)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---- ACT OF 1934 (FEE REQUIRED) For the fiscal year ended DECEMBER 31, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from
to
------------ -----------------
Commission file number 0-17864
DAWN TECHNOLOGIES, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 13-3493060
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
433 SOUTH MAIN STREET, WEST HARTFORD, CONNECTICUT 06110
(Address of Principal Executive Office) (Zip Code)
(860) 561-3979
(Issuer's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class Name of Each Exchange on Which Registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Exchange Act:
COMMON STOCK $.001 PAR VALUE 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 registration 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 contained in this form, and no disclosure will be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statement 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 were $5,791,582.
The aggregate market value of the voting stock held by non-affiliates (persons
other than directors and officers of the Registrant) of the Registrant was
$1,415,602 based upon a market value per share of $0.23 per share, representing
the average of the bid and ask price of the Registrant's common stock on April
11, 1997.
There were 9,419,478 shares of the Registrant's $.001 par value per share common
stock outstanding at March 15, 1997.
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PART III
ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
DIRECTORS
Set forth below is certain information with respect to directors of the Company,
each of whom was elected for a one-year term at the 1996 Annual Meeting of
Stockholders.
WARREN K. NOVICK Mr. Novick, age 62, has been Chairman, Secretary and a
Director since 1987. Mr. Novick is a private investor and
has periodically acted as a consultant to the Company with
respect to business development. Mr. Novick is currently a
principal stockholder of DMI, Inc., a privately held
corporation operating in the cultured marble industry. Mr.
Novick is currently a principal stockholder of New Media
Telecommunications, Inc., a privately held corporation
operating in the telecommunications industry. Mr. Novick is
also a member of the Board of Directors and an officer and
stockholder of Aerocess Inc. a privately held corporation
operating in the aerospace industry.
PLACIDO SARETTO Mr. Saretto, age 75, has been a Director since 1989. Mr.
Saretto is currently retired. Mr. Saretto was previously
President and principal stockholder of Own Instrument, Inc.,
for over thirty years. Own Instrument, Inc. is a specialty
machine jobbing company located in Mount Vernon, New York.
VICTOR WINOGRADO Mr. Winogrado, age 46, has been a Director since 1992.
Since 1994, Mr. Winogrado has been Treasurer and a principal
stockholder of Nova Dye and Print Corp. Mr. Winogrado
previously held positions in the banking industry for over
twenty years with Lloyds Bank, Ltd. and DAIWA Bank, Ltd. Mr.
Winogrado is a member of the American Banking Associates and
the American Management Association.
MURRAY TRACHTEN Mr. Trachten, age 61, has been a Director since 1994. Mr.
Trachten has been an attorney engaged in private practice
since 1963.
MANAGEMENT
Set forth below is certain information with respect to the executive officers of
the Company not listed above. Executive officers have terms of office which run
until the next succeeding meeting of the Board of Directors following the annual
meeting of stockholders or until their successors are elected and qualified,
unless they are removed sooner by the Board.
DAVID SKLAR Mr. Sklar, age 36, was elected President and Chief Executive
Officer of the Company in April 1996. Since 1994, Mr. Sklar
has been President and Chief Executive Officer of DMI, Inc.,
Designed Marble, Inc. and Distinctive Marble, Inc.,
manufacturer and installers of cultured marble in the
southwest United States. Mr. Sklar was previously general
manager of the "Steel Door" division of FHA Fire Door Corp.,
a privately owned manufacturer of steel doors and frames
serving the New York area.
WILLIAM WINAKOR Mr. Winakor, age 54, was elected Executive Vice President
and Chief Operating Officer of the Company in April 1996.
From 1995 until April 1996, Mr. Winakor was President and
Chief Executive Officer of Aerocess, Inc., a manufacturer
and distributor of after market aerospace parts. Mr. Winakor
was previously President of AGC, Inc., a manufacturer of
aerospace parts and components.
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PART III
(Continued)
JOHN SCANLON Mr. Scanlon, age 39, was elected Treasurer, Chief Financial
and Accounting Officer and Assistant Secretary of the
Company in April 1996. Mr. Scanlon is a sole practitioner
Certified Public Accountant who has agreed to fulfill the
duties of Treasurer and Chief Financial and Accounting
Officer of the Company on an as needed basis. From 1990
until 1996, Mr. Scanlon was employed by VSM & Co.,
Certified Public Accountants and Consultants in Farmington,
Connecticut. Mr. Scanlon is a member of the American
Institute of Certified Public Accountants and the
Connecticut Society of Certified Public Accountants.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE- Section 16(a) of the
Securities Exchange Act of 1934 requires the Company's directors, executive
officers and persons owning more than ten percent of the Company's common stock
("insiders") to file reports of ownership on Form 3 and changes in ownership on
Forms 4 and 5 with the Securities and Exchange Commission and to furnish the
Company with a copy of all Section 16(a) forms they file. Based solely on the
review of Section 16(a) reports received by the Company and representations
received from certain of the Company's directors and executive officers, the
Company is aware of the following instances of non-compliance with Section 16(a)
by insiders regarding 1996 transactions. Mr. Novick was delinquent in the filing
of Form 4 for the month of September 1996 regarding two transactions: Mr. Novick
filed the delinquent Form 4 in November 1996. Mr. D'Aloia, was delinquent in the
filing of a Form 4 for the month of January 1996 regarding one transaction. Mr.
D'Aloia reported the transaction in a delinquently filed Form 5 in April 1997.
Mr. Trachten was delinquent in filing Form 4 for the months of April,
September and December of 1996 regarding these transactions. Mr. Trachten
reported the transactions in a delinquently filed Form 5 in August 1997.
ITEM 10 - EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth certain information concerning total compensation
during each of the last three fiscal years which was earned by or paid to the
President/Chief Executive Officer of the Company, and the most highly
compensated executive officer of the Company who served in such capacities
during 1996 and two former Co-Executive Officers of the Company (collectively
referred to as the "named executive officers"). There were no other executive
officers of the Company whose combined salary and bonus for any of these years
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Awards
--------------------------- ---------------------
(a) (c)
Other (b) Securities
Annual Restricted Underlying
Compen- Stock Options/
Name and Principal Position Salary Bonus sation Awards SARS
- --------------------------- ------ ----- ------ ------ ----
$ $ $ $ $
<S> <C> <C> <C> <C> <C>
David Sklar, President and CEO
1996 -- -- -- 39,022 582,000
1995 -- -- -- -- --
1994 -- -- -- -- --
Dennis DiDonato, prior Co-CEO(d)
1996 58,352 -- 1,800 -- --
1995 140,625 -- 7,200 -- --
1994 529,790 93,608 7,200 33,600 250,000
</TABLE>
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PART III
(Continued)
ITEM 10 - EXECUTIVE COMPENSATION (Continued)
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Awards
--------------------------- -----------------------
(a) (c)
Other (b) Securities
Annual Restricted Underlying
Compen- Stock Options/
Name and Principal Position Salary Bonus sation Awards SARS
- --------------------------- ------ ----- ------ ------ ----
<S> <C> <C> <C> <C> <C>
Nicholas Garruto, Prior Co-CEO
and Treasurer(d)
1996 55,089 -- -- -- --
1995 110,170 -- -- -- --
1994 85,924 -- -- 16,080 80,000
Andrew D'Aloia, prior President
and CEO(e)
1996 -- -- -- -- --
1995 -- -- -- -- --
1994 193,867 564,969 7,000 36,000 250,000
</TABLE>
(a) Automobile allowances paid during the fiscal year.
(b) In 1996, 218,000 shares of restricted common stock were issued to Mr.
Sklar under the Company's employee stock bonus plan. According to the plan,
50% of these shares become vested one year from the grant date and the
other 50% one year thereafter. A total of 407,000 shares of restricted
common stock were awarded to named executive officers in 1994. Had they
remained employed by the Company, shares granted to Messrs. DiDonato and
Garruto would have vested to them at a rate equal to the number of shares
that 10% of the Company's pre-tax profit, and defined, could purchase at
the fair value of the stock at the time it was awarded in 1994 ($0.25 per
share). During 1995, Messrs. DiDonato and Garruto became vested in 27,718
and 13,625 shares, respectively, that had been awarded in 1994. The amounts
reported in the table reflect the approximate market value of the shares at
the time of grant. At December 31, 1995, Mr. DiDonato held 149,782
restricted shares with an aggregate market value of approximately $15,000
and Mr. Garruto held 53,735 restricted shares with an aggregate market
value of approximately $5,000 using the closing bid price at December 31,
1995 without giving effect to the diminution of value attributable to the
restriction on such stock. If the Company were to pay a dividend, dividends
would be paid on the restricted shares reported in this column.
(c) Options granted in 1994 include options granted in exchange for the
cancellation of options during a Company wide option repricing. Mr. DiDonato
was granted options to purchase 110,000 shares in exchange for options
cancelled and Mr. D'Aloia was granted options to purchase 250,000 shares in
exchange for options cancelled.
(d) Messrs. DiDonato and Garruto ceased to be executive officers in April 1996.
(e) Mr. D'Aloia ceased to be an executive officer in September 1994. Mr.
D'Aloia's bonus compensation for 1994 does not include compensation accrued
with respect to his agreement not to compete with the Company for five
years. See discussion below under "Other Transactions".
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PART III
(Continued)
Options/SAR - Grants - During 1996, options to purchase 582,000 shares for
$0.18 per share were granted to David Sklar under the
Company's stock option plan. These options expire on August
11, 2006. This represents approximately 49% of options
granted for the year. No options were granted to any other
executive officers during 1996.
Options/SAR - Exercises - The following table sets forth certain information
with respect to the exercise of options to purchase the
Company's common stock and SARS by each of the named executive
officers during the year ended December 31, 1996 and the
unexercised options held by each of the named executive
officers (and their value) as of December 31, 1996:
Number of Securities
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options
Shares /SARS at Fiscal Year End /SARS at Fiscal Year End
Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
David Sklar -- -- -- 582,000 -- 145,500
Dennis DiDonato -- -- -- -- -- --
Nicholas Garruto -- -- -- -- -- --
Andrew D'Aloia -- -- 237,500 12,500 59,375 3,125
</TABLE>
OTHER TRANSACTIONS
The following is a summary of other transactions with directors, officers and
former directors and officers:
The Company pays a fee of $300 per meeting to its directors who are not
otherwise employees of the Company.
During 1996, the Company paid approximately $34,375 for consulting services
rendered by Warren K. Novick, a director of the Company.
During 1994 Mr. D'Aloia (a director of the Company until March 1996)
announced his retirement as president of the Company. Mr. D'Aloia has agreed
not to compete with the Company for a five year period ending December 31,
1999. As consideration for his agreement not to compete with the Company, Mr.
D'Aloia will receive $125,000 per year through December 31, 1999. The present
value of payments under this agreement was accrued in 1994. In September
1995, Mr. D'Aloia agreed to defer the payments due him under this agreement
in order to allow the Company to meet other existing cash commitments. In
addition, accrued payroll includes $197,000 at December 31, 1995 payable to
Mr. D'Aloia as compensation for services rendered in 1994. Interest expense
in 1995 includes approximately $54,000 to Mr. D'Aloia on the Company's
non-compete agreement and the accrued payroll.
See Note 7 to the consolidated financial statements.
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PART III
(Continued)
ITEMS 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of December 31, 1996, the number of shares and
percentage of the Company' common stock owned, of record and beneficially, be
each person known to the Company to own more than 5% of the outstanding common
stock each director of the Company, each named executive included in the summary
compensation table, all other executive officers and by all executive officers
and directors as a group:
<TABLE>
<CAPTION>
Share Option
Currently Shares Total Percent
Name and Address Owned Available Shares of Class
- ---------------- ----- --------- ------ --------
<S> <C> <C> <C> <C>
Persons known to own more than 5% of
the outstanding common stock:
Warren K. Novick, Director and
nominee(b) 2,703,730 237,500(a) 2,941,230 30.75%
Andrew D'Aloia, former Director,
President and CEO(e) 1,951,000 237,500(a) 2,188,500 22.88%
Directors (excluding
those listed above):
Placido Saretto(b) 7,936 -- 7,936 .01%
Victor Winogrado(b) -- -- -- --
Murray Trachten(b, c) 110,520 -- 110,520 1.18%
Executive officers:
David Sklar, President and Chief
Officer(b,d,f) 218,000 -- 218,000 2.34%
William Winakor, Executive Vice
President and Chief Operating -- -- -- --
Officer(b, d)
John Scanlon, Treasurer(b, d) -- -- -- --
All directors and executive officers 3,040,186 237,500(a) 3,277,686 34.27%
as a group (8 persons)
Former C0-Chief Executive Officers:
Dennis DiDonato(g) 355,500 -- 355,500 3.81%
Nicholas Garruto(h) -- -- -- --
</TABLE>
(a) Shares that may be acquired upon exercise of stock options within 60 days.
(b) The address of Messrs. Novick, Saretto, Winogrado, Trachten, Sklar, Winakor,
and Scanlon and is care of Dawn Technologies, Inc., 433 South Main Street,
West Hartford, Connecticut 06110.
(c) Mr. Trachten's ownership does not include 3,960 shares of common stock owned
by Mr. Trachten as custodian for his minor children who reside with him in
which shares Mr. Trachten disclaims any beneficial interest.
(d) Messrs. Sklar, Winakor and Scanlon became executive officers in April 1996.
(e) Mr. D'Aloia's address is 176 Lynam Road, Stamford, Connecticut 06403.
(f) Restricted shares granted under the Company's employee bonus plan.
(g) Mr. DiDonato's address is 42 Larry's Lane, Pleasantville, New York 10570.
Stock ownership reported based on information obtained from Company's
transfer agent.
(h) Mr. Garruto's address is 33 Smull Avenue, Cadwell, N.J. 07006. Stock
ownership reported based on information obtained from the Company's transfer
agent.
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
Not applicable.
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PART III
(Continued)
ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K
A. The following is an index of exhibits which are a part of this report.
The following exhibits are filed as a part of this report.
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
------ ---------------------- ----
10.18a Amendment to Stock Option Plan 29
10.19a Amendment to Stock Bonus Plan 30
10.20A Settlement agreement with D'Aloia 31
10.23a Form of indemnification agreement with
directors and officers of the company 33
10.25 Settlement agreement with Dennis DiDonato 38
10.26 Sublease agreement for Scanton Manufacturing Facility 42
10.27 Sublease for West Hartford Corporate Office Space 47
23 Consent by accountants to incorporate auditors
report by reference 51
27 Financial data schedule 52
The following exhibits are incorporated by reference:
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
------ ---------------------- ----
3.1 Certificate of Incorporation, as amended b
3.2 By-laws of Dawn Technologies, Inc., as amended d
3.2a Amendment to the by-laws of Dawn Technologies, Inc. g
10.16 Subordinated convertible note payable to Paul Elliot,
dated September 28, 1993 a
10.17 Term loan and line of credit agreement with Citibank,
dated April 1994 c
10.18 Dawn Technologies, Inc. Stock Bonus Plan, as amended c
10.19 Dawn Technologies, Inc. 1989 Stock Option Plan, as amended b
10.20 Non compete agreement with Andrew D'Aloia e
10.21 Lease for corporate office facility e
10.22 Asset purchase agreement with Leslie-Locke, Inc. dated
May 16, 1995 f
21 Subsidiaries of the registrant h
-------------------
a - Form 10-QSB for the period ended September 30, 1993
b - Form 10-KSB for the year ended December 31 1993
c - Form 10-QSB for the period ended March 31, 1994
d - Form 10-QSB for the period ended September 30, 1994
e - Form 10-KSB for the year ended December 31, 1994
f - Form 10-QSB for the period ended June 30, 1995
g - Form 10-QSB for the period ended September 30, 1995
h - Financial statements at Item 8 of this Form 10-KSB
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PART III
(Continued)
The following management contracts or compensatory plans incorporated by
reference:
The Dawn Technologies, Inc. Stock Bonus Plan, as amended (Exhibits 10.18 and
10.18a) and the Dawn Technologies, Inc. 1989 Stock Option Plan, as amended
(Exhibits 10.19 and 10.19a) are incorporated by reference from the Company's
Form 10-QSB for the period ended March 31, 1994 and Form 10-KSB for the year
ended December 31, 1993, respectively.
B. Reports on Form 8-K
None
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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.
Dawn Technologies, Inc.
/s/ David Sklar August 5, 1997
----------------------------------------- --------------
By: David Sklar Date
President and Chief Executive
Officer (Principal Executive Officer)
Dawn Technologies, Inc.
/s/ John Scanlon August 5, 1997
----------------------------------------- --------------
By: John Scanlon Date
Chief Financial and Accounting
Officer (Principal Finance and
Accounting Officer)
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report is signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates included:
/s/ Warren K. Novick, Director August 5, 1997
----------------------------------------- --------------
Warren K Novick, Director Date
/s/ Placido Saretto, Director August 5, 1997
----------------------------------------- --------------
Placido Saretto, Director Date
/s/ Victor Winogrado, Director August 5, 1997
----------------------------------------- --------------
Victor Winogrado, Director Date
/s/ Murray Trachten, Director August 5, 1997
----------------------------------------- --------------
Murray Trachten, Director Date
