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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/AMENDMENT NO. 1
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO ______________
FOR THE FISCAL YEAR ENDED JUNE 30, 1996 COMMISSION FILE NUMBER 0-17928
NEW IMAGE INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4088548
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2283 COSMOS COURT, CARLSBAD, CALIFORNIA 92009
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE (619) 930-9900
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS
-------------------
COMMON STOCK
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 THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K / /
AT SEPTEMBER 27, 1995, THERE WERE OUTSTANDING 5,479,908 SHARES OF THE
COMMON STOCK OF REGISTRANT, AND THE AGGREGATE MARKET VALUE OF THE SHARES HELD ON
THAT DATE BY NON-AFFILIATES OF THE REGISTRANT, BASED ON THE CLOSING PRICE ($1
5/8 PER SHARE) OF THE REGISTRANT'S COMMON STOCK ON THE NATIONAL MARKET SYSTEM
WAS $8,689,629. FOR PURPOSES OF THIS COMPUTATION, IT HAS BEEN ASSUMED THAT THE
SHARES BENEFICIALLY HELD BY DIRECTORS AND OFFICERS OF REGISTRANT WERE "HELD BY
AFFILIATES"; THIS ASSUMPTION IS NOT TO BE DEEMED TO BE AN ADMISSION BY SUCH
PERSONS THAT THEY ARE AFFILIATES OF REGISTRANT.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF REGISTRANT'S PROXY STATEMENT RELATING TO ITS 1996 ANNUAL MEETING OF
STOCKHOLDERS ARE INCORPORATED BY REFERENCE IN PART 3 OF THIS REPORT.
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ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to the Agreement and Plan of Reorganization ("Agreement") relating
to the acquisition of Insight Imaging Systems, Inc., Mr. Stevens was appointed
to the board of directors in May 1996, and each time the position occupied by
Mr. Stevens comes up for reelection, management has agreed to nominate Mr.
Stevens or other person designated by a majority of the former Insight
stockholders for reelection or election to the board.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table shows, as to the Chief Executive Officer and as to each
of the other executive officers whose salary plus bonus exceeded $100,000 during
the last fiscal year, information concerning all compensation paid for services
to the Company in all capacities during the last three fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
OTHER RESTRICTED STOCK
NAME AND ANNUAL STOCK OPTION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS ($) AWARDS (1)
- ------------------ ---- --------- -------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dewey F. Edmunds 1996 $180,000 -- $66,262(2) -- --
Chief Executive Officer & 1995 16,500 -- -- -- 200,000
President 1994 -- -- -- -- --
Mark Stevens (3) 1996 $127,500 $14,375 -- -- 40,000(4)
Sr. VP Business Dev. & Int'l. 1995 114,000 14,000 -- -- --
Sales 1994 81,850 8,512 -- -- --
Doug Golay (5) 1996 $109,917 -- 84,167(6) -- 15,000
Former Officer 1995 175,000 -- 26,922(7) -- 50,000(8)
1994 156,000
David M. Cooper 1996 135,000 -- 98,565(9) -- --
VP & Chief Technical Officer 1995 15,057 -- -- -- 20,000
1994 -- -- -- -- --
</TABLE>
___________
(1) All numbers reflect the number of shares of Common Stock subject to options
granted during the fiscal year.
(2) Consists of relocation reimbursement.
(3) Mr. Stevens joined the Company in May 1996. He had been President of
Insight Imaging Systems, Inc. since 1992. Compensation paid to Mr. Stevens
by Insight Imaging Systems, Inc. and the Company is included in his totals.
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(4) Does not include fully vested options to purchase 17,187 shares of Common
Stock at $3.61 per share which were assumed in connection with the
acquisition of Insight Imaging Systems, Inc.
(5) Mr. Golay is the former Vice President, Software Development of the
Company.
(6) Consists of $53,424 related to relocation reimbursement, $17,500 related to
a stock option exercise and $13,243 related to consulting fees.
(7) Consists of $18,172 in accrued vacation pay and $8,750 in car allowance.
(8) Consists of options, originally granted in December 1993, which were
repriced in December 1994 and extended to January 31, 1997.
(9) Consists of relocation reimbursement.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding grants of
stock options made during the fiscal year ended June 30, 1996, to the executive
officers named in the Summary Compensation Table ("Named Executive Officers").
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES TOTAL OPTIONS VALUE OF ASSUMED
UNDERLYING GRANTED TO EXERCISE OR ANNUAL RATES OF STOCK
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION APPRECIATION FOR OPTION
NAME GRANTED FISCAL YEAR(1) ($/SH) (2) DATE TERM (3)
---- ---------- -------------- ----------- ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
@ 5% @ 10%
Dewey F. Edmunds -- -- -- -- --
David Cooper -- -- -- -- --
Mark Stevens 40,000 (4) 8.3% 3.625 5/16/01 $40,061 $88,524
Doug Golay 15,000 (5) 3.1% 2.25 4/30/96 -- --
</TABLE>
___________
(1) Options covering an aggregate of 476,256 shares were granted to eligible
optionees during the fiscal year ended June 30, 1996. This includes
102,756 shares covered by employee options which were assumed in connection
with the acquisition of Insight Imaging Systems, Inc.
(2) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares, subject to certain conditions.
(3) The potential realizable value is based on the assumption that the Common
Stock of the Company appreciates at the annual rate shown (compounded
annually) from the date of grant until the expiration of the option term.
These amounts are calculated pursuant to applicable requirements of the
Securities and Exchange Commission and do not represent a forecast of the
future
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appreciation of the Company's Common Stock.
(4) These options vest as follows: 10,000 on May 31, 1997; 13,000 on May 31,
1998; and 17,000 on May 31, 1999. Does not include fully vested options to
purchase 17,187 shares of Common Stock at $3.61 per share which were
assumed in connection with the acquisition of Insight Imaging Systems, Inc.
(5) These options expired 90 days after Mr. Golay's termination as an employee.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth, for each of the Named Executive Officers,
certain information regarding the exercise of stock options during the fiscal
year ended June 30, 1996, and the value of options held at fiscal year end.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
NUMBER OF SECURITIES
UNDERLYING UNEXERCISABLE VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED FISCAL YEAR-END AT FISCAL YEAR-END
NAME ON EXERCISE VALUE REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Doug Golay 20,000 $90,000 30,000/0 $0/0
Mark Stevens -- -- 17,187/40,000 0/0
Dewey Edmunds -- -- 60,000/140,000 0/0
David Cooper -- -- 20,000/0 0/0
</TABLE>
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(1) Based upon the last reported sale price of the Common Stock on NASDAQ
National Market System on June 30, 1996 of $3.00.
COMPENSATION OF DIRECTORS
Directors do not receive cash compensation for their services. Under the
Company's option plans applicable to directors, each director who is not an
employee, receives an option to purchase 7,000 shares of Common Stock of the
Company at the time he or she first becomes a director and options to purchase
12,500 shares on the date of each Annual Stockholders Meeting where he or she is
a continuing or reelected director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last fiscal year, executive compensation for the Company was
administered by the Compensation Committee of the Board. Mr. Greenthal and Mr.
Richart served as the Compensation Committee during the last fiscal year.
Neither of the members of the Compensation Committee is, nor has been, an
officer or employee of the Company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 28, 1996, certain information
relating to the ownership of the Company's Common Stock by (i) each person known
by the Company to be the beneficial owner of more than 5% of the outstanding
shares of the Company Common Stock, (ii) each of the Company's directors,
(iii) each of the Company's Named Executive Officers, and (iv) all of the
Company's executive officers and directors as a group. Except as may be
indicated in the footnotes to the table and subject to applicable community
property laws, each of such persons has the sole voting and investment power
with respect to the shares owned. Beneficial ownership has been determined in
accordance with Rule 13d-3 under the Exchange Act. Under this Rule, certain
shares may be deemed to be beneficially owned by more than one person (such as
where persons share voting power or investment power). In addition, shares are
deemed to be beneficially owned by a person if the person has the right to
acquire the shares (for example, upon exercise of an option) within 60 days of
the date as of which the information is provided; in computing the percentage
ownership of any person, the amount of shares outstanding is deemed to include
the amount of shares beneficially owned by such person (and only such person) by
reason of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in the following table does not necessarily
reflect the person's actual voting power at any particular date. The address of
each person is c/o New Image Industries, Inc., 2283 Cosmos Court, Carlsbad,
California 92009.
<TABLE>
<CAPTION>
NAME NUMBER PERCENT OF
---- OF SHARES CLASS OWNED
--------- -----------
<S> <C> <C>
Dewey F. Edmunds 67,500(2) 1.2
David Cooper 20,000(3) *
Doug Golay 30,000(4) *
Robert S. Colman 275,666(5) 4.9
Richard P. Greenthal 6,499(6) *
Harold J. Meyers 39,166(7) *
Ralph M. Richart, M.D. 6,499(8) *
Kenneth B. Sawyer 123,599(9) 2.2
Kennedy Capital Management, Inc. 279,000 5.1
Dimensional Fund Advisors, Inc. 249,000 4.5
Weghsteen & Co. 383,950 7.0
Stevens Trust 453,623 8.2
All executive officers and directors as 612,660(12) 10.3
a group (12 persons)
</TABLE>
___________
* Less than 1%.
(1) Applicable percentage of ownership is based on 5,479,908 shares of Common
Stock outstanding as of October 28, 1995, together with unissued shares
deemed beneficially owned by the named person under applicable rules of the
Securities and Exchange Commission. Beneficial ownership is determined in
accordance with the rules of the Securities and exchange Commission, and
includes voting and investment power with respect to shares. Shares of
Common Stock subject to options currently exercisable or exercisable within
60 days after October 28, 1996, are deemed outstanding for purposes of
computing the percentage ownership of the person holding such options, but
are not deemed outstanding for purposes of computing the percentage
ownership of any other person.
(2) Includes 60,000 shares of Common Stock underlying options.
(3) Common Stock underlying options.
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(4) Common Stock underlying options.
(5) Includes 166,666 shares of Common Stock underlying options and warrants.
Also includes 4,000 shares owned by a trust as to which Mr. Colman
disclaims any beneficial interest.
(6) Common Stock underlying options.
(7) Common Stock underlying options.
(8) Common Stock underlying options.
(9) Includes 118,999 shares of Common Stock underlying options and warrants.
(10) Includes 17,187 shares of Common Stock underlying options. Also includes
7,200 shares owned by Mr. Stevens' wife of which he disclaims beneficial
ownership.
(11) Includes 41,524 shares of Common Stock underlying warrants
(12) Includes 481,360 shares of Common Stock underlying options and warrants.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CERTAIN TRANSACTIONS WITH RELATED PARTIES
In March 1995, Colman Furlong & Co. ("Colman Furlong") was engaged by the
Company to effect a management restructuring. In exchange for services
rendered, the Company has issued warrants to purchase a total of 350,000 shares
of common stock, 275,000 in March 1995 at an exercise price of $3.875 per share
and 75,000 in March 1996 at an exercise price of $2.12 per share, (in each case
the exercise price was at fair market value on the date of grant). The warrants
were allocated 137,500 shares to Robert S. Colman, Chairman of the Company's
Board of Directors, 112,500 shares to Kenneth B. Sawyer, a member of the
Company's Board of Directors and Corporate Secretary, and 100,000 shares to
Joseph F. Furlong. Additionally, the Company incurred fees from Colman Furlong
totaling $184,000 and $36,000 in 1996 and 1995, respectively, for consulting
services. In addition, the Company incurred $150,000 of acquisition expenses
relating to services provided by Colman Furlong in conjunction with the Insight
acquisition during fiscal year 1996. Included in accrued liabilities in the
accompanying balance sheet at June 30, 1996, is $197,000 related to services
provided by Colman Furlong. Effective June 30, 1996, the Colman Furlong
engagement expired.
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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 caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NEW IMAGE INDUSTRIES, INC.
(Registrant)
By: /s/ DEWEY F. EDMUNDS
----------------------------
Dewey F. Edmunds
Chief Executive Officer
Date: October 28, 1996
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, this Report has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ DEWEY F. EDMUNDS
- ---------------------------- Chief Executive Officer October 28, 1996
Dewey F. Edmunds and President
(Principal Executive
Officer and Director)
/s/ HAL ORR
- ---------------------------- Chief Financial Officer October 28, 1996
Hal Orr (Principal Financial
Officer and Principal
Accounting Officer)
/s/ ROBERT S. COLMAN
- ---------------------------- Director October 28, 1996
Robert S. Colman
/s/ MARK W. STEVENS
- ---------------------------- Director October 28, 1996
Mark W. Stevens
/s/ HAROLD J. MEYERS
- ---------------------------- Director October 28, 1996
Harold J. Meyers
/s/ RALPH M. RICHART
- ---------------------------- Director October 28, 1996
Ralph M. Richart
/s/ RICHARD P. GREENTHAL
- ---------------------------- Director October 28, 1996
Richard P. Greenthal
49
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/s/ KENNETH B. SAWYER
- ---------------------------- Director
Kenneth B. Sawyer October 28, 1996
50
</TABLE>
