<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended July 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission file number 0-23268
-------
AMERICAN TECHNOLOGIES GROUP, INC.
---------------------------------
(Name of small business issuer in its charter)
NEVADA 95-4307525
------ ----------
(State or other jurisdiction of (IRS. Employer
incorporation or organization) Identification No.)
1017 SOUTH MOUNTAIN AVENUE, MONROVIA, CA. 91016
-------------------------------------------------
(Address of principal executive offices) (zip code)
Issuer's telephone number: (818) 357-5000
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of exchange on which registered
None
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK
------------
(Title of Class)
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 Regulations S-B not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy of
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The registrant's revenues for its most recent fiscal year were $457,642.
As of October 23, 1996, the registrant had 17,181,200 shares of Common Stock
outstanding. The aggregate market value of the voting stock held by non-
affiliates was $20,801,205 computed by reference to the average closing bid and
asked prices on such date.
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
PART III
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 as of July 31, 1997 are
listed below, together with brief accounts of their business experience and
certain other information.
Year First
Present Elected
Name Age Office or Position Director
- ---- --- ------------------ --------
John Collins 46 Chairman of the Board of 1991
Directors, Chief Executive
Officer and Treasurer
Hugo Pomrehn 59 Director, Vice Chairman 1995
of the Board of Directors
Lawrence J. Brady 58 Director and 1997
President
Shui-Yin Lo 56 Director of Research 1993
and Development
and a Director
David Gann 48 Director of Marketing 1993
and a Director
Harold Rapp 51 Chief Operating Officer ---
JOHN COLLINS: has been Chief Executive Officer, Treasurer, and Director of the
Company since July, 1991, and also served as President from that date until
June, 1993. From 1983 until July, 1991, Mr. Collins operated New Image Public
Relations, which he co-founded. New Image provided financial public relations
and consulting services to emerging public companies, as well as other services.
Mr. Collins has resigned from all positions with the Company effective as of
December 1, 1997, however he will continue to provide certain services to the
Company as a consultant.
HUGO POMREHN: after serving as President from April, 1995 to March, 1997 and
Chief Operating Officer from November, 1995 to March, 1997, Mr. Pomrehn served
as Vice Chairman since March, 1997. Since November, 1995, he has served as a
Director.
2
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Effective December 1, 1997, Mr. Pomrehn has resigned from his position on the
Board and will serve as Executive Vice President - Special Projects on a part-
time basis.
From June, 1993, until March, 1995, he was a Senior Vice President at PLG
Inc., a risk management consulting firm. In 1992, Mr. Pomrehn served as Under
Secretary of Energy. He was the third ranking official at the U.S. Department
of Energy, which employs approximately 170,000 federal and contractor personnel
and has an annual budget of $20 billion. At the Department of Energy, he was
responsible for defense programs, environmental restoration and waste
management, as well as nuclear energy development and operation.
Prior to his nomination, he was Vice President and Manager of the Los
Angeles Office for Bechtel Corporation where he was principally employed since
1967 in positions of increasing responsibility. Mr. Pomrehn's assignments
included Assistant Chief Nuclear and Environmental Systems Engineer; Project
Engineer on the Arizona Nuclear Power Plant at Palo Verde, Arizona; and Project
Manager of the Korean Nuclear Projects. From 1986 to 1988, Mr. Pomrehn was Site
Director for the Browns Ferry Nuclear Power Plant operated by the Tennessee
Valley Authority. Subsequent to this assignment, he was named Vice President
and General Manger of the Bechtel/Kraftwerk Union Alliance providing
maintenance, modification and inspection services to U.S. operating nuclear
power plants.
LAWRENCE J. BRADY: became President and a Director in March, 1997. Effective
December 1, 1997, he becomes Chief Executive Officer and Chairman of the Board
of Directors. Mr. Brady was a Vice Prsident at Hill & Knowlton Public Affairs
Worldwide and Direcctor of International Marketing for Sanders Associates, a
Lockheed subsidiary.
SHUI-YIN LO: became Director of Research and Development and a Director in
June, 1993. From January, 1987 until June, 1993, he was Chief Executive Officer
of the Institute of Boson Studies Inc., a privately funded research company.
Dr. Lo received his Ph.D. in physics in 1966 from the University of Chicago. He
has been a visiting scholar at numerous universities and institutes including
Stanford University, California, Oxford University, England, Institute for
Theoretical Physics, Berlin University, Germany and the Institute of High Energy
Physics, Beijing, China.
DAVID GANN: was appointed Vice President of the Company in January, 1993, and
became President and Director in June, 1993. Upon the hiring of Mr. Pomrehn in
April, 1995, Mr. Gann relinquished his position as President and was appointed
Director of Marketing. In November, 1995 he became President of ATG Media. He
was President of Catalytic Solution Inc. from July, 1990 to October, 1992, at
which time it was acquired by the Company. From 1987 to 1990, Mr. Gann worked
as a technical consultant to Los Angeles area banks for the disposal of high
tech equipment. Mr. Gann received a Bachelor of Science degree in 1972 from
Central Missouri State University. He did post-graduate work in Biology in 1975
at the University of Tampa
3
<PAGE>
and in physics in 1982 at Central Missouri State University. Mr. Gann has
resigned from all positions with the Company effective as of December 1, 1997,
however he will continue to provide certain services to the Company as a
consultant.
HAROLD RAPP: has been Chief Operating Officer since March, 1997, and effective
December 1, 1997 he will serve the Company as Chief Financial Officer/Treasurer.
Mr. Rapp was a principal and Executive Vice President of Baltres-Valentio
Associates, a larger Arizona vbased consulting engineering firm.
Subsequent to July 31, 1997, Messrs. Kingon, Odom and Wachsner were apponted to
fill vacancies on the Board of Directors.
ALFRED KINGON:
WILLIAM ODOM:
TERRY WACHSNER:
Directors are elected annually at the Company's annual meeting of shareholders.
The term of each person currently serving as a director will continue until the
Company's next annual meeting or until a successor is duly elected and
qualified.
Executive officers are appointed annually by the Board of Directors and serve at
the discretion of the Board, except to the extent that provisions of employment
agreements may govern.
SECTION 16(b) BENEFICIAL OWNERSHIP COMPLIANCE
Based upon the Company's review of the reports on Form 3, Form 4 or Form 5
furnished to the Company pursuant to Section 16 of the Securities Exchange Act
of 1934, various officers failed to file certain Form 4s and Form 5s. The
details of these failures to file these forms will be provided by amendment to
this Form 10K-SB/A.
4
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ADVISORY BOARD:
The Company's Advisory Board consists of renowned scientists or businessmen in
technological fields who have agreed to be available for scientific or other
consultations when needed. Board members will be compensated at individually
determined hourly rates and will be granted options to acquire 2,500 shares of
Common Stock at fair market value on the date of grant. Presently, twelve
individuals have agreed to serve as Advisors and the Company is discussing
appointment to the Advisory Board with additional people. The following is
summary background information on the twelve people who have agreed to serve on
the Advisory Board. There can be no assurance that these people will actually
serve on the Advisory Board for any particular length of time.
JAMES S.I. LO: holds a Ph.D. in clinical biochemistry from the University of
Toronto (1975). He is currently a Clinical Assistant Professor, Department of
Pathology, Health Sciences Center at Brooklyn, New York State University and is
a Clinical Biochemist at Brookdale Hospital and Medical Center, Brooklyn, New
York. Dr. S.I. Lo is the brother of Dr. S.Y. Lo, a director of the Company.
ALFRED Y. WONG: holds a Ph.D. in plasma physics from Princeton University
(1962). He is currently the director of the Plasma Physics Department at the
University of California, Los Angeles, and the HIPAS Observatory, an outdoor
plasma physics laboratory in Fairbanks, Alaska which he designed at a cost of
$7,000,000 in 1980. Dr. Wong has received numerous honors and awards, including
American Physical Society Award for Excellence in Plasma Physics and the
Chairmanship of the Pacific Rim Environmental Research Group.
CHARLES YOUNG: holds a Ph.D. in physics from the Massachusetts Institute of
Technology (1977). He is currently a staff physicist at the Stanford Linear
Accelerator Center where he has been employed since 1978.
ANMIN LIU: holds a B.S. in civil engineering from Chuan Yuan University in
Taiwan and an M.S. in Sanitary Engineering from Colorado State University,
(1970). Since 1989 he has been the Engineer Manager at the Hyperion Wastewater
Treatment Plant of the City of Los Angeles where he responsible for engineering
and operations, including the multi-billion dollar expansion program ongoing at
the plant. He has supervised the start up of two of the four wastewater plants
operated by the City of Los Angeles.
S.Y. CHENG: holds a Ph.D. in Mathematics from the University of California,
Berkeley (1974). Since 1981 he has been a Professor of Mathematics at the
University of California, Los Angeles where he was Vice-Chairman of the
department from 1988 to 1990. In 1976 he was the Alfred P. Sloan Foundation
Fellow and in 1989 he was the J.C. Wong Fellow.
5
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GARY A. WILLIAMS: holds a Ph.D in Physics from the University of Califonria,
Berkeley (1974). Since 1984 he has been a Professor of Physics at the
University of California, Los Angeles. From 1978 to 1982 he was a Alfred P.
Sloan Foundation Fellow.
ED ROSE: holds a B.S. in Civil Engineering/Engineering Geology from the
University of Southern California (1956). He is currently an independent
consultant providing project and construction management services. For over 25
years he was employed by Bechtel Corporation retiring as a project manager. His
professional affiliations include the American Society of Civil Engineers and
the National Society of Professional Engineers.
DANIEL C. TSUI: holds a Ph.D. in Electrical Engineering from the University of
Chicago (1967). Since 1982 he has been a Professor of electrical engineering at
Princeton University. He is a member of the National Academy of Sciences,
Academia Sinica, Fellow of The American Physical Society, American Association
for the Advancement of Science. In 1984, he received the Oliver E. Buckley
Condensed Matter Physics Prize of The American Physical Society.
VIJAY K. DHIR: To be provided by amendment.
W. KEN CURRIE: To be provided by amendment.
MARY LIDSTROM: To be provided by amendment.
REINHARD BRUCH: To be provided by amendment.
6
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ITEM 10. EXECUTIVE COMPENSATION.
The tables and discussion below set forth information about the compensation
awarded to, earned by or paid to the Company's executive officers during the
fiscal years ended July 31, 1995, 1996, and 1997
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- -------------
Other Annual
Name & Principal Position Year Salary Compensation Stock Options
------------------------- ---- ------ ------------ -------------
<S> <C> <C> <C> <C>
John Collins 1997 $252,493 0 250,000 (1)
Chairman of the Board, 70,000 (2)
Chief Executive Officer and
Treasurer 1996 189,459 0 97,500 (3)
1995 208,225 0 65,000 (4)
Hugo Pomrehn 1997 $120,662 0 250,000 (1)
Vice Chairman of the Board 50,000 (5)
40,000 (6)
1996 121,666 - 50,000 (7)
40,000 (8)
500,000 (9)
1995 - - 40,000 (10)
Shui-Yin Lo 1997 $151,576 0 250,000 (1)
Director of Research & 45,000 (5)
Development and a Director
1996 136,625 0 40,000 (7)
1995 120,120 0 60,000 (11)
David Gann 1997 $163,714 0 250,000 (1)
Director of Marketing and a 40,000 (5)
Director
1996 151,272 0 400,000 (12)
20,000 (7)
1995 139,756 0 40,000 (11)
Jim Nicastro 1997 $161,632 0 250,000 (1)
Vice President 40,000 (5)
1996 164,497 0 600,000 (13)
24,500 (7)
1995 155,081 0 20,000 (11)
John M. Dab 1997 $145,333 0 20,000 (5)
General Counsel and
Secretary 1996 67,308 (14) 0 90,000 (15)
25,000 (7)
_________________ 1995 (16) 0 55,000 (11)
</TABLE>
(Footnotes are on the following page.)
7
<PAGE>
(Footnotes from prior page.)
(1) The exercise price of these options is $3.00 per share, the estimated fair
market value on the date of grant. The options vest at the rate of 25% per year
commencing March, 1997.
(2) The exercise price of these options is $1.87 per share, 10% above the
estimated fair market value on the date of grant. The options vest at the rate
of 25% per year commencing January, 1998.
(3) The exercise price of these options is $1.65 per share, 10% above the
estimated fair market value on the date of grant. The options vest at the rate
of 25% per year commencing August, 1996.
(4) The exercise price of these options is $3.30 per share, 10% above the
estimated fair market value on the date of grant. The options vest at the rate
of 25% per year commencing August, 1995.
(5) The exercise price of these options is $1.70 per share, the estimated fair
market value on the date of grant. The options vest at the rate of 25% per year
commencing January, 1998.
(6) The exercise price of these options is $3.00 per share, One Dollar less
than the average of the closing bid and asked prices of the Common Stock over
the thirty trading days prior to the date of grant.
(7) The exercise price of these options is $1.50 per share, the estimated fair
market value on the date of grant. The options vest at the rate of 25% per year
commencing August, 1996.
(8) The exercise price of these options is $10.067 per share, One Dollar less
than the average of the closing bid and asked prices of the Common Stock over
the thirty trading days prior to the date of grant.
(9) The exercise price of these options is $3.00 per share, the estimated fair
market value on the date of grant. The options vest at the rate of 25% per year
commencing November, 1995; 250,000 options were voluntarily surrendered in
March, 1996.
(10) The exercise price of these options is $2.18 per share, One Dollar less
than the average of the closing bid and asked prices of the Common Stock over
the thirty trading days prior to the date of grant.
(11) The exercise price of these options is $3.00 per share, the estimated fair
market value on the date of grant. The options vest at the rate of 25% per year
commencing August, 1995.
(12) The exercise price of these options is $1.50 per share the estimated fair
market value on the date of grant. Options for 100,000 shares of Common Stock
have vested and the remaining options vest upon the occurrence of certain events
relating to sales of The Force-Registered Trademark-.
(13) The exercise price of these options is $3.00 per share, the estimated fair
market value on the date of grant; 500,000 options were voluntarily surrendered
in March, 1996.
(14) Does not include $64,250 paid to Mr. Dab during the fiscal year as legal
fees prior to his employment by the Company.
(15) The exercise price of these options is $3.00 per share the estimated fair
market value on the date of grant. Options for 30,000 shares of Common Stock
have vested and 30,000 options vest upon the occurrence of certain events
relating to sales of The Force and 30,000 options vest upon listing of the
Company's Common Stcok on a stock exchange.
(16) Represents $______ in legal fees paid to Mr. Dab during the fiscal year.
8
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OPTIONS GRANTED IN FISCAL 1997
Percent
of Total
Number of Options
Securities Granted to
Name Underlying Employees Expiration Date
---- Options in Fiscal Exercise ---------------
Granted 1997 Price
------- ---- -----
John Collins 250,000 13.1 3.00 March, 2006
70,000 3.7 1.87 January, 2006
Hugo Pomrehn 40,000 2.1 3.00 April, 2002
50,000 2.6 1.70 January, 2006
250,000 13.1 3.00 March, 2006
Shui-Yin Lo 250,000 13.1 3.00 March, 2006
45,000 2.4 1.70 January, 2006
David Gann 250,000 13.1 3.00 March, 2006
70,000 3.7 1.87 January, 2006
Jim Nicastro 250,000 13.1 3.00 March, 2006
70,000 3.7 1.87 January, 2006
John M. Dab 20,000 1.1 1.70 January, 2006
OPTION VALUES AT JULY 31, 1997
Number of Securities Underlying Value of in-the-money Options
Options at July 31, 1997 at July 31, 1997
------------------------ ----------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
John Collins 363,125 444,375 $ 436,163 $ 548,137
Shui-Yin Lo 346,250 373,750 $ 882,338 $ 417,833
Hugo Pomrehn 445,000 275,000 $ 460,600 $ 399,000
David Gann 331,250 643,750 $ 656,188 $1,111,563
Jim Nicastro 167,500 335,500 $ 241,488 $ 355,419
John M. Dab 63,750 126,250 $ 78,938 $ 181,638
Effective January 1, 1997, the Company entered into one year employment
agreements with Messrs. Collins, Gann, Nicastro and Dab and Dr. Lo at annual
salaries of $266,466, $172,700, $170,000, $154,000 and $159,880, respectively.
Each of Messrs. Collins, Gann, Pomrehn and Nicastro and Dr. Lo were granted an
option to purchase to purchase 250,000 shares of Common Stock at a price of
$3.00 per share. The option expires in March, 2006 and vests at the rate of 25%
per year commencing as of March 1, 1997.
9
<PAGE>
Effective as of April 1, 1995, the Company entered into a three year employment
agreement with Mr. Pomrehn at a base salary of $120,000 per year. In addition,
the agreement requires the granting of an option to purchase 40,000 shares of
Common Stock as of that date at $2.18 per share and each anniversary thereof
during the term of the agreement at $1.00 less than the average of the closing
bid and asked prices for the Common Stock over the preceding 30 trading days.
Each option will terminate upon the earlier of five years after granting or
thirty days after termination of the agreement prior to the expiration its term.
Effective as of December 1, 1997, Mr. Pomrehn resigned from all positions with
the Company and his employment agreement was amended to provide three day a week
service to the Company as Executive Vice President - Special Projects at an
annual salary of $72,000.
Each employment agreement provides for early termination by the Company for
"cause," which includes final conviction of the employee of a felony involving
willful conduct materially detrimental to the Company or the final adjudication
of the employee in a civil proceeding for acts or omissions to act involving
willful conduct detrimental to the Company, and for "good reason" by the
employee, which includes the diminution of employee's title, responsibilities or
status, or reduction in pay or benefits. In addition, except for Mr. Pomrehn's
employment agreement, each agreement provides for the payment of three months
salary if the employee terminates his employment in connection with a Change of
Control as defined in the agreement or one year's salary in the event the
Company terminates the employee during the period commecing 90 dyas before and
ending 180 days after the Change of Control. Change of Control is defined as an
event or series of events that would be required to be described as a change in
control of the Company in a proxy or information statement distributed by the
Company pursuant to Section 14 of the Securities Exchange Act of 1934 in
response to Item 6(e) of Schedule 14A promulgated hereunder, or any substitute
provision which may hereafter be promulgated thereunder or otherwise adopted.
Directors of the Company who are employees do not receive compensation for
serving as such; non-employee Directors receive $7,500 and an option to purchase
10,000 shares of Common Stock at the fair market value on the day of appointment
per year. All Directors hold office until the next annual meeting of the
shareholders or until their successors have been duly elected and qualified.
All officers serve at the discretion of the Board of Directors.
The Company has no retirement, pension or similar programs at the present time.
The creation of any such plan, however, will be at the discretion of the Board
of Directors of the Company. The Board of Directors may, in the future, adopt
such employee benefit and executive compensation programs as it deems advisable
and consistent with the best interests of the shareholders and the financial
condition and potential of the Company.
10
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STOCK OPTION PLANS
The Company's 1993 Incentive Stock Option Plan and 1993 Non-Statutory Stock
Option Plan (the "Option Plans") provide for the granting of Incentive Stock
Options, within the meaning of Section 422b of the Internal Revenue Code of
1986, as amended, to employees and Non-Statutory Stock Options to employees,
non-employee directors, or consultants or independent contractors who provide
valuable services to the Company. At November 30, 1997, 1,658,000 shares of
Common Stock were reserved for issuance under the Option Plans. The Option
Plans were approved by the shareholders in November, 1993.
The Option Plans are administered by the Board of Directors or, if the Board so
designates, a Stock Option Committee consisting of at least two members of the
Board of Directors. The Board or the Stock Option Committee, as the case may
be, has the discretion to determine when and to whom options will be issued, the
number of shares subject to option and the price at which the options will be
exercisable. The Board or the Stock Option Committee will also determine
whether such options will be Incentive Stock Option or Non-Statutory Stock
Options and has full authority to interpret the Option Plans and to establish
and amend the rules and regulations relating thereto.
Under the Incentive Stock Option Plan, the exercise price of an Incentive Stock
Option shall not be less than the fair market value of the Common Stock on the
date the option is granted. However, the exercise price of an Incentive Stock
Option granted to a ten percent (10%) stockholder (as defined in the Incentive
Stock Option Plan), shall be at least 110% of the fair market value of Common
Stock on the date the option is granted, exercise prices of options granted
under the Non-Statutory Stock Option Plan may be less than fair market value.
The maximum aggregate number of shares which may be covered by options under the
Option Plans is 10% of the total outstanding share of Common Stock.
Incentive Stock Options covering 75,000 shares exercisable at $6.25 per share,
11,000 shares exercisable at $5.00 per share, 140,000 shares exercisable at
$3.30 per share, 624,000 shares exercisable at $3.00 per share, 97,500 shares
exercisable at $1.65 per share and 233,000 shares exercisable at $1.50 per share
and Non-Statutory Stock Options covering 45,000 exercisable at $5.00 per share,
55,000 shares exercisable at $3.00 per share, 20,000 shares exercisable at $1.70
per share and 30,000 shares exercisable at $1.50 per share have been granted and
not cancelled or exercised. As of November 30, 1997, Options covering an
additional ________ shares may be issued under the Option Plans.
11
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information as of December 1, 1997
concerning the ownership of the Company's Common Stock by (i) each person known
by the Company to be the beneficial owner of more than five percent of the
outstanding Common Stock, (ii) each of the directors of the Company, and (iii)
all directors and executive officers of the Company as a group:
Amount and Nature Percent
Name and Address of Beneficial Ownership (1) of Class
- ---------------- --------------------------- --------
John Collins (2) 5,000,000 (3) 22.0
Lawrence J. Brady (2) 143,000 (4) *
Shui -Yin Lo (2) 876,033 (5) x.x
Alfred Kingon (2) 10,000 (6) *
Williqam Odom (2) 10,000 (7) *
Terry Wachsner (2) 10,000 (8) *
Harold Rapp (2) 26,500 (9) *
All officers and x,xxx,xxx xx.x
directors as a group
(7 persons) (4) (5)
(6) (7) (8) (9) (10)
- --------------------
* Less than 1 percent.
(1) Except as reflected below, each of the persons included in the table has
sole voting and investment power over the shares respectively owned, subject to
the rights of spouses under applicable community property laws.
(2) The address of each of these persons is c/o American Technologies Group,
Inc., 1017 South Mountain Avenue., Monrovia, CA 91016.
(3) This amopunt is an estimate with the exact amountand correct percentage to
be filed by amendment to this Form 10k-SB/A Includes xx,xxx shares of Common
Stock held of record by Mr. Collins' children under the Uniform Gift to Minors
Act, x,xxx shares held of record by Mr. Collins' wife, 190,000 shares issuable
upon exercise of Incentive Stock Options and 312,500 shares issuable under other
options. Also included are shares of Common Stock held of record by T/S
Financial Services for which Mr. Collins holds a proxy but not financial
interest.
(4) Includes 125,000 shares issuable upon exercise of an option.
(5) Includes 151,250 shares issuable upon exercise of Incentive Stock Options
held by Dr. Lo and 762,500 shares issuable upon exercise of other options.
(6) Represents 10,000 shares issuable upon exercise of an option.
(7) Represents 10,000 shares issuable upon exercise of an option.
(8) Represents 10,000 shares issuable upon exercise of an option.
(9) Includes 25,000 shares issuable upon exercise of an option.
(10) Includes _______ shares of Common Stock held of record by an officer's
children under the Uniform Gift to Minors Act and 88,750 shares issuable upon
exercise of options granted under the Company's Stock Option Plans.
12
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The licensor of the BASER technology which the Company has sublicensed from NWEC
is Apricot which is 50% owned by Dr. Shui-Yin Lo, a director of the Company.
On July 22, 1994, the Company entered into a Technology Acquisition Agreement
with Shui-Yin Lo, the Company's Director of Research and Development and a
member of the Board of Directors. For $150,000 payable at the rate of a
minimum of $1,000 per month, of which $92,000 was paid as of October 30, 1996,
the Company acquired an option to acquire a 50% interest in Apricot or 100% of
the technology underlying BASERs as invented by Dr. Lo, if he reacquires such
rights. The exercise price for the option is 10,000 shares of Common Stock and
a royalty of 5% of ATG's net profit, if any, from the exploitation of BASERs
through July 21, 1999. Additionally, if Dr. Lo has not received 1,700,000
shares of Series A Stock in connection with the Company's purchase of the
Invention, the exercise price will include such shares. Under the Technology
Acquisition Agreement the Company acquired from Shui-Yin Lo exclusive right,
title and interest to the Invention for an Option to acquire 450,000 shares of
Common Stock at $3.00 per share, and, at such time as ATG receives an offer to
purchase the Invention as developed by ATG for commercial utilization or ATG
commences commercial utilization of any application of the Invention developed
by ATG, ATG agreed to (i) issue to Lo 1,700,000 shares of Series A Stock and
(ii) pay to Lo a royalty at the rate of 7.5% of ATG's net profit from the
exploitation of the Invention. If Dr. Lo receives the 1,700,000 shares of
Series A Stock as part of the exercise price for the BASER rights, then Dr. Lo
will not receive such shares if the Invention is commercialized in accordance
with the foregoing criteria.
Certain officers of the Company are employed pursuant to written employment
agreements the principal terms of which are described under "Item 10 Executive
Compensation."
In connection with the resignation of John Collins from his positions with the
Company, the Company and Mr. Collins entered into a Consulting Agreement with a
term expiring July 31, 1998 at a rate of $__________.
13
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN TECHNOLOGIES GROUP, INC.
By:/s/ Lawrence J. Brady
---------------------
Lawrence J. Brady
Chairman of the Board and
Chief Executive Officer
Date: November 28, 1997
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
/s/ Lawrence J. Brady
---------------------
Lawrence J. Brady
Chairman of the Board and
Chief Executive Officer
Date: November 28, 1997
/s/ Harold Rapp
---------------
Harold Rapp
Chief Fiancial Officer
Date: November 28, 1997
/s/ Shui-Yin Lo
---------------
Shui-Yin Lo
Director and
Director of Research
Date: December 1, 1997
/s/ Terry Wachsner
------------------
Terry Wachsner
Director
Date: November 28, 1997
14
