Washington, D.C. 20549
FORM 10-KSB / A
(Amendment No. 1)
(MARK ONE)
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (fee required)
For the fiscal year ended December 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR A5(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (no fee required)
Commission file number 0-23544
HUMAN PHEROMONE SCIENCES, INC.
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(Name of small business issuer in its charter)
California 94-3107202
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employee
incorporation or organization) Identification No.)
4034 Clipper Court, Fremont, California 94538
- --------------------------------------- -------------------
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (510) 226-6874
Securities registered under Section 12(b) of the Exchange Act:
None
----------------
(Title of class)
Checkwhether the Issuer (1) filed all reports required 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 contained in this form, and no disclosure will be
contained, to the best of registrant's 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. $10,378,717
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 price of such stock, as of a specified date within the past 60
days. (See definition of affiliate in rule 12b-2 of the Exchange Act.)
$5,586,667(1)
(1) Excludes 1,421,763 shares held by directors, officers and shareholders whose
ownership exceeds 5% of the outstanding shares at March 19, 1999 based on a
closing bid price on that day of $0.63 per share. Exclusion of such shares
should not be construed as indicating that the holders thereof possess the
power, direct or indirect, to direct the management or policies of the
registrant or that such person is controlled by or under common control with the
registrant.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 1,445,716 shares of
convertible preferred stock, 10,289,488 shares of common stock as of April 12,
1999.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
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<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The executive officers of the Company and their ages as of April 12,
1999 are as follows:
Name Age Position
---- --- --------
William P. Horgan 50 Chairman, Chief Executive Officer and Director
Gregory S. Fredrick 44 Vice President, Controller
William P. Horgan was appointed to the newly created post of Chairman of the
Board in November 1996 after serving as President, Chief Executive Officer and
Director since January 1994, when he joined the Company. From May 1992 to
January 1994, he served as Chief Financial and Administrative Officer of
Geobiotics, Inc., a biotechnology-based development stage company, and from
January 1990 to May 1992, was employed by E.S. Jacobs and Company as Senior Vice
President of Worlds of Wonder, Inc. From March 1988 to January 1990, he was
Chief Financial Officer of Advanced Polymer Systems, Inc., a manufacturer and
supplier of polymer based delivery systems for the ethical dermatology, OTC skin
care and personal care markets. Prior thereto, he held various executive and
management positions with CooperVision, Inc. and several affiliated companies,
including President of its Revo, Inc. subsidiary.
Gregory S. Fredrick joined the Company in October 1998 as Vice President,
Controller. Prior to joining the Company Mr. Fredrick spent nearly eight years
in the Entertainment industry. From February 1997 to June 1998 he was the Vice
President, Controller for a start-up record label / internet company 911
Entertainment. Mr. Fredrick served in various finance and operations capacities
while with Windham Hill Records / BMG Entertainment from April 1990 leaving as
Director of Operations in December 1996.
The directors of the Company and their ages as of April 12, 1999 are as
follows:
Name Age Principal Occupation
---- --- --------------------
William P. Horgan 50 Chairman of the Board of Directors, Chief
Executive Officer and Director
Bernard I. Grosser, M.D 69 Director
Michael D. Kaufman 58 Director
Helen C. Leong 71 Director
Robert Marx 68 Director
Bernard I. Grosser, M.D. has served as a Director since March 1992. Dr. Grosser
is Chairman of the Department of Psychiatry at the University of Utah and has
served in that capacity since 1982. Dr. Grosser has conducted extensive research
related to hormonal target areas of the brain.
Michael D. Kaufman, a Director since August 1997, is Managing General Partner of
MK Global Ventures, a firm he founded in 1987. Prior to 1987, Mr. Kaufman spent
six years as a General Partner of Oak Investment Partners, where he was involved
in the formation of numerous technology companies and served as founding
investor and director of Businessland, Davox, Katun, Easel, Ekco, Interlan and
Ziyad, among others. Prior to becoming a Partner of Oak Investment Partners, Mr.
Kaufman was President and COO of Centronics Data Corporation, a $150 million
NYSE-listed manufacturer of computer-related printing devices.
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<PAGE>
Helen C. Leong has served as a Director since April 1993. Mrs. Leong is and has
been for more than five years the managing partner of Leong Ventures, which
makes investments in the areas of biogenetics and health-oriented technologies.
She is a general partner of CLW Associates, which specializes in real estate and
start-up businesses in consumer fields. Mrs. Leong is also a founder of
Mid-Peninsula Bank of Palo Alto where she has served as a director since 1988.
Robert Marx has served as a Director since October 1994. Mr. Marx was the
founder and Co-Chief Executive Officer of Gildamarx Incorporated, a firm
specializing in designing and manufacturing exercise apparel and products for
active lifestyles from 1979 until the sale of the company in 1996. He is a
member of the Executive Committee of the Sports Apparel Products Council and the
Board of Directors of the California Manufacturers Association. There are no
family relationships between directors or executive officers of the Company.
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<PAGE>
Item 10. Executive Compensation
<TABLE>
The following table sets forth the total compensation for 1998, 1997 and 1996 of
the Chief Executive Officer and each of the other executive officers of the
Company whose total salary and bonus for 1998 exceeded $100,000 (the "Named
Officers").
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Award
------------------- -----
Name and Principal Position Year Salary Bonus Securities Underlying
--------------------------- ---- ------ ----- Options(#)
----------
<S> <C> <C> <C> <C>
William P. Horgan 1998 $193,000 -- --
Chairman of the Board and 1997 $193,000 -- --
Chief Executive Officer 1996 $185,000 $55,000 100,000
Michael P. Stern 1998 $143,400 -- --
President (Resigned 9/30/98) 1997 $143,400 -- --
1996 $134,000 $40,200 150,000
Maxine C. Harmatta 1998 $106,650 -- --
Vice President (Resigned 8/31/98) 1997 $118,000 -- --
1996 $110,000 $31,850 125,000
</TABLE>
Option Grants in Last Fiscal Year
There were no option grants in 1998 to the Named Officers and none of the Named
Officers acquired any shares on exercise of options in 1998.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table sets forth certain information concerning the number of
unexercised options held as of December 31, 1998 by the Named Officers.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at December 31, 1998 In-the-Money Options at
Exercisable/Unexercisable December 31, 1998
------------------------- Exercisable/Unexercisable
Name (#) ($)(1)
---- --- ------
William P. Horgan 316,874/53,126 -/-
Michael V. Stern -/- -/-
Maxine C. Harmatta -/- -/-
- --------------------
(1) Assuming a stock price of $.97 per share, which was the closing price
of a Share of Common Stock reported on the NASDAQ National Market on
December 31, 1998.
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<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
<TABLE>
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 12, 1999 by: (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock; (ii) each of the Company's executive officers named in
the Summary Compensation Table; (iii) each of the Company's directors; and (iv)
by all directors and executive officers as a group. Except as otherwise
indicated, the Company believes that the beneficial owners of the securities
listed below, based on information furnished by such owners, have sole
investment and voting power with respect to the Common Stock shown as being
beneficially owned by them:
<CAPTION>
Directors, Nominees, Officers And 5% Stockholders Shares Beneficially Owned(1) Percent Of Class(1)(2)
------------------------------------------------- ---------------------------- ----------------------
<S> <C> <C>
William P. Horgan (3) 343,200 3.2
Michael V. Stern 197,340 1.9
Bernard I. Grosser, M.D.(4) 156,716 1.5
Helen C. Leong(5) 229,124 2.2
Michael D. Kaufman(6) 1,096,163 10.6
Robert Marx(7) 163,224 1.6
Maxine C. Harmatta - -
All executive officers and directors as a group (7 persons)(8) 2,185,767 20.1
<FN>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of Shares
beneficially owned by a person and the percentage of ownership of that
person, shares of Common Stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of April 12, 1999
are deemed outstanding. Such shares, however, are not deemed outstanding
for the purpose of computing the percentage ownership of each other
person. The persons named in this table have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially
owned by them, subject to community property laws where applicable and
except as indicated in the other footnotes to this table.
(2) Percentage of beneficial ownership is based on 10,289,488 shares of Common
Stock outstanding as of April 12, 1999.
(3) Includes 320,000 shares issuable on exercise of outstanding options.
(4) Includes74,166 shares issuable on exercise of outstanding options.
(5) Includes 74,166 shares issuable on exercise of outstanding options.
(6) Includes 1,061,997 shares held in the name of partnerships and 34,166
shares issuable on exercise of outstanding options.
(7) Includes 64,166 shares issuable on exercise of outstanding options
(8) Includes 566,664 shares issuable on exercise of outstanding options.
</FN>
</TABLE>
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<PAGE>
Item 12. Certain Relationships and Related Transactions
In 1991, the Company transferred to Pherin Corporation ("Pherin"), a
newly formed California corporation, all of the Company's rights to its human
pheromone technology for use other than in the consumer products field, together
with $2 million in cash, in exchange for all of the stock of Pherin. Upon
approval by its shareholders at the Annual Meeting, held in August 1991, the
Company distributed to its shareholders all of the stock of Pherin. Certain
stockholders identified under "Principal Stockholders" above are also
stockholders of Pherin.
HPSI and Pherin are parties to an agreement, pursuant to which Pherin will
supply HPSI with its reasonable requirements of human pheromones and to make
available to HPSI the basic manufacturing technology. Under the agreement,
payments to Pherin in 1998 totaled $303,625. After January 31, 1996, rather than
supply human pheromones to HPSI, Pherin may instead elect to provide to the
Company all manufacturing technology in its possession that it has not
previously supplied to HPSI. . Through 1998 only small quantities of human
pheromones, which could be produced in a laboratory environment, were required
for its fragrance and ancillary products. As a result of the initial third party
supply agreement entered into in December 1998, the Company requires
significantly more production of the synthesized human pheromones than were
needed in the past. In January 1999, HPSI and Pherin contracted with two
independent laboratories to manufacture kilogram quantities of the synthesized
human pheromones under the direction of scientists working on behalf of the
Company and Pherin. HPSI has received the initial quantities from these
independent laboratories. The Company and Pherin have agreed to the terms of a
new research and development agreement, and a supply agreement effective April
1, 1999.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Human Pheromone Sciences, Inc. has duly caused this Amendment of the Annual
Report on Form 10-KSB to be signed on its behalf by the undersigned, thereunto
duly authorized, in Fremont, California, on April 29, 1999.
HUMAN PHEROMONE SCIENCES, INC.
By: /s/ William P. Horgan
---------------------------------
Name: William P. Horgan
-------------------------------
Title: Chairman of the Board
------------------------------
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report has been signed on behalf of Human Pheromone Sciences, Inc.
by the following persons in the capacities and on the dates indicated.
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ William P. Horgan Chief Executive Officer April 29, 1999
- -------------------------------------- and Director
William P. Horgan
/s/ Gregory S. Fredrick Vice President, April 29, 1999
- -------------------------------------- Principal Financial and
Gregory S. Fredrick Accounting Officer
/s/ Bernard I. Grosser Director April 29, 1999
- --------------------------------------
Bernard I. Grosser, MD
/s/ Michael D. Kaufman Director April 29, 1999
- --------------------------------------
Michael D. Kaufman
/s/ Helen C. Leong Director April 29, 1999
- --------------------------------------
Helen C. Leong
/s/ Robert Marx Director April 29, 1999
- --------------------------------------
Robert Marx
</TABLE>
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