U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
Form 10-KSB/A
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED).
For the fiscal year ended December 31, 1996.
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED).
For the transition period from __________ to __________.
Commission file number 0-19827
HYMEDIX, INC.
(Exact name of registrant, as specified in its charter)
Delaware 22-3279252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2245 Route 130, Dayton, New Jersey 08810
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (908) 274-2288
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
(Title of class)
Check whether 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
--- ---
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Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and will not 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.
State registrant's revenues for its most recent fiscal year: $1,986,798
The aggregate market value of the voting stock held by non-affiliates, based
upon the average of the bid and asked price of the Common Stock on March 26,
1997 as reported by The OTC Bulletin Board, was approximately $1,132,324. Shares
of Common Stock held by each officer and director and by each person who owns 5%
or more of the outstanding Common Stock have been excluded in that such persons
may be deemed to be affiliates for this purpose but not necessarily for other
purposes.
The number of shares of Common Stock outstanding as of March 26, 1997 was
5,713,500.
Transitional Small Business Disclosure Format (Check one):
Yes No X
--- ---
Documents Incorporated by Reference
None
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HYMEDIX, INC.
INDEX
Page No.
PART III
Item 10. Executive Compensation 4
Item 11. Security Ownership of Certain Beneficial Owners 6
and Management
Item 12. Certain Relationships and Related Transactions 9
SIGNATURES 11
Page 3
<PAGE>
PART III
Item 10. Executive Compensation.
The table below sets forth certain compensation information for the fiscal year
ended December 31, 1996, 1995 and 1994 with respect to HYMEDIX, Inc.'s
("HYMEDIX's" or the "Company's") President and its two other most highly
compensated executive officers whose compensation exceeded $100,000 during 1996.
HYMEDIX, INC.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
------------
--------------------------------------- Securities
Name and Other Annual Underlying
Principal Compensation Options
Position Year Salary($) ($)(2) (#)(1)
--------- ---- --------- ------------ ----------
<S> <C> <C> <C> <C>
Joseph Y. Peng, 1996 113,615 0 15,000
President (3)(4) 1995 99,808 0 0
1994 94,923 0 0
George P. Stoy, Vice 1996 100,000 6,000 3,000
President Engineering 1995 66,923 3,600 0
1994 73,846 4,600 0
</TABLE>
(1) The option grants set forth hereof were granted by HYMEDIX to the named
individuals during the fiscal year ending December, 1996 issuable for
shares of HYMEDIX Common Stock.
(2) Represents car allowance for such executive officer.
(3) During 1995 and 1994, Mr. Peng was Chief Financial Officer of HYMEDIX.
(4) Fiscal year 1996 compensation includes $24,231 accrued in fiscal year 1995
and paid in fiscal year 1996.
Fiscal year 1995 compensation includes $27,692 accrued in fiscal year 1994
and paid in fiscal year 1995.
Fiscal year 1994 compensation includes $19,231 accrued in fiscal year 1993
and paid in fiscal year 1994.
The Company has no pension, retirement, annuity, savings or similar
benefit plan for its executive officers.
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<PAGE>
Executive Employment and Related Agreements
Each of the Company's current and former employees and consultants
having access to its proprietary or technical information has executed a
confidentiality and invention assignment agreement with the Company.
As of November, 1993, HYMEDIX entered into a Consulting Agreement with
Dr. Vladimir A. Stoy, a Company Director (the "Stoy Consulting Agreement"),
pursuant to which Dr. Stoy will serve on HYMEDIX's Board of Directors and render
certain consulting services to HYMEDIX. Under the Stoy Consulting Agreement, Dr.
Stoy is to be available to render services to HYMEDIX for at least 130 days per
year and is to receive consulting fees of $1,000 per diem for the first 52 days
of consulting rendered each year and $750 per diem for each additional day of
consulting, such consulting fees to be at least $52,000 per annum in the
aggregate, with certain consulting fees in the aggregate amount of $6,000 to be
credited against fees otherwise payable to Dr. Stoy as a member of HYMEDIX's
Scientific Advisory Board. Under the Stoy Consulting Agreement, Dr. Stoy has
agreed not to compete with HYMEDIX in any of the fields licensed to HYMEDIX
under the SKY License Agreement. See "Certain Transactions." The Stoy Consulting
Agreement is terminable by HYMEDIX for cause, upon Dr. Stoy's death or
disability or upon termination of the SKY License Agreement. The agreement may
be terminated by Dr. Stoy for cause or upon 30 days prior notice to HYMEDIX.
Stock Option Plans
Amended and Restated 1991 Incentive and Non-Qualified Stock Option
Plan. On February 23, 1994, the Company's stockholders approved the adoption of
the Amended and Restated 1991 Incentive and Non-Qualified Stock Option Plan (the
"Stock Option Plan"). The Stock Option Plan is designed to qualify as an
incentive Stock Option Plans under Section 422 of the Internal Revenue Code of
1986, as amended. The Company may also award non-qualified stock options under
the Stock Option Plan. Pursuant to the terms of the Stock Option Plan, incentive
stock options may only be granted to management and other key employees of the
Company; non-qualified stock options may be granted to Directors, advisors and
consultants to the Company as well as employees. The Board of Directors has
appointed a Compensation Committee of the Board of Directors to administer the
Stock Option Plan, including the selection of the individuals to receive options
and the terms thereof. The Plan permits the grant of options to purchase up to
an aggregate of 500,000 shares of Common Stock.
Under the Stock Option Plan, the exercise price of incentive stock
options must be not less than 100% (or 110% with respect to any optionee owning
more than 10% of the total combined voting power of all classes of stock of the
Company) of the fair market value of the Common Stock at the date of grant, and
the aggregate fair market value (determined at the time of grant) of shares
issuable pursuant to such options which first become exercisable in any calendar
year by an employee or officer, may not exceed $100,000. The term of such
options may not exceed ten years (except that with respect to any optionee who
owns more than 10% of the total combined voting power of all classes of stock of
the Company, the term may not exceed five years). The corresponding provisions
of any non-qualified stock options granted under the Stock Option Plan are not
similarly limited by the Stock Option Plan terms.
As of March 31, 1997, options for the purchase of a total of 418,919
shares of Common Stock were outstanding under the Stock Option Plan (of which
323,419 were exercisable as of March 31, 1997) and options to purchase an
additional 81,081 shares remained available for grant under the Stock Option
Plan.
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Director Stock Option Plan. On June 6, 1996, the Company's stockholders
approved the adoption of the Company's Director Stock Option Plan (the "Director
Plan"). The Director Plan is intended to provide nondiscretionary option grants
to independent Directors of the Company as follows: (1) to those persons already
serving on the Board and who are not employees, an option exercisable for 9,000
shares of the Company's Common Stock on the effective date of the Director Plan
and, for so long as service on the Board continues, an option of 2,000 shares of
the Company's Common Stock on each anniversary date thereof and (2) to those
persons joining the Board after the effective date of the Director Plan and who
are not employees, an option exercisable for 5,000 shares of the Company's
Common Stock on the date of election or appointment and, for so long as service
on the Board continues, an option for 2,000 shares of the Company's Common Stock
on each anniversary date of his or her joining the Company's Board, in each case
exercisable at fair market value and subject to certain provisions of
forfeiture. The Director Plan permits the grant of options to purchase up to an
aggregate of 50,000 shares of Common Stock, all of which were reserved for
grants under the Director Plan as of April 15, 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
- --------------------------------------------------------------------------------
Percent Of
Number Of Total Options/
Securities SARs Granted
Underlying To Employees Exercise Or
Options/SARs In Fiscal Base Price
Name Granted (#) Year ($/Sh) Expiration Date
(a) (b) (c) (d) (e)
- --------------------------------------------------------------------------------
Joseph Y. Peng
President 15,000 15.15% $1.00 January 15, 2006
- --------------------------------------------------------------------------------
George P. Stoy
Vice President
Engineering 3,000 3.03% $1.00 January 15, 2006
- --------------------------------------------------------------------------------
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information as of March 31, 1997
regarding the beneficial ownership of the Company's Common Stock by: (a) all
those known by the Company to be beneficial owners of more than 5% of its Common
Stock; (b) all Directors; (c) each of the executive officers of the Company
named in the Summary Compensation Table; and (d) all executive officers and
Directors of the Company as a group:
Name and Address Shares Beneficially
of Beneficial Owner Owned(1)
------------------- ---------------------------
Number Percentage
------ ----------
Kingston Technologies 1,384,551 24.23%
Limited Partnership (2)(3)
First Taiwan Investment 2,942,221 49.06%
Holding Inc. (4)(5)(6)
First Taiwan Venture 2,942,221 49.06%
Capital Inc. (4)(5)(7)
First Taiwan Investment and 2,942,221 49.06%
Development, Inc. (4)(5)(8)
Vladimir A. Stoy, Ph.D. (2)(3) 1,390,180 24.31%
William G. Gridley, jr. (2)(3) 1,452,065 25.12%
George P. Stoy (2)(3) 1,404,437 24.50%
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Sheng-Hsiung Hsu (4)(5)(9) 2,942,221 49.06%
Dr. Hsia-Fu Chao (4)(5)(10) 2,942,221 49.06%
Shu-Jean Kuo Chou (4)(5)(11) 2,942,221 49.06%
Michael K. Hsu (4)(5)(12) 2,942,221 49.06%
William J. Golden (13) 158,274 2.76%
Boston University
108 Bay State Road
Boston, MA
Edward H. Jennings, Ph.D. ---
The Ohio State University
154 W. 12th Street
Columbus, OH
All officers and Directors 4,744,346 75.38%
as a group (12 persons)
(1) Shares of Common Stock subject to options or warrants exercisable as of
March 31, 1997 (or exercisable within 60 days after such date), are deemed
outstanding for purposes of computing the percentage ownership of the
person holding such option or warrant but are not outstanding for purposes
of computing the percentage of any other person. Unless otherwise
indicated in these footnotes, each stockholder has sole voting and
investment power with respect to the shares beneficially owned.
(2) Includes shares owned of record by Kingston Technologies Limited
Partnership ("KTLP"). The general partners of KTLP include Vladimir A.
Stoy, William G. Gridley, jr., George P. Stoy (each a Director of the
Company) and Oak II, Inc., a corporation controlled by such Directors.
Each of Vladimir A. Stoy, William G. Gridley, jr., and George P. Stoy
exercises shares voting and investment power with respect to the shares of
Common Stock of the Company held by KTLP and disclaims beneficial
ownership of such shares except to the extent of his partnership interest
in KTLP. Also gives effect to the exercise by Research Corporation
Technologies, Inc., a Delaware nonprofit corporation ("RCT") and a
stockholder of HYMEDIX, of its right to require KTLP to transfer and
assign without further consideration, that number of shares of HYMEDIX
Common Stock (166,271 shares) to make RCT's total holding of HYMEDIX
Common Stock equal to 5% of HYMEDIX's outstanding Common Stock on a
modified fully diluted basis (excluding shares reserved for issuance upon
exercise of options granted under the HYMEDIX Stock Option Plan and
conversion of HYMEDIX Series A Redeemable Preferred Stock) upon the
effective date of the Company's Registration Statement on Form SB-2
(effective August 12, 1995).
(3) The business address of each of these persons is c/o HYMEDIX, Inc., 2245
Route 130, Dayton, New Jersey 08810.
(4) The business address of each of these persons is 15th Floor, 563 Chung
Hsiao East Road, Section 4, Taipei, Taiwan 10516.
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(5) Consists of the following:
<TABLE>
<S> <C>
* shares owned of record by First Taiwan Investment Holding Inc. ("FTIHI") 2,051,078
* shares issuable to FTIHI upon exercise of a warrant 50,658
* shares owned of record by First Taiwan Venture Capital Inc. ("FTVC") 508,265
* shares owned of record by First Taiwan Investment and 99,080
Development, Inc. ("FTIDI")
* shares issuable to FTIDI upon exercise of warrants 70,921
* shares issuable to Dr. Hsia-Fu Chao upon exercise of a warrant 162,219
----------
Total 2,942,221
</TABLE>
Based on a Schedule 13D dated as of February 23, 1994 filed by FTIHI, FTVC,
FTIDI and Dr. Chao, such persons may be deem to form collectively a "group" and
each of such persons may be deemed to share voting power with each other with
regard to the foregoing shares. Dr. Chao, in his capacity as Chairman of FTIHI,
may also be deemed to share dispositive power over the shares of Common Stock
owned of record by or issuable to FTIHI.
(6) FTIHI disclaims beneficial ownership as to 840,485 of such shares,
consisting of shares owned of record by or issuable upon exercise of
warrants to FTVC, FTIDI and Dr. Chao.
(7) FTVC disclaims beneficial ownership as to 2,433,956 of such shares,
consisting of shares owned of record by or issuable upon exercise of
warrants to FTIHI, FTIDI and Dr. Chao.
(8) FTIDI disclaims beneficial ownership as to 2,772,220 of such shares,
consisting of shares owned of record by or issuable upon exercise of
warrants to FTIHI, FTVC and Dr. Chao.
(9) Mr. Hsu is Chairman of FTVC. Mr. Hsu disclaims beneficial ownership of all
such shares, except to the extent of his investment interest therein.
(10) Dr. Chao is Chairman of FTIHI. Dr. Chao disclaims beneficial ownership as
to 2,780,002 of such shares, except to the extent of his investment
interest therein, consisting of shares owned of record by or issuable upon
exercise of warrants to FTIHI, FTVC and FTIDI.
(11) Ms. Chou is a Director of FTIHI. Ms. Chou disclaims beneficial ownership
of all such shares, except to the extent of her investment interest
therein.
(12) Mr. Hsu is a Director of FTVC and until June 1995, was Executive
Vice-President of each of FTIHI, FTVC and FTIDI. Mr. Hsu disclaims
beneficial ownership of all such shares, except to the extent of his
investment interest therein.
(13) Consists of 132,945 shares owned of record by The Trustees of Boston
University and 25,329 shares issuable to The Trustees of Boston University
upon exercise of warrants. Mr. Golden is Managing Director of the
Community Development Fund of Boston University. Mr. Golden disclaims
beneficial ownership of all such shares. On November 13, 1996, Mr. William
Golden replaced Mr. Bagalay as a director of the Company.
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<PAGE>
Item 12. Certain Relationships and Related Transactions.
HYMEDIX was incorporated in Delaware on December 20, 1993 as a
wholly-owned subsidiary of Servetex International Inc. (the "Predecessor"). On
February 23, 1994, the Predecessor merged with and into HYMEDIX and,
concurrently, a wholly-owned subsidiary of the Predecessor was merged with and
into HYMEDIX International, Inc. ("HYMEDIX International"), which resulted in
HYMEDIX International becoming a wholly-owned subsidiary of HYMEDIX
(collectively, the "Acquisition Merger"). HYMEDIX International was incorporated
in October, 1985 under the name Kingston Technologies, Inc.
In February, 1994, the Company issued 150 shares of Series A Redeemable
Preferred Stock, par value $.01 per share, to RCT, a stockholder of the Company,
in consideration of the assignment to the Company of the initial $1,500,000 of
RCT's royalty right relating to exclusive licenses from HYMEDIX International to
Optical Radiation Corporation and Pilkington Visioncare, Inc. for certain lens
products. RCT has certain registration rights with respect to its shares in the
Company.
As of November, 1993, HYMEDIX International entered into a license
agreement (the "SKY License Agreement") with S.K.Y. Polymers, Inc. ("SKY"), a
corporation controlled by Dr. Vladimir A. Stoy, a Director and indirect
shareholder of HYMEDIX, under which agreement HYMEDIX International acquired an
exclusive license to use and sublicense certain technology in the fields of
wound and burn care, cardiovascular applications, radiology and neuroradiology,
biliary applications and drug delivery (excluding obstetrical/gynecological drug
delivery applications). In consideration of such license, HYMEDIX International
is to pay SKY certain royalties based on annual sales revenues and a monthly
license maintenance fee. Under the SKY License Agreement, HYMEDIX International
has a right-of-first refusal with respect to SKY's technology in certain other
specified fields. The SKY License Agreement is terminable by HYMEDIX
International at any time after January 31, 1994.
Contemporaneously with the SKY License Agreement, HYMEDIX International
entered into a Project Agreement with SKY (the "Project Agreement") under which
SKY agreed to undertake certain projects relating to the development of products
utilizing technology licensed under the SKY License Agreement for a monthly per
project fee. All results of the project are to be owned exclusively by SKY and
licensed to HYMEDIX International. The Project Agreement has a 15 year term and
may be terminated earlier by HYMEDIX International if the SKY License Agreement
is terminated or expires, if Dr. Stoy ceases to be employed by SKY or is
otherwise unable to supervise the projects, or at any time after February 1,
1994.
In November, 1993, HYMEDIX also entered into a Consulting Agreement
with Dr. Vladimir A. Stoy.
HYMEDIX International is the sole general partner of Kingston
Diagnostics, L.P. ("KDLP"), a Delaware limited partnership of which KTLP is the
principal limited partner. The remainder of KDLP's limited partnership interests
are held by unaffiliated parties. As KDLP's sole general partner, HYMEDIX
International has a 1.69% interest in its assets and is responsible for its
obligations ($59,222 as of December 31, 1996). KDLP is currently inactive and
has sold its assets in exchange for certain shares of the buyer. Such shares
have been pledged to HYMEDIX International to secure KDLP's debts to HYMEDIX
International. Due to uncertain collectability of these debts, HYMEDIX
International has taken a charge against earnings for the entire amount of such
debts. As the sole general partner of KDLP, HYMEDIX International may be
ultimately liable for repayment of the remaining liabilities of KDLP (which are
included in the financial statements of HYMEDIX International).
In December, 1992, First Taiwan Investment Holding Inc. and First
Taiwan Venture Capital Inc. (collectively "First Taiwan") agreed to acquire from
HYMEDIX International 5,038 shares of HYMEDIX International Common Stock and
from Research Corporation Technologies Inc., a non-profit corporation and a
stockholder of HYMEDIX International ("RCT"), 3,359 shares of HYMEDIX
International Common Stock, respectively. At this time, HYMEDIX International
also issued and sold a Common Stock Purchase Warrant to First Taiwan Investment
and Development, Inc. exercisable for 252 shares of HYMEDIX International Common
Stock. In Jun, 1993 HYMEDIX International issued and sold to First Taiwan an
additional 574 shares of the Common Stock of HYMEDIX International and a Common
Stock Purchase Warrant for the purchase of 180 shares of HYMEDIX International's
Common Stock for an aggregate purchase price of $1,000,000.
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<PAGE>
As a result of the Acquisition Merger, First Taiwan received its proportionate
number of shares and warrants in HYMEDIX in exchange for its shares and warrants
in HYMEDIX International. See "Security Ownership of Certain Beneficial Owners
and Management." First Taiwan participated in the private placement of the
Company's securities consummated at the time of the Acquisition Merger
(purchasing 95,380 units (consisting of one share of the Company's Common Stock
and a Warrant to purchase 1/4 share of the Company's Common Stock) at an
aggregate purchase price of $548,435) and also acted as a placement agent in
connection with certain sales of HYMEDIX Common Stock for which it received
commissions of approximately $138,000 of which $88,435 were applied against the
purchase of 15,380 units. Sheng-Hsiung Hsu, Michael K. Hsu, Dr. Hsia-Fu Chao and
Shu-Jean Kuo Chou are representatives of First Taiwan on the Board of HYMEDIX.
First Taiwan has certain registration rights with respect to its shares of the
Company.
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<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.
HYMEDIX, INC.
(Registrant)
Date: April 30, 1997 By: /s/ Joseph Y. Peng
------------------
Joseph Y. Peng
President (Principal Executive Officer);
Treasurer
Date: April 30, 1997 By: /s/ William G. Gridley, jr.
---------------------------
William G. Gridley, jr.
Chairman, Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
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