U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______________ to ______________________
Commission file number: 0-20436
RT INDUSTRIES, INC.
(Name of small business issuer in its charter)
DELAWARE 65-0309477
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1875 E. LAKE MARY BLVD., SANFORD, FL 32773
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (800) 998-6966
Securities registered under Section 12 (b) of the Exchange Act:
Name of each exchange on
which registered: Nasdaq Small Cap
Title of each class: Common
Securities registered under Section 12 (g) of the Act:
Common Stock
(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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not 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].
The Issuer's revenues for its most recent fiscal year were $3,912,237.
The aggregate market value of the voting stock held by non-affiliates (shares
held in street name are assumed to be non-affiliates) based on the closing sale
price, as at December 31, 1996, was approximately $44,788,644.
The number of shares of Common Stock outstanding as at December 31, 1996 was
8,332,771. No annual reports to securities holders, proxy or information
statements, or prospectuses filed pursuant to Rule 424(b) have been incorporated
by reference in this report.
<PAGE>
PART II
ITEM 7. FINANCIAL STATEMENTS
Notes to Consolidated Financial Statements F-18 to F-23 (Note 10)
<PAGE>
10. Stockholders'
Equity
At December 31, 1996, the Company has two stock option plan and has granted
nonplan stock options. The Company applies APB Opinion 25, "Accounting for Stock
Issued to Employees," and related interpretations in accounting for the options.
Under APB Opinion 25, if options are granted or extended at exercise prices less
than fair market value, compensation expense is recorded for the difference
between the grant price and the fair market value.
Under the Company's 1992 Stock Option Plan, the Company may grant options to
purchase up to 60,000 shares of the Company's common stock to key employees.
Under the Company's 1995 Stock Option Plan, the Company's Board of Directors has
reserved 750,000 shares which may be
F-18
<PAGE>
RT Industries, Inc.
Notes to Consolidated Financial Statements
================================================================================
granted at the Board of Directors' discretion. The current managemnt, however,
disputes the validity of the 1995 Stock Option Plan. The maximum term of the
options granted under the option plans is ten years.
Statement of Financial Accounting Standards No. 123 (FAS 123) "Accounting for
Stock-Based Compensation," requires the Company to provide pro forma information
regarding net income and earnings per share as if compensation cost for the
Company's stock options had been determined in accordance with the fair value
based method prescribed in FAS 123. The Company estimates the fair value of each
stock option at the grant date by using the Black-Scholes option-pricing model
with the following weighted-average assumptions used for grants: no dividend
yield, volatility of 60%, risk-free interest rates ranging from 5.7% to 6.7% and
expected lives ranging from one to five years.
Under the accounting provisions of FASB Statement 123, the Company's net loss
and loss per share would have been increased to the pro forma amounts indicated
below:
1996 1995
================================================================================
Net loss
As reported $ (6,118,170) $ (4,179,642)
Pro forma (6,118,170) (5,765,542)
Loss per common share
As reported $ (0.90) $ (1.46)
Pro forma (0.90) (2.01)
================================================================================
F-19
<PAGE>
RT Industries, Inc.
Notes to Consolidated Financial Statements
================================================================================
Changes in 1992 and 1995 plan options outstanding are summarized as follows:
Weighted-Average Weighted-Average
Exercise Price Fair Value of
Shares Per Share Options Granted
================================================================================
Balance, December 31, 1994 52,740 $13.27 $ --
Granted - equal to market value 578,622 3.00 2.25
- --------------------------------------------------------------------------------
Balance, December 31, 1995 631,362 5.26 --
Forfeited (257,384) 7.33 --
- --------------------------------------------------------------------------------
Balance, December 31, 1996 373,978 $ 3.30 $ --
================================================================================
Changes in nonplan options outstanding are summarized as follows:
Weighted-Average Weighted-Average
Exercise Price Fair Value of
Shares Per Share Options Granted
================================================================================
Balance, December 31, 1994 20,000 $5.00 $ --
Granted - equal to market value 100,000 5.00 2.84
- --------------------------------------------------------------------------------
Balance, December 31, 1995 and 1996 120,000 $5.00 $ --
================================================================================
At December 31, 1996, all nonplan options outstanding and a total of 373,201 of
the outstanding 1992 and 1995 plan stock options were exercisable with a
weighted-average exercise price of $3.13 per share.
The following table summarizes information about fixed stock options at December
31, 1996:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------------------- ------------------------------------
Number Weighted-Average Number
Outstanding Remaining Weighted-Average Exercisable Weighted-Average
Exercise Prices at Dec. 31, 1996 Contractual Life Exercise Price at Dec. 31, 1996 Exercise Price
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$3.00 372,578 8.5 years $ 3.00 372,578 $ 3.00
$5.00 120,000 3.3 years 5.00 120,000 5.00
$17.15 1,400 5.5 years 17.15 623 17.15
------------- --------------
493,978 493,201
============= ==============
</TABLE>
F-20
<PAGE>
RT Industries, Inc.
Notes to Consolidated Financial Statements
================================================================================
Stock Warrants
At December 31, 1996, the Company had 5,994,000 common stock warrants
outstanding. Information relating to these warrants is summarized as follows:
Number of Exercise
Expiration date Warrants Price
- --------------------------------------------------------------------------------
June 1997 22,000 $19.83
March 2001 4,792,000 4.20
No expiration date 1,180,000 2.28
================================================================================
Private Placements
During 1996, the Company completed a private placement of its securities in the
form of units. Each unit sold in the private placement consisted of one share of
Company common stock and two redeemable common stock purchase warrants. The
common stock purchase warrants enable the holders to purchase one share of the
Company's common stock at a price of $4.20. The warrants are redeemable at the
option of the Company at a redemption price of $.005 per warrant beginning six
months from the private placement closing date. The Company received $2,763,743
of proceeds, net of offering costs of $231,258, for the sale of 2,396,000 units
during the year. In addition, the Company sold 100,000 shares of common stock at
$1 per share in a separate offering not associated with the private placement
described above.
Convertible Debentures
During 1996, the Company issued $3,775,000 of cumulative convertible debentures
payable bearing interest at 10%. Debentures with principal balances of
$2,275,000 and $44,216 of related accrued interest were converted into 660,628
shares of Company common stock during the year. Deferred loan costs of $253,750
associated with the converted debentures were charged to operations as a loss
from early extinguishment of debt and were recorded as interest expense.
F-21
<PAGE>
RT Industries, Inc.
Notes to Consolidated Financial Statements
================================================================================
Convertible Notes Payable
During 1995, the Company issued a note payable of $750,000 to the Company's
former president and current shareholder in connection with the Company entering
into the Composition of Creditors Agreement (see Note 1). The Note payable was
converted into 750,000 shares of Company common stock during 1995.
Common Stock Issued as Payment of Consulting Services
During 1995, the Company entered into various consulting service contracts with
third parties. Under the contracts, the Company agreed to issue a total of
527,000 shares of common stock as payment for the consulting services rendered.
The consultants completed their obligations under the contracts during 1996, and
the Company issued the required shares of common stock. In addition, the Company
issued a $500,000 note payable to a consultant for services rendered in 1995.
The Company paid $22,942 under the note, and the remaining balance was converted
into 500,000 shares of the Company's common stock during 1995. Total consulting
expense of $1,004,058 was recorded by the Company in 1995 related to these
consulting arrangements.
During 1996, the Company issued 85,000 shares of common stock as payment of
consulting services. Consulting expense and prepaid consulting fees of $207,830
and $114,072, respectively, were recorded during 1996 related to these stock
issuances.
Shares Reserved
At December 31, 1996, the Company has reserved common stock for the following
purposes:
- --------------------------------------------------------------------------------
Convertible notes payable 683,100
Stock option plans 810,000
Nonplan stock options 120,000
Stock warrants 5,994,000
- --------------------------------------------------------------------------------
7,607,100
================================================================================
F-22
<PAGE>
RT Industries, Inc.
Notes to Consolidated Financial Statements
================================================================================
Stock Split
On February 15, 1995, the Company's Board of Directors approved a 1-for-5
reverse stock split with respect to the Company's common stock. The loss per
share calculation and all share information contained in these financial
statements have been retroactively adjusted to give effect to the reverse stock
split.
Authorized Common Stock
During 1996, the stockholders approved an increase in the authorized shares of
common stock from 10,000,000 to 30,000,000.
F-23
<PAGE>
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.
RT INDUSTRIES, INC.
April 3, 1997 By: /s/ John K. Kenney
-----------------------------------
John K. Kenney, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the date
indicated.
SIGNATURE DATED
/s/ John K. Kenney Director, Chief Executive Officer, April 3, 1997
- ------------------- President, (principal executive officer)
John K. Kenney
/s/ Alfred Paul Chief Financial Officer, April 3, 1997
- ------------------- Chief Accounting Officer
Alfred Paul (principal financial officer)
/s/ Mandel Sherma Director April 3, 1997
- -------------------
Mandel Sherman
/s/ David Love Director April 3, 1997
- -------------------
David Love
