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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended: Commission File Number:
December 31, 1997 0-21092
OCTUS, INC.
(Name Of Small Business Issuer As Specified In Its Charter)
California 33-0013439
(State Or Other Jurisdiction Of (IRS Employer
Incorporation Or Organization) Identification No.)
4520 EXECUTIVE DRIVE, PLAZA ONE
SAN DIEGO, CA 92121
(Address Of Principal Executive Offices)
Issuer's telephone number, including area code:
(619) 824-1185
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units
consisting of one Share of Common Stock and one Warrant to purchase
Common Stock (Title of Class)
Indicate by check mark whether the Issuer (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.
(1) YES X NO ____ (2) YES X NO _____
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Indicate by check mark if disclosure of delinquent filers pursuant 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/A or any
amendment to this Form 10-KSB/A. [X]
Issuer's revenue for the most recent fiscal year: $94,997
The aggregate market value of the voting stock held by nonaffiliates of the
Issuer: $ 516,426 as of July 10, 1998.
The number of shares outstanding of each of the Issuer's class of common stock,
as of the close of the period covered by this report:
Class: Common Stock, No Par Value
Outstanding at July 10, 1998: 4,222,922 shares
Class: Series C Preferred
Outstanding at July 10, 1998: 250,000 shares
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PART III
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ending December 31,
1996 and 1997, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to (i) Mr. Belden, who
served as Chief Executive Officer of the Company. No other officers were
employed by the Company in 1996 or 1997who earned over $100,000 in annual salary
and bonuses (the "named executive officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
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ANNUAL COMPENSATION
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(E) (F) (G) (H)
(A) OTHER RESTRICTED SECURITIES ALL OTHER
NAME AND (B) (C) (D) ANNUAL STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION AWARDS($) OPTIONS(#) ($)(2)
- -------------------- ---- ------------ -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John C. Belden(1)(2)().... 96,000 0 0 0 200,000 4,640
1996
President & CEO 1997 96,000 0 0 0 0 9,640
</TABLE>
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(1) Includes compensation that was accrued and deferred pursuant to the
Company's 401(k) Plan.
(2) Includes premium for life insurance policies paid by the Company, 401(k)
contributions by the Company, and with respect to Mr. Belden, cash out of
accrued and unused service pay.
STOCK OPTION GRANTS TABLE
The following table provides information concerning the grant of stock options
to the named executive officers of the Company during fiscal 1996 and 1997. The
Company does not have any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE
------ ------------ -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
John C. Belden...... 1996 200,000 100% $0.25 July 17, 2001
1997 0 0 N/A N/A
</TABLE>
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table provides information with respect to the named executive
officers, concerning the exercise of stock options during fiscal 1997and 1996
and unexercised options held as of the end of fiscal 1997 and 1996.
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END(#) FY-END($)
------------ --------------
SHARES
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<TABLE>
<CAPTION>
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
------ ------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
John C. Belden. 1997 0 0 289,799/100,000 0/0
1996 0 100,000/100,000 0/0
</TABLE>
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT
In July, 1996, the Company entered into a new employment agreement with Mr.
Belden for a two year period at a salary of $96,000 per year.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Voting Stock as of , by (i) each of the Company's
named executive officers and directors; (ii) the Company's named executive
officers and directors as a group; and (iii) shareholders known by the Company
to beneficially own more than 5% of any class of the Company's voting
securities. For purposes of this Proxy Statement, beneficial ownership of
securities is defined in accordance with the rules of the Securities and
Exchange Commission and means generally the power to vote or exercise investment
discretion with respect to securities, regardless of any economic interests
therein. Except as otherwise indicated, the Company believes that the beneficial
owners of the securities listed below have sole investment and voting power with
respect to such shares, subject to community property laws where applicable.
Unless otherwise indicated, the business address for each of the individuals or
entities listed below is c/o OCTuS, Inc., 4520 Executive Drive, Plaza Two, San
Diego CA 92121-3018.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SERIES C
COMMON SHARES PREFERRED SHARES
BENEFICIALLY BENEFICIALLY
NAME OWNED OWNED PERCENT OF CLASS
---- ------------- ------------------ ----------------
<S> <C> <C> <C>
OFFICERS AND DIRECTORS
Donald O. Aldridge(1)(2)........... 35,000 0.8% of Common Stock
Chairman; Director 0.5% of Voting Stock
John C. Belden(1) President & CEO, 6.4% of Common Stock
Director........................... 289,799 3.9% of Voting Stock
3.7% of Voting Stock
Robert A. Freeman(1)(3).............. 25,000 0.6% of Common Stock
Assistant Secretary, Director 0.4% of Voting Stock
Gilbert N. Holloway(1)............... 25,000 0.6% of Common Stock
Director 0.4% of Voting Stock
Lucile Lansing(1)(4)................. 81,511 1.9% of Common Stock
Director 1.2% of Voting Stock
Lawrence W. Taggart(1)............... 25,000 0.6% of Common Stock
Secretary, Director 0.4% of Voting Stock
Advanced Technologies
International,..................... 3,000,000 250,000 44.6% of Common Stock
Ltd.(5) 100% of Preferred Stock
56.6% of Voting Stock
EXECUTIVE OFFICERS AND DIRECTORS AS A
GROUP
10.2% od Common Stock
(6 persons)(1)..................... 481,310
6.4% of Voting Stock
</TABLE>
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(1) Includes the following shares issuable upon exercise of stock options
which are exercisable within 60 days from: Mr. Aldridge, 25,000;
Mr. Belden, 289,799; Mr. Freeman, 25,000; Mr. Holloway, 25,000;
Ms. Lansing, 25,000 and Mr. Taggart, 25,000.
(2) Mr. Aldridge's address is 159 Orange Blossom Circle, Folsom, California
95630-8117.
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(3) Mr. Freeman's address is. 525 Seabright Lane, Solana Beach, CA 92075
(4) Shares shown include 48,514 shares of Common Stock held by Special
Opportunities, L.P., of which Lansing Financial Group, Inc., Lucile
Lansing, President, is General Partner. Ms. Lansing holds 7,297 shares
pursuant to the Lansing Financial Group Pension Plan; the Lansing
Financial Group Pension Plan also holds public warrants to purchase 700
shares of Common Stock.
(5) As reported in a Schedule 13D filed by Advanced Technologies International,
Ltd. ("ATI") on July 12, 1996. ATI owns warrants to purchase 3,000,000
shares of Common Stock at prices ranging from $.43 to $.75 per share. ATI's
address is Suite 2200 Two La Salle Street, Chicago, IL 60602.
CHANGE IN CONTROL
In June 1996, the Company sold to Advanced Technologies International, Ltd.
("ATI") 250,000 shares of Series C Preferred Stock for $150,000 and issued to
ATI warrants to purchase up to an additional 3,000,000 shares of the Company's
Common Stock at an initial exercise price of $0.43 per share. While voting power
was disbursed among the Company's shareholders prior to the ATI transaction, ATI
now controls 56.6% of the voting power (assuming exercise by ATI of the warrant)
of the Company's Voting Stock.
INFORMATION REGARDING DIRECTORS
The information set forth below as to each nominee for Director has been
furnished to the Company by the respective nominees for Director:
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<CAPTION>
DIRECTOR
NAME PRESENT POSITION WITH THE COMPANY SINCE AGE
---- ------------------------------------- ---------- -----
<S> <C> <C> <C>
Donald O. Aldridge...... Chairman of the Board; Director 1995 67
John C. Belden.......... President and Chief Executive 1989 68
Officer; Chief
Financial Officer; Director
Robert A. Freeman....... Director; Assistant Secretary 1983 59
Gilbert N. Holloway..... Director 1997 56
Lucile Lansing.......... Director 1990 68
Lawrence W. Taggart..... Director; Secretary 1997 55
</TABLE>
Mr. Aldridge was appointed to the board in June 1995 and has served as
Chairman of the Board since October 1995. Since 1991, he has served as an
independent management consultant, advising a variety of clients in joint
ventures, locating investment capital, market research, and strategic planning.
From 1988 to 1991, Mr. Aldridge was Vice Commander-in-Chief of the Strategic Air
Command, where he served as chief operating officer of the largest command in
the United States Air Force.
Mr. Belden has served as a director of the Company since October 1989, as
its President and Chief Executive Officer from March 1990 to November 1994, and
as its Chairman from November 1994 to October 1995. He was reappointed President
and Chief Executive Officer in June 1995 following Ray M. Healy's resignation.
From November 1990 to July 1992, and since August 1994, he has also served as
the Company's Chief Financial Officer. From March 1995 to January 1997, he
served as Corporate Secretary. From June 1984 until assuming his current
position, Mr. Belden served as Vice President, Marketing of the American
Electronics Association.
Mr. Freeman, a co-founder and an original director of the Company, has
served as a director since 1983 and as Assistant Secretary of the Company since
1996. In addition, he has served in other positions with the Company, including
Vice President, Marketing, in 1988 and Vice President, Research and Development,
from 1983 to 1987. Since 1989, Mr. Freeman has provided consulting services from
time to time in addition to his duties as a director.
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Since 1991, Mr. Freeman has been a partner in RJ Engineering which has, from
time to time, provided consulting services to the Company. Mr. Freeman also
served as Chief Operating Officer of Pan Pacific Technology Group from 1989 to
1991.
Mr. Holloway was appointed to the board in January 1997. Since April 1996,
he has served as President of Basic Research Corporation, a San Diego based
technology development firm. From 1991 to 1996, he was Associate Professor of
Management at New Mexico State University. From 1969 to 1991, he was President
of Holloway Distributing Company, a major distributor of NIKE products in the
Western United States. Prior to 1969, he held various sales and marketing
positions with the XEROX Corporation.
Ms. Lansing has served as a director of the Company since February 1990;
she previously served as a director from August 1989 to October 1989. Since
1979, Ms. Lansing has been President of Lansing Financial Group, Inc., the
General Partner of Special Opportunities, L.P., a shareholder of the Company.
Ms. Lansing also serves as a director for Nord Pacific Limited.
Mr. Taggart was appointed to the board in January 1997. Since April 1996,
he has served as Vice President, Secretary/Treasurer and in-house legal counsel
for Basic Research Corporation, a San Diego-based technology development firm.
From 1994 to 1996 he was a sole legal practitioner. During this period he also
served as President of Basic Research Corporation. From 1993 to 1994, he served
as "Of Counsel" to the law firm of Fedynyshyn & Gallo. From 1990 to 1992, he was
a partner in the firm of Taggart & Johnston, attorneys.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently has been meeting its needs for cash through loans
from ATI. The loan balance has been increasing at approximately $15,000 per
month. The Company pays 10.0% simple interest on such loans and the loan is due
within five (5) days of the Company's receiving sufficient funds from the
exercise of warrants by ATI.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
The Company did not file any reports on Form 8_K during the last quarter of
the period covered by this report.
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OCTUS, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
small business issuer has duly caused this report to be signed on its behalf by
the undersigned thereunto authorized.
OCTUS, INC.
Date: July ,10, 1998. /s/ John C. Belden
-----------------------------------
John C. Belden
President & CEO/Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated as of July 10, 1998.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John C. Belden President (Principal Executive Officer, July 10, 1998
- ---------------------- Principal Financial & Accounting
John C. Belden Officer) Director
/s/ Donald O. Aldridge Director and Chairman of the Board July 10, 1998
- ----------------------
Donald O. Aldridge
/s/ Robert A. Freeman Director July 10, 1998
- ----------------------
Robert A. Freeman
/s/ Gilbert Holloway Director July 10, 1998
- ----------------------
Gilbert Holloway
/s/ Lucille Lansing Director July 10, 1998
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Lucille Lansing
/s/ Lawrence Taggart Director July 10, 1998
- ----------------------
Lawrence Taggart
</TABLE>
