UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB/A-1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
Ages Health Services Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 04-3102249
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
800 Hingham Street, Suite 103S 02370
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(Address of principal executive offices) (Zip Code)
617-871-6550 (Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
None
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(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
<TABLE>
<CAPTION>
Name of exchange
Title of each class on which registered
------------------- -------------------
<S> <C>
Common Stock, without Par Value None
Redeemable Common Stock Purchase Warrant None
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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.
Yes [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, 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 [X]
The Company' revenues for the year ended September 30, 1996 were $7,214,781.
As of January 31, 1997 the aggregate market value of the voting stock held by
non-affiliates of the registrant (computed by reference to the average bid and
asked prices of such stock) was $444,659.
As of January 31, 1997, there were 2,508,100 shares of the registrant's common
stock outstanding.
The purpose of this Amendment is to include in Registrant's Form 10-KSB
for the fiscal year ended September 30, 1996 the Part III information (Items 9,
10, 11, and 12) which was to be incorporated by reference to a definitive proxy
statement to be filed within 120 days after the close of Registrant's fiscal
year. Such definitive proxy statement was not so filed.
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Directors and Executive Officers
The following are the directors and executive officers of the Company:
<TABLE>
<CAPTION>
Name Age Position with the Company
---- --- -------------------------
<S> <C> <S>
Anders Laren 37 President, Chief Executive Officer, Clerk
(Secretary) and Director
Kuno Laren 72 Director
Peter W. Clegg 52 Director
Jonathan D. Lieff, M.D. 51 Medical Director
Robert A. Conway 49 Vice President of Operations
</TABLE>
Anders Laren joined the Company as Vice President and Secretary in May
1991 and has been Chairman of the Board and Chief Executive Officer since May
1992. He was elected as a Director of the Company in June 1992. Mr. Laren was
appointed President of the Company in May 1993. Prior to joining the Company,
Mr. Laren was an associate with the law firm of Shearman & Sterling from 1986 to
1991. Mr. Laren holds a J.D. from Fordham University School of Law. He is a
member of the New York bar and the Massachusetts bar. Anders Laren is the son of
Kuno Laren.
Kuno Laren has been a Director of the Company since February 1991. He has
been engaged in investment banking for more than ten years. He is a director of
several public and private companies, including Grant Enterprise Ltd., Kalex
Corp., and Tarlind Inc., each of which is a stockholder of the Company. Kuno
Laren is the father of Anders Laren.
Peter W. Clegg has been a Director of the Company since February 1993. He
is a business consultant with The August Group. He is also a major general U.S.
Army Reserve and currently serves as Commanding General, 94th Regional Support
Command, Fort Devens, Massachusetts. Mr. Clegg was a Vice President of the Bank
of Boston from 1986 to 1989.
Jonathan D. Lieff, M.D., joined the Company as Medical Director and Chief
of Psychiatry in October 1990. He currently serves as a member of the hospital
staff of several hospitals in Massachusetts, including St. Elizabeth's Hospital,
Baptist Hospital, Arbour Hospital and Human Resource Institute, positions he has
held since 1985. Dr. Lieff has approximately 22 years of experience as a
practitioner and has published numerous articles in national journals. Dr. Lieff
founded and currently serves as the Consulting Editor to the American Journal of
Geriatric Psychiatry. Dr. Lieff holds a B.A. from Yale College (1966) and an
M.D. from Harvard Medical School (1972). He is board certified by the American
Board of Psychiatry and Neurology with added qualification in Geriatric
Psychiatry.
Robert A. Conway has served as the Company's Vice President of Operations
since November, 1995. Prior to that, Mr. Conway provided substance
abuse/counseling services through Northeast Health Management Services, a
company he founded in 1989. From June, 1992 through November 1994 he served as
the director of management and development for Brookside Hospital. Mr. Conway
holds a BA from the University of Massachusetts (1970) and a masters degree in
education from Cambridge College (1983).
Messrs. Anders Laren, Kuno Laren and Peter Clegg have served as directors
during the fiscal year ended September 30, 1996 and will continue to serve as
such until the next meeting of shareholders and until their successors are duly
elected and qualified. The Company expects to hold a shareholders meeting,
within 90 days, at which meeting directors will be elected.
Meetings of the Board of Directors
There were 5 meetings of the Company's Board of Directors during the 1996
fiscal year. Anders Laren, Peter W. Clegg and Kuno Laren were present at such
meetings. The Company has one formal committee, the Audit Committee, consisting
of Kuno Laren and Peter W. Clegg.
Director Compensation
Outside directors may be paid an honorarium for attending meetings of the
Board of Directors in an amount which management anticipates will not exceed
$500 per meeting of the Board of Directors of the Company. Mr. Clegg received
$1,325 for fees and expenses related to attending meetings held in fiscal 1996.
Section 16(a) Reporting
Under the securities laws of the United States, the Company's directors,
its executive and certain other officers, and any other persons holding ten
percent or more of the Company's Common Stock must report on their ownership of
the Company's Common Stock and any changes in that ownership to the Securities
and Exchange Commission and to the National Association of Securities Dealers,
Inc.'s Automated Quotation System. Specific due dates for these reports have
been established. During the year ended September 30, 1996 all reports for all
transactions were filed on a timely basis.
Item 10. Executive Compensation.
Summary Compensation Table - Executives and Officers
The following table sets forth all cash compensation for services rendered
in all capacities to the Company for the fiscal years ended September 30, 1996,
1995, and 1994, paid to the Company's Chief Executive Officer, the four other
most highly compensated executive officers at the end of the above fiscal years
whose total compensation exceeded $100,000 during the above fiscal years,
although they were not executive officers at the end of such years. In fiscal
1994, 1995, and 1996, the Company paid no bonus, other annual compensation,
restricted stock awards, options, stock appreciation rights or long term
incentive payments to officers or executives.
<TABLE>
<CAPTION>
Annual Compensation
Name and -------------------
Principal Position Year Salary
------------------ ---- ------
<S> <C> <C>
Anders Laren 1994 $116,750
President, Chief Executive Officer and 1995 $121,000
Director 1996 $121,000
Kuno Laren 1994 -0-*
Director 1995 $ 48,000
1996 $ 48,000
Dr. Jonathan D. Lieff 1994 $180,000
Medical Director 1995 $180,000
1996 $180,000
Executives as a group (4 individuals in 1994 $409,250
1994 and 6 individuals in 1995 and 1995 $481,417
6 individuals in 1996). 1996 $483,830
<FN>
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<F1> * The Company paid $42,000 to Kumala Corp. for the consulting services of
Kuno Laren in fiscal 1994. No such payments were made thereafter.
</FN>
</TABLE>
Employment Agreements
The Company entered into an employment agreement with Anders Laren on
January 1, 1994 to serve as Chief Executive Officer through December 31, 1997.
The agreement provides for a base annual salary of $121,000 plus a bonus
entitling Mr. Laren to 30% of the Company's profits before interest and taxes,
as defined, in excess of $700,000, and 10% of such excess over $800,000. No
bonus was earned in fiscal 1994, 1995, or 1996 under the agreement. The Company
also entered into an agreement with Dr. Jonathan D. Lieff on January 1, 1994 to
serve as the Company's Medical Director. The agreement provides for a base
annual salary of $180,000 and is terminable upon six months notice after June
30, 1996.
Option Grants
No stock options were granted to the executive officers named in the
foregoing compensation table during the fiscal year ended September 30, 1996.
Option Year End Values
The following is certain information regarding options exercised by the
executive officers named in the foregoing compensation table during the year
ended September 30, 1996 and the fiscal year end value of unexercised options as
such date:
<TABLE>
<CAPTION>
Number of Value of
Unexercised Options Unexercised
at 9/30/96 in-the-Money Options
Shares Acquired Value Exercisable/ Exercisable
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- --------------- ------------ ------------------- --------------------
<S> <C> <C> <C> <C>
Anders Laren None - 0/5,000 (Options) $0/$0
Peter W.Clegg None - 0/5,000 (Options) $0/$0
Dr. Jonathan D. Lieff None - 0/2,500 (Options) $0/$0
</TABLE>
Stock Options and Stock Appreciation Rights
Stock Options Plans
In June 1993, the Board of Directors and stockholders adopted and approved
the 1993 Employee Incentive Stock Option Plan (the "Employee Plan") and the 1993
Non-Employee Directors' Stock Option Plan (the "Directors' Plan," and with the
Employee Plan are collectively referred to herein as the "Plans"). The Plans are
administered by the Board of Directors or by a committee appointed by the Board.
Pursuant to the Plans, options to acquire an aggregate of 241,000 shares of
common stock may be granted (181,000 shares pursuant to the Employee Plan and
60,000 share pursuant to the Directors' Plan). The Plans provide for grants to
employers, consultants, and directors of the Company.
The Employee Plan authorizes the Board to issue incentive stock options
("ISOs"), as defined in Section 422A of the Internal Revenue Code. The Directors
Plan authorizes only stock options that do not conform to the requirements of
the Code section ("non-ISOs"). Consultants and directors who are not also
employees of the Company may be granted only non-ISOs. The exercise price of
each ISO may not be less than 100% of the fair market value of the common stock
at the time of grant, except that in the case of a grant to an employee who owns
10% or more of the outstanding stock of the Company or a subsidiary or parent of
the Company (a "10% Stockholder"), the exercise price shall not be less than
110% of the fair market value on the date of the grant. The exercise price of
each non-ISO granted under the Director Plan shall be as determined by the Board
of Directors in its discretion and may be less than the fair market value of the
common stock on the date of the grant.
In July 1994, the Board of Directors granted stock options under the
Employee Plan to purchase 25,000 shares of common stock at a price equal to the
fair market value of the shares on the date of grant ($1.32 per share).
Subsequently, options to purchase 15,000 share were terminated. The remaining
options become exercisable to purchase 2,000 shares beginning on or after
January 29, 2000. No options shall be exercisable unless at the time of such
exercise (i) the fair market value of the common stock equals or exceeds $3.50
per share and (ii) the individual is employed by the Company. No options granted
under the Employee Plan were exercisable in fiscal 1994, 1995 or 1996. In
February 1995 the Board of Directors granted stock options under the Directors'
Plan to purchase 5,000 shares of common stock at a price equal of the fair
market value of the shares on the date of grant ($.9375 per share). The options
become exercisable to purchase 1,000 shares beginning on or after August 17,
1997 with additional 1,000 shares becoming available each year thereafter
through August 17, 2001. No options shall be exercisable unless at the time of
such exercise (1) the fair market value of the common stock equals or exceeds
$3.50 per share and (ii) the individual is a Director of the Company. No options
granted under the Directors Plan were exercisable in fiscal 1994, 1995 or 1996.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information as of January 31, 1997
with respect to each beneficial owner of five percent (5%) or more of the
outstanding shares of Common Stock and Series A Preferred Stock of the Company,
each officer and director of the Company and all officers and directors as a
group. Unless otherwise indicated, the address of each such person or entity is
c/o Ages Health Services Inc., 800 Hingham Street, Suite 103S, Rockland, MA
02370.
<TABLE>
<CAPTION>
Common Stock (no par value):
- ----------------------------
Name and Address Number of Shares Percentage
---------------- ---------------- ----------
<S> <C> <C>
Grant Enterprise Ltd. 796,000 30.85%
320 Lexington Avenue
New York, NY 10016
Kalex Corp. 140,000 5.43%
320 Lexington Avenue
New York, NY 100016
Tarlind Inc. 76,000 2.94%
320 Lexington Avenue
New York, NY 10016
Kuno Laren* ** 1,012,000 39.22%
320 Lexington Avenue
New York, NY 10016
Anders Laren** 70,300 2.72
Peter W. Clegg -- --
Dr. Jonathan D. Lieff -- --
Robert A. Conway -- --
All officers and directors
as a group (5 persons) 1,082,300 41.95%
<CAPTION>
Series A Preferred Stock (no par value):
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Name and Address Number of Shares Percentage
---------------- ---------------- ----------
<S> <C> <C>
Grant Enterprises 87 35%
320 Lexington Avenue
New York, NY 10016
Kalex Corp. 70 28%
320 Lexington Avenue
New York, NY 10016
Kuno Laren* ** 93 37%
320 Lexington Avenue
New York, NY 10016
<FN>
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<F1> * Kuno Laren, a director of the Company, is a director and principal
shareholder of Tarlind, Inc., Kalex Corp. and Grant Enterprises Ltd., and
thus is presumed to be the beneficial owner of all shares of the Company
owned by such companies.
<F2> ** Anders Laren is the son of Kuno Laren. Both Anders Laren and Kuno Laren
disclaim beneficial ownership of the shares of Common Stock attributed to
the other.
</FN>
</TABLE>
Item 12. Certain Relationships and Related Transactions
The Company has an aggregate of 250 shares of Series A Preferred Stock
issued and outstanding. Until June 24, 1996, all of the Series A Preferred Stock
was owned by Grant Enterprises Ltd. ("Grant"), a principal stockholder of the
Company. On June 24, 1996, Grant made distributions of Preferred Stock to Kalex
Corporation (70 shares) and to Kuno Laren (93 shares). Grant retained 87 shares
of Preferred Stock. The Series A Preferred Stock pays a cumulative dividend
equal to 12% per annum of the liquidation value ($1,000 per share). The Company
has also borrowed money from Grant at various times for working capital. The
Company repaid a note for $198,000 to Grant in accordance with its terms in
fiscal 1995. Interest at the rate of 1% per month on the outstanding balance
under the note was paid to Grand, aggregating $25,060 and $5,940 for fiscal 1994
and 1995, respectively. Kuno Laren, a director and principal stockholder of the
Company is a director and principal stockholder of Grant and is the father of
Anders Laren. Kuno Laren was made an employee of the Company and was paid
$48,000 in each of fiscal 1995 and 1996 to provide services with respect to
potential acquisitions, institutional financing and stockholder relations.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant cause
this Amendment No. 1 to its Annual Report on Form 10-KSB to be signed on its
behalf by the undersigned, thereunto duly authorized.
Ages Health Services Inc.
By: /s/ ANDERS LAREN Dated: February 14, 1997
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Anders Laren, President,
Chief Executive Officer and Director
