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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-KSB/A
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
OR
/ / 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 33-83526
SECURITONE AMERICA, INC.
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(Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 34-1833574
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(State of Incorporation) (I.R.S. Employee Identification No.)
5850 Oberlin Drive, Suite 220, San Diego, California 92121
- ------------------------------------------------------ -------------------
(Address of Principal Executive Offices) (Zip Code)
(619) 677-5580
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(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$0.001 per value
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 / / No /X/
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 definite proxy or
information statements incorporated by reference in Part III of this Form
10-KSR or any amendment to this Form 10-KSB. _____
State issuer's revenues for its most recent fiscal year: $88,431
(December 31, 1997)
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act).
Common Stock, $0.001 par value: $397,970 (as of February 1, 1999)
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Common Stock, $0.001 par value: 6,091,881 shares as of February 1, 1999
Transitional Small business Disclosure Format (check one): Yes / / No /X/
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Certain information about the directors and executive officers is
included below. Effective February 20, 1998, Michael Lee, the Company's Chief
Financial Officer and a Director resigned. Mr. Lee's departure was by mutual
agreement with the Company's Board of Directors. On September 11, 1998, the
Company's Chief Operating Officer and a Director, Derek M. Davis, resigned to
pursue other interests. Mr. Davis agreed to be available to Company
executives for a period of two months, without compensation, in order to
ensure a smooth transition of tasks and responsibilities to his replacement.
William P. Stueber, II, Chief Executive Officer and a Director, left the
Company to pursue other interests effective November 1, 1998.
<TABLE>
<CAPTION>
DIRECTOR OR
NAME AGE POSITION OFFICER SINCE
- ---- --- ------------------------------------ --------------
<S> <C> <C> <C>
Derek M. Davis 31 Chief Operating Officer and Director June 1996
Michael M. Grand 59 Director April 1997
Michael Lee 38 Chief Financial Officer and Director June 1996
Paul B. Silverman 55 Chief Executive Officer and Director November 1998
William P. Stueber, II 38 President and Director April 1996
Steven L. Wasserman 45 Secretary and Director April 1996
</TABLE>
The following describes the business background and the experience of
each of the directors and executive officers of the Company:
DEREK M. DAVIS became Chief Operating Officer of the Company in June
1996 and interim Chief Financial Officer in February 1998. From March 1993
until June 1996, Mr. Davis was Director of Operations of Central
Communications Corporation, a company engaged in the construction and
operation of 220 MHz Specialized Mobile Radio systems. From December 1990
until September 1991, Mr. Davis was a financial analyst for Rovic Diamonds, a
diamond mining company.
MICHAEL M. GRAND has been a director of the Company since its inception.
Mr. Grand is an attorney practicing in the areas of commercial and real
estate law. He is a member of the Michigan bar. Mr. Grand is the President
and sole shareholder of Parthenon Holdings, L.L.C., a holding company which
is the sole shareholder of Montpilier Holdings, Inc. ("Montpilier"), a
holding company and a significant stockholder of the Company.
MICHAEL LEE became Chief Financial Officer of the Company in June 1996.
Mr. Lee is a certified public accountant and member of the American Institute
of Certified Public Accountants and the Ohio Society of Certified Public
Accountants. Mr. Lee has been a tax partner since October 1993 at Bober,
Markey & Company, a large regional public accounting firm. Previously Mr. Lee
has worked at Grant Thornton International LLP, one of the world's largest
public accounting firms.
PAUL B. SILVERMAN became Chief Executive Officer of the Company in
November 1998 and a director in December 1998. Since January 1997, Mr.
Silverman has been Chairman of the Board and Chief Executive Officer of
SCIES, Inc., a global Internet telephone systems and services company. The
Company is presently in negotiations to acquire SCIES. See "Certain
Relationships and Related Transactions." From 1990 to 1996, Mr. Silverman was
Chief Executive Officer of JMS North America, Inc. (formerly James Martin
Strategy, Inc.), an international management consulting and engineering
company.
WILLIAM P. STUEBER, II became President and a director of the Company in
June 1996. Since 1983, he has been the President of Vortex Cellular, Inc., a
cellular activating and consulting company doing business as Direct Mobile
("Direct Mobile"). Mr. Stueber is also an exclusive agent of Bell Atlantic
NYNEX Mobile.
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STEVEN L. WASSERMAN has been Secretary and a director of the Company
since its inception. Mr. Wasserman is an attorney and a partner of the law
firm of Kohman Jackson & Krantz P.L.L., Cleveland, Ohio. He also serves as
Secretary and a director of INTEK Global Corporation, a wireless service and
technology company. Mr. Wasserman was a principal of the law corporation of
Honahen, Harwood, Chernett & Wasserman, LPA, Cleveland, Ohio, from 1983 to
September 1994.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met six times and acted by written consent once
in 1997. During 1997, all members of the Board of Directors participated in
at least 80% of all Board meetings.
DIRECTOR COMPENSATION
Members of the Board of Directors are not compensated for their services
as directors. The SecurFone America, Inc. 1997 Directors' Option Plan (the
"Directors' Option Plan") provides for the automatic "formula" grant to each
director of an option to purchase 50,000 shares of the Company's common
stock, $0.001 par value per share (the "Common Stock"), on the date of his or
her initial election to the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10%
of the Company's Common Stock, to file with the Securities and Exchange
Commission ("SEC") the initial reports of ownership and reports of changes in
ownership of the Common Stock. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Messrs. Davis, Grand, Lee, Stueber and Wasserman inadvertently failed to
file a required form on a timely basis when SecurFone, Inc. was acquired by
Material Technology, Inc. and became a publicly-traded company in August
1997. Messrs. Davis, Grand, Stueber and Wasserman subsequently filed the
required form.
ITEM II. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company
since its inception to William P. Stueber, II, the Company's former President
and the only executive officer whose total annual salary exceeded $100,000 in
1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
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LONG-TERM
FISCAL COMPENSATION ALL OTHER
NAME YEAR SALARY OPTION AWARDS COMPENSATION
- ---- ------ ---------- ------------- ------------
<S> <C> <C> <C> <C>
William P. Stueber, II 1997 $39,358(1) 50,000 $105,000(2)
1996 -- -- 55,000(2)
</TABLE>
______________
(1) $11,666 of this amount was earned by Mr. Stueber in 1997, but payment has
been deferred pursuant to the terms of his employment agreement. See
"Employment Agreements."
(2) The listed amounts were paid to Direct Mobile for consulting services
provided to the Company in 1996 and before Mr. Stueber joined the Company
in 1997. Mr. Stueber is the President and sole owner of Direct Mobile.
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OPTION GRANTS IN 1997
The following table summarizes information concerning options granted
during 1997 to Mr. Stueber.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON TOTAL OPTIONS
NAME STOCK GRANTED TO EXERCISE MARKET VALUE
UNDERLYING EMPLOYEES IN PRICE PER PER SHARE ON EXPIRATION
OPTIONS FISCAL 1997 SHARE DATE OF GRANT DATE
- --------- ---------- ------------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C>
William P.
Stueber, II 50,000 11.6% $1.00 $15.00 10/08/07
</TABLE>
OPTION VALUES AT 1997 YEAR-END
The following table summarizes information with respect to the number of
unexercised options held by Mr. Stueber as of December 31, 1997. Also
reported are values of "in-the-money" options, that is, the amount by which
the exercise price of the option is exceeded by the last sale price of the
Common Stock on December 26, 1997, the last day on which a sale occurred
before year-end. Mr. Stueber did not exercise any options in 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
NAME OPTIONS AT DECEMBER 31, 1997 AT DECEMBER 31, 1997
- ---------------- ---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William P.
Stueber, II 50,000 -- $250,000 --
</TABLE>
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive, pension or similar
plans.
EMPLOYMENT AGREEMENTS
Effective November 1, 1997, the Company entered into an employment
agreement with Mr. Stueber to act as President. The agreement was for a term
of one year with automatic annual renewals unless either party terminated the
agreement. Mr. Stueber left the Company to pursue other interests effective
October 31, 1998.
Mr. Stueber's employment agreement provided for an annual salary of
$250,000, of which $15,000 was payable monthly. The agreement provided that
the deferred portion of Mr. Stueber's salary would become payable upon the
earlier of a determination by the Board of Directors of the Company that the
Company had sufficient revenues or capital or May 1, 1998. After May 1, 1998
Mr. Stueber agreed to continue to defer the deferred portion of his salary
until the Company had sufficient revenues or capital to pay Mr. Stueber. In
addition, Mr. Stueber was granted an option to purchase 400,000 shares of
Common Stock at an exercise price of $0.10 per share on January 6, 1998,
pursuant to the agreement. The agreement provided that if Mr. Stueber was
terminated or left the employment of the Company, his salary would continue
for a period of three or six months depending upon the reason for the
termination of his employment. Pursuant to the employment agreement, Mr.
Stueber has agreed not to compete with the Company for a period of one year
after the termination of his employment. On February 8, 1999, the Company
executed a settlement agreement with Mr. Stueber to resolve all outstanding
claims related to his prior employment by the Company and cancel his
outstanding options for $50,000, payable on or before April 1, 1999.
The Company executed an employment agreement with Mr. Silverman on
November 1, 1998 to serve as Chief Executive Officer. Mr. Silverman's salary
compensation is $150,000, increasing to $180,000 per year after the Company
secures minimum new funding of $750,000. Mr. Silverman also received options
to acquire 100,000 shares of the Company's Common Stock upon execution of the
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employment agreement, and additional options for 300,00 shares directly
linked to the Company's ability to meet specified market capitalization
targets and financial milestones. On December 11, 1998, Mr. Silverman was
appointed a director of the Company and granted options to purchase 50,000
shares of Common Stock under the Directors' Option Plan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table includes, as of February 1, 1999, information
regarding the beneficial ownership of the Company's Common Stock, by each
stockholder known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of Common Stock, each director and executive
officer of the Company, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (2)
-----------------------------------
NAMES AND ADDRESS (1) SHARES PERCENTAGE
- --------------------- ------------- -------------
<S> <C> <C>
E.B. Advisory Limited (3) 500,000 8.2%
Paul B. Silverman (4) 100,000 1.6%
Steven L. Wasserman (5) 50,000 0.8%
Michael M. Grand (6) 4,550,000 74.1%
All directors and executive officers
As a group (three individuals)(7) 5,250,000 74.9%
</TABLE>
______________
(1) Unless otherwise indicated, the address of each of the beneficial owners
is c/o SecurFone America, Inc. 5850 Oberlin Drive, Suite 20, San Diego,
California 92121.
(2) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. A person is
considered to be the beneficial owner of securities that can be acquired
by such person within 60 days from September 15, 1998 upon the exercise
of warrants or options. Each beneficial owner's percentage ownership is
determined by assuming that options or warrants that are held by that
person (but not those held by any other person) and which are
exercisable within 60 days from February 1, 1999 have been exercised.
(3) E.B. Advisory Limited's address is P.O. Box 544, Britannia Place, Bath
Street, St. Ilelier, Jersey, Channel Island.
(4) Includes an option to purchase 100,000 shares of the Company's Common
Stock granted upon execution of Mr. Silverman's employment agreement.
Does not include an option to purchase 50,000 shares of Common Stock
granted under the Directors' Option Plan, which are not presently
exercisable, or options to acquire up to an additional 300,000 shares
of Common Stock contingent upon the Company's ability to meet
specified market capitalization and financial milestones which have
not yet been reached.
(5) Includes an option to purchase 50,000 shares of Common Stock granted
under the Directors' Option Plan.
(6) Includes (i) an option to purchase 50,000 shares of Common Stock granted
under the Directors' Option Plan and (ii) 4,500,000 shares of Common
Stock held by Montpilier. Montpilier is wholly owned by Parthenon
Holdings, L.L.C., of which Mr. Grand is the sole shareholder.
(7) Includes options to purchase a total of 250,000 shares of Common Stock.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 1, 1997, SecurFone, Inc. was acquired by Material Technology,
Inc. (formerly Tensiodyne Scientific Corporation) and became a
publicly-traded corporation. Material Technology, Inc. issued 4,500,000
shares of its common stock to Montpilier in exchange for all the outstanding
capital stock of SecurFone, Inc. Montpilier is the principal stockholder of
the Company and is owned indirectly by Michael M. Grand, a director of the
Company.
On June 12, 1998, the Company executed a term sheet for the acquisition
of SCIES, Inc. ("SCIES"), a global Internet telephone systems and services
company. The term sheet calls for the Company to issue shares of unregistered
Common Stock to purchase SCIES. Paul B. Silverman, Chief Executive Officer of
the Company, is Chief Executive Officer of SCIES. Mr. Silverman currently
retains a 40% ownership interest in SCIES. The planned acquisition of SCIES
had not yet been completed due to lack of funding. SCIES is now co-located
with the Company and is operating as a strategic partner of the Company.
Steven L. Wasserman, a director and the Secretary of the Company, is a
partner of the law firm of Kohrman Jackson & Krantz P.L.L., which provides
legal services to the Company.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized.
SECURFONE AMERICA, INC.
By: /s/ PAUL B. SILVERMAN
------------------------------------------
Paul B. Silverman, Chief Executive 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 and on the dates indicated.
/s/ PAUL B. SILVERMAN Chief Executive Officer February 26, 1999
- ----------------------- (principal financial and
Paul B. Silverman executive officer)
/s/ STEVEN L. WASSERMAN Secretary and Director February 26, 1999
- -----------------------
Steven L. Wasserman
/s/ MICHAEL M. GRAND Director February 26, 1999
- -----------------------
Michael M. Grand
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