<PAGE>
<PAGE>
FORM 10-KSB/A FOR TTR INC. FILED ON APRIL 30, 1998
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-KSB/A
AMENDMENT NO. 1 TO
FORM 10-KSB
ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
------------------------
TTR INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
This Amendment No.1 on Form 10-KSB/A amends and restates the cover page,
Item 9, Item 10, Item 11 and Item 12 of the Annual Report on Form 10-KSB filed
with the Securities and Exchange Commission in respect of the Year ended
December 31, 1997 by TTR Inc. for the purpose of deleting all references therein
to incorporation by reference to the registrant's definitive proxy material to
be filed in connection with registrant's 1998 annual meeting of its shareholders
and to furnish the information required by the afore-referenced items, as set
forth on the pages attached hereto.
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
Date: April 30, 1998 TTR INC.
/s/ MARC D. TOKAYER
.......................................
Registrant
By: Marc D. Tokayer
Chairman of the Board, President, Chief
Executive Officer and Treasurer
</TABLE>
________________________________________________________________________________
<PAGE>
<PAGE>
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-KSB
ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
------------------------
TTR INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 0-22055 11-3223672
(STATE OR OTHER JURISDICTION COMMISSION FILE IRS EMPLOYER
OF INCORPORATION) NUMBER) IDENTIFICATION NO.)
</TABLE>
1841 BROADWAY, NEW YORK, NY, 10023
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
212-333-3355
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
------------------------
[Mark One]
[x] Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934 For the fiscal year ended December 31, 1997
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:
<TABLE>
<S> <C>
TITLE OF EACH CLASS: NAME OF EACH EXCHANGE ON WHICH REGISTERED
None None
</TABLE>
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
None
Common Stock, par value $0.001
(Title of Class)
Check whether the issuer (1) has field 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. [x] Yes
[ ] No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B 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]
ISSUER'S REVENUES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997:
None
The aggregate market value of the Registrant's Common Stock at March 30,
1998 held by persons deemed to be non-affiliates was approximately $13,620,255.
As of March 30, 1998, the Registrant had outstanding 4,052,548 shares of
$0.001 par value Common Stock.
________________________________________________________________________________
<PAGE>
<PAGE>
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
The directors, officers and key employees of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------- ---- ----------------------------------------------------------------------------
<S> <C> <C>
Mark D. Tokayer.............. 41 Chairman of the Board, Chief Executive Officer, President and Treasurer; and
President and Director of TTR Israel
Arik Shavit.................. 48 Director and Vice President; Chief Executive Officer and Director of TTR
Israel
Baruch Sollish............... 51 Director, Vice President -- Product Research and Development and Secretary;
Director of Product Research and Development and Director of TTR Israel
Robert Friedman.............. 35 Chief Financial Officer
</TABLE>
All officers serve until the next annual meeting of directors and until
their successors are elected and qualified.
Marc. D. Tokayer is the founder of the Company and has been chairman of the
Board of Directors, President and Treasurer of the Company since its inception
in July, 1994 and Chairman of the Board of Directors, President and Chief
Executive Officer of TTR Israel since its inception in December, 1994. From 1992
until he joined TTR, Mr. Tokayer worked as an independent consultant primarily
in the areas of business applications. From October 1990 through August, 1992,
Mr. Tokayer was employed by Yael Ltd., an Israeli company, where he managed the
development of the Central Inventory Control System.
Arik Shavit, has been a Director and Vice President of the Company and
Chief Executive Officer of TTR Israel since September, 1996. Prior thereto, Mr.
Shavit was a Manager of Business Development at IBM (Israel) Ltd., where he had
this position since August 1994. From August 1990 through July 1994, Mr. Shavit
founded and managed Silvaco (Israel) Ltd., an Israeli subsidiary of SILVACO
International, Inc., a California based software company which develops
state-of-the-art computer assisted engineering (CAE) Software Applications and
provided marketing and support services. Mr. Shavit also served as Corporate
Vice-President and Director of the US company.
Baruch Sollish, Ph.D, has been a Director of the Company and Manager of
Product Research and Development for TTR Israel since December, 1994. He was
elected the Vice President-Product Research and Development and Secretary of the
Company in September 1996. Dr. Sollish created the core technology that makes up
the DiscGuard protection process. Prior to joining the Company, from June, 1987
through December, 1994, Dr. Sollish founded and managed Peletronics Ltd., an
Israel software company, engaged primarily in the field of smart cards and
software design for personnel administration, municipal tax authorities and
billing procedures at bank clearance centers. Dr. Sollish holds six United
States patents in the fields of electro optics, ultrasound and electronics and
has published and lectured extensively.
Robert Friedman has been chief financial officer since he joined the
Company in March, 1997. Previous to joining the Company, from 1993 to 1996 he
was a Vice President of Oppenheimer & Co., Inc., where he managed the Israel
Desk and was responsible for sales of equity and fixed income products primarily
to leading Israeli financial institutions. From 1989 to 1993, he was Vice
President of The Castle Group Ltd., in New York, a venture capital firm, where
he performed financial and strategic marketing analysis for seed capital
investments and equity private placements for hi-tech companies. From 1989 to
1990 he also served as CEO of The Metropolitan Media Group, a Los Angeles-based
investment firm. He has a Master's Degree from Yale University's School of
Management and a B.A. in Economics, with Honors, from Yeshiva University.
There are no family relationships, as defined, between any of the above
executive officers, and there is no arrangement or understanding between any of
the above executive officers and any other person pursuant to which he was
selected as an officer. Each of the above executive officers was elected by the
Board of Directors to hold office until the next annual election of officers and
until his successor is elected and qualified or until his earlier resignation or
removal. The Board of Directors elects the officers in conjunction with each
annual meeting of the stockholders.
2
<PAGE>
<PAGE>
SECTION 16 FILINGS
No person who, during the fiscal year ended December 31, 1997, was a
director, officer or beneficial owner of more than ten percent of the Company's
Common Stock [which is the only class of securities of the Company registered
under Section 12 of the Securities Exchange Act of 1934 (the 'Act') ], a
'Reporting Person' failed to file on a timely basis, reports required by Section
16 of the Act during the most recent fiscal year. The foregoing is based solely
upon a review by the Company of Forms 3 and 4 during the most recent fiscal year
as furnished to the Company under Rule 16a-3(d) under the Act, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and any representation received by the Company from any reporting
person that no Form 5 is required.
ITEM 10. EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Chief
Executive Officer of the Company for 1997 and for the previous two years, as
well as all other executive officers of the Company who received compensation in
excess of $100,000 for 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------- ---------------------------------------------------
AWARDS PAYOUTS
------------------------ -----------------------
RESTRICTED SECURITIES LTIP ALL OTHER
STOCK UNDERLYING PAYOUTS COMPENSATION
NANE AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARDS OPTION(#) ($) ($)
- --------------------------------- ---- -------- ------ ------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $ 81,500 0 $26,389(1) 0 0
1996 $ 60,000 0 (2) 0 0
1995 $ 60,000 0 (2) 0 0
Marc D. Tokayer .................
Chairman, President & CEO
1997 $100,008 0 $31,177(1) 0 217,473(4)
1996 N/A N/A N/A 0 N/A
1995 N/A N/A N/A 0 N/A
Arik Shavit .....................
Vice-President
1997 $ 94,931 50,000(3) $24,948(1) 0 0
1996 $ 65,000 0 $(2) 0 0
1995 $ 60,000 0 $(2) 0 0
Baruch Sollish ..................
Vice-President -- Research &
Development
1997 $ 60,000 0 0 $500,000(6) 100,000(7)
1996 N/A
1995 N/A
Robert Friedman .................
Chief Financial Officer(5)
</TABLE>
- ------------
(1) Consists of contributions to insurance premiums, car allowance and car
expenses.
(2) Does not include the cost to the Company of the use of automobiles leased by
the Company, the cost to the Company of benefits, including premiums for
life and health insurance and any other personal benefits provided by the
Company to such persons in connection with the Company's business, all of
which in the aggregate does not exceed the lesser of $50,000 or 10% of such
person's annual salary and bonus.
(3) In consideration of Dr. Sollish's waiver of incentive bonus payments based
due to him under his employment agreement based on Company revenues of
certain products, Dr. Sollish received in, 1997, a one-time bonus payment of
$50,000.
(4) Pursuant to the employment agreement, Mr. Shavit has been issued on February
10, 1997 warrants to purchase an aggregate of 217,473 shares of Common
Stock. The warrants are exercisable at $.01 per share until September 2002,
subject to a four-year vesting schedule, whereby the first 72,491 warrants
have vested as of September, 1997 and 48,328 are not exercisable until
September 1998, 48,327 in September 1999 and 48,327 in September 2000.
(5) Mr. Friedman commenced employment with the Company in March, 1997.
(6) In connection with his employment, Mr. Friedman was granted 50,000 shares of
the Company's Common Stock. Pursuant to an escrow arrangement, 25,000 shares
were released to him in July 1997 and the remaining 25,000 were released in
January 1998.
(7) In connection with his employment Mr. Friedman received under the Company's
1996 Incentive and Non-Qualified Stock Option Plan (i) incentive stock
options to purchase 40,000 shares of Common
(footnotes continued on next page)
3
<PAGE>
<PAGE>
(footnotes continued from previous page)
Stock at an exercise price per share of $10 and (ii) non-qualified stock
options to purchase 60,000 shares of Common Stock at an exercise price per
share of $5. All options vest over a four year period, commencing on the
date of Mr. Friedman's employment, in equal annual installments.
OPTIONS GRANTED DURING YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENT OF TOTAL MARKET
UNDERLYING OPTIONS GRANTED EXERCISE OR PRICE
OPTIONS TO EMPLOYEES IN BASE PRICE ON GRANT EXPIRATION
NAME GRANTED(#) 1997 ($/SH) DATE DATE
- ----------------------------------------- ---------- ---------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Mark Tokayer............................. 0
Arik Shavit.............................. 217,473 55.3% $ .01 $ 7.00 8/8/2006
Baruch Sollish........................... 0
Robert Friedman.......................... 100,000 25.44% $ 10.00 $ 10.00 3/11/2007
$ 5.00 $ 10.00 3/11/2007
</TABLE>
AGGREGATED OPTION AND WARRANT EXERCISES IN THE YEAR ENDED DECEMBER 31, 1997 AND
OPTION VALUES AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXCERCISED
SHARES NUMBER OF UNEXERICSED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT DEC. 31, 1997 AT DEC. 31, 1997(1)
ON VALUE ---------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------------ --------- -------- ----------- ------------- -------------------------
<S> <C> <C> <C> <C> <C>
Arik Shavit......................... 0 0 72,491 144,982 $420,629/$841,258
Robert Friedman..................... 0 0 25,000 75,000 $ 12,188/$36,563
</TABLE>
- ------------
(1) Based upon the closing price ($5.8125) on December 31, 1997, as reported on
the OTC Electronic Bulletin Board.
STOCK OPTION PLAN
It is currently the Company's policy that all full time key employees be
considered annually for the possible grant of stock options, depending upon
employee performance. The criteria for the awards are experience, uniqueness of
contribution to the Company and level of performance shown during the year.
Stock options are intended to improve loyalty to the Company and help make each
employee aware of the importance of the business success of the Company.
As of December 31, 1997, the Company has 161,100 options to purchase shares
of the Company's Common Stock outstanding under the 1996 Plan (as defined
below). During 1997, the Company also granted to its Vice President, Mr. Arik
Shavit, warrants to purchase up to 217,473 shares of its Common Stock, which
warrants vest over a four year period. See 'Summary Compensation Table' and
'Employment/Consulting Contracts.' A summary of the established stock option
plan is as follows:
The Company's Incentive & Non-Qualified Stock Option Plan, adopted in 1996,
(the '1996 Plan') provides for the grant to qualified employees (including
officers and directors) of the Company of options to purchase shares of Common
Stock. A total of 450,000 shares of Common Stock have been reserved for issuance
upon exercise of stock options granted under the 1996 Plan. The 1996 Plan is
administered by the Board of Directors or a committee of the Board of Directors
whose members are not entitled to receive options under the Plan (excluding
options granted exclusively for directors fees). The Board or the Board
committee has complete discretion to select the optionee and to establish the
terms and conditions of each option, subject to the provisions of the Plan.
Options granted under the Plan may or may not be 'incentive stock options' as
defined in Section 422 of the Internal Revenue Code ('Incentive Options')
depending upon the terms established by the Board at the time of grant, but the
exercise price of options granted may not be less than 100% of the fair market
value of the
4
<PAGE>
<PAGE>
Common Stock as of the date of grant (110% of the fair market value if the grant
is an Incentive Option to an employee who owns more than 10% of the outstanding
Common Stock). Options may not be exercised more than 10 years after the grant
(five years if the grant is an Incentive Option to any employee who owns more
than 10% of the outstanding Common Stock). Options granted under the Plan are
not transferable and may be exercised only by the respective grantees during
their lifetimes or by their heirs, executors or administrators in the event of
death. Under the 1996 Plan, shares subject to canceled or terminated options are
reserved for subsequently granted options. The number of options outstanding and
the exercise price thereof are subject to adjustment in the case of certain
transactions such as mergers, recapitalizations, stock splits or stock
dividends.
As of the date of this Prospectus, the Company has granted options for an
aggregate of 161,100 shares of Common Stock.
EMPLOYMENT/CONSULTING CONTRACTS/DIRECTORS' COMPENSATION
Marc D. Tokayer. TTR Israel has entered into an employment agreement with
Marc Tokayer, pursuant to which Mr. Tokayer is employed as the President and
General Manager for a term of three years commencing in August 1994, which term
is automatically renewable unless the one of the parties' decides otherwise.
Pursuant to the employment agreement, Mr. Tokayer will devote his full business
time in consideration of a current monthly salary of approximately $6,791,
subject to adjustment. If Mr. Tokayer is terminated without cause, as defined in
the agreement, then he shall be entitled to continue to receive his salary and
benefits for an additional 12 months subject to certain limitations.
Baruch Sollish, Ph.D. TTR Israel has entered into an employment agreement
with Baruch Sollish, pursuant to which Dr. Sollish is employed as the Director
of Product Research & Development for a term of one year commencing in December
1995 and renewable for additional one year periods. Pursuant to the employment
agreement, Dr. Sollish will devote his full business time in consideration of a
current monthly salary of approximately $7,911. In consideration of Dr.
Sollish's waiver of incentive bonus payments based due to him under the Abased
on Company revenues of certain products, Dr. Sollish received in 1997, a
one-time bonus payment of $50,000.
Arik Shavit. TTR Israel has entered into an employment agreement with Arik
Shavit, pursuant to which Mr. Shavit is employed as the Chief Executive Officer
for a term of three years commencing in September 1996. Pursuant to the
employment agreement, Mr. Shavit will devote his full business time in
consideration of a monthly salary of $8,334, subject to adjustment. Pursuant to
the employment agreement, Mr. Shavit has been issued on February 10, 1997
warrants to purchase an aggregate of 217,473 shares of Common Stock. The
warrants are exercisable at $.01 per share until September 2002, subject to a
four-year vesting schedule, whereby the first 72,491 warrants have vested as of
September, 1997 and 48,328 are not exercisable until September 1998, 48,327 in
September 1999 and 48,327 in September 2000.
Robert Friedman. TTR Inc. has entered into an employment agreement with
Robert Friedman pursuant to which Mr. Friedman is employed as the Chief
Financial Officer for a one year term, commencing in March, 1997. Pursuant to
his employment agreement, Mr. Friedman is to devote his full business time in
consideration of a monthly salary of $5,000, subject to adjustment. Pursuant to
his employment arrangement, Mr. Friedman has been issued 50,000 shares of Common
Stock. Additionally, in connection with his employment Mr. Friedman received
under the 1996 Plan (i) incentive stock options to purchase 40,000 shares of
Common Stock at an exercise price per share of $10 and (ii) non-qualified stock
options to purchase 60,000 shares of Common Stock at an exercise price per share
of $5, which options vest over a four year period, commencing on the date of Mr.
Friedman's employment, in equal annual installments. During the initial term of
employment, each of the Company and Mr. Friedman is entitled to terminate the
employment relationship upon 60 days advance written notice.
Director's Compensation. In 1997, Directors did not provide any
compensation for service on the Board or for attending Board Meetings.
5
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<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of April 15, 1998,
concerning the ownership of the Common Stock by (a) each person who, to the best
of the Company's knowledge, beneficially owned on that date more than 5% of the
outstanding Common Stock (b) each of the Company's directors (c) all current
directors, officers and significant employees of the Company as a group. Except
as otherwise indicated, the stockholders listed in the table have the sole
voting and investment power with respect to the shares indicated.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES OF COMMON STOCK PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS(1)
- --------------------------------------------------------------------- ---------------------- ------------------
<S> <C> <C>
Marc D. Tokayer(2) .................................................. 693,547 18.7%
c/o TTR Ltd
2 Hanagar Street
Kfar Saba, Israel
Baruch Sollish ...................................................... 100,000 3%
c/o TTR Ltd
Hanagar Street
Kfar Saba, Israel
Arik Shavit(3) ...................................................... 0 0
c/o TTR Ltd.
2 Hanagar Street
Kfar Saba, Israel
Robert Friedman(4) .................................................. 50,000 1.5%
c/o TTR Inc.
1841 Broadway
New York, New York 10023
All directors and officers as a group (4 persons).................... 903,547 23.2%
</TABLE>
- ------------
(1) Based on 3,302,548 shares of Common Stock outstanding (excluding 750,000
Escrow Shares referred to in Footnote 2 below).
(2) Includes 384,274 shares held by the Tokayer Family Trust (the 'Trust'). The
wife of Mr. Tokayer is the trustee for the Trust and the income
beneficiaries of the trust are Mr. Tokayer's children. Mr. Tokayer does not
have or share any voting power or investment power with respect to the
securities held by the Trust and, accordingly, disclaims beneficial
ownership of all such securities. The Trust may be deemed to hold 11.6% of
the outstanding shares of Common Stock.
The amount of beneficial interest for Mr. Tokayer excludes 201,949 Escrow
Shares in the name of Mr. Tokayer and 548,051 Escrow Shares in the name of
the Trust. These shares have been deposited in escrow pending the
achievement by the Company of certain revenue levels or the trading of the
Company's stock at a certain price range for a specified period. Including
the Escrow Shares would increase Mr. Tokayer's percentage of outstanding
shares owned to 33.7%
(3) Excludes 217,473 shares issuable upon exercise of a like number of warrants
exercisable as follows: 72,491 warrants have become exercisable as of
September 1997, 48,238 in September 1998 and 48,237 in each of September
1999 and September 2000. See 'Certain Transactions'.
Mr. Tokayer, the Trust and Dr. Sollish, who hold in the aggregate
approximately 21.7% of the shares of Common Stock, have entered into a
voting arrangement whereby they have agreed to vote their respective shares
to elect directors and in support of positions favored by a majority of the
shares held among them.
(4) Excludes 100,000 shares issuable upon exercise of a like number of stock
options issued to Mr. Friedman under the Company's Stock Option Plan
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
6
