SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
- ----- SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
- ----- THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number: 0-12643
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GANDALF TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
ONTARIO, CANADA NOT APPLICABLE
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
130 COLONNADE ROAD SOUTH, NEPEAN, ONTARIO, CANADA K2E 7M4
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code:
(613) 723-6500
- ----------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Shares
Indicate by check mark whether the registrant (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.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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-K or any amendment to this Form 10-K. [ X ]
[Cover page 1 of 2 pages]
The aggregate market value of the common shares held by non-
affiliates of the registrant, based upon the closing sales
price of the common shares as reported on The Nasdaq Stock
Market (National Market System) on June 1, 1995 was
approximately $202,073,190. This amount excludes 4,648,227
common shares held by all executive officers, directors, and
shareholders holding over five percent of the outstanding
common shares on that date, as such persons may be deemed to
be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of June 1, 1995, 38,681,607 common shares, without nominal
or par value, were issued and outstanding.
All dollar amounts in the Annual Report on Form 10-K are in
United States dollars, except where indicated. C$ refers to
Canadian dollars.
DOCUMENTS INCORPORATED BY REFERENCE
PART I None
PART II
Item 5 Market for Registrant's Common Stock and Related
Security Holder Matters. Page 31 of the Annual
Report to Shareholders for the fiscal year ended
March 31, 1995 (Exhibit 13).
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations. Pages 26 to
30 of the Annual Report to Shareholders for the
fiscal year ended March 31, 1995 (Exhibit 13).
Item 8 Financial Statements and Supplementary Data.
Pages 12 to 25 of the Annual Report to Shareholders for
the fiscal year ended March 31, 1995 (Exhibit 13).
PART III None
[Cover page 2 of 2 pages]
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 4
Industry Background 4
The Company and Corporate Structure 4
Products and Strategy 4
Sales and Marketing 6
Field Service and Customer Support 6
Research and Development 6
Manufacturing 7
Customers 7
Competition 7
Backlog 8
Proprietary Rights 8
Employees 8
Environmental Affairs 8
Item 2. Properties 9
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote
of Security Holders 10
PART II
Item 5. Market for Registrant's Common Stock
and Related Security Holder Matters 10
Item 6. Selected Financial Data 10
Item 7 Management's Discussion and Analysis
of Financial Condition and Results of
Operations 11
Item 8. Financial Statements and Supplementary
Data 11
Item 9. Disagreements on Accounting and
Financial Disclosure 11
PART III
Item 10. Directors and Executive Officers 11
Item 11. Executive Compensation 13
Item 12. Security Ownership of Certain
Beneficial Owners and Management 18
Item 13. Certain Relationships and Related
Transactions 19
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 19
Signatures 22
PART 1
ITEM 1. DESCRIPTION OF BUSINESS
Industry Background
- -------------------
Current economic, technical and social changes have
influenced the way to obtain access to information. New
client/server applications, government environmental
regulations, an increasingly competitive business climate and
a changing social environment have resulted in a growing
number of teleworkers, business travelers and remote office
users.
Corporations are faced with many new challenges as their
networks grow, among them the need for increased performance,
greater flexibility and cost-effective network management.
New applications, emerging multimedia technologies and a
growing number of users impose great bandwidth demands.
This combination of events is placing increasing demands on
the enterprise network of the '90s -- from the need to
provide location independent access for a growing number of
users to the need for higher transmission speeds and
capabilities to support the new generation of client/server,
image processing and multimedia applications.
The Company and Corporate Structure
- -----------------------------------
Gandalf Technologies Inc. was incorporated on April 29, 1971
as Gandalf Data Communications Limited, by articles of
incorporation under the laws of the Province of Ontario,
Canada. The terms "Gandalf" and the "Company" herein
refer to Gandalf Technologies Inc. and its subsidiaries. The
registered office of the Company is 130 Colonnade Road South,
Nepean, Ontario, Canada K2E 7M4, telephone (613) 723-6500. On August
2, 1991 the Company acquired Infotron Systems Corporation
("Infotron"), an American company incorporated in 1968 and
merged its two U.S. subsidiaries under the name Gandalf
Systems Corporation. In addition, the Company has
subsidiaries in the United Kingdom, the Netherlands, France
and an International subsidiary whose head office is located
in the United Kingdom. For information regarding Gandalf's
foreign and domestic operations, see note 17 to the Company's
financial statements incorporated by reference herein.
Products and Strategy
- ---------------------
Gandalf's software and hardware products permit users to
communicate between information sources originating from a
variety of equipment supplied by different vendors, over
distances ranging from inter-office local area networks to
intercontinental wide area networks. The Company's products
may be sold separately as discrete network components or they
may be configured, integrated and serviced by the Company or
its partners as value-added networks designed to interconnect
multi-vendor computer, voice and video systems in
geographically dispersed areas.
The Company's vision is to provide people with access to
information through technology. More specifically, the
Company's vision is to provide the most effective, efficient,
user friendly, advanced products and services that provide
its customers with needed and secure access to their
information, while preserving and enhancing their investment,
using the best technology. The Company's products feature
modular designs which provide a high degree of flexibility in
terms of features, performance and price, but which are
tightly coupled within the Company's customer value
architecture to ensure seamless integration and security.
The Company has core competencies in ISDN, frame relay,
compression, switching, bandwidth on demand and cell relay.
In order to meet the need to grow and increase the traffic
handling capacity of networks, the Company has developed a
product architecture and strategy that protects and enhances
a customer's investment in network infrastructure equipment
while enabling the network to grow and evolve, leveraging
public wide area networks and utilizing new high speed LAN
switching and ATM technologies.
The Company's product strategy spans four lines of business.
These are access products, backbone products, concentration
products and services, encompassing remote, on-demand
internetworking access, LAN and WAN access, concentration and
switching, private networking and network management
software, all supported and complemented by the Company's
service offerings.
Access Products
The increase in LAN traffic, coupled with the rapidly
increasing variety of telephone carrier service offerings,
means that in addition to optimizing their private networks,
customers are also managing a selection of telephone carrier
service offerings chosen for their cost effectiveness. The
user selects the services which provide the functionality
needed, at the lowest cost. The Company's access devices are
designed to connect remote LAN devices to corporate or public
information sources over a variety of switched digital,
bandwidth-on-demand carrier facilities.
The Company's family of XpressConnect TM internetworking
access devices sit at the edge of the network, providing
teleworkers in a regional office, on the road or in their
home, access to information, giving them the same look and
feel as those users directly connected to the local LAN.
XpressConnect products operate over a number of different
carrier services such as ISDN, switched 56K, and frame relay
and can support future functionality through software
upgrades that can be downline loaded and managed from a
centralized location.
Backbone Products
The Company's backbone products transport and switch at high
rates, information collected by one or more concentrators on
a campus or over a wide area between major sites, forming the
main integrated communications path of a company.
Xpressway Virtual LAN Switch (VLS TM) resolves bandwidth
congestion and traffic bottlenecks due to the growth of
bandwidth intensive PC applications, without requiring
additional investment in infrastructure.
The Company's WAN 2000 family of backbone products are
designed to concentrate and integrate multimedia traffic
(including voice, fax, low-speed and high-speed data, LAN and
video) over leased facilities such as T1. The product
incorporates fast-packet technologies such as cell and frame
relay and combines voice with low speed data and high speed
LAN traffic on a single platform that delivers data and voice
compression and dynamic bandwidth utilization.
Concentration Products
The Company's concentration products collect, concentrate and
switch information from remote sites over a variety of
carrier facilities (ISDN basic and primary rate, switched
56K, leased lines) and feed the information to a campus or
building backbone of an enterprise network.
Xpressway TM is a chassis-based concentration and
internetworking system that is designed to address the high
end of the remote access market where high port density,
fault tolerance and robustness are mandatory characteristics.
Xpressway provides the network manager with centralized
network monitoring, management control, including eight
levels of security and the ability to downline load software
to the XpressConnect family of products.
XpressStack TM is a new family of stackable, concentration
and switching devices that deliver much of the performance of
the Xpressway but on platforms which are more granular in
terms of network size and functionality and which, as a
result, are more easily installed and maintained.
XpressStack is designed to provide performance and ease of
use for medium density applications.
Services
The Company provides expertise in the design, implementation
and management of customer networks. The Company provides
value added services, customized to meet specific customer
needs, which are designed to increase productivity, reduce
costs or add value through the design and implementation of
well managed networks. The Company provides an end-to-end
network management system with Gandalf Passport TM, which
combines the management of both local and wide area networks
on a common, standards based platform.
Sales and Marketing
- -------------------
Gandalf supplies its customers in more than 75 countries with
telecommunication networking products and services that
provide the infrastructure necessary to enable people to
communicate and easily access information regardless of the
geography and technology separating the people and the
desired information. Gandalf markets its products and
services through both direct and indirect channels through
wholly-owned subsidiaries in the United States, Canada,
United Kingdom, the Netherlands and France. The Company's
International subsidiary sells through local distributors
worldwide.
Field Service and Customer Support
- ----------------------------------
The Company provides, through its field service staff, both
technical support relating to the successful installation and
interconnection of the Company's products with those of other
manufacturers, and ongoing field service and maintenance
support. The Company's field service and technical support
staff consists of over 180 employees in the United Sates,
Canada, the United Kingdom and continental Europe.
The Company believes that providing network services and
support to its installed base of customers is fundamental to
growth. The Company, through its extensive field service
organization, sells support services under contract to many
of its customers. The Company believes that the customer
support contracts generated through its field service
organization provide the opportunity for sales of additional
Gandalf products and enhance referrals for the sale of
products to new customers.
Research and Development
- ------------------------
The Company believes that success in the rapidly changing
communications element of the information industry is
dependent upon the ability to anticipate and respond to
customer needs and to develop reliable, cost-effective
products with expanded capabilities and performance. The
Company spent $20.5 million in product development in fiscal
1993, $15.0 million in fiscal 1994 and $10.1 million in
fiscal 1995.
Manufacturing
- -------------
The Company's manufacturing operations consist of materials
planning and procurement, assembling and testing electronic
assemblies. In addition, enclosures and racks are built
complete with electrical power apparatus, interconnect wiring
and cabling. Finally, electronic assemblies are integrated
with the enclosures or racks to engineering specifications
and customer configurations and are final tested before
shipment to customers.
All manufacturing process procedures are managed under the
ISO 9002 quality management program. This program provides a
basis for the Company's ongoing quality improvement and is
recognized as the mark of a world class manufacturer.
In some cases, the Company subcontracts the entire
manufacturing of a product to a single supplier. Also, a
single source supplier is used in instances when the Company
designs components and sub-assemblies. As a corporation, the
Company believes that the close working relationship with a
single supplier enhances product quality, delivery and cost
control. If necessary, these items could be sourced from
other vendors.
Customers
- ---------
Gandalf's target customers are end users of data processing
equipment and include major corporations, institutions,
carriers and governments in all of its major geographic
markets.
Gandalf sells to end user customers either directly or via
indirect sales channels which include distributors, value
added resellers, systems integrators and original equipment
manufacturers.
The Company's business is not seasonal. The Company is not
dependent upon a single customer or a few customers and the
loss of any one or more would not have a material adverse
effect on the Company. During the three-year period ended
March 31, 1995, no customer accounted for 10 percent or more
of the Company's revenues in any year.
Competition
- -----------
Competition in the telecommunications market is intense and
marked by advances in technology which frequently result in
the introduction of products with improved performance
characteristics. Failure to keep pace with such advances
could negatively affect the Company's competitive position
and prospects for growth. The Company competes on the basis
of price, product quality and communications reliability,
various supporting services, product development capabilities
and availability. The Company believes it is competitive in
each of these respects. The Company's competitors vary
depending upon the sector of the network being identified.
Generally, these include 3Com Corporation, Cisco Systems
Inc., Bay Networks Inc., Ascend Communications, Inc.,
Newbridge Networks Corp. and Combinet. These and other
competitors may have greater financial, technological,
manufacturing, marketing and personnel resources than the
Company. Gandalf believes its worldwide coverage, its
extensive customer base, its experienced sales force and its
global technical support will allow it to compete
successfully in its chosen markets.
Backlog
- -------
The Company attempts to manufacture inventory in quantities
sufficient to provide timely delivery of its products.
Because of this short delivery cycle, backlog is not
considered to be a meaningful indication of future revenues.
Proprietary Rights
- ------------------
The Company believes that while proprietary information
represents a valuable asset of the Company, it is secondary
to the ability of the Company to continue to develop and
implement innovative engineering and design initiatives. The
Company protects its proprietary information through the
worldwide use of trademarks and patents, and has accumulated
goodwill in respect of its name, GANDALF, which is a
registered trademark internationally. The Company has
received a patent for its compression technology, which in
the view of the Company, represents a significant competitive
advantage. Proprietary information is disclosed to
distributors, customers and potential customers only under
confidentiality agreements. The Company's proprietary
software is provided under license to its customers.
Employees
- ---------
On March 31, 1995 the Company had 897 employees worldwide.
Of these, 202 were engaged in manufacturing, 121 were engaged
in engineering development, 440 were sales, marketing and
customer support personnel and 134 held general
administrative positions. On March 31, 1994 the Company had
1,127 employees and on March 31, 1993 the company had 1,366
employees. Restructuring actions taken in the fourth quarter
of fiscal 1994 and completed in the first quarter of fiscal
1995 led to the reduction in the number of employees from
fiscal 1994 to fiscal 1995.
Fifty percent of the Company's employees are located in
Canada, 25% in the United Kingdom and 13% in the United
States. The remainder are employed in France, the
Netherlands and in the International operations.
While the attrition rate in the Company is within acceptable
norms, the Company has experienced the loss of some
employees with valuable skills. The Company continues to
recruit and hire qualified and skilled employees.
The Company believes that its relationship with its employees
is satisfactory.
Environmental Affairs
- ---------------------
In compliance with the State of New Jersey's Environmental
Cleanup Responsibility Act, the Company is presently engaged
in the remediation of certain nonhazardous materials at its
former engineering, administration and distribution facility
in Cherry Hill, New Jersey. The Company maintains a letter
of credit in the amount of $500,000 with the Royal Bank of
Canada to secure its clean-up obligations under New Jersey
law. In the opinion of management, the Company's compliance
with New Jersey environmental laws and regulations are not
expected to have a material effect on future expenditures or
earnings.
ITEM 2. PROPERTIES
The Company's headquarters are located in Nepean, Ontario,
Canada, near Ottawa. The Company operates from three leased
premises at this location. A research and administration
facility (97,000 square feet) is located on land adjacent to
the Company's manufacturing facility (58,000 square feet) in
Nepean. Both facilities were sold to the builder upon
completion in 1987 and leased back to the Company for a 10-
year term with four options to renew of five years each. The
Company also occupies an 18,250 square foot printed circuit
board manufacturing facility on land adjacent to the
Company's other buildings in Nepean. In 1988, this building
was sold to the builder and leased back to the Company for a
20-year term.
The Company's principal property in the United States is
located in Delran, New Jersey. The 27,000 square foot
facility is leased for a three year period expiring in 1997
and is occupied by certain engineering, service and sales and
marketing staff of the Company.
The Company owns a facility in Warrington, Cheshire, England
(37,200 square feet) used as a distribution centre and
offices.
It is management's belief that the existing principal
properties described above are adequate for the Company's
current needs.
ITEM 3. LEGAL PROCEEDINGS
In April 1993, the Company was joined by way of third party
claim in an action started in the Ontario Court (General
Division) between Deskin Inc. and a Quebec numbered company
as plaintiffs and Digital Equipment of Canada Limited,
Distribution Architects International Inc. and D.A.
Distribution Software Systems Ltd. as defendants. The third
party claim was brought by the defendants D.A. Distribution
Software Systems Ltd. and Distribution Architects
International Inc. for contribution and indemnity in respect
of the main claim for damages for breach of contract and
negligence relating to the design, supply and installation of
a computer system. The main action claims specified damages
totalling C$2.6 million and damages for lost sales and
profits of C$20.0 million. Each of the defendants has
defended the claim. The third party claim alleges that the
Company improperly selected network hardware and improperly
designed the network for Deskin. Deskin has not sued the
Company. The Company had limited involvement in the project
and has defended the third party claim on the grounds that
Deskin's complaints related to malfunctions in equipment or
deficiencies in software unrelated to equipment or software
supplied by the Company. Pleadings in the action were
completed in August 1993. The plaintiff has taken no further
steps in the action. Based upon the information received by
the Company and the present state of proceedings, counsel
believes the Company has a good defense to the third party
claim on the merits and that the Company's liability, if any,
is for a nominal portion of the amount claimed in the main
action.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
For information relating to the registrant's common stock and
related shareholder matters, reference is made to page 31 of
the 1995 Annual Report to Shareholders, filed as Exhibit 13
hereto, which information is incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
Thousands of U.S. dollars except per share amounts
1995*** 1994*** 1993*** 1992** 1991* 1990*
- ----------------------------------------------------------------------------------------------------
Income Statement Data:
Revenues $120,511 $131,323 $160,900 $119,181 $129,013 $140,366
Gross margin 44.5% 41.7% 43.7% 46.5% 49.4% 48.5%
Selling, general and administration 40,661 54,772 62,807 45,778 54,223 56,662
Research and development 10,197 14,316 17,279 13,679 13,788 13,702
Net income (loss) 1,406 (47,238) (19,507) (9,912) (5,869) (9,190)
Basic earnings (loss) per share 0.05 (2.27) (1.24) (0.63) (0.48) (0.75)
- ----------------------------------------------------------------------------------------------------
Balance Sheet Data:
Total assets 81,508 89,186 129,603 141,408 102,999 110,754
Fixed assets 18,619 20,214 30,768 38,416 22,761 27,074
Working capital 21,057 13,978 25,596 19,276 22,050 32,673
Current ratio 1.6 1.3 1.5 1.3 1.6 1.9
Cash and cash equivalents
net of current bank debt 5,963 (5,239) (688) (17,918) (9,030) (3,196)
Long-term debt 1,877 2,020 22,980 23,729 5,548 5,330
Convertible debentures 10,051 21,681 23,862 - - -
Shareholders' equity 34,442 19,109 34,308 55,491 59,363 67,425
<FN>
*** Year ended March 31
** For eight months only, ended March 31, 1992
* Year ended July 31
</FN>
<PAGE
Acquisition
- -----------
On August 2, 1991, the Company's subsidiary in the United
States, Gandalf Data, Inc. completed a merger with Infotron,
an international data communications company headquartered in
Cherry Hill, New Jersey, U.S.A.
Change in Reporting Currency
- ----------------------------
During the fiscal 1992 period, the Company adopted the U.S.
dollar as the unit of measurement for presentation in its
consolidated financial statements. This change was made due
to the significant increase in the Company's activities in
the United States as a result of the merger with Infotron.
The comparative figures for the fiscal year 1991 and 1990
were restated in U.S. dollars using a translation method of
convenience by which amounts previously stated in Canadian
dollars were converted to U.S. dollars using the July 31,
1991 exchange rate of $0.8683, without any other effects on
previous results stated in Canadian dollars. The results of
operations for the eight month period ended March 31, 1992
were converted at the average exchange rate for the period
of $0.8690.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For information relating to management's discussion and
analysis of financial condition and results of operations,
reference is made to pages 26 to 30 of the 1995 Annual Report
to Shareholders, filed as Exhibit 13 hereto, which
information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For information relating to the Company's financial
statements and supplementary data, reference is made to pages
12 to 25 of the 1995 Annual Report to Shareholders, filed as
Exhibit 13 hereto, which information is incorporated herein
by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
The following table and the notes thereto set out, as of June
1, 1995, the name and age of each director of the Company and
any nominees for director of the Company; his present
principal occupation, business or employment; his principal
occupation, business or employment during the past five
years, the period during which he has served as a director of
the Company, all other major positions and offices with the
Company and significant affiliates thereof now held by him,
if any.
BUSINESS EXPERIENCE
DIRECTOR DURING THE PAST FIVE YEARS,
NAME SINCE DIRECTORSHIPS AND OTHER INFORMATION
- -----------------------------------------------------------------------------------------------------
Desmond Cunningham, 64 1971 Past Chairman and co-founder of the Company. Director
of Gandalf Canada Ltd., Gandalf Systems Corporation,
Gandalf Digital Communications Limited, Gandalf
International Limited (subsidiaries of the Company).
Alexander Curran, 68 1987 President, Alex Curran Consultant Inc. (management
consultant) since December 1988.
John Gamba (Nominee) Senior Vice President, Corporate Resources and Performance
Assurance of Bell Atlantic Corporation since May 1994.
Group President, Network Technologies and Systems of Bell
Atlantic Network Services, Inc. from March 1992 to May
1994. Executive Vice President Bell Atlantic Network
Services from April 1990 to March 1992. Prior to 1990
held senior management positions in finance, operations,
labor relations, external affairs and customer services
areas of Bell Atlantic Corporation and its related
companies.
Charles J. Gardner, Q.C., 59 1981 Partner of Goldberg, Shinder, Gardner & Kronick
(Barristers & Solicitors)since 1965.
Donald M. Gleklen, 58 1991 President, Jocard Financial Services, Inc. since October
1994 (merchant banking). Special Counsel to Robert J.
Brobyn & Associates, Attorneys at Law from February 1994
to October 1994. Senior vice president of MEDIQ
Incorporated (health care services company) from September
1968 to February 1994.
Robert E. Keith, 53 1992 President, Technology Leaders Management Inc. (high
technology venture capitalists) since December 1991 and
Managing Director of Radnor Venture Partners, LP (high
technology venture capitalists) since July 1989.
A. Graham Sadler, 70 1994 President, Moreline Inc. (suppliers of electronic and
mechanical components and parts) since 1991. Executive
with Northern Telecom (manufacturers of telecommunications
products) from 1962 to 1991 and President of Northern
Telecom Electronics (a subsidiary of Northern Telecom)
from 1987 to 1991.
Albert Sinyor, 48 (Nominee) President, Amico Corporation (medical equipment
manufacturing) since 1993. From 1988 to 1993, General
Manager, Canadian Operations of Bell Atlantic Business
Systems Services. Prior to 1988 held senior management
positions in various companies.
Thomas A. Vassiliades, 59 1993 Chairman of the Company since May 1995 and president and
chief executive officer of the Company since May 1994.
President and chief executive officer of Avatar Management
Services, Inc. (management and consulting services) since
June 1993. President and chief executive officer of Bell
Atlantic Business Systems Inc. (international independent
computer and network services) from February 1990 to June
1993. From August 1988 to February 1990, chief executive
officer of Bell Atlantic Customer Services Inc.
(independent computer services).
There are no family relationships between directors or
executive officers of the Company. Under the provisions of
the Ontario Business Corporations Act, 1982, a majority of
the directors must be resident Canadians.
The names, ages, positions with the Company and business
experience of the executive officers of the Company, other
than Mr. Vassiliades, are as follows:
Gatone A. Daniello, 50, has been Vice President Product
Operations and Chief Technology Officer since June 1993.
From March 1991 to May 1993, he was founder and president of
Network Architects Inc., (a software company specializing in
the development of custom business applications). From May
1982 to March 1991, he was president and chief executive
officer of Datamedia Corp., (a specialty microcomputer
manufacturer).
Michael Chawner, 48, joined the Company in February 1995 as
Vice President of Strategy and Business Development. From
1988 to February 1995, Mr. Chawner was with Newbridge
Networks Corporation and held positions as Vice President of
Research and Development and Vice President of Network
Engineering. Mr. Chawner has over 20 years of combined
experience in the industry with Bell-Northern Research Ltd.,
Mitel Corporation, Leigh Instruments and British Telecom in
the United Kingdom.
Walter R. MacDonald, 33, has been Vice President of Finance
and Chief Financial Officer since September 1993. From June
1992 to September 1993, he was Controller; from June 1991 to
June 1992 he was Treasurer and from January 1990 to June 1991
he was Assistant Treasurer of the Company.
Paul Beaumont, 39, has been Vice President Sales, Services
and Marketing for the Americas since April 1995. Previously,
he was Vice President North American Sales and Marketing,
from October 1994 to March 1995, and from April 1994 to
October 1994 was the Managing Director, Europe for Gandalf
Digital Communications Limited. Prior to April 1994 Mr.
Beaumont was with the Company's sales organization since
October 1990.
John McGoldrick, 42, has been Managing Director of Sales,
Services and Marketing in Europe, the Middle East,
Australasia and Africa since April 1995. Mr. McGoldrick
previously held the position of Managing Director of Gandalf
Digital Communications Limited from January 1995 to April
1995, and General Manager, European Direct for Gandalf
Digital Communications Limited from October 1994 to January
1995. Between February 1990 and October 1994, Mr. McGoldrick
was Vice President of Sorbus UK, and from July 1991 to
October 1994 was also general manager of a joint venture
between ICL Company located in the United Kingdom, and Bell
Atlantic Customer Services, located in the United States.
From November 1987 to January 1991 Mr. McGoldrick was
Director of Sales and Marketing, reporting to Sorbus UK.
ITEM 11. EXECUTIVE COMPENSATION
Overview
- --------
The Company currently has six executive officers. The
aggregate cash compensation (excluding amounts paid on
retirement) paid to all executive officers as a group (10
persons) by the Company and its subsidiaries for services
rendered during the fiscal year ended March 31, 1995 was
$927,767
Liability Insurance
- -------------------
The Company provides liability insurance for directors and
officers of the Company and its subsidiaries. A new policy
was put into place effective November 1, 1994 with policy
limits of $17.9 million per claim with an aggregate
deductible to the Company of $107,000 on any Canadian claims
and $250,000 for any US claims, and no deductible to the
individual. The premium for said coverage during fiscal 1995
was $160,000. The individual directors and officers of the
Company and its subsidiaries are insured for losses arising
from claims against them for certain of their acts, errors or
omissions. The Company is insured against any loss arising
out of any liability to indemnify a director or officer.
Summary Compensation Table
- ---------------------------
The following table presents information provided in
accordance with regulations under the Securities Act
(Ontario) which requires the disclosure of compensation paid
during each of the years in the three year period ended March
31, 1995, in respect of the individuals who, during any
portion of fiscal 1995, served as the chief executive officer
of the Company, the individuals who were at March 31, 1995,
the other four most highly compensated executive officers of
the Company and one additional individual who was an
executive officer of the Company during fiscal 1995, but was
not serving at March 31, 1995. In addition, the Company has
included information in respect of two other executive
officers of the Company serving at March 31, 1995.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
----------------------------------- -----------
Securities
Under
Name and Fiscal Other Annual Options All Other
Principal Position Year Salary Bonus Compensation Granted Compensation
($) ($) (#)
(a) (b) (c) (d) (e) (f) (g)
- ------------------------------------------------------------------------------------------------------
Executive officers serving with the Company as at June 1, 1995
- ------------------------------------------------------------------------------------------------------
T.A. Vassiliades 1995 $178,498 (1) --- --- 600,000 ---
Chairman, President and CEO 1994 --- --- --- --- ---
1993 --- --- --- --- ---
G.A. Daniello 1995 $137,478 --- --- 75,000 ---
VP Product Operations 1994 $111,493 (2) --- --- 125,000 ---
and Chief Technology Officer 1993 --- --- --- --- ---
M. Chawner 1995 $10,228 (3) --- --- 75,000 ---
VP Strategy and Business 1994 --- --- --- --- ---
Development 1993 --- --- --- --- ---
W. R. MacDonald 1995 $84,443 --- --- 40,000 ---
VP Finance and CFO 1994 $71,287 --- --- 71,000 ---
1993 --- --- --- --- ---
P. Beaumont 1995 $149,376 (4) --- --- 125,000 ---
VP Sales, Services and 1994 --- --- --- --- ---
Marketing for the Americas 1993 --- --- --- --- ---
J. McGoldrick 1995 $62,240 (5) --- --- 50,000 ---
Managing Director, Sales, 1994 --- --- --- --- ---
Services and Marketing in 1993 --- --- --- --- ---
Europe, the Middle East,
Australasia and Africa
Executive officers no longer serving with the Company as at June 1, 1995
- ------------------------------------------------------------------------------------------------------
B.R. Hedges 1995 $39,707 (6) --- --- --- ---
President and CEO 1994 $147,455 --- --- 50,000 ---
1993 $65,787 (7) --- --- 75,000 ---
A. Brisbourne (8) 1995 $96,296 --- --- 40,000 ---
Managing Director, 1994 $90,076 $65,496 --- 85,000 ---
Gandalf International 1993 $92,709 --- --- 25,000 ---
Limited
J.M. Scott 1995 $97,538 (9) --- --- 50,000 $113,507 (10)
Managing Director, 1994 $101,860 $8,726 $ 15,920 (11) 50,000 ---
International 1993 $101,655 $44,297 --- 50,000 ---
<FN>
(1) T.A. Vassiliades was appointed President and CEO on May
10, 1994. He held this office for ten months in fiscal
1995, and previously provided consulting services to
the Company through Avatar Management Services, Inc., a
company controlled by him.
(2) G. A. Daniello was employed by the Company for ten
months during fiscal 1994.
(3) M. Chawner was employed by the Company for one month
during fiscal 1995.
(4) Includes sales commissions.
(5) J. McGoldrick was employed by the Company for five
months during fiscal 1995.
(6) B. R. Hedges resigned as CEO on April 15, 1994 and from
the board of directors of June 1, 1994. He continued
to receive a salary until June 3, 1994.
(7) B. R. Hedges was employed by the Company for six months
in fiscal 1993.
(8) A. Brisbourne resigned from the Company on April 10,
1995.
(9) J.M. Scott retired from the Company on January 10,
1995.
(10) Amounts accrued or paid in respect of retirement.
(11) Includes automobile lease payments and payments of
$4,074 for retirement benefits.
</FN>
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL
YEAR
% Market
of Total Value of
Options Securities
Securities to Granted Underlying
Under Employees Option on
Name and Options Financial Exercise or the Date Expiration
Principal Positions Granted Year Base Price of Grant (1) Date
(#) ($/Security) ($/Security)
(a) (b) (c) (d) (e) (f)
Executive officers serving with the Company as at June 1, 1995
- -----------------------------------------------------------------------------------------------
T.A. Vassiliades 600,000 33.52% 300,000 @ $0.91 $0.91 November 10, 2003
Chairman, President 300,000 @ $1.20 $1.20 October 19, 2004
and CEO
G.A. Daniello 75,000 4.2% 75,000 @ $0.64 (2) $0.64 July 4, 2004
VP Product Operations
and Chief Technology
Officer
M. Chawner 75,000 4.2% 75,000 @ $2.32 (2) $2.32 February 19, 2005
VP Strategy and Business
Development
W. R. MacDonald 40,000 2.2% 40,000 @ $0.64 (2) $0.64 July 4, 2004
VP Finance and CFO
P. Beaumont
VP Sales, Services 125,000 7.0% 50,000 @ $0.68 (3) $0.68 July 4, 2001
and Marketing for 75,000 @ $0.98 (3) $0.98 September 30, 2001
the Americas
J. McGoldrick 50,000 2.8% 50,000 @ $1.38 (3) $1.38 October 30, 2001
Managing Director,
Sales, Services and
Marketing in Europe,
the Middle East, Australasia
and Africa
Executive officers no longer serving with the Company as at June 1, 1995
- -----------------------------------------------------------------------------------------------
B.R. Hedges Nil N/A N/A N/A N/A
President and CEO
A. Brisbourne 40,000 2.2% 40,000 @ $0.64 (2) $0.64 July 4, 2004
Managing Director,
Gandalf International
Limited
J.M. Scott 50,000 2.8% 50,000 @ $0.68 (3) $0.68 July 4, 2001
Managing Director,
International
<FN>
(1) The market value of the common shares underlying the
options was the closing market price on the Toronto
Stock Exchange on the day prior to the date of the
grant.
(2) Options were granted in Canadian dollars. Translated
at the year end exchange rate of C$1=$0.7148.
(3) Options were granted in pounds sterling. Translated at
the year end exchange rate of 1 pound sterling=$1.6203
</FN>
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY
COMPLETED FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION VALUES
Value of (1)
Unexercised
Unexercised in-the-Money
Options Options
at Fiscal at Fiscal
Securities Aggregate Year End (#) Year End ($)
Name and Acquired Value Exercisable/ Excerciseable/
Principal Positions on Exercise Realized Unexerciseable Unexcerciseable
(#) ($)
(a) (b) (c) (d) (e)
- --------------------------------------------------------------------------------------------------------------
Executive officers serving with the Company as at June 1, 1995
- --------------------------------------------------------------------------------------------------------------
T.A. Vassiliades --- --- 609,583 Exercisable $1,732,571 Exercisable
Chairman, President 20,417 Unexercisable $16,981 Unexercisable
and CEO
G.A. Daniello --- --- 66,670 Exercisable $77,065 Exercisable
VP Product Operations 133,330 Unexercisable (4) $351,353 Unexercisable (4)
and Chief Technology Officer
M. Chawner --- --- 75,000 Unexercisable $120,750 Unexercisable (5)
VP Strategy and Business
Development
W. R. MacDonald --- --- 30,670 Exercisable $46,547 Exercisable (5)
VP Finance and CFO 80,330 Unexercisable $220,944 Unexercisable (5)
P. Beaumont --- --- 125,000 Unexercisable $383,750 Unexercisable (6)
VP Sales, Services and
Marketing for the Americas
J. McGoldrick --- --- 50,000 Unexercisable $127,500 Unexercisable (6)
Managing Director, Sales,
Services and Marketing in
Europe, the Middle East,
Australasia and Africa
Executive officers no longer serving with the Company as at June 1, 1995
- -------------------------------------------------------------------------------------------------------
B.R. Hedges --- --- Nil (7) ---
President and CEO
A. Brisbourne 48,007 $39,898 104,993 Unexercisable (8) $251,553 Unexercisable (5)
Managing Director,
Gandalf International Limited
J.M. Scott 16,670 $11,793 44,833 Exercisable (9)(10) $25,611 Exercisable (6)
Managing Director, 99,997 Unexercisable (9)(11) $251,363 Unexercisable (6)
International
<FN>
(1) The market value of common shares underlying the
options on March 31, 1995 was $3.93.
(2) Includes 9,583 options granted to Mr. Vassiliades in
his capacity as a director, prior to his appointment as
President and CEO.
(3) Options were granted to Mr. Vassiliades in his capacity
as a director, prior to his appointment as President
and CEO.
(4) Includes options granted in Canadian dollars.
Translated at the year end exchange rate of C$1=0.7148.
(5) Options were granted in Canadian dollars. Translated
at the year end exchange rate of C$1=0.7148.
(6) Options were granted in pounds sterling. Translated at
the year end exchange rate of 1 pound sterling
=$1.6203.
(7) B. R. Hedges resigned from the Company on April 15,
1994. The options expired upon the Optionee ceasing to
be employed by the Company.
(8) A. Brisbourne resigned from the Company on April 10,
1995. The options expired upon the Optionee ceasing to
be employed by the Company.
(9) J.M. Scott retired from the Company on January 10,
1995. Expiry date of options was extended beyond the
fiscal 1995 year end date.
(10) Includes 33,333 options which were not in-the-money at
March 31, 1995.
(11) Includes 16,667 options which were not in-the-money at
March 31, 1995.
</FN>
Bonus and Stock Plans
- ---------------------
The Company has an executive incentive plan under which cash
compensation is distributed to executive officers during the
year. The plan is administered by the Compensation Committee
of the board of directors which determines the amount that
may be paid to executive officers as a bonus during the year.
The criteria used to determine the amount awarded reflects
the position held by the executive officer in the Company,
the level of responsibility, and the degree to which
objectives are achieved. There were no bonuses paid to
executive officers during the fiscal year ended March 31,
1995.
The Company has five stock options plans, of which only two
are active plans from which future grants may be made. These
are the Stock Option Plan for Executives and Directors and
the 1988 Stock Option Plan for Directors.
As at March 31, 1995 2,339,786 common shares were subject to
options at prices ranging from C$0.88 to C$6.00
(approximately $0.63 to $4.29) and expiring at various dates
between January 10, 1997 and April 18, 2005. Of such
options, 1,632,486 common shares were subject to options held
by all directors and executive officers as a group.
Compensation of Directors
- -------------------------
The by-laws of the Company authorize the Board to determine
the amount of remuneration to be paid to directors for their
services as directors. The Board has approved the following
schedule of fees for directors who are not employees of the
Company ("Outside Directors"). Outside Directors resident
in Canada receive an annual retainer of C$7,500. Outside
Directors resident in the United States receive an annual
retainer of $7,000. In addition, each director receives an
attendance fee of $400 (in local currency) for meetings of
shareholders, the Board and committees of the Board of which
he is a member. Directors are entitled to reimbursement by
the Company for all reasonable expenses incurred in attending
such meetings. Directors who are employees receive no
remuneration for serving as members of the Board or as
members of committees of the Board. No additional
compensation is paid to the chairs of the various committees.
During the fiscal year ended March 31, 1995, the following
amounts were paid to directors of the Company in their
capacity as directors, including amounts paid for committee
participation or special assignments: Alexander Curran
C$10,300; Charles J. Gardner C$17,500; Donald M. Gleklen
$11,800; Robert E. Keith $16,600; A. Graham Sadler C$6,018.
Thomas A. Vassiliades was appointed president and chief
executive officer on May 10, 1994. He received $1,148 for the
period in fiscal 1995 which preceded his appointment.
Brian R. Hedges resigned as president and chief executive
officer on April 15, 1994 and as a director of the Company on
June 6, 1994. He received C$596 in respect of services as a
director during fiscal 1995.
The Company has one active stock option plan for directors
under which directors who are not employees are each awarded
stock options on 5,000 common shares of the Company on the
date of their initial election or re-election as a director,
provided they do not hold unexercised stock options at that
time under any of the Company's stock option plans. On
August 11, 1994, Mr. Sadler was elected as a director of the
Company and received a stock option under the 1984 Stock
Option Plan for Directors to purchase 5,000 common shares at
a discounted exercise price of C$1.23 (approximately $0.88)
per share. The market price on the date of grant was C$1.36
(approximately $0.97) per common share of the Company.
Directors are also eligible to receive grants of options
under in the 1993 Stock Option Plan for Executives and
Directors. A stock option under this plan was granted to Mr.
Vassiliades on May 10, 1994, upon his appointment as
president and chief executive officer, to purchase 300,000
common shares of the Company at an exercise price of $0.91.
Mr. Vassiliades also received a stock option grant on October
19, 1994 to purchase 300,000 additional common shares of the
Company at an exercise price of $1.20. A further option
grant was made on April 8, 1995 to Mr. Vassiliades, of
800,000 common shares, at an exercise price of $3.77. The
exercise price of each of these grants was determined based
on the market price on the date of grant.
Mr. Gardner is a member of a law firm that provides legal
services to the Company. During the fiscal year ended March
31, 1995, Mr. Gardner's firm was paid $42,107 in legal fees
by the Company and its subsidiaries.
Desmond Cunningham had a consulting arrangement with the
Company during fiscal 1995 under which he received fees from
the Company and its subsidiaries in the amount of $97,440.
Mr. Vassiliades provided consulting services to the Company
on certain specific matters prior to his appointment as
president and chief executive officer on May 10, 1994
pursuant to which he was paid $18,000 during fiscal 1995.
Following his appointment, Mr. Vassiliades received $178,498
in compensation during fiscal 1995.
Mr. Keith is an executive of Radnor Venture Partners, LP and
Safeguard Scientifics (Delaware), Inc. which are parties to a
loan agreement with the Company which was retired in fiscal
1995. During the fiscal year ended March 31, 1995, a
subsidiary of the Company repaid $301,500, representing the
remaining outstanding balance.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of June 1, 1995
with respect to (1) all shareholders known to the Company to
be beneficial owners of more than 5 percent of its
outstanding common shares and (2) share ownership by each
director and nominee for director and by each named executive
officer still in the employ of the Company and by all
executive officers and directors as a group.
Amount Percent
Name Beneficially Owned (1) of Class (8)
- ----------------------------------------------------------------------------------
Technology Investors 1
Limited Partnership (2,575,935)
260 Engleburn Ave., Peterborough,
Ontario, K9H 1S7
and BCI Holdings Inc. (353,300) 2,929,235 (2)(3) 7.6%
1437 Matthews Ave., Vancouver,
B.C., V6H 1W7
Paul Beaumont 16,667 (5) -
Michael Chawner - -
Desmond Cunningham 1,576,425 (4)(6) 4.1%
Alexander Curran 12,083 (6) -
Gatone A. Daniello 91,675 (5) -
John Gamba - -
Charles J. Gardner 28,333 (6) -
Donald Gleklen 83,333 (6) -
Robert Keith 34,583 (6) -
John McGoldrick - -
A. Graham Sadler 12,150 (6) -
Albert Sinyor - -
Walter MacDonald 44,006 (5) -
Thomas A. Vassiliades 907,499 (6) 2.3%
All executive officers and
directors as a group (14 persons) 2,806,754 (7) 7.1%
<FN>
Footnotes
(1) All shares are owned of record and beneficially and the
sole investment and voting power is held by the person
named, except as set forth below.
(2) At June 1, 1995, Technology Investors 1 Limited
Partnership also held 8.5% convertible debentures with
an aggregate principle amount of C$2,850,000 which, if
converted, would increase their ownership by 1,212,765
common shares to 10.4%. This percentage ownership is
calculated based upon total shares outstanding as of
June 1, 1995 plus shares issuable on conversion of the
debentures held by such shareholders.
(3) Michael H. Iles is a principal shareholder in Iles &
Isherwood Inc. which indirectly manages Technology
Investors 1 Limited Partnership. As of June 1, 1995
Michael H. Iles personally held 138,300 common shares of
the Company.
(4) Shares are owned personally or by Donosti Investments
Inc., a corporation controlled by Desmond Cunningham.
(5) Represents options (currently exercisable or exercisable
within 60 days).
(6) Includes options (currently exercisable or exercisable
within 60 days) on the following shares:
Desmond Cunningham 8,333
Alex Curran 9,583
Charles J. Gardner 13,333
Donald M. Gleklen 13,333
Robert E. Keith 12,083
A. Graham Sadler 1,250
Thomas A. Vassiliades 877,499
(7) Includes options (currently exercisable or exercisable
within 60 days) on 1,087,762 common shares.
(8) Percentage ownership is calculated based upon total
shares outstanding plus shares subject to options
(currently exercisable or exercisable within 60
days) held by the individual named or the persons
included in the relevant group. "-" indicates
beneficial ownership of less than 1% of the class.
</FN>
Statements contained in the table as to securities
beneficially owned by directors, officers and certain
shareholders or over which they exercise control or direction
are, in each instance, based upon information obtained from
such directors, executive officers and shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Gardner is a member of a law firm that provides legal
services to the Company. Mr. Cunningham had a consulting
arrangement with the Company under which he performed
services for the Company during the fiscal year ended March
31, 1995. Mr. Vassiliades provided consulting services to
the Company on certain specific matters prior to his
appointment as president and chief executive officer on May
10, 1994. Other than as described above, there are no
material relationships and related transactions with
directors and executive officers of the Company.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) The following documents are filed as part of this
report.
(1) The following financial statements, included in the
1995 Annual Report to Shareholders are incorporated by
reference into this report.
Auditors' Report.
Consolidated Financial Statements of Gandalf
Technologies Inc. including:
Consolidated Balance Sheets at March 31, 1995 and
March 31, 1994.
Consolidated Statements of Income for the years ended
March 31, 1995, March 31, 1994 and March 31, 1993.
Consolidated Statements of Changes in Financial
Position for the years ended March 31, 1995, March
March 31, 1994 and March 31, 1993.
Consolidated Statements of Shareholders' Equity for the
years ended March 31, 1995, March 31, 1994 and March
31, 1993.
Notes to Consolidated Financial Statements.
(2) Financial Statement Schedule.
Auditors' Report on Schedule.
Schedule II: Valuation and qualifying accounts.
Note: Schedules other than the one above are omitted
as not applicable, not required, or the information is
included in the consolidated financial statements
thereto.
(3) Exhibits
Exhibit No. Description
---------- -----------
*3.1 Articles of Incorporation of the Registrant and
amendments thereto (filed as Exhibit 3.1 to
Registration Statement No. 2-74405 on Form
S-1).
*3.2 Articles of Amendment to Articles of
Incorporation of the Registrant effective
December 14, 1983 and December 13, 1985
(filed as Exhibit 4.4 to Registration
Statement No.33-14899 on Form S-2).
*3.3 By-laws of the Registrant (filed as Exhibit 3.2
to the Form 10-K for the fiscal year ended July
31, 1985).
*3.4 Amendment to By-laws of the Registrant (filed as
Exhibit 4.5 to Registration Statement No. 33-
14899 on Form S-2).
*4.1 Common Share certificate (filed as Exhibit 4.1
to the Form 10-K for the fiscal year ended March
31, 1993).
*10.1 Lease dated 15th September, 1987 between The
Glenview Corporation, the Company and Gandalf
Data Limited whereby The Glenview Corporation
leased the land and buildings known as 130
Colonnade Road South, Nepean to the Company and
Gandalf Data Limited for an initial term of 10
years at an initial rent of C$1,125,000
per annum with four options to extend
each being for five year periods (filed as
Exhibit 10.2 to the Form 10-Q for the quarter
ended April 30, 1988).
*10.2 Lease dated 15 September, 1987 between The
Glenview Corporation, the Company and Gandalf
Data Limited whereby The Glenview Corporation
leased the land and the buildings known as 100
Colonnade Road South, Nepean, to the Company
and Gandalf Data Limited for an initial term of
10 years at an initial rent of C$402,000 per
annum with four options to extend each being for
five year periods (filed as Exhibit 10.3 to the
Form 10-Q for the quarter ended April 30,
1988).
*10.3 Agreement of Purchase and Sale dated October
14, 1988 between the Company and The Glenview
Corporation of the land and building known as
40 Concourse Gate in Nepean, Ontario for
C$3,000,000 subject to a lease-back to the
Company for 20 years at a basic rent of
C$420,000 per annum; and providing the Company
with an exclusive option to re-purchase the
lands for C$3,500,000 within 10 years or
C$4,000,000 after October 31, 1998 and before
October 31, 2003 (filed as Exhibit 10.27 to the
Form 10-K for the fiscal year ended July 31,
1989).
*10.4 Agreement dated as of July 3, 1991, among
Radnor Venture Partners, L.P., Safeguard
Scientifics (Delaware), Inc., the Company and
Gandalf Systems Corporation (filed as Exhibit
10.17 to the Form 10-K for the fiscal year
ended July 31, 1991).
*10.5 Registration Agreement dated as of August 1,
1991, among Radnor Venture Partners, L.P.,
Safeguard Scientifics (Delaware), Inc. and the
Company (filed as Exhibit 10.18 to the Form 10-
K for the fiscal year ended July 31, 1991).
*10.6 Lease dated September 13, 1988 between Cherry
Hill Industrial Sites, Inc. and Gandalf Systems
Corporation (filed as Exhibit 10.52 to the Form
10-K for the fiscal year ended July 31, 1991).
*10.7 Trust Indenture dated as of November 10, 1992
between The R-M Trust Company and the Company
(filed as Exhibit 10.26 to the Form 10-K for
the fiscal year ended March 31, 1993).
*10.8 Special Note Indenture dated November 10, 1992
between The R-M Trust Company and the Company
(filed as Exhibit 10.27 to the Form 10-K for
the fiscal year ended March 31, 1993).
*10.9 Underwriting Agreement (Canadian) dated as of
October 20, 1993 among Wood Gundy Inc., Deacon
Barclays de Zoete Wedd Limited, Gordon Capital
Corporation and Richardson Greenshields of
Canada Limited and the Company (filed as
Exhibit 10.1 to the Form 10-Q for the quarter
ended January 1, 1994).
*10.10 Consulting agreement dated as of February 21,
1994 between the Company and Thomas A.
Vassiliades (filed as Exhibit 10.17 to the Form
10-K for the fiscal year ended March 31, 1994).
13 Pages 12 to 31 of the Annual Report to
Shareholders for the fiscal year ended March
31, 1995.
21 List of subsidiaries.
23 Consent of KPMG Peat Marwick Thorne.
- -----------------------
*Incorporated herein by reference.
(b) The Company did not file any reports on Form 8-K
during the last quarter of the fiscal year ended March
31, 1995.
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.
GANDALF TECHNOLOGIES INC.
By: s/THOMAS A. VASSILIADES
-----------------------
(Thomas A. Vassiliades)
Chairman, President and Chief Executive Officer
Dated: June 29, 1995
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Thomas A.
Vassiliades and Walter R. MacDonald, jointly and severally,
his attorneys-in-fact, each with full power of substitution,
for him in any and all capacities, to sign any amendments to
the Report on Form 10-K, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission hereby ratifying and
confirming all that each said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by
virtue hereof.
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 date indicated.
Signatures Title Date
- ------------------ ----- --------
s/DESMOND CUNNINGHAM
- --------------------
(Desmond Cunningham) Director June 29, 1995
s/ALEXANDER CURRAN
- ------------------
(Alexander Curran) Director June 29, 1995
s/CHARLES J. GARDNER
- --------------------
(Charles J. Gardner) Director June 29, 1995
s/DONALD M. GLEKLEN
- -------------------
(Donald M. Gleklen) Director June 29, 1995
s/ROBERT E. KEITH
- -----------------
(Robert E. Keith) Director June 29, 1995
s/WALTER R. MACDONALD
- ---------------------- Vice President June 29, 1995
(Walter R. MacDonald) of Finance
(Principal Financial and
and Accounting Officer)
s/A. GRAHAM SADLER
- ------------------
(A. Graham Sadler) Director June 29, 1995
s/THOMAS A. VASSILIADES
- ------------------------ Director, Chairman, June 29, 1995
(Thomas A. Vassiliades) President, and
Chief Executive Officer
(Principal Executive Officer)
<PAGE
AUDITORS' REPORT ON SCHEDULE
To the Board of Directors and Shareholders
of Gandalf Technologies Inc.
Under date of May 26, 1995, we reported on the consolidated
balance sheets of Gandalf Technologies Inc. as at March 31,
1995 and 1994 and the consolidated statements of income,
changes in financial position and shareholders' equity for
each of the years in the three year period ended March 31,
1995 as contained in the 1995 annual report to shareholders.
These consolidated financial statements and our report
thereon are incorporated by reference in the annual report on
Form 10-K for the year 1995. In connection with our audits
of the aforementioned consolidated financial statements, we
also have audited the related financial statement schedule as
listed in item 14 of Form 10-K. This financial statement
schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial
statement schedule based on our audits.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
S/KPMG PEAT MARWICK THORNE
- ------------------------
KPMG Peat Marwick Thorne
Chartered Accountants
Ottawa, Canada
May 26, 1995
GANDALF TECHNOLOGIES INC.
Schedule II: Valuation and qualifying accounts and reserves.
(Thousands of United States dollars)
- -------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D Col. E
Additions
---------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts Deductions at end
Description of year expenses - describe(1) - describe(2) of year
- -------------------------------------------------------------------------------
Fiscal 1995 (Year ended March 31, 1995)
- -----------
Reserve for bad
debts deducted
in the balance
sheet from amounts
receivable ...... $ 4,414 $ 519 $ (503) $ - $ 4,430
Fiscal 1994 (Year ended March 31, 1994)
- -----------
Reserve for bad
debts deducted
in the balance
sheet from amounts
receivable ....... $ 3,797 $ 2,235 $(1,345) $ (273) $ 4,414
<FN>
(1) Relates to accounts receivable charged directly against
reserve for bad debts.
(2) Balance deducted represents a reserve recorded in the
accounts of a subsidiary which was sold in the fiscal
year.
</FN>