SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/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 000-22101
IAT Multimedia, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3920210
--------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
Geschaftshaus Wasserschloss
Aarestrasse 17
CH-5300 Vogelsang-Turgi, Switzerland
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (011)(41)(56) 223-5022
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: Common
Stock, $0.01par value (the "Common Stock")
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 twelve (12) months (or for such shorter period that
the registrant was required to file such report(s)), and (2) has been subject
to the filing requirements for the past ninety (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 [ ].
The aggregate market value of the voting stock (excluding preferred stock
convertible into and having voting rights on certain matters equivalent to
622,220 shares of common stock) held by non-affiliates of the registrant as of
March 27, 1998 was 11,055,602. The number of shares of the registrant's Common
Stock outstanding as of March 27, 1998 was 9,701,949.
Document Incorporated By Reference
None
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
Common Stock as of March 27, 1998 by (i) each director of Multimedia, (ii) each
of the Named Executive Officers, (iii) each person known by the Company to own
beneficially more than five percent of the outstanding Common Stock, and (iv)
all executive officers and directors of the Company as a group.
Number of Shares Percentage of Shares
Name and Address of Beneficial Owner(1) Beneficially Owned Beneficially Owned
- --------------------------------------- ------------------ ---------------------
Executive Officers and Directors:
Viktor Vogt(2) 512,129(3) 5.25%
Jacob Agam(2) -- (4)(12) --
Klaus Grissemann(2) 189,395(5) 1.95%
Volker Walther(6) 943,250(7) 9.72%
Reiner Hallauer(2) 52,000(9) *
Arnold Wasserman(2) 40,000(10) *
Alfred Simmet(2) 146,949 1.51%
Significant Stockholders:
Vertical Financial Holdings
Establishment(4)(11) 1,580,304(12) 15.21%
Behala Anstalt(13) 592,804(14) 5.93%
Lupin Investments Services Ltd.(15) 592,804(16) 5.93%
Henilia Financial Ltd.(17) 594,694(18) 5.95%
Klaus-Dirk Sippel(19) 1,055,923(20) 10.45%
Richard Suter(21) 721,551(22) 7.29%
All executive officers and directors of the
Company as a group (7 persons) 1,883,723 19.42%
- -----------------
* Less than 1%
(1) Unless otherwise noted, 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. See "Item 13--Certain
Relationships and Related Transactions."
(2) The address of these directors and officers is c/o IAT Multimedia, Inc.,
Geschaftshaus Wasserschloss, Aarestrasse 17, CH-5300 Vogelsang-Turgi,
Switzerland.
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(3) Includes 69,605 shares of Common Stock which are held in escrow but in
respect of which Dr. Vogt retains the power to vote. See "--Escrow
Shares."
(4) Jacob Agam, the Co-Chairman of the Company, is the Chairman of the Board
of Vertical. Pursuant to an agreement between Orida and Vertical, Orida
has the right to receive a portion of the profits from the sale of the
shares held by Vertical. Mr. Agam is the Chairman of Orida. Mr. Agam
disclaims beneficial ownership of the shares held by Vertical.
(5) Includes 15,151 shares of Common Stock which are held in escrow but in
respect of which Mr. Grissemann retains the power to vote. See "--Escrow
Shares."
(6) Volker Walther's address is Pestalozziweg 8, D-34439, Willebadessen,
Germany.
(7) Includes 52,500 shares held by Volker Walther and 831,985 shares held by
Walther Glas GmbH of which Mr. Walther is a majority shareholder. Also
includes 58,765 and 12,495 shares of Common Stack which are held in escrow
but in respect of which Mr. Walther and Walther Glas GmbH, respectively,
retain the power to vote. See "--Escrow Shares."
(8) Includes 7,575 shares of Common Stock which are held in escrow but in
respect of which Mr. Muller retains the power to vote. See "--Escrow
Shares."
(9) Includes 50,000 shares of Common Stock issuable upon exercise of options
which are currently exercisable.
(10) Represents 40,000 shares of Common Stock issuable upon exercise of options
which are currently exercisable.
(11) The address of Vertical Financial Holdings Establishment is
Hombrechtikerstrasse 61, CH-8640 Rapperswil, Switzerland.
(12) Includes (i) 690,152 shares of Common Stock issuable upon exercise of
warrants beneficially owned by Vertical and exercisable within 60 days and
(ii) 1,212 shares of Common Stock which are held in escrow but which
Vertical retains the power to vote. See "--Escrow Shares." Excludes an
aggregate of 890,151 shares of Common Stock and 890,151 shares of Common
Stock issuable upon exercise of warrants held by Behala Anstalt, Lupin
Investments Services Ltd. and Henilia Financial Ltd. (the "Vertical
Assignees"). Vertical has advised that pursuant to agreements with third
party investors in each Vertical Assignee, Vertical owns equity interests
in each Vertical Assignee entitling it to varying percentages of the
profits resulting from the sale of the shares of Common Stock held by each
Vertical Assignee. In addition, Vertical has advised that pursuant to
agreements with each Vertical Assignee, each Vertical Assignee has
designated as a trustee the same individual (the "Trustee") and has
granted to the Trustee voting and dispositive
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power over the shares of Common Stock held by each Vertical Assignee.
Vertical has also advised that it retains the right to appoint or
terminate the appointment of the Trustee.
(13) The address of Behala Anstalt is Heiligkreuz 6, PL-9490 Vaduz,
Liechtenstein.
(14) Includes 296,402 shares of Common Stock issuable upon exercise of warrants
beneficially owned by Behala Anstalt and exercisable within 60 days. Also
includes 23,712 shares of Common Stock which are held in escrow but in
respect of which Behala Anstalt retains the power to vote. See "--Escrow
Shares." Vertical has advised that pursuant to an agreement with third
party investors in Behala Anstalt, Vertical owns an equity interest in
Behala Anstalt entitling it to a percentage of the profits resulting from
the sale of the shares of Common Stock held by Behala Anstalt. In
addition, Vertical has advised that the Trustee has voting and dispositive
power over the shares of Common Stock held by Behala Anstalt, although
Vertical retains the right to appoint or terminate the appointment of the
Trustee.
(15) The address of Lupin Investments Services Ltd. is P.O. Box 3186,
Tortola/BVI, Road Town, Tortola, British Virgin Islands.
(16) Includes 296,402 shares of Common Stock issuable upon exercise of warrants
beneficially owned by Lupin Investments Services Ltd. and exercisable
within 60 days. Also includes 23,712 shares of Common Stock which are held
in escrow but in respect of which Lupin Investments Services Ltd. retains
the power to vote. See "--Escrow Shares." Vertical has advised that
pursuant to an agreement with third party investors in Lupin Investments
Services Ltd., Vertical owns an equity interest in Lupin Investments
Services Ltd. entitling it to a percentage of the profits resulting from
the sale of the shares of Common Stock held by Lupin Investments Services
Ltd. In addition, Vertical has advised that the Trustee has voting and
dispositive power over the shares of Common Stock held by Lupin
Investments Services Ltd., although Vertical retains the right to appoint
or terminate the appointment of the Trustee.
(17) The address of Henilia Financial Ltd. is 35A Regent Street, Belize City,
Belize.
(18) Includes 297,347 shares of Common Stock issuable upon exercise of warrants
beneficially owned by Henilia Financial Ltd. and exercisable within 60
days. Also includes 23,788 shares of Common Stock which are held in escrow
but in respect of which Henilia Financial Ltd. retains the power to vote.
See "--Escrow Shares." Vertical has advised that pursuant to an agreement
with third party investors in Henilia Financial Ltd., Vertical owns an
equity interest in Henilia Financial Ltd. entitling it to a percentage of
the profits resulting from the sale of the shares of Common Stock held by
Henilia Financial Ltd. In addition, Vertical has advised that the Trustee
has voting and dispositive power over the shares of Common
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Stock held by Henilia Financial Ltd., although Vertical retains the right
to appoint or terminate the appointment of the Trustee.
(19) The address of Klaus-Dirk Sippel is Tannenweg 2, CH-5415 Nussbaumen,
Switzerland. Excludes 76,941 shares sold in October 1996 by Mr. Sippel to
Mr. Jurgen Henning. While Mr. Sippel does not have any voting or
dispositive power with respect to these shares, the agreement between
Messrs. Sippel and Henning provides that Mr. Sippel will share in the
proceeds of the sale of Mr. Henning's shares.
(20) Includes 398,864 shares of Common Stock issuable upon exercise of
Shareholder Warrants beneficially owned by Klaus-Dirk Sippel and
exercisable within 60 days. Also includes 56,565 shares of Common Stock
which are held in escrow but in respect of which Mr. Sippel retains the
power to vote. See "--Escrow Shares."
(21) Richard Suter's address is Lendikerstrasse 25, CH-8484 Weisslingen,
Switzerland.
(22) Includes 198,864 shares of Common Stock issuable upon exercise of
Shareholder Warrants beneficially owned by Richard Suter and exercisable
within 60 days. Also includes 45,815 shares of Common Stock which are held
in escrow but in respect of which .Mr. Suter retains the power to vote.
See "--Escrow Shares."
ESCROW SHARES
The existing stockholders of the Company immediately prior to the IPO
deposited an aggregate of 498,285 shares of Common Stock into escrow in
connection with the IPO (the "Escrow Shares"). The Escrow Shares are not
assignable or transferable. Of the Escrow Shares:
(i) 166,095 shall be released from escrow if, for the fiscal year ending
December 31, 1997, the Company's minimum revenues (the "Minimum Revenues")
equals or exceeds $5.5 million;
(ii) 166,095 Escrow Shares; (or, if the conditions set forth in (i)
above was not met, 332,190 Escrow Shares) shall be released, if, for the fiscal
year ending December 31, 1998, the Minimum Revenues equals or exceeds $8.0
million;
(iii) 166,095 Escrow Shares (or, if the conditions set forth in either
(i) or (ii) were not met, the remaining Escrow Shares) shall be released if,
for the fiscal year ending December 31,1999, the Minimum Revenues equals or
exceeds $12.0 million and the Company's income before provision for taxes (the
"Minimum Pretax Income") equals or exceeds $1.0 million; and
(iv) all of the Escrow Shares will be released from escrow if one or
more of the following conditions is/are met:
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(a) the average of the closing bid prices of the Company's Common Stock
for any 30 consecutive trading days commencing March 26, 1999 exceeds $13.00
per share; or
(b) the Company is acquired by or merged into another entity commencing
on the date set forth in (a) above in a transaction in which the value of the
per share consideration received by the stockholders of the Company (after
giving effect to the release of shares from escrow) on the date of such
transaction exceeds $13.00 per share.
The Minimum Revenues and Minimum Pretax Income Amounts set forth above
shall be (i) derived solely from the business owned and operated by the Company
at the time of the IPO and shall not give effect to any operations relating to
business or assets acquired after April 1, 1997; (ii) calculated exclusive of
any extraordinary earnings including, but not limited to, any charge to income
resulting from the release of the Escrow Shares and (iii) audited by the
Company's independent public accountants.
Any money, securities, rights or property distributed in respect of the
Escrow Shares shall be received by the escrow agent, including any property
distributed as dividends or pursuant to any stock split, merger,
recapitalization, dissolution or total or partial liquidation of the Company
(the "Escrow Property"). On March 31, 2000, any remaining Escrow Shares, as
well as any dividends or other distributions made with respect thereto, will be
canceled and contributed to the capital of the Company. The Company expects
that the release of the Escrow Shares to officers, directors, employees and
consultants of the Company will be deemed compensatory and, accordingly, will
result in a substantial charge to operations, which would equal the then fair
market value of such shares. Such charges could substantially increase the loss
or reduce or eliminate the Company's net income for financial reporting
purposes for the period during which such shares are, or become probable of
being, released from escrow. Although the amount of compensation expense
recognized by the Company will not affect the Company's total stockholder's
equity, it may have a negative effect on the market price of the Common Stock.
See "Item 7--Management's Discussion and Analysis of Financial Condition and
Results of Operations."
The Minimum Revenues and Minimum Pretax Income amounts and closing bid
price levels set forth above were determined by negotiation between the Company
and the IPO Underwriters and should not be construed to imply or predict any
future earnings by the Company or any increase in the market price of the
Common Stock.
IAT's Minimum Revenues for the year ended December 31, 1997 were less
than $5.5 million and accordingly, the target for release described in (i)
above was not met.
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SIGNATURES
In accordance with 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.
IAT MULTIMEDIA, INC.
By: /s/ Jacob Agam
------------------------
Jacob Agam
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Jacob Agam Chairman of the Board December 3, 1998
- ------------------------ and Chief Executive Officer
Jacob Agam (principal executive officer)
/s/ Klaus Grissemann Chief Financial Officer December 3, 1998
- ------------------------ and Director
Klaus Grissemann (principal financial officer)
/s/ Robert Weiss Director December 3, 1998
- ------------------------
Robert Weiss
/s/ Viktor Vogt Director December 3, 1998
- ------------------------
Viktor Vogt
Director December , 1998
- ------------------------
Volker Walther
/s/ Erich Weber Director December 3, 1998
- -------------------------
Erich Weber
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