As filed with the Securities and Exchange Commission on June 3, 2003
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A NO. 2
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 2 TO ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2002
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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COMMISSION FILE NUMBER: 0-26020
APPLIED DIGITAL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 43-1641533
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(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
400 ROYAL PALM WAY, SUITE 410, PALM BEACH, FLORIDA 33480
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP-CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561) 805-8000
EXPLANATORY NOTE
The undersigned Registrant hereby amends the following item of its
Annual Report on Form 10-K for the year ended December 31, 2002, filed by
the Registrant on March 31, 2003, as amended on April 4, 2003, to include in
Part III. Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholders Matters disclosure regarding Securities
Authorized for Issuance Under Equity Compensation Plans.
PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
OWNERSHIP OF EQUITY SECURITIES
The following table sets forth information regarding beneficial
ownership our common stock by each director and by each executive officer
named in the summary compensation table and by all the directors and
executive officers as a group as of March 24, 2002:
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Number of
Shares of Percent of
Common Stock Common Stock
Beneficially Beneficially
Name of Beneficial Owner Owned (1) Owned
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Arthur F. Noterman 1,385,000 *
Daniel E. Penni 1,849,065 *
Dennis G. Rawan -- *
Constance K. Weaver 1,123,000 *
Scott R. Silverman 1,325,000 *
Kevin H. McLaughlin 369,333
Michael E. Krawitz 1,158,781 *
Evan C. McKeown 184,170
Peter Zhou 302,526 *
All directors and executive officers as a group (12 persons) 8,698,480 2.4%
<FN>
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* Represents less than 1% of the issued and outstanding shares of our common
stock.
(1) This table includes presently exercisable stock options. The
following directors and executive officers hold the number of
exercisable options set forth following their respective names:
Arthur F. Noterman - 1,064,000; Daniel E. Penni - 1,064,000;
Constance K. Weaver - 889,000; Scott R. Silverman - 1,325,000;
Kevin H. McLaughlin - 358,333; Michael E. Krawitz - 1,104,000; Evan
C. McKeown - 183,334; Peter Zhou - 279,000; and all directors and
officers as a group - 7,204,667.
PRINCIPAL STOCKHOLDER
Set forth in the table below is information as of March 24, 2003,
with respect to persons known to us (other than the directors and executive
officers shown in the preceding table) to be the beneficial owners of more
than five percent of our issued and outstanding common stock:
Name and Address Number of Shares Percent Of Class
Beneficially Owned
- ----------------------------- ------------------------ ----------------------
Richard J. Sullivan (1) 69,633,852 (2) 19.3%
<FN>
(1) Pursuant to the terms of Mr. Sullivan's severance agreement
dated March 24, 2003, and subject to shareholder approval,
Mr. Sullivan will be issued 56.0 million shares of our common stock
on or before December 31, 2003. These shares have been reflected
as part of Mr. Sullivan's beneficially owned shares at March 24, 2003.
(2) Includes 10,885,000 stock options owned by Mr. Sullivan and
700,000 stock options and 5,000 shares of common stock owned by
Mr. Sullivan's wife. Also, includes 259,598 shares owned by The
Bay Group and 367,177 shares owned by Great Bay Technology, Inc.
Mr. Sullivan controls The Bay Group and Great Bay Technology, Inc.
CHANGES IN CONTROL
Except as provided with respect to the IBM Credit Agreement and
related forbearance agreement, there are no arrangements known to us,
including any pledge of our securities by any person, the operation of which
may at a subsequent date result in a change in control us.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
During 2002, the Company granted 10,126,000 options under its
1999 Flexible Stock Plan and 1996 Non-Qualified Stock Option Plan. As of
December 31, 2002, the following shares of the Company's common stock were
authorized for issuance under the Company's equity compensation plans:
EQUITY COMPENSATION PLAN INFORMATION
(a) (b) (c)
Plan Category (1) Number of securities to Weighted-average Number of securities
be issued upon exercise exercise price remaining available for
of outstanding options, per share of future issuance under
warrants and rights outstanding equity compensation
options, warrants plans (excluding
and rights securities reflected in
column (a))
Equity compensation plans
approved by security holders 34,039,000 $0.71 7,183,000 (2)(3)
Equity compensation plans not
approved by security holders -- -- --
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Total 34,039,000 $0.71 7,183,000
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<FN>
(1) A narrative description of the material terms of the Company's
equity compensation plans is set forth in Note 13 to the Company's
consolidated financial statements, which are set forth in the
Company's Annual Report on Form 10-K/A filed with the Securities
and Exchange Commission on April 4, 2003.
(2) In addition to the shares available for future issuance reflected
in the above table, the shares available for future issuance under
the 2003 Flexible Stock Plan, if approved, would be 14,000,000.
(3) Includes 6,900,000 shares available for future issuance under the
Company's 1999 Employees Stock Purchase Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: JUNE 3, 2003 APPLIED DIGITAL SOLUTIONS, INC. (REGISTRANT)
By: /s/ Evan C. McKeown
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Evan C. McKeown, Senior Vice President and
Chief Financial Officer