U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
(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, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
DIGITAL POWER CORPORATION
(Exact name of registrant as specified in its charter)
California 94-1721931
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
41920 Christy Street, Fremont, California 94538-3158
(Address of principal executive offices)
510-657-2635
Issuers Telephone number
Securities registered under Section 12(b) of the Exchange Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock American Stock Exchange
Securities registered under Section 12(g) of the Exchange Act:
Title of Each Class
None
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-B 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-KSB or any amendment to
this Form 10-KSB. [ ]
Revenues for the year ended December 31, 2001, were $10,329,857.
As of March 15, 2002, the aggregate market value of the voting common stock held
by non-affiliates was approximately $2,804,185 based on the closing price of
$0.80 per share.
As of March 15, 2002, the number of shares of common stock outstanding was
4,510,680.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(B) OF THE EXCHANGE ACT.
The following are the current directors of the Board of Directors and
executive officers of the Company as of March 31, 2002.
Name Age Since Position
Ben-Zion Diamant 52 2001 Chairman of the Board
David Amitai 59 2001 President and Chief Executive Officer
(since October 2001) and Director
Robert O. Smith 57 1989 Director, Former President and Chief
Executive Officer
Mark L. Thum 52 2001 Director
Josef Berger 51 2002 Director
Uri Friedlander 39 2001 Chief Financial Officer
Directors
The following is a brief description of the business background of Digital
Power Corporation's current Directors:
Ben-Zion Diamant Chairman of the Board since 2001
Mr. Diamant, age 52, has been the Chairman of the Board of Telkoor Telecom
Ltd., which designs and manufactures power supplies, since 1994. From 1992-1994,
Mr. Diamant was a partner and business development manager. From 1989 to 1992,
Mr. Diamant was a partner and manager of Rotel Communication. Mr. Diamant was
also a senior officer in the Israel Air Force. He earned his BA in Political
Science from Bar-Ilan University.
David Amitai Director since 2001
Mr. Amitai, age 59, is the President and Chief Executive Officer of Telkoor
Telecom Ltd. and its subsidiary Telkoor Power Supplies. Mr. Amitai has held both
positions since 1994. Prior to working for Telkoor Telecom Ltd., Mr. Amitai was
the founder and General Manager of Tadiran's Microelectronics Division from 1978
to 1989 and the Director of Material and Logistics of Tradiran from 1989 to
1994. Mr. Amitai held positions in engineering and manufacturing at the
California base semiconductor companies: Monolithic Memories (MMI) and National
Semiconductor. Mr. Amitai earned his engineering degree from California State
University at San Jose, California.
Mark L. Thum Director since 2001
Mr. Thum, age 52, is currently Vice President of International Business
Development for BAE Systems Information and Electronic Warefare System (formerly
Sanders, a Lockheed Martin company, and formerly Loral Electronics Systems). Mr.
Thum joined then Loral Electronic Systems in 1993. From 1971 to 1993, Mr. Thum
worked for Germane Aerospace Corporation. From 1989 to 1993, he was a director
of Airborne Early Warning Aircraft International Programs. Mr. Thum holds a B.E.
in Engineering Science from State University of New York at Stony Brook and a
M.S. in Management Engineering from Long Island University.
Robert Smith Director since 1989
Mr. Smith, age 57, has served as a Director of the Company since 1989.
Since 2001, he has served as a consultant to the Company. Mr. Smith served as
Chief Executive Officer from 1989 to 2001, President where he served from 1996
to 2001 and Chairman of the Board where he served from 1999 to 2001. From 1980
to 1989, he served as Vice President/Group Controller of Power Conversion Group,
General Manager of Compower Division, and President of Boschert, a subsidiary of
Computer Products, Inc., a manufacturer of power conversion products and
industrial automation systems. Mr. Smith received his B.S. in Business
Administration from Ohio University and has completed course work at the M.B.A.
program at Kent State University.
Josef Berger Director since 2001
Dr. Berger, age 51, has served as a Director of the Company since 2002. Dr.
Berger is President and Chief Executive Officer of CALY Networks, a company that
markets and supports Internet access solutions, which he founded in 1998. From
1988 to 1997, Dr. Berger was a Director of Harmonic Inc., which provides
broadband solutions to deliver video, voice and data to communication providers.
Dr. Berger holds a doctorate in Physics from Technion Israel Institute of
Technology University.
Executive Officers
The following is a brief description of the business background of the
Company's officers. There are no family relationships between any of the
directors and officers.
David Amitai - see Directors above.
Uri Friedlander Officer since 2001
Mr. Friedlander, age 39, is the financial officer of Telkoor Telecom Ltd
and its subsidiaries since 1997, and Chief Financial Officer of Digital Power
since November 2001. From 1991 to 1996 Mr. Friedlander was a controller of
International Technology Lasers Ltd and Quality Power Supplies Ltd, members of
Clal Electronics Group. From 1986 until 1990 served as auditor for lyoboshitz
Kasirer (today Arthur Andersen) Public Accountants. Mr. Friedlander received a
B.A. degree in Accounting and Economics from Tel - Aviv University.
Compliance with Section 16 of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires our executive officers and
directors to file reports of ownership and changes in ownership of our common
stock with the SEC. Executive officers and directors are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely upon a review of Forms 3, 4 and 5 delivered to the Securities and
Exchange Commission ("Commission"), directors and officers of the Company timely
filed all required reports pursuant to Section 16(a) of the Securities Exchange
Act of 1934.
ITEM 10. EXECUTIVE COMPENSATION.
This table lists the aggregate cash compensation paid in the past three years
for all services of the named executive officers of the Company.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
Restricted Securities LTIP All Other
Name and Other Annual Stock Underlying Payouts Compensation
Principal Position Year Salary Compensation Award(s) ($) Options (#) ($)
($)
David Amitai, 2001 $ 0 $0 $0 200,000(2) $0 (1)
President and Chief
Executive Officer
Robert O. Smith, 2001 $125,851 $0 $0 100,000 $0 $0
former 2000 $200,000 $0 $0 100,000(4) $0 $0
President and Chief 1999 $134,038(3) $0 $0 100,000(4) $0 $0
Executive Officer
Chris Schofield 2001
Former Managing 2000 $105,927 $0 $0 25,000(5) $0 $0
Director, Digital 1999 $ 95,726 $0 $0 60,000 $0 $0
Power Limited(6)
(1) For the year ended December 31, 2001, Mr. Amitai received no salary.
However, the Company pays for Mr. Amitai's rent and automobile
expenses in the form of a loan. As of December 31, 2001, the amount of
the loan was $14,427.53. It is anticipated that Mr. Amitai will enter
into a compensation agreement with the Company in 2002.
(2) Represents options to purchase 200,000 shares of common stock at $0.70
per share.
(3) Pursuant to Mr. Smith's employment contract, during 1999, Mr. Smith
was entitled to receive $200,000 per annum. Due to the financial
condition of the Company, Mr. Smith only received $134,038 during
1999.
(4) Pursuant to his employment contract, Mr. Smith is entitled to receive
options to acquire 100,000 shares of common stock at the beginning of
each year. The exercise price is equal to the lower of market value as
of the first business day of the year or the average closing price for
the first six months of each year of his contract. The exercise price
for year 2001 was $1.50; year 2000 was $1.5625 and for year 1999 the
exercise price was $1.875.
(5) Represents options to acquire 25,000 shares of common stock at $1.5625
per share.
(6) On December 31, 2001, Mr. Schofield resigned from the Company.
Options Grants in Last Fiscal Year
The following table provides information relating to stock options granted
to our executive officer during the year ended December 31, 2001.
Individual Grants
Number of Percent of Total
Securities Options Granted
Underlying to Employees in
Options Granted Fiscal Year Exercise Base Expiration Date
Name Price ($/sh)
---- ------------
David Amitai 200,000 36.6% 0.70 12/10/11
Robert O. Smith 100,000 27.3% $1.5625 1/2010
Chris Schofield 25,000 6.8% $1.5625 1/2010
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values
There were no options exercised during the year ended December 31, 2001
by executive officers.
Ten-Year Options/SAR Repricings
There were no repricing of options for the fiscal year ended December 31,
2001.
Long-Term Incentive Plans - Awards in Last Fiscal Year
There were no awards made to the named executive officer under any
long-term incentive plan during the year ended December 31, 2001.
Directors Compensation
All directors who are not employees of the Company are paid $10,000 per
annum paid quarterly on a pro rata basis and granted options to purchase 10,000
shares of common stock vesting upon completion of one year of service.
Employment Agreements
On November 16, 2002, Mr. Smith entered into an consulting agreement with
the Company for a period of three years, for which Mr. Smith will receive
$100,000 per year and the right to receive options to purchase 100,000 shares of
common stock for each year.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table shows the amount of our common stock (AMEX Symbol: DPW)
beneficially owned (unless otherwise indicated) by each shareholder known by us
to be the beneficial owner of more than 5% of our common stock, by each of our
executive officers and directors and the executive officers and directors as a
group. As of March 31, 2002, there were 4,510,680 shares of common stock
outstanding. Except as otherwise indicated, all information is as of March 31,
2002. Unless indicated otherwise, the address of all shareholders listed is
Digital Power Corporation, 41920 Christy Street, Fremont, California 94538.
Shares Beneficially
Owned(1)
Name & Address of Beneficial Owner Number Percent
Telkoor Telecom Ltd. 3,150,000(2) 49.1%
5 Giborei Israel
Netanya 42293
Israel
Ben-Zion Diamant 3,350,000(3) 50.7%
David Amitai 3,350,000(3) 50.7%
Robert O. Smith 435,000(4) 8.8%
Josef Berger 10,000(5) *
Mark L. Thum 10,000(5) *
All directors and executive officers as a group 4,005,000(6) 55.1%
(6 persons)
Footnotes to Table
* Less than one percent.
(1) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to all shares
of common stock shown as beneficially owned by them, subject to community
property laws where applicable.
(2) Includes warrants to purchase 1,900,000 shares exercisable within 60 days.
(3) Mr. Diamant and Mr. Amitai each serve as directors of Telkoor Telecom.
Includes 3,150,000 shares of common stock beneficially owned by Telkoor
Telecom, which may also be deemed beneficially owned by each Mr. Diamant
and Mr. Amitai. Also includes options to purchase 200,000 shares of common
stock granted to both Messr. Diamant and Amitai.
(4) Represents 435,000 shares subject to options exercisable within 60 days.
(5) Represents options to purchase shares of common stock.
(6) Includes warrants to purchase 1,900,000 shares of common stock and options
to purchase 855,000 shares of common stock also including 1,250,000 shares
attributed to Telkor Telecom.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On November 16, 2001, the Company sold Telkoor Telecom Ltd. (i) 1,250,000
shares of common stock (ii) a warrant to purchase an additional 900,000 shares
of common stock at $1.25 per share; and (iii) a warrant to purchase an
additional 1,000,000 shares of common stock at $1.50 per share for the aggregate
purchase price of $1,250,000. The 900,000 share warrant will expire sixty (60)
days after the Company files its Form 10-KSB for the year ending December 31,
2002 and the 1,000,000 share warrant will expire on December 31, 2003. Our
Chairman, Mr. Diamant owns 34.03% and our President and Chief Executive Officer,
Mr. Amitai owns 33.99% of the outstanding shares of Telkoor Telecom Ltd.
On November 16, 2001, Mr. Smith entered into a consulting agreement with
the Company and agreed to terminate his prior employment agreement which would
have granted him a severance of $1,200,000, upon the purchase of shares by
Telkoor Telecom Ltd. Under the consulting agreement, Mr. Smith will receive
$100,000 and options to purchase 100,000 shares of common stock each year for
three (3) years.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits
None
b) Reports on Form 8-K
The following report on Form 8-K was filed during the last quarter of the
period covered by this report:
Date of Report Item Reported
November 16, 2001 Change in Control of the Company
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this amendment number 1 to Form 10-KSB to be signed on its behalf by the
undersigned, thereunto duly authorized.
DIGITAL POWER CORPORATION,
a California Corporation
Dated: May 8, 2002 /s/ David Amitai
David Amitai, President and
Chief Executive Officer
(Principal Executive Officer)