Attached files
| file | filename |
|---|---|
| EX-32 - EXHIBIT 32 - LAPOLLA INDUSTRIES INC | a201410k-ax3exhibit_32.htm |
| EX-31.2 - EXHIBIT 31.2 - LAPOLLA INDUSTRIES INC | a201410k-ax3exhibit_31x2.htm |
| EX-31.1 - EXHIBIT 31.1 - LAPOLLA INDUSTRIES INC | a201410k-ax3exhibit_31x1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 3)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2014
Commission File No. 001-31354
Lapolla Industries, Inc. |
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) | 13-3545304 (I.R.S. Employer Identification No.) | |
Intercontinental Business Park 15402 Vantage Parkway East, Suite 322 Houston, Texas (Address of principal executive offices) | 77032 (Zip Code) | |
(281) 219-4700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $.01 par value | ||
(Title of Each Class) | ||
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. YES ¨ NO þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ¨ NO þ
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 þ NO ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES þ 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. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
Large Accelerated Filer ¨ | Accelerated Filer ¨ | Non-Accelerated Filer ¨ | Smaller Reporting Company þ |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO þ
As of June 30, 2014, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $11,190,004 based on the closing sales price as quoted on the OTCQB. For purposes of this computation only, all officers, directors and 10% or greater stockholders of the registrant are deemed to be affiliates.
Common Stock outstanding as of March 16, 2015 — 120,999,016 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
Lapolla Industries, Inc. (the “Company,” “we,” “us,” or “our”) is filing this Amendment No. 3 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the year ended December 31, 2014 (“Original Form 10-K”), which was originally filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2015 (the “Original 10-K Filing Date”). On September 18, 2015, we filed Amendment No. 1 to the Original Form 10-K and November 12, 2015, we filed Amendment No. 2 to the Original Form 10-K (the “Prior Amendments”). We are filing this Amendment solely for the purpose of amending and restating Part III, Item 13 - Certain Relationships and Related Transactions, and Director Independence, Certain Relationships and Related Transactions, to add a series of indirect arm’s length transactions for purchases of our products aggregating more than $120,000 between the Company and entities in which our chairman of the board and principal stockholder holds at least a 10% interest in during 2013 and 2014.
As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications of our principal executive officer and principal financial officer are being filed as exhibits to this Amendment. Except as specifically described above, this Amendment does not amend any other information set forth in the Original Form 10-K or the Prior Amendments. This Amendment speaks only as of the Original 10-K Filing Date, does not modify or update in any way disclosures made in the Original Form 10-K (including, without limitation, the financial statements and accompanying notes), and does not reflect events that may have occurred subsequent to the Original 10-K Filing Date. This Amendment should be read in conjunction with the Original Form 10-K, the Prior Amendments and our other filings made with the SEC subsequent to the Original 10-K Filing Date.
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PART III
Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions
(a) During 2013, the Company vested an aggregate of 1,938,111 shares, including anti-dilution issuances, of restricted common stock, to a director for advisory and consulting services, which transactions were valued and recorded in the aggregate at $1,045,693 and paid $180,000 in cash to Mr. Nadel under the Nadel Agreement. On February 22, 2011, the Company and Mr. Nadel, a director, entered into the Nadel Agreement. In addition to any other compensation Mr. Nadel is currently receiving from the Company, Mr. Nadel was granted 5,000,000 shares of restricted common stock, which vest monthly over 3 years, and $200,000 in cash fees per year (which was changed to $180,000 in 2012). Mr. Nadel‘s services include business development and planning, assisting management on strategic initiatives, and other tasks as requested by the Chairman or the Company in consultation with the Chairman.
(b) During 2013, the Company accrued an aggregate of $70,595 for interest relating to the April 16, 2012 promissory note for $1,300,000 with the Chairman of the Board and majority stockholder, bearing interest at 5% per annum (“4/16/12 Kurtz Note”). The 4/16/12 Kurtz Note’s maturity date was extended to June 10, 2017 in connection with the New Enhanced Note financing. See also (j) below.
(c) The Chairman of the Board and principal stockholder made two $500,000 advances, one on July 2, 2013 and the other on August 5, 2013, to the Company to assist in cash flow fluctuations and the Company repaid the Chairman back on said dates.
(d) On July 26, 2013, the Chairman of the Board and principal stockholder provided Management with a financial commitment to ensure payment of the $2,314,000 balloon payment under the Prior Enhanced Note and taking into account the Company’s obligations under the Revolver Loan, an additional $450,000, for a total amount of $2,764,000, which is required to be paid 90 days before the Prior Enhanced Note’s maturity date, or by March 31, 2014 (the “7/26/13 Commitment”). The 7/26/13 Commitment will be superseded in the event and to the extent that: (a) the Company is independently funded by a third party source, either privately or institutionally, at or before the time the 7/26/13 Commitment as such relates to the Prior Enhanced Note is fully satisfied; or (b) in the event any outstanding balance under the Prior Enhanced Note, plus accrued interest, is satisfied in connection with a liquidity event as defined in and pursuant to the Prior Enhanced Note. See (e) below (The 7/26/13 Commitment was superseded when the Company entered into the New Enhanced Note on December 10, 2013, which included a personal guaranty from the Chairman of the Board).
(e) On December 10, 2013, in connection with the New Enhanced Note entered into of even date, Richard J. Kurtz, Chairman of the Board and majority stockholder of the Company, entered into a guaranty agreement with to Enhanced Credit Supported Loan Fund, LP, as agent under the New Enhanced Note, to secure the Company’s performance under the New Enhanced Note. The Company, in exchange for Mr. Kurtz’s personal guarantee of the obligations under the New Enhanced Note, granted him 3,681,000 Million shares of restricted common stock, which shares vest monthly on a pro rata basis over the three year term of the New Enhanced Note (New Guaranty Shares). The New Guaranty Shares were valued at $.60 per share, which was the closing price of the Company common stock as quoted on the OTCQB on the day preceding the closing date for the New Enhanced Note, for an aggregate amount of $2,208,600. As a result of the payoff of the Prior Enhanced Note, the Company canceled an aggregate of 1,376,712 unvested Prior Guaranty Shares (with an unrecorded valued of $371,801) previously issued in connection with the personal guaranty provided by the Chairman under the Prior Enhanced Note being paid off earlier than the maturity date (The Company had previously granted 5,000,000 shares to the Chairman valued at $1,350,000 in connection with such Prior Enhanced Note which was vesting monthly on a pro rata basis over its 2 year term (Prior Guaranty Shares).
(f) During 2013, the Company vested an aggregate of 2,423,137 shares of restricted common stock, of which 2,349,315 shares were Prior Guaranty Shares and 73,822 shares were New Guaranty Shares, issued to the Chairman of the Board and majority stockholder in connection with his personal guarantees relating to the Prior Enhanced Note and New Enhanced Note, which transactions were valued and recorded in the aggregate at $678,697, and classified as interest expense - related party. See also (e) above.
(g) During 2013, Richard J. Kurtz, Chairman of the Board and majority stockholder of the Company, indirectly purchased the Company’s products in a series of arm’s length transactions at or above the prevailing selling prices for the products at the time of each transaction, which transactions were valued in the aggregate at $395,900, through entities in which he holds at least a 10% interest.
(h) On November 14, 2014, the Company borrowed $250,000 from the Chairman of the Board and majority stockholder as a condition precedent to entering into that certain second amendment dated as of November 14, 2014 to the New Enhanced Note and that certain eleventh amendment dated November 14, 2014 to the Loan Agreement, and entered into a promissory note (the “11/14/14 Kurtz Note”). Pursuant the 11/14/14 Kurtz Note, the Company agreed to pay eight percent (8%) per annum on the principal balance of $250,000 and repay the principle balance on June 10, 2017. The 1/21/15 Kurtz Note is subordinated to the Loan Agreement and the New Enhanced Note.
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(i) On November 14, 2014, the Chairman of the Board and majority stockholder provided Management with a financial commitment to ensure payment of the amount outstanding under the Revolver Loan pursuant to the Loan Agreement, which matured at the time of entering into this commitment on February 15, 2015, and make available working capital of up to $1.5 Million for the Company’s ongoing operations from the date hereof and on or after the maturity date of the Loan Agreement (“Financial Substitution Commitment”). This Financial Substitution Commitment will either be satisfied from his personal funds, or, from funds caused by him to be otherwise provided by an appropriate lending or other institution, and any funds provided thereunder will have a maturity date of June 10, 2017. The Financial Substitution Commitment will be superseded in the event and to the extent that the Company is independently funded by a third party source, either privately or institutionally, at or before the time the Financial Substitution Commitment is due and the Revolver Loan is repaid and Loan Agreement obligation is fully satisfied, and working capital of $1.5 Million for the Company’s ongoing operations is obtained from the date hereof and on or after the maturity date of the Loan Agreement. Management requested that the Chairman of the Board fund $250,000 under this Financial Substitution Commitment to meet a request from Bank of America which payment was made on November 14, 2014. This Financial Substitution Commitment was satisfied upon the Company entering into that certain twelfth amendment dated January 23, 2015 to the Loan Agreement, under which the Revolver Loan maturity date was changed from February 15, 2015 to March 31, 2016.
(j) On December 2, 2014, the Company issued 3,908,453 shares of its Common Stock, par value $.01, to Richard J. Kurtz, chairman of the board and principal stockholder, in exchange for the cancellation of $1,485,212 of debt owed by the Company to him, of which $1,300,000 was the principal amount of the 4/16/12 Kurtz Note and $185,212 was the accrued and unpaid interest thereon. The purchase price for each share of Common Stock was based on the closing price of the Company's Common Stock on December 1, 2014, or $.38 per share. See also (b) above.
(k) On December 18, 2014, Charles A. Zajaczkowski resigned as chief financial officer and corporate treasurer of the Company and Michael T. Adams, chief governance officer, executive vice president, and corporate secretary took on the additional responsibility of being interim chief financial officer and corporate treasurer until a successor was appointed on January 1, 2015.
(l) During 2014, the Company vested an aggregate of 347,972 shares, including anti-dilution issuances, of restricted common stock, to a director for advisory and consulting services, which transactions were valued and recorded in the aggregate at $214,113 and paid $180,000 in cash to Mr. Nadel under the Nadel Agreement. See also (a) above.
(m) During 2014, the Company vested an aggregate of 1,224,763 shares of restricted common stock as New Guaranty Shares, issued to the Chairman of the Board and majority stockholder in connection with his personal guarantees relating to the New Enhanced Note, which transactions were valued and recorded in the aggregate at $734,858, and classified as interest expense - related party. See also (e) and (f) above.
(n) During 2014, Richard J. Kurtz, Chairman of the Board and majority stockholder of the Company, indirectly purchased the Company’s products in a series of arm’s length transactions at or above the prevailing selling prices for the products at the time of each transaction, which transactions were valued in the aggregate at $434,117, through entities in which he holds at least a 10% interest.
(o) On January 21, 2015, the Company borrowed $250,000 from the Chairman of the Board and majority stockholder as a condition precedent to entering into that certain twelfth amendment dated as of January 23, 2015 to the Loan Agreement, and entered into a promissory note (the “1/21/15 Kurtz Note”). Pursuant the 1/21/15 Kurtz Note, the Company agreed to pay eight percent (8%) per annum on the principal balance of $250,000 and repay the principle balance on June 10, 2017. The 1/21/15 Kurtz Note is subordinated to the Loan Agreement and the New Enhanced Note.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(b) Exhibits:
INDEX OF EXHIBITS
Exhibit No. | Description | |
31.1* | Certification of Principal Executive Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. | |
31.2* | Certification of Principal Financial Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. | |
32* | Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350. | |
* Filed herewith
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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.
Date: | June 1, 2017 | LAPOLLA INDUSTRIES, INC. |
By: /s/ Harvey L. Schnitzer | ||
Harvey L. Schnitzer | ||
Director and Chief Operating Officer | ||
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